Document of

The World Bank

FtLE {tft] 8 y FOR OFFICIAL USE ONLY

Report No. 3503-TUN

TUNISIA

STAFF APPRAISAL REPORT OF THE

GRAIN DISTRIBUTION AND STORAGE PROJECT

September 1, 1981

EMENA PROJECTS DEPARTMENTAgriculture II Division

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(As of January 30, 1981)

Currency Unit = Tunisian Dinar (D)

D 0.40 Us$1 /lDl = US$2.5

D 1,000 = US$2,500

D 400 = US$1,000

D 400,000 US$1,000,000

WEIGHTS AND MEASURES

Metric System British/U.S. System

1 meter (m) = 3.28 feet (ft)1 kilometer (km) = 0.62 miles (mi)1 square kilometer (km2) = 0.386 square miles (sq. mi)1 hectare (ha) = 2.47 acres1 litre (1) = 0.2200 Imperial gallons (I gal)

0.2642 U.S. gallons (gal)1 ton (t) = 1,000 kg/2,205 pounds (lb)1 quintal (q) - = 100 kg/220.5 pounds (lb)

1 cubic meter (m3) = 35.315 cu. ft

Fiscal Year

Republic of Tunisia: January 1 - December 31

Office of Cereals: October 1 - September 30 ¶

/1 The Tunisian Dinar is floating. The rate of US$1 = D 0.40 was average for1980.

FOR OFFICIAL USE ONLY

ACRONYMS AND ABBREVIATIONS

ATI = Agro Technic International Ingénierie (InternationalAgro-Technical Engineering Company'

BAC = Bureau Central d'Audit de Comptabilité etd'Organisation Industrielle, Commerciale et Agricole(Central Bureau of Auditing and Accounting and ofIndustrial, Commercial and Agricultural Organization)

BNT = Banque Nationale de Tunisie (National Bank of Tunisia)CCGC = Coopérative Centrale des Grandes Cultures (Central

Cooperative for Basic Crops)CGC = Caisse Générale de Compensation (Price Equalization

Fund)COCEBLE = Coopérative Centrale de Blé (Central Wheat Cooperative)FAO = Food and Agriculture OrganizationMEN = Ministère de l'Economie Nationale (Ministry of the

National Economy)MPW = Ministère de l'Equipement (Ministry of Public Works)MTC = Ministère des Transports et des Communications

(0inistry of Transport and Communications)OC = Office des Céréales (Office of Cereals)OED = Operations Evaluation DepartmentO&M = Operation and Maintenance CostsOPNT = Office des Ports Nationaux Tunisiens (Tunisian

National Port Board)OTEP = Office Technique d'Etudes Portuaires (Technical Office

of Port Studies)PCC = Project Coordination CommitteePMU = Project Management UnitPPAR = Project Performance Audit ReportSCET = Société Centrale d'Etudes Tunisienne (Central Company

for Studies of Tunisia)SNCFT = Société Nationale des Chemins de Fer Tunisiens

(Tunisian National Railroad Company)SNT = Société Nationale de Transport (National Transport

Company)SRT = Société Regionale de Transport (Regional Transport

Company)STAM = Société Tunisienne d'Aconage et de Manutention

(Tunisian Lighterage and Stevedoring Company)STM = Société Nationale de Transport de Marchandises

(National Freight Transport Company)STPA = Société Tunisienne de Production Alimentaire (Tunisian

Food Production Company)

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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TUNISIA

STAFF APPRAISAL REPORT OF THE

GRAIN DISTRIBUTION AND STORAGE PROJECT

Table of Contents

Page No.I INTRODUCTION

A. Origin 1B. Agriculture and Transport Projects Previously 1

Financed by the Bank and OED Comments

II THE GRAIN SUB-SECTOR

A. Demand 3

B. Supply 5C. Distribution; Mills, Port Silos, Storage Silos, 8

TransportationD. Institutional Aspects: Office of Cereals, Grain Prices 15

and Subsidies

III THE PROJECT

A. Summary Description 20B. Detailed Features 21C. Status of Design and Implementation Schedule 23D. Cost Estimates 24E. Financing 25

F. Procurement 25G. Disbursements 26h. Environmental Effect 27

IV PROJECT IMPLEMENTATION

A. Organization and Management of the Project 27B. Operation of Silos and Management of Grain 28C. Studies 29D. Monitoring, Reporting, and Evaluation 30E. Accounts and Audit 31

V PROJECT BENEFITS

A. benefits 31

B. Economic Analysis 35C. Employment Impact 36

VI SUMMARY OF RECOMMENDATIONS AND LOAN CONDITIONS 36

This report is based on the findings of an appraisal mission in February1981 composed of Messrs R.B. Palmer (Mission Leader), S.Spencer (RailwayExpert), A. Surier (Consulting Storage Engineer), B. Webber (ConsultingTransport Economist), and Miss L. Meek (Financial Analyst).

ANNEXES ATTACHED TO APPRAISAL REPORT

1. Documents in Project File2. Implementation Schedule (Chart)3. Cost Table

MAPSNo. IBRD 15784 Tunisia - Soil Suitability for CropsNo. IBRD 15785 Tunisia - Agriculture; Location of Main CropsNo. IBRD 15783 Tunisia - Projected Grain Distribution and Storage, 1986

Annexes in the Implementation Volume

4. Domestic Supply of Grain5. Demand for Grain6. Grain Importing7. Analysis of Grain Distribution, Transportation Costing, Storage Silo

Operating Costs, Peak Storage Requirements, Silo Capacity and LocationAnalysis, Utilization of Tunis Area Silos, Costing of Mill Storage

8. Operation of Programmed Trains, Silo Rail Sidings, SNCFT9. Location and Design of Silos10. Office of Cereals; Legal Status, Finance, and Accounting11. Prices and Subsidies in the Grain Sub-Sector12. Economic Analysis13. Technical Assistance, Training, Studies, and Implementation:

Terms of Reference for:(a) consultants for OC program of institutional improvement

and training(b) new organizational units in OC(c) study of OC's financial system and a plan of action for improvement(d) study to prepare a second-stage grain storage project

TUNISIA

STAFF APPRAISAL REPORT OF THE

GRAIN DISTRIBUTION AND STORAGE PROJECT

I. INTRODUCTION

A. Origin

1.01 In 1976, FAO issued a report entitled "A Policy and a Plan of Actionfor Reinforcing National Security in Food in Tunisia". Subsequently, poorharvests, coupled with rapidly rising demand for industrially milled grain farin excess of normal domestic production, led to increased grain imports andstrains on the government's system of grain importing, storage anddistribution. An IBRD mission in May 1978 identified a grain storage projectwithin a program of investments then being considered by the government. AnFAO/CP mission undertook preparation in 1979 and a report was submitted inJanuary 1980. In November 1979 the government requested Bank financing forthe project. The project is designed to expand throughput and storagecapacities and to largely complete the conversion from bag to bulk handling inTunisia's distribution system for imported grain. The project also providesfor preparation of a second project in about three years aimed at a similarimprovement of the distribution system for domestic grain. The investments,technical assistance, and studies proposed under the project involve both theagriculture and the transportation sectors. The principal themes are theshift from bag to bulk handling and storage and from piecemeal to systematicmanagement of distribution, supported by improvement of personnel development,maintenance, cost control, planning and evaluation.

B. Agriculture and Transport Projects PreviouslyFinanced by the Bank and OED Comments

1.02 The Bank has participated in ten agricultural and nine transportationprojects in Tunisia, several of which have included components in both sectors.

1.03 Agriculture. The first of three irrigation projects (IrrigationRehabilitation, Loan 1068-TUN, 1974, US$12.2 million) provided forrehabilitation of a 20,000-ha irrigation system in the Lower Medjerda Valley,which is now about 80% complete, and rehabilitation of irrigation, drainage,and road networks on about 5,000 ha in the Nebhana region around Sousse, forwhich physical implementation is satisfactory. The Second Irrigation Project(Sidi Salem Multipurpose Project, Loan 1431-TUN, 1977, US$42 million, includedthe irrigation of 10,600 ha in the Testour/Medjez el Bab and Cap Bon areas,preservation of 6,000 ha of citrus in Cap Bon, improved agriculturalproduction on 32,800 ha in the Lower Medjerda Valley, flood control,generation of electricity and the supply of about 100 million m3 /year ofpotable and industrial water to the Tunis area. Implementation issatisfactory. The Third Irrigation Project (Southern Irrigation, Loan1796-TUN, 1980, US$25 million) has started satisfactorily.

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1.04 The First Fisheries Project (Credit 270-TUN, 1971, US$2 million) wascompleted at the end of 1979 with considerable delay. The local institutionlending for boats (the National Bank of Tunisia, BNT) experienced low loanrecoveries. The Second Fisheries Project (Loan 1746-TUN, 1979, US$ 28.5million) became effective in May 1980 after agreement was reached on astrategy for improving BNT recoveries. The Cooperative Farm Project tl967,US$18 million), which was designed to develop production cooperatives as partof a 10-year national program of agrarian reform was delayed by technical,managerial, and financial problems, and then, following the government'sabandonment of production cooperatives, was revised in 1970, and an amount ofUS$8.8 million cancelled. At completion in 1973, most project objectives,namely, productivity, production, worker incomes, and institutional viability,were attained (PPAR No. 968 of January 8, 1976).

1.05 The First Agricultural Credit Project (Loan 779, Credit 263-TUN,

1971, US$8 million) financed BNT lending for farm machinery, dairydevelopment, date palm plantations, and dairy processing, but was not fullydisbursed until 34 months after the original closing date because BNT lentBank group funds at a higher interest rate than it did government funds;although the project achieved a good rate of return, livestock development didnot yield the benefits expected, and dairy processing suffered major costoverruns (PPAR No. 2497, May 11, 1979). The Second Agricultural CreditProject (Loan 1340-TUN, 1976, US$12 million), under which uniformity of BNTlending terms was introduced, is nearly fully disbursed. The ThirdAgricultural Credit Project (Loan 1885-TUN, 1980, US$30 million) has been madeeffective. The Northwest Rural Development Project (Loan 1997-TUN, US$24million), which includes a rural roads component, was signed on July 15, 1981.

1.06 Transportation. The First and Second Highway Projects (Loan 746-TUN,1971, US$24 million and Loan 1188-TUN, 1976, US$28 million), and the FirstRailway Project (Loan 606/Credit 150-TUN, 1964, US$17 million) were focused onmodernization and rehabilitation of primary and secondary roads, and renewalof track and purchase of railway equipment. Although execution of the Fîrsthighway Project was satisfactory, only about half the roads were rehabilitateddue to cost increases (PPAR No. 2772, December 26, 1979). Implementation ofthe Second Highway Project is behind schedule due to problems of propertyacquisition and local financing, but the government has recently developed asatisfactory financing and execution plan for the balance of the project. TheFirst Railway Project was completed successfully (PPAR No. 2109, June 23,1978).

1.07 Two smal] loans in the port sub-sector (Loan 380-TUN, 1964,US$7 million, and Loan 573-TUN, 1969, US$8.5 million) provided supportfacilities for port operations, mainly dredging, maintenance operations andcargo handling equipment. The Second Ports Project included the constructionof the 30,000-ton bulk port silo at La Goulette (Tunis), the only functioningport silo in Tunisia. Both these projects were implemented successfully andhad an important institution-building effect (PPAR No. 1049, February 26,1979). A Third Highway Project (Loan 1601-TUN, 1978, US$32 million) initiatedan integrated program for improving about 1,000 km of rural roads, with direct

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benefits intended for the agriculture sector. Implementation of complementaryagricultural investments and extension services lagged initially but now isproceeding satisfactorily. A Third Port Project (Loan 1797-TUN, 1980, US$42.5million) will assist the government in modernizing berth facilities at themain ports of La Goulette and Sfax and in providing support facilities forimproved port operations. A Fourth Highway project (Loan 1841, 1980, US$36.5million) will help the government in improving highway planning, maintenance,rehabilitation and safety.

II. THE GRAIN SUB-SECTOR

A. Demand

2.01 Human Consumption. Cereals are the basic staple of the Tunisian

diet. Human consumption is about 60% durum wheat, eaten as pasta when milledfinely or as couscous when ground more coarsely, 36% bread wheat and 4%barley. Over two-thirds of the cereal consumed is grain (coming from bothlocal production and imports) which has been processed in industrial millsafter entering the official marketing system controlled by the Office ofCereals (OC), a semi-autonomous agency responsible to the Ministry ofAgriculture. The remaining one-third is local grain estimated to be aboutequally divided between consumption on-farm and sales in the souks or villagemarketplaces (the "parallel market") for grinding in homes or in smallartisanal mills. Tolerated but not authorized by the government, the parallelmarket circumvents the official price system through sales at negotiatedprices.

2.02 During the 1970's estimated consumption of uncontrolled wheatremained roughly constant, fluctuating between 0.28 million tons and 0.36million tons. Consumption of industrially milled (officially controlled)wheat increased more than twice as fast as population, reaching 9% per yearduring 1975-80 while rising from 0.62 million tons to 0.95 million tons. Thisdramatic increase reflects pricing policy (para. 2.39) and changing tastes ofTunisian consumers, who increasingly prefer convenience in food purchasing andin meal preparation.

2.03 In the coming decade, consumption of industrially milled wheat isprojected to continue to rise rapidly, although at a decelerating rate. It isexpected to reach an estimated 1.24 million tons or nearly 80% of total wheatconsumption at project completion in 1986, and 1.48 million tons in 1991, asthe level of consumption on-farm and in the parallel market begins a gradualdecline. The following table gives summary projections of human consumptionof wheat and barley.

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1975 1980 1986 Rate of GrowthActual Estimate Forecast 1975-80 1980-86

Population (millions of persons) 5.6 6.4 7.5 2.6 2.6Human consumption (millions of tons)

- Controlled wheat 0.62 0.95 1.24 9.0 4.4- Non-controlled wheat 0.36 0.33 0.33 - 1.5 -- Barley /a 0.05 0.05 0.04 - -

- Total, all grains 1.03 1.34 1.61 5.4 4.4Per capita consumption ofall grains (kg/head) 184 209 215 2.6. 0.7

/a Uncontrolled except for small part of forecast in 1986.

2.04 Animal Consumption. The 1970's witnessed a revolution in animal feeding in

Tunisia. While direct consumption of barley, the traditional ruminant feed grain,declined slightly to about 0.12 million tons in 1980, consumption of feedconcentrates for both ruminants and poultry increased at rates well over 30% peryear, rising in total from 0.07 million tons of grain raw material (excludingsoybean pellets) in 1975 to 0.31 million tons in 1980. These changes were inducedlargely by highly subsidized prices (para. 2.42) for concentrates, which have becomea cheaper ruminant feed than on-farm barley and have made chicken the cheapest meaton the Tunisian market. Higher protein content and successful extensiondemonstrations of feedlot operations have also encouraged the use of concentrates.If current levels of price subsidies were continued, demand for concentrates wouldbe expected to continue rising at a rapid but decelerating rate. With an adjustmentof prices of concentrates to reflect the border prices for imported grain, growth indemand would slacken more sharply but not completely, given the absence of localcorn for poultry production, the vested interest of feedlot operators, and theopportunity to pass part of any additional cost of concentrates on in the price ofmeat to higher-income consumers. On the assumption of progressive price adjustment(para. 2.42), the demand for concentrates is projected to rise at 5-10% per year upto a level of 0.46 million tons of grain raw material (excluding soybean pellets) in1986 and 0.59 million tons in 1991. The following table gives a summary.

Animal Feed Consumption

(Millions of tons of grain)

1975 1980 1986 Annual Growth ratesActuai Actual Forecast 175-80 1980-86

(M0) (M0)

Concentrates 0.07 0.31 0.46- Poultry 0.04 0.25 30 5- Ruminants 0.03 0.12 0.21 38 10On-Farm Barley 0.14 0.12 0.12

Total 0.21 0.43 0.58

2.05 Total industrialized consumption. On the basis of these assessments,total consumption of industrially milled grain (which will pass through thestorage system) is projected at 1.7 million tons in 1986 at project completionand about 2.2 million tons in 1991. The projection is summarized in thefollowing table:

Total Industrialized Grain Consumption

(Millions of tons)

1975 1980 1986Actual Estimated Forecast

Human 0.62 0.95 1.24Animal 0.07 0.31 0.46

Total 0.69 1.26 1.71

B. Supply

2.06 Production. Grain is produced in two sharply contrasting zones. Inthe north, two long parallel valleys running south-west from Bizerte Provincethrough Beja to Jendouba and from Zaghouan Province near Tunis through Silianato Le Kef enjoy fertile soils, a mild mediterranean climate and 400-800 mm ofrainfall well suited to wheat as well as barley, although the summer is toodry for corn. In the center and south is a large diffuse region between theMediterranean and the desert of poor and rocky soils, hotter summers, and muchlower and less certain rainfall. In the north, medium-sized and large farmsare common and modern inputs including high yielding wheat varieties have beenwidely adopted. The last two years northern yields have averaged about 1.1tons/ha for durum wheat, 1.4 tons/ha for bread wheat and 1.0 ton/ha forbarley. In the center and south, where subsistence farming predominates, theharsh climate and greater risks have minimized the use of modern practices,and yields fluctuate more and tend to be only about one-third those of thenorth. The last two years center-south yields have averaged about 0.28tons/ha for durum wheat, 0.51 tons/ha for bread wheat, and 0.37 tons/ha forbarley. As a result of the contrasting conditions, acreage planted in thenorth has been relatively stable around an average of about 800,000 ha,whereas in the center-south plantings have fluctuated widely above and belowan average of about 750,000 ha, and the area harvested has often been muchless than the area planted.

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2.07 During most of the 1970's, total national grain production fluctuatedconsiderably from year to year, but without significant trend, around anaverage of about one million tons following a rapid increase in productivityand production at the beginning of the decade under the government's renewedimpetus to private initiative in agriculture. Peaks were reached of 1.25

million tons in 1975 and 1.17 million tons in 1980 when weather was veryfavorable. In 1976-79 four consecutive modest-to-poor harvests including alow of 0.74 million tons in 1977 resulted from unfavorable weather even in thenorth, which both offset and slowed down the increase in use of modern inputsand cultivation practices.

2.08 The prospects for increased production in the future are likely to bedetermined by the following factors. In the north, there is only limitedscope for expanded planting and little likelihood of grain production inirrigated areas given the competitive position of fruits and vegetables.Medium-sized and large farmers in the north are generally following goodpatterns of input use, which can still be improved through better techniquesof seedbed preparation and hence more efficient moisture utilization. Thiswill lessen the decline of production in periods of low rainfall. Yields ofsmall farmers in the north can probably be increased gradually within theconstraints of their generally greater remoteness, poorer land and greaterrisk. In the center-south there is little prospect either for significantimprovement of yields or for avoidance of fluctuations in yields, plantingsand production. -

2.09 On the assumption of average weather, no significant change in

acreage, and an increase in average yields of about 10% over the late 1970's,reflecting mainly improvements in the north, the projection of overall grainproduction by project completion in 1986 is about 1.2 million tons, or about20 percent over the average for the decade of the 1970's. Varying weather,with an average of one very unfavorable and one very favorable year out ofevery four, will cause continuing fluctuations in production, projected to bein the range of 1.0 - 1.35 million tons in the mid 1980's. Continuedextension efforts are expected to enable average-year production to increasegradually up to a level of about 1.5 million tons by the mid-1990's. Thefollowing table summarizes the projecton for 1986.

Grain Production(Millions of tons)

--------1971-79 Average ------- -------------1986-------------------------Actual…----------- ----------Projection----------Durum Bread Barley Total Durum Bread Barley TotalWheat Wheat Wheat Wheat

North 0.50 0.13 0.12 0.75 0.66 0.14 0.15 0.95Center-south 0.11 0.03 0.10 0.24 0.11 0.01 0.13 0.25

Total 0.61 0.16 0.22 0.99 0.77 0.15 0.28 1.20

2.10 CoiLection. OC has a legal monopoly over the marketing of grain and

normally handles about 60W of the official collection itself, contracting outthe remaining 40% to two grain producer cooperatives, CCGC and COEBLE_'.Durum wheat is usually about 65% of the collection, bread wheat about 20% aadbarley 15%. During the 1970's, the collection fluctuated considera:ly fromyear to year- roughly with the level of production. It ranged between 0.23million tons and 0.41 million tons, averaging about 0.34 million tons or about34% of the harvest without significant trend.

2.11 Thus the rapid rise in national consumption of industrialLy milledgrain in the 1970's did not result in any significant shift of local grainfrom on-farm and parallel market consumpzion into the official collectiornM'oreover, the government has no explicit policy regarding the size of theŽcollection. In practice, whereas larger farmers tend to sell only to OC andthe cooperatives, smaller farmers often sell in the parallel market to avoidthe 7% production tax and to benefit from prices that respond more quickly toshort-term or local supply conditions. Faster payment for small lots, barteropportunities, and proximity are also factors. However, in the future,increments above recent average grain production of one million tons areexpected to be marketed increasing]y through the official collection, which isprojected to rise gradually as a share of production to 40% or about0.48 million tons in 1986 within a range of 0.35 - 0.56 million tons. Averageyear collections could rise to 50% of production or 0.60 - 0.70 million tonsin 1991. The composition of wheats and barley is expected to remain about thesame as at present.

2.12 Imports. The result of Tunisia's rapidly rising demand forindustrially milled grain (10% per year in the 1970's) and stagnant domesticproduction has been a rapidly growing gap in the national grain supply. Thisgap could be filled only by imports which tripled from an average of 0.33million tons in 1971-76 to nearly 1.1 million tons in 1980. This importdemand is projected to increase further over the next decade, although at aslower rate, in respunse to the deceleration in consumption and the gradualrise in production described above. Average imports of 1.23 million tons areforeseen for 1986, within an expected range of fluctuation of 1.1 - 1.4million tons depending on the effect of weather on domestic production.Average imports could reach 1.5 million tons by 1991. The following tablesummarizes the basis of the projection.

/1 CCGC is the Central Cooperative for Basic Crops (Coopérative Centraledes Grandes Cultures); COCEBLE is the Central Wheat Cooperative(Coopérative Centrale de Blé).

OC - Controlled Grain: Summary of Demand,Collection and Imports

(Millions of tons)

1975 1980 1986Actual Actual Forecast

DemandIndustrial milling 0.69 1.26 1.71Sales to individuals and changes in stock .07 0.23 -

Total 0.76 1.49 1.71

Local Supply (Collections) 0.41 0.40 0.48

Imports 0.35 1.09 1.23

2.13 Bread wheat, the principal grain import in the past, is expected tocontinue to dominate imports in the future. The rapidly rising demand forpoultry feeds is expected to move imports of corn up into second place.Imports of durum wheat and barley, the two large domestic crops, have tendedto fluctuate in response to harvests, and will continue to be significant.The following table summarizes the composition of imports.

Composition of Grain Imports(Millions of tons)

Average 1971-75 1980 1986

Actual Actual Forecast

Bread wheat 0.24 0.50 0.62Durum wheat 0.04 0.29 0.20Barley 0.02 0.06 0.11Corn 0.03 0.24 0.30

Total 0.33 1.09 1.23

C. Distribution

2.14 General. OC Grain is distributed in two main circuits. First,domestic purchases in the north, mainly of durum wheat, enter local collectioncenters and are transported largely by rail in bags to storage silos aroundTunis and thence by truck in bags and in bulk to nearby mills. About 15% ofthe collection is transported from collection centers to Tunis silos by truck,much of it in bulk. Another 15% is transported from collection centers in theLe Kef region largely by train in bags to the cities in the center and south.Second, OC's imports of bread wheat, durum wheat, corn, and barley (plussoybean pellets), enter through all five of Tunisia's main ports. About 60 %of grain imports enter through the La Goulette (Tunis) bulk port silo and therest in bags at merchandise quays at Bizerte, Sousse, Sfax and the port ofGhannouch serving Gabes. About three-fourths of imports are transported bytruck, mainly to local mills around the five port cities. Of these truck

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movements, about 30% are in bulk, mostly from La Goulette. One-fourth of theimports move by rail, mainly from Bizerte and La Goulette to the Tunis storagesilos and from La Goulette to the southern cities. About 20% of these railmovements are in bulk, representing primarily shipments in hopper cars ownedby the STPA mill in Sfax.

2.15 The larger and more rapidly growing import circuit poses more urgentproblems because of the extreme congestion at the ports. For example, in eachof the last two years La Goulette has handled imports of over 600,000 tons, or20 times its 30,000-ton storage capacity. This turnover rate is well abovethe norm turnover of 10-12 for a port silo. This performance has beenachieved at the cost of almost continuous ship occupancy of the grain quay,long ship waiting periods in the harbor, and high demurrage charges that mustbe paid in foreign exchange. At the other ports, the costs of congestioninclude not only demurrage, but also heavy fees for open-air storage of grainin bags on the quays as well as the high labor and bag costs of bag filling,weighing and handling operations. To correct this problem by providingadditional port silo capacity necessitates also correcting downstreambottlenecks to assure a smooth flow through the import circuit. The physicalbottlenecks include inadequate throughput capacity and poor condition ofexisting storage silos, some shortage of storage silo capacity outside theTunis region, insufficient bulk rail cars, and insufficient bulk reception andstorage capacity at mills. The institutional bottlenecks include inadequaciesin silo maintenance, grain inventory control, transport scheduling, rail carhandling, and coordination of investment planning.

2.16 Most of these problems of the import circuit have their counterpartin the collection circuit. There, however, grain volumes are smaller, andalthough activity is concentrated in a few harvest and post-harvest months,the cost penalties of inadequate storage and handling capacities are less thanin the import circuit. OC's two-stage approach to dealing with Tunisia'sgrain storage problems reflects these differences. It also takes account ofthe need for further institutional as well as investment analysis to ensure anefficient modernization of the present system of 150 collection centers oftenrepresenting OC and the two cooperatives in separate inadequate facilities inthe same locality.

Location of New Port Silos

2.17 The location of proposed new port silo capacities is based on theprojected pattern of regional demand of mills for grain supplies, the patternof shipments of domestic grain, the comparative cost of ground transport andhandling for alternative port silo locations, as well as certain practicalconsiderations.

2.18 Regional Demand of Mills for Grain Supplies. Of Tunisia's 21 flourand semolina mills (all private, but many with government and OCparticipation), 13 are located in the Tunis region and account for over 60% oftotal wheat milling capacity compared to the region's 50% share of milledwheat consumption. To improve the regional balance, the government is

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encouraging decentralization of mills. Two major new mills have startedoperations outside the Tunis region in the north and one in the south in thelast three years. Four more are in planning or under construction in thecenter and south. The government is also encouraging, with financialincentives, the relocation of several old mills from congested sites indowntown Tunis to the outskirts of the city. However, these mills are alsoexpanding their plants, and as a result surplus milling capacity will persistin the Tunis region. Animal feed mills, which are nearly all private andsmaller scale than flour mills, have grown in number from less than ten in1970 to 110 at present. They are distributed regionally in better balancewith consumption, although interior regions still depend to some degree onmills in Tunis, Sousse, and Sfax.

2.19 Pattern of Shipments of Domestic Grain. The pattern of shipments of

dom.estic grain is influenced by the government's policy of assuring anequitable distribution to the mills of local and imported grain. Under thispolicy about 407. of the collection in the north is projected for shipment tothe center and south in 1986. These shipments would come almost entirely fromthe projected 0.20 million tons of collections in the Zaghouan-Siliana-Le Kefvalley, which is linked to the southern cities by the narrow gauge railwayline. Collections totaling an estimated 0.18 million tons in theBizerte-Beja-Jendouba valley, which is served by the standard gauge railwayline, would go partly to the new Beja flour mill and partly to Tunis.Collections in the Tunis and Nabeul regions would go to local mills. Theregional deficits in mill grain supply left after these projected shipments ofdomestic grain show import requirements in the north of 0.82 million tons, inthe center of 0.18 million tons, and in the south of 0.22 million tons for anaverage harvest year. These requirements will vary substantially in years ofvery good and very poor weather and are projected to follow an upward trendinto the l990's. The following table summarizes the projected 1986 regionaldemarld and supply pattern.

Projected Regional Distribution Patternof Milling, Collections and Imports: 1986

(Millions of tons)

North Center SouthTunis Beja Sub- Sousse Sfax Gabes Gafsa Sub- Total

Total Total

Demand (Milling) 0.99 0.13 1.12 0.26 0.21 0.06 0.05 0.32 1.71Supply

- Collections 0.26 0.04 0.30 .08 0.06 0.02 0.02 0.10 0.48- Imports 0.73 0.09 0.82 0.18 0.15 0.04 0.03 0.22 1.23

2.20 Comparative Cost of Ground Transport. With this import distributionpattern, the most appropriate arrangement of port silos from the point of view ofcost of ground transportation would be to have adequate capacities at La Goulette(Tunis) to handle upward of 0.8 million tons as the hub of the north and the linkto the two railway gauges and at Sfax to handle upward of 0.4 million tons as thehub of the center and south. However, in the case of La Goulette, expansion ofthe existing port silo faces the problem of shipping traffic that is already

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heavy, while at the nearby Bizerte port there is 20,000 tons of underutilizedsilo capacity designed decades ago for exports and not equipped for imports.In the case of Sfax, reconstruction underway of the quay that could be madeavailable for the installation of a port silo will not be completed forseveral years, and there are also major unresolved problems of urban planningwhich would affect rail access to this quay. On the other hand, the new portof Gabes at Ghannouch, while somewhat distant from Sousse, is well located forthe south, poses no problems of congestion, and is expected to have a sl'oquay available in 1982.

2.21 An analysis of comparative costs for transport (rail and road) andrelated transit handling costs at storage silos confirms the cost advantage ofthe construction of a new 30,000-ton port silo at Gabes/Ghannouch and therehabilitation, equipping for imports and expansion of the Bizerte silo to30,000 tons. The following table comparing the existing with the projectedpattern of importation under the project shows the shift from bag to bulk andthe achievement of sustainable satisfactory turnover ratios, averaging 13 forthe total of 90,000 tons of port silo capacity.

Imports of Grain and Bulk Silo Turnovers by Port(Millions of tons)

1980 Actual 1986 ProjectedImports Bulk Silo Imports Bulk Silo

Turnover Turnover

Bizerte 0.14 (bags) 0.37 12La Goulette (Tunis) 0.62 20 0.45 15Sousse 0.05 (bags) - -

Sfax 0.17 (bags) - -

Gabes/Ghannouch 0.11 (bags) 0.41 13Total 1.09 1.23 13

Location of New Storage Silos

2.22 The location of proposed new storage silo capacities takes intoaccount the projected availability at mills of bulk receiving and storagecapacity as well as the location of mills and the volume of grain to behandled in a given region.

2.23 Bulk Reception and Storage at Mills. Bulk reception and storagecapacity is widely available at flour mills, with mills representing 80% ofnational milling capacity having bulk storage averaging ll days of millingoperations. However, this storage is unevenly distributed, and 20-30 dayswould be a more prudent norm. In addition, only 6 out of 110 animal feedmills have bulk storage capacity, and introducing bulk receiving capacity,even if accompanied by only limited storage capacity, is important so as toeliminate costly bag operations. The need for more bulk reception and storagecapacity at mills is recognized both by the government, which is consideringvarious incentives and regulations, and by the wheat milling industry, whichis planning a 120% expansion by 1986 that would provide bulk storage to all

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f'lour mills and an industry average equal to 17 days of milling operations.Even the current level of bulk storage would permit virtually all wheaterliveries to flour mills from the proposed project port and storage silos to

bDe made in bulk since the four unequipped flour mills are in Tunis and couldbe served by bag from existing Tunis silos (para. 2.26) and La Goulette.Tntroduction of bulk reception and storage capacity equal to an average of 10days of milling operations in 1986 in some 100 smaller scale animal feed millswould require an aggregate of about 12,000 tons storage capacity at anestimated total cost of US$4 million. Because of the dispersion of thesemiiils, bulk capacity will probably come gradually and require transitional bagdeliveries of corn and barley from storage silos and warehouses (para. 2.25).

2 e24L New Storage Silos at Beja, Gafsa, Kalaa Seghira, and Sfax. All fourproposed silos are projected to receive both domestic and imported grain. Theproposed silo of 10,000 tons at Beja in the northern production zone isdeesigned to support the new flour mill at Beja and feedmills in the region.It will have a projected relatively high turnover of 10 at project completionin 1986 (compared to an acceptable standard of about five) which is balanced

loy csation in a major production area and by the planned direct connection ofthe silo to the flour mill's own bulk storage capacity of 2,500 tons. It isexoected that the preparation study for the proposed second-stage project willsaIalyze the possibility of an additional role for the Beja silo as aczîliection center for grain shipments to Tunis and make appropriate2ecos.endat1ans regarding any increase in its capacity. The proposed silo of0 000 tons at Gafsa is designed to serve a new adjacent flour mill and

several regional feed mills and provide a measure of food security in thegrai-n--deficit southern interior. It is projected to have a turnover of 5 atproject completion.

,Z_É5 The proposed expansion by 20,000 tons of the existing 8,000-tonstorage silo at Kalaa Seghira 6 km west of Sousse is designed to servenuirerous mills in Sousse as well as in nearby coastal cities and the centerhinterland. It is projected to have a 1986 turnover of 6. The proposedStOrage silo of 20,000 tons at Sfax will serve about 15 local feed mills andprovide reserve storage capacity for two large flour mills connected to thesaie rail siding which have their own bulk storage. The turnaover of the Sfaxsilo is projected at 4.5 in 1986 and will increase thereafter as widerconversion to bulk handling permits the phasing out of remaining bag storageat CC's existing Sfax warehouse. All four silos also have satisfactoryturnrovers when measured in combination with nearby mill storage capacities.The following table summarizes the projected activity for each silo and nearby sUi tls

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Projected Storage Activity at Silos and Nearby Mills: 1986(Thousands of tons)

Grain Arrivals Bulk Storage Capacity TurnoverSilo Mills/a Silo Mills Silo Silo+Mills

Beja 96 36 10 2.5 9.6 10.6Gafsa 52 12 10 2.5 5.2 5.1Kalaa Seghira 190 29 28 4.0 6.8 6.6Sfax 90 118 20 12.2 4.5 6.5

/a Arrivals of domestic grain at milis, which include some transshipmentsvia warehouses, are projected to be 70% in bags atBeja and Gafsa, 50% at Kalaa Seghira and Sfax; these percentages wouldbe expected to decline gradually under the second-stage project.

2.26 Rehabilitation of Manouba Storage Silo at Tunis. Bulk shipmentsdirect to mills and to the four proposed new storage silos are projected toaccount for about 75% of the imports foreseen in 1986. The remaining 25% orabout 290,000 tons, coming through Bizerte and La Goulette ports, plus about190,000 tons of collections or a total of about 450,000 tons, would need to behandled in Tunis area silos. At present there are five storage silos with acombined capacity of 216,000 tons and two warehouses totaling 32,000 tons inand around Tunis. In 1979, they handled about 400,000 tons, much of itreceived and shipped out in bags, at a low average turnover of about 1.6. Thetwo warehouses, which are old and ill-suited for bulk handling, are scheduledfor early closing. The silos are also old (although they have some recentexpansions of storage capacity), and their handling equipment is of limitedthroughput capacity and in poor repair. However, with minor maintenanceactions, four of these silos totaling 166,000 tons of storage capacity areexpected to be able to handle satisfactorily, partly in bulk, partly in bag,about 255,000 tons in 1986, including the remaining imports throughLa Goulette. The average turnover of these silos would be about 1.5.

2.27 The Manouba silo, with a capacity of 50,000 tons, and located on thestandard gauge railway, is projected to handle in bulk about 73,000 tons ofcollections from the Bizerte-Beja-Jendouba region and 154,000 tons of importsshipped from Bizerte. This volume implies a turnover of 4.5, which isexpected to increase after 1986. The proposed rehabilitation of the 4anoubaSilo is designed to enable it to handle these projected grain volumes. It isexpected that the preparation study for a second-stage project will analyzethe future role and possible need for rehabilitation of the other Tunis areasilos.

2.28 Transport of Grain from Port Silos: Programmed Trains. On the basisof inter-modal cost analyses, a large proportion of the grain imported throughthe proposed new port silos at Gabes/Ghannouch and Bizerte is planned to beshipped onward to mills and storage silos by programmed trains. These trainswould consist of bulk cars and would be used exclusively for grain traffic onshuttle runs programmed on a priority basis to ensure 48-hour cycles to

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maximize their cost effectiveness. From the Gabes/Ghannouch port silo, oneprogrammed train is planned to run to the Kalaa Seghira storage silo atSousse, and a second one to Sfax for deliveries to the storage silo and thelarge mills of STPA and Moulin du Sud on the same rail spur. Together, thesetwo trains are projected to transport about 250,000 tons of grain per year,which is an approximate limit determined by turn-around times, rail linegradients and existing locomiotive traction power. The average cost per ton ofgrain transported by these trains (plus the average cost of storage silohandling and reshipment by truck to mills) is estimated to be about 60Z of theaverage cost per ton for shipment by bulk trucks, even though a largerproportion of the latter shipments can go direct from Gabes/Ghannouch to thenills and avoid silo handling costs.

2.29 Fromn the Bizerte port silo about 281,000 tons of grain is projectedto be shipped in 1986 to Tunis area mills--127,000 tons by bulk truck directand 154,000 tons by programmed train to the Manouba silo for transshipment tothe mills by bulk truck. This pattern reflects the roughly equal cost per tonof the two modes, given their itineraries and the limits of projected storagecapacity at the Tunis mills to absorb direct shipments from the Bizerte portsilo. In the event that experience indicates that this programmed traincannot be operated competitively, then conversion to an all-truck option afterfive years can be carried out with a nominal penalty. On the other hand, inview of the higher initial cost of bulk trucks, the abandonment of anall-truck solution after five years to introduce a programmed train wouldincur a penalty of 5-10%. The mixed-mode solution also provides additionalflexibility and security in the vital and congested Tunis area. The followingtable summarizes the comparative cost of road and programmed train transport.

Comparative Cost of Bulk Grain Shipments fromPort Silos to Main Milling Centers by Truck

and Programmed Train (including SiloHandling and Transshipment Costs)

(Dinars per ton)

Truck ProgrammedTrain

Gabes to Sfax 7.6 4.2Gabes to Sousse 11.1 5.9Bizerte to Tunis 2.3 2.2 /a

|a Mixed train and truck.

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2.30 It is believed that the three proposed programmed trains are arealistic first step for improving grain rail transport that can beeffectively carried out by OC and SNCFT under the project. After a period ofsuccessful experience with these trains, it is expected that OC and SNCFTwould be able to extend programmed train service to additional itiner','ries o1grain transport, including programmed trains that might serve two c - =itineraries with iower volumes of traffic. It is envisaged that the preposedpreparation study for a second-stage grain storage project would incXAsd

further intermodai transport analysis to help plan the future shipmerd ofdomestic grain as well as imported grain not covered by the three p ùcposedprogrammed trains. In the interim, the imports through Gabes/Ghannouchbeginning in 1986 of upward of 150,000 tons not covered by the proposedprogrammed trains are expected to be shipped in trucks to nearby mills and ina mixture of regular trains and trucks to Sfax, Sousse, Gafsa, and Kasserine.An estimated 89,000 tons of imports through Bizerte not covered by theproposed programmed train and bulk trucks to Tunis are expected to be shippedto Beja, about half each in trucks and regular trains. These shipments fromGabes/Ghannouch and Bizerte are likely to be both bag and bulk at first, butthe share of bulk shipments is expected to increase steadily as truckers adaptto the availability of bulk handlîng facilities and as SNCFT and some of thelarger mills adjust future freight car investment priorities to the results ofthe bulk programmed trains. During negotiations OC agreed to ensure thatgrain that is in excess of the capacity of the programmed trains would betransported in an efficient manner.

D. Institutional Aspects

The Project Entity: The Office of Cereals

2.31 Background. The Office of Cereals (OC) is the government's nationalagency for grain marketing. Established in 1962 by the merger of twoagricultural service organizations stemming from the colonial period, OC islegally a public sector industrial and commercial enterprise, endowed withfinancial autonomy under the authority of the Ministers of Agriculture and ofPlanning and Finance. Its main responsibilities are to buy, store,distribute, and sell local and imported grain; administer the government'sprice control system for grains and their derivatives; make recommendationsfor changes in the level of these prices as well as of profit margins formilling; and supply technical assistance, seeds, fertilizer and other inputsto grain producers. In practice, OC carries out its physical operations asenvisaged, but as discussed in paras. 2.34-2.39, OC's financial autonomy isinhibited by the government's complex price control and subsidy system andbudgetary constraints.

2.32 Organization and Management. OC is controlled by a board ofdirectors composed of eight members, including representatives of the parentMinisters of Agriculture and of Planning and Finance, the National Bank ofTunisia (BNT), the two wheat cooperatives, CCGC and COCEBLE, the millingindustry, and the farming community. The board of directors is headed by apresident-director-general (PDG) nominated by the parent ministers. The PDG,with the assistance of a deputy director general, is responsible forday-to-day management. OC has about 2,230 employees of which about 390 aremiddle and high level administrative and technical staff, about 1,050 arelower level staff and skilled laborers, and about 790 are unskilled andseasonal laborers. OC is organized into four main divisions--technical,administrative, financial, and marketing--and several separate services. The

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technical division handles extension and demonstrations. The administrativedivision includes a construction service which heretofore has been in chargeof design and contracting for the construction of new silos and has mianagedday-to-day r7lations with OC's French and Tunisian engineeringconsultants 1. Under a recent reorganization, a Project Management Unithas been established which has taken over these functions (para. 4.03). Themarketing division is responsible for purchase of domestic grain andmanagement of storage silos, stocks and sales. A separate import-exportservice manages the contracting and scheduling of imports of grains and ofother supplies and equipment (exports of grain have occurred only occasionallyin recent years). Another separate quay service monitors grain unloading andtransfer operations at the La Goulette port silo and at the quays in the fourother ports. The financial division is responsible for payments and receiptsand a separate service is in charge of the budget and accounts. There is astatistical service, but no unit with a capability for economic analysis inthe grain sub-sector.

2.33 Operations. OC is autonomous in its operations which permits it toact with flexibility in commercial transactions and in control anddistribution of grain stocks. In spite of an antiquated distribution system,OC has until now succeeded in assuring the supply and distribution of grainthroughout the country to meet the very rapid rise in demand for industriallyprocessed grain. However, certain organizational, management, and financialdeficiencies adversely affect OC's operations, and will need to be correctedto ensure cost-effective operations in the future, especially as more and moregrain is handled in bulk. Control of grain stocks is a key problem. Forexample, OC management receives reports on stock availabilities onlybimonthly, which impedes the placing of import orders when prices are mostfavorable. As a result of outmoded techniques of record-keeping, it isdifficult to obtain reliable data on volumes of grain handled at individualsilos, quantities stored outside, losses, and volumes and destinations ofshipments by truck. Similar grain from different origins is often stored inseparate cells, causing under-utilization of capacity. Poor stock control anddivided responsibility for domestic and foreign grain purchases results inuneconomic transport patterns such as transshipments between two Tunis storagesilos. Maintenanice is also a problem. Maintenance budgets are low and silomanagers inadequately trained. As a result, broken handling equipment andunrepaired leaks inhibit operations or endanger grain in many installations.

/1t OC's prime engineerirng consultant is Agro Technic InternationalIngénierie (ATI) of France. ATI has a subcontract with the OfficeTechnique d'Etudes Portuaires (OTEP) of Tunisia.

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2.34 Financial Situation. OC operates within the government's complexsystem of controlled prices, administered profit margins, rebates, losses, andsubsidies that affect grain and grain produet prices at each stage of handlingand processing from the farm gate to the retail bread counter. The centralfeatures of the system are twofold. First, in theory OC analyzes marketconditions and determines prices and margins more or less in keeping withsound commercial and financial practice. In fact, OC's analytical capacitiesare limited, and its recommendations are often rejected by the Governmentespecially when price increases are proposed. Second, the Government's policyto keep producer and retail prices roughly in line with world prices despitehigh intermediary costs, results in substantial losses and subsidies as grainpasses from the farmer and from importers through OC's system to the millerand from the miller to the baker (para. 2.42).

2.35 Normally, in an industrial or commercial enterprise, this situationwould call for a major financial reform as part of the project. OC, however,while created in the form of an independent financially autonomous publicenterprise, serves in reality as an implementing agent of Government policy,with key financial and pricing decisions being made by the Ministries ofAgriculture, Planning and Finance, and National Economy. As a result, therehas developed a degree of imbalance between the operational results expectedof OC and the financial resources placed at its disposàl. This imbalance,together with the uncertainty and the administrative complexity of financingarrangements, greatly handicaps OC's functioning and affects its relationswith the milling industry. However, given the financial complexities and thesensitivity of the prices involved, it is desirable to have a much morecomprehensive analysis of OC's financial system than is currently available.Accordingly, the project would provide for a cost control and financing studyand the subsequent implementation of a program of improvement (para.4.06(a)). The project also envisages certain financial reforms which appearfeasible to implement even before completion of the study (para. 2.38).

2.36 Financial Structure and Performance. As of September 30, 1979, OC'sbalance sheet showed assets and liabilities of D 164 million (about US$400million). About 10% was equity, including shares of its two predecessororganizations, about 70% interest-free short-term Treasury loans for workingcapital, and 20% short-term credit from Banks, suppliers, and other sources.Noticeably absent were medium- and long-term debt, a reflection of OC's lowlevel of investment activity (new or replacement) prior to the proposedproject. In addition to Treasury outlays, which cover most of OC's workingcapital needs including purchases of grain from farmers, loans to farmers, andoperating expenses at collection centers, OC has two other major sources offunds; sales of grain to industrial mills and reimbursements from the PriceEqualization Fund (Caisse Générale de Compensation--CGC - para. 2.38). Acomparison of OC's balance sheets and income statements for the four yearsfrom 1975-76 to 1978-79 shows a continuing unbalanced financial structure asillustrated by two financial indicators. In this period current assetsremained consistently below current liabilities, with the current ratioranging between 0.81 and 0.86. In parallel with this, the ratio of capitalplus reserves plus long-term debt minus losses to fixed assets ranged from

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0.24 to 0.45, indicating the financing of a substantial portion of fixed

assets by short-term debt and the consequent desirability of replacing suchshort-term debt by long-term debt or equity. On the other hand, well overhalf of OC's short-term liabilities consisted of recurrent advances from theTreasury at no interest, giving them a quasi-equity character. Nevertheless,a restructuring of OC's debt seems desirable as is underscored by OC' s growingreliance on Treasury advances, which increased from 55% to 71% of totalliabilities over the four years (see para. 3.13 regarding financing under theproject).

2.37 During the same period, OC's liquidity was also generally tight.The operating ratio (total operating expenditures divided by total operatingincome) was between 1.00 and 1.01 for two years and at 0.98 for the other twoyears when reimbursements from CGC for OC's losses on subsidized grain salesare counted as part of OC's operating income. If these reimbursements are notincluded in operating income, OC's operating ratio for those years rangesbetween 1.3 and 1.4. The ratio of disposable liquid assets to total operatingexpenditures fell during the period from an acceptable 0.24 to a low 0.12.0C's income statements show positive returns in all four years and an average

positive return of D 2.4 million on the basis of production costs alone.however, performance is less favorable when administrative costs, taxes,depreciation and provisions are taken into account, with losses incurred inthree of the years and an average loss over four years of D -0.9 million peryear. Final financial results after all transfers show profits in three yearsand a four-year average of just breaking even.

2.38 Financial Relations with CGC. Tunisian law provides that the CaisseGénérale de Compensation (CGC) should compensate OC for the costs of its grainoperations to the extent they are not covered by OC's official grain sellingprice established by the government. However, CGC, which obtains its ownrevenues from excise taxes on gasoline, alcohol and other commodities, hasbeen in budgetary deficit since 1976. As a consequence, in recent years ithas made only partial reimbursements to OC, for example in FY 1978/79 onlyD 34 million out of D 91 million due. In addition, OC has received nointerest on delayed payments, and the coefficients used to calculate CGCtransfers have not fully reflected the costs borne by OC. The reimbursementmargin ("marge de rétrocession") which OC receives from CGC on a per ton basisfor each type of grain is meant to cover the difference between OC's purchaseand sales price, plus the costs of handling, storage (silo depreciation) andmaintenance. However, the reimbursement margin, which is determined by thegovernment, has not been adjusted regularly to reflect annual increases inOC's actual costs. The inadequacy and the uncertainty of the amount andtiming of CGC reimbursements have been a major constraint to OC's financialplanning and cash flow management. As seen (para. 2.33), this constraint hasalso impeded silo maintenance.

2.39 Accounts. Price controls for grain and guaranteed profit marginsfor the mills and bakeries have necessitated the creation at OC of a complexaccounting system for records of financial relations with these private sectororganizations. For example, for each ton of grain purchased from OC by one ofthe 21 flour mills in Tunisia, the mill is liable for a series of specifiedtaxes and fees to OC and OC is obligated to pay the mill a milling profitmargin, as well as reimbursement for the actual transport costs incurred bythe mill. These procedures were created partly to assure a uniform price of

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bread throughout Tunisia. A similar network of financial obligations exists

between OC and CCGC and COCEBLE (for collecting and storing grain) and betweenOC and the approximately 1,000 bakeries and 110 feed mills. With each ofthese organizations, OC keeps a running account and calculates a balance on aquarterly basis. The balances have usually been in favor of the mills,bakeries, and cooperatives, but OC has sometimes paid with considerable delaybecause of its tight cash flow situation. Disagreements over balances duehave led to the lengthy suspension of accounts with several mills. Thecomplexity of the system and the shortage of funds have placed a burden onOC's accounting staff and have diverted both OC and these other organizationsfrom controlling and monitoring actual costs of grain storage, handling andtransportation. The government has recognized the difficulties caused by theinadequacy of the CGC reimbursements to OC and by the complexity of OC'sfinancing system. Accordingly, this year special budgetary provisions weremade under which all of CGC's arrears to OC have now been paid. In addition,during negotiations, assurances were obtained that the government would causeCGC to transfer to OC all future arrears in reimbursements owed by CGC to OCwithin three months after the due dates; or, failing the availability of suchresources to CGC, that the government would promptly make such transfersitself on a basis satisfactory to the Bank. It was further agreed that suchpayments would be recorded in OC's separate account for "market support".(See also para. 4.06(a) regarding a study and plan of action to improve OC'scost-control and financing system).

2.40 Audit. In 1978, OC began to prepare balance sheets and annualoperating statements for outside auditing. Statements for the fiscal yearfrom October 1, 1978 to September 30, 1979, were prepared in the fall of1980. These accounts were reviewed and corrected by the Tunisian "BureauCentral d'Audit de Comptabilité et d'Organisation Industrielle, Commerciale etAgricole" (BAC). This semi-private group released a final verification of therevised statements on January 27, 1981. The audit performed by BAC appears tohave been meaningful, as evidenced by their modifications of the preliminarystatements prepared by OC.

2.41 Program of Improvement. OC has recently initiated efforts toimprove its control of stocks and its financial and accounting practices. ATunisian consulting firm (SCET) did a study on the computerization of OCinventory data, proposing a comprehensive system for the reporting and codingof information. However, the study recommended a degree of sophisticationthat will be difficult to implement in small collection centers and did notadequately outline practical steps for a transition to the proposed system.OC has nevertheless taken preliminary steps to implement the SCET system andhas budgeted for acquisition of computer facilities and additional personnel.In the financial field, BAC has been contracted to evaluate OC's accountingand control system, to set up new bookkeeping procedures, and to assist OC inpreparing a budget for 1981/82. BAC has been asked to assemble a workinggroup of current OC staff to help carry out these tasks as a first step towardthe creation of a new unified financial department. The contract provides forwork to be completed by the end of October 1981.

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Prices and Subsidies for Grain and Grain Products

2.42 Producer prices and retail prices for wheat and wheat-based productsare maintained by the government approximately in line with world marketprices. However, these price levels are achieved at the farm gate partly as aresult of heavily subsidized inputs. At the retail level, prices of flour,semolina and bread are set at levels some 35-40% below actual costs as aresult of subsidies applied to reduce intermediary expenditures on transport,storage, milling, and baking. Meat production is stimulated both by the heavysubsidization of imported animal feed grains and by the low price establishedby the government for bran sold by flour mills to animal feed factories. Theconsequences of these policies include fiscal burdens on the government,administrative burdens on OC, disincentives to improved efficiency in theintermediary organizations, and the development of a beef-fattening industrythat is expensive in terms of domestic resources and foreign exchange and thatneglects Tunisia's comparative advantage in extensive grazing and foragecrops. In the long run animal feed pricing policies could also generateadditional requirements for expensive port silo investments. The potentialdifficulties inherent in these pricing policies, particularly as regardsanimal feed grains, are recognized by the government, and these policies arecurrently under review. During negotiations, assurances were obtained thatthe government will communicate to the Bank by June 30, 1982, for the purposeof an exchange of views, the strategy adopted for the livestock sector for theSixth Plan period (1982-1986). The government also agreed to take allmeasures necessary for the progressive elimination of price subsidies onanimal feed grains in accordance with a schdule to be agreed on with the Bankby December 31, 1982 (See also para. 4.01).

III. THE PROJECT

A. Summary Description

3.01 The objectives of the project are to:

(a) increase grain storage capacities;

(b) reduce the congestion, handling costs, demurrage charges and

grain losses incurred at the five main ports because ofinsufficient bulk port silo handling and throughput capacity;

(c) reduce the cost of transport and handling of imported grain

resulting from insufficient bulk rail transport, poor transportprogramming, and outdated and insufficient downstream silostorage and throughput capacity;

(d) strengthen the technical capacity and financial management of OC;

(e) prepare a second project designed to modernize the system ofcollection, storage and transport of local grain.

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3.02 The components of the project are:

(a) rehabilitation, adaptation for imports, and expansion to

30,000 tons of the existing export port silo at Bizerte,implementation of related port works, and construction of a30,000-ton port silo at the new port of Ghannouch on theoutskirts of the city of Gabes;

(b) construction of four storage silos, two of 10,000 tons each atBeja in the north and Gafsa in the south, one of 20,000 tons atSfax, and one an expansion to 28,000 tons of an existing silo of8,000 tons at Kalaa Seghira near Sousse; and rehabilitation ofan existing 50,000-ton storage silo at Manouba (Tunis);

(c) construction and rehabilitation of rail sidings at project silosand acquisition of about 50 bulk rail hopper cars for use inthree programmed trains to transport imported grain from Bizerteand Gabes/Ghannouch to downstream storage silos and mills;

(d) technical assistance for programming of imports and domestictransport of grain, management and maintenance of silos, controlof stocks and costs, and preparation of a second project.

B. Detailed Features

Port Silos

3.03 Bizerte. The existing silo with a storage capacity of 20,000 tonswould be expanded to 30,000 tons. The new cells would be of reinforcedconcrete, slipform construction and would be integrated with the existingcells by a new handling, cleaning, weighing, and dust control system.Pneumatic equipment for unloading of ships and a conveyor system to the silowould have a throughput capacity of 300 tons/hour -. Simultaneous loadingcapacities of 200 tons/hour for rail hopper cars and trucks would beinstalled. Reserve receiving capacity at 100 tons/hour for occasionaldeliveries by rail hopper cars and trucks and a reserve bagging capacity of20 tons/hour for emergency outshipments would be included. The existing quaywould be modified by the construction of three dolphins for mooring of ships.Limited quayside dredging would be carried out to accommodate ships of up to30,000 tons.

3.04 Gabes/Gannouch. A port silo with a storage capacity of 30,000 tonswould be constructed on the north quay (berth four) of the new harbor locatedat Ghannouch just outside Gabes. The cells would be of reinforced concrete,slipform construction, and pneumatic ship unloading capacity would be 300tons/hour. To avoid conflict with general merchandise unloading equipmentshared by berth 4 and the adjacent berth 3, the conveyor system

/1 All throughput capacities shown are rated capacities; actual capacitiesduring operation may be 20-30% lower. All capacities are for bulkhandling unless indicated for bags.

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(300 tons/hour) would be installed underground. Handling equipment wouldinclude cleaning, drying and dust control. Simultaneous loading capacities of200 tons/hour for hopper cars and 100 tons/hour for trucks would be installed.Reserve receiving capacity of 100 tons/hour for hopper cars and trucks and areserve bagging capacity of 20 tons/hour for emergency outshipments would beincluded.

Construction and Rehabilitation of StoragSilos

3.05 All four new storage silos would consist of cells of reinforcedconcrete, slipform construction. Beja would have a storage capacity of10,000 tons and two interconnected handling circuits of 100 tons/hour each,permitting either simultaneous unloading of trains and trucks at 100 tons/houreach or unloading at 200 tons/hour for one transport mode alone. The sameflexibility would apply to loading of trains and trucks. Gafsa would have astorage capacity of 10,000 tons and two separate circuits of 100 tons/houreach, one for unloading either trains or trucks, the other for loading eithertrains or trucks. Sfax would have a storage capacity of 20,000 tons and twoseparate circuits, one of 200 tons/hour for unloading trains, the other of100 tons/hour permitting either unloading of trucks, loading of trucks, orloading of trains. Kalaa Seghira would have a capacity of 28,000 tons(20,000 tons new plus 8,000 tons existing). It would have two circuitspermitting simultaneous unloading of trains and loading of trucks each at200 tons/hour. Unloading of trucks and loading of trains would be at100 tons/hour. The rehabilitation of the Manouba silo would involve noincrease of its existing storage capacity of 50,000 tons. Present lowthroughput capacities would be replaced by simultaneous unloading capacitiesof 200 tons/hour for trains and 100 tons/hour for trucks. Loading capacitywould be either 200 tons/hour for trucks or 100 tons/hour for trains. Baggingcapacity of 40 tons/hour at Kalaa Seghira and 20 tons/hour at the four othersilos is envisaged.

Rehabilitation and Construction of Silo Rail Sidings

3.06 At Bizerte, Manouba, and Kalaa Seghira, the existing rail sidingswould be rehabilitated, and at Gabes/Ghannouch, Beja, Sfax, and Gafsa, newsidings constructed, in most cases with a view to accommodating programmedtrains with a minimum of manoeuvering. At Bizerte, a new siding link to themain line at the western approach to the silo would eliminate the need formanoeuvering grain trains in the merchandise port area east of the silo.

Acquisition of Bulk Rail Hopper Cars

3.07 The project would provide about 50 bulk grain rail hopper cars (26narrow gauge and 24 standard gauge) of about 64 tons gross weight and 47 tonsnet load capacity. These would be augmented by 12 similar cars (narrow gauge)owned by STPA and currently operated in bulk grain service by SNCFT. Thetotal of 62 cars (including three standard and four narrow gauge spares) wouldbe used in programmed trains between Bizerte and Manouba, Gabes/Ghannouch andSfax, and Gabes/Ghannouch and Kalaa Seghira.

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Technical Assistance and Training

3.08 An estimated 66 man-months of consultant services would be financedto assist OC to introduce new organizational units, improve operations, carryout a study of its financial system and a study for preparation of asecond-stage grain storage project, and organize training programs. Thelatter would include an estimated 40 man-months of training abroad (see paras.4.04-4.05).

Credit for Financing Mill Storage Capacity

3.09 Ancillary to the project, it is also envisaged to encourage the useof credit available under the Third Agricultural Credit Project (Loan1340-TUN) for financing the introduction of bulk receiving and storagecapacity in animal feed mills. The credit would help support governmentpolicies to encourage the inclusion of such storage capacity in futureinvestments in milling capacity.

C. Status of Design and Implementation Schedule

3.10 Detailed functional designs have been prepared by OC's engineeringconsultants, Agro Technic International Ingénierie (ATI) and Office Techniqued'Etudes Portuaires (OTEP), for the five silos at Bizerte, Beja, Gafsa, Sfaxand Kalaa Seghira and for the rehabilitation of Manouba. Performancespecifications and a general layout site plan for Gabes/Ghannouch are inpreparation. Tender documents for single-responsibility contracting inaccordance with OC's designs and performance specifications (with an optionfor bids based on alternative solutions in addition to the required basicdesigns) for the seven silos are under final preparation for submittal to theBank for approval and issuance by OC in the fall of 1981. Bid evaluation andselection of lowest evaluated bidders are planned for mid 1982. Contractsigning is envisaged for late-1982. Construction and rehabilitation of silosis expected to be carried out on a phased schedule between late-1982 andmid-1985. Construction of the quay at berth 4 at Gabes/Gannouch is currentlyin progress under the responsibility of the Ministry of Equipment, and isexpected to be completed by February 1982, after which the ownership of thequay would be transferred to OPNT. During negotiations, assurances wereobtained regarding the prompt completion of the quay and its transfer to OPNT.

3.11 The design and construction of the three dolphins and the executionof quayside dredging at the Bizerte port silo quay would be carried out byOPNT on a schedule permitting the unloading of grain ships beginning in Mid-1984. Detailed designs of railway sidings for five of the new silos have beenprepared by SNCFT. Detailed designs for Gabes/Gannouch and Manouba are inpreparation. Construction is expected to begin shortly after silo contractsare awarded and be completed over a period of about 12 months, well beforecompletion of silo construction. Procurement of rail hopper cars would be

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phased to assure delivery of the standard gauge cars for the Bizerte-Manoubatrain in February 1984 and of the narrow gauge cars for the two Gabes/Gannouchtrains in February 1985.

D. Cost Estimates

3.12 The estimated total cost of the project, including physical andprice contingencies, is D 37.5 million (about US$93.9 million), of whichD 16.8 million equivalent (US$42.1 million) or 45% is in foreign exchange.Import duties and taxes included in the total cost are estimated at D 5.9million (US$14.7 million). The unit costs are based on estimates obtained inFebruary-March 1981 from local and foreign suppliers of equipment and civilworks. Price contingencies amount to 20% of base costs plus physicalcontingencies. Price contingencies have been estimated on the basis ofexpected annual rates of increase of prices for local costs ot 7% in 1982 and6% in 1983-86 and for foreign costs of 8.5% in 1982, 7.5Z in 1983-85, and 6%in 1986. Foreign technical assistance is costed at US$8,700 per month. Costestimates are provided in detail in Annex 3 and in summary in the Table below.

Project Cost Estimates

Project ------D Millions---- ----US$ Millions---- Total ForeignComponents Local Foreign Total Local Foreign Total as % of as % of

Base Cost Total

Port Silos 5.9 4.9 10.8 14.7 12.4 27.1 40 46Storage Silos 5.6 3.4 9.0 14.0 8.4 22.4 33 39Silo Rehabilitation 0.8 0.9 1.7 2.1 2.2 4.3 6 52Subtotal Silos 12.3 9.2 21.5 30.8 23.0 53.8 79 43

Port Works 0.2 0.4 0.6 0.6 0.9 1.5 2 58

Railway Sidings 1.1 0.6 1.7 2.7 1.7 4.4 6 38Bulk Cars 0.3 1.0 1.3 0.8 2.5 3.3 5 77Subtotal Railways 1.4 1.6 3.0 3.5 4.2 7.7 il 54

Engineering 0.9 0.5 1.4 2.2 1.3 3.5 5 38

Technical Assistance 0.3 0.3 0.6 0.7 0.7 1.4 2 48Total,Base Cost 15.1 12.0 27.1 37.8 30.1 67.9 100 44

Physical Contin-gencies (15%) 2.3 1.8 4.1 5.7 4.5 10.2 15 44

Price Contingencies 3.3 3,0 6.3 8.3 7.5 15.8 23 47

Total Cost withContingencies 20.7 16.8 37.5 51.8 42.1 93.9 138 45

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E. Financing

3.13 The proposed Bank loan of US$ 42 million equivalent would be made tothe government and would finance the full estimated foreign exchange cost ofthe project. During negotiations assurances were obtained on the followingmatters: that the Bank's loan would be on-lent to OC on the same terms andconditions as the Bank loan (the authorization and ratification of aSubsidiary Loan Agreement satisfactory to the Bank by the Government and OCwould be a condition of effectiveness of the Bank's loan); that thegovernment would bear the foreign exchange risk; that local costs of theproject would be financed through the government's annual budget as granttransfers to OC, so that the new silos, rail sidings, and rail cars wouldbecome additions to OC's equity; that arrangements satisfactory to the Bankwould be made by OC with OPNT and SNCFT to make available to them theportions of the proceeds of the Bank's loan and the local funds necessary forthe execution, respectively, of port works and railway activities under theproject. The Tunisian budget for 1981 contains US$ 10.7 million equivalentin dinars for initial costs of silo construction and rehabilitation.

F. Procurement

3.14 By OC: ICB. Contracts for construction and rehabilitation of silos(estimated to cost US$ 53.8 million) would be awarded after internationalcompetitive bidding which would be carried out by OC in accordance with theBank's Guidelines for Procurement. The silos would be grouped in threeseparate contracts for (i) the three northern silos of Bizerte, Manouba, andBeja (estimated to cost US$ 20.0 million), which include most of therehabilitation work; (ii) the three center-south storage silos of KalaaSeghira, Sfax, and Gafsa (estimated to cost US$ 17.9 million); and (iii) thenew port silo at Gabes/Gannouch (estimated to cost US$ 15.9 million). Thebid documents would provide for single-responsibility contracts forconstruction of civil works, supply and installation of equipment, start-uptesting, and training of local staff in operation and maintenance of thesilos. This approach is designed to ensure more effective coordination ofstructures and equipment and better standardization of both equipment andtraining. Bidders would be required to submit bids for Bizerte, Beja, Gafsa,Sfax, Kalaa Seghira and Manouba based on the detailed designs prepared forthose silos by OC's consulting engineers and for Gabes/Gannouch based on OC'sperformance specifications and technically compatible with OC's designs forthe other silos. Bidders would also be free to submit their own designs forthe seven silos as additional variant solutions. Some 20 groups of firmsrepresenting some 10 Bank member countries and Switzerland have beenprequalified according to procedures consistent with the Bank's Guidelines.All prequalified groups contain foreign firms. Some groups include Tunisianfirms, and most bidders are expected to seek to subcontract much of the civilworks to local contractors in view of the latters' knowledge of localconditions.

3.15 By OC: LCB. Miscellaneous equipment and supplies not exceeding theequivalent of US$100,000, and up to an aggregate maximum of US$500,000, wouldbe procured by OC under local competitive bidding procedures acceptable tothe Bank or after quotations had been sought from at least three suppliers.

3.16 By SNCFT AND OPNT. OC would enter into contractual agreements withSNCFT and OPNT, satisfactory to the Bank, pursuant to which, respectively,

(a) SNCFT, on behalf of OC, would:

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(i) procure about 50 rail hopper cars (estimated to cost US$3.3million) under international competitive bidding, and

(ii) provide new or rehabilitated railway sidings .estimated tocost US$4.4 million) at the seven silo sites, using localcompetitive bidding procedures acceptable to the Bank forcivil works and earth moving costing less than US$0.5million, international competitive bidding procedures forcivil works and earth moving costing US$0.5 million or moreand for siding rails and equipment. SNCFT itself would doany other work necessary to complete the sidings.

OC's contractual agreement with SNCFT would also provide for Bankreview of SNCFT's procedures for international competitive biddingfor conformance with the Bank's guidelines.

(b) OPNT, on behalf of OC, would:

(i) provide three dolphins and dredging (estimated to costUS$1.5 million) at the Bizerte silo quay, using localcompetitive bidding procedures acceptable to the Bank.

3.17 Consultants for technical assistance would be recruited on terms andconditions acceptable to the Bank.

G. Disbursements

3.18 The proposed Bank loan would be disbursed on the following basis:

Amount of theLoan AllocatedUS$ million Z of Expenditures

Category Equivalent to be financed

(1) Construction and rehabilitation of silos(a) at locations other than Manouba 23.5 40% of total(b) at Manouba 2.5 50% of total

(2) Port works 1.0 60% of total.

(3) Construction of silo railway sidings 2.0 40% of total

(4) Purchase of bulk hopper cars 3.0 100% of foreign

(5) Engineering services 2.2 80% of total

(6) Studies and technical assistance 1.2 80% of total

(7) Overseas training 0.2 100% of foreign

(8) Unallocated 6.4

Total 42.0

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3.19 Loan disbursement requests would be supported by full documentation.Retroactive financing estimated not to exceed US$300,000 equivalent is proposed

for engineering consultant costs incurred since the return of the appraisalmission March 1, 1981. The entry of OC into satisfactory arrangements withCCGC, OPNT, and SNCF1, respectively, for the rehabilitation of Manouba, the

carrying oux of port works at Bizerte, and the implementation of the railwaysiding and hopper car component of the project would be conditions ofdisbursement of funds for these purposes. The schedule of estimateddisbursements is given below. The projected completion of disbursements in fiveyears and relatively heavy disbursements shown for FY83 reflect the fact that

procurement of silos is underway and contract signing is expected in late 1982.Down payments are expected in mid FY83. A group of eight completedBank-financed Tunisian projects featuring comparable large-scale constructionand equipment installation had a composite disbursement profile covering six anda half years, with 91Z disbursement after five-and-a-half years.

……--…_________---……Bank FY…----------------FY82 FY83 FY84 FY85 FY86

Annual 0.7 12.9 16.9 8.5 3.0Cumulative 0.7 13.6 30.5 39.0 42.0

H. Environmental Effect

3.20 The project is not expected to have any significant adverse

environmental effect. Silo design would provide for satisfactory cleaning ofstored grain, which should result in an improvement in the average quality of

grain delivered to flour and animal feed mills. Silo design would also providefor satisfactory dust and humidity control, which, together with technical

assistance in silo management and maintenance, should reduce to a minimum therisk of silo explosions.

IV. PROJECT IMPLEMENTATION

A. Organization and Management of the Project

4.01 Responsibilities for Implementation. Under the general authority of

the Ministry of Agriculture, OC would have responsibility for the project withthe assistance of OPNT and SNCFT. The authorization and ratification of theProject Agreement by OC, OPNT, and SNCFT would be a condition of effectivenessof the Bank's loan. OC would own all the project silos except Manouba which isowned by CCGC (para. 4.03). OC would carry out the construction andrehabilitation of silos, the study of its financial system, and the preparationof a second-stage grain storage project. During negotiations, assurances wereobtained that OC would enter into arrangements with OPNT under which OPNT wouldconstruct and maintain the dolphins at the Bizerte silo and carry out thenecessary dredging at the Bizerte port silo. The Ministry of Equipment is incharge of ongoing construction of the Gabes port silo quay (para. 3.10). Duringnegotiations, assurances were obtained that OC would enter into arrangements

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with SNCFT tnder which SNCFT would carry out the construction of silo railwaysidings and the procurement, maintenance, and operation of the 50 bulk graincars, which would be owned by OC. These arrangements would also set out theobligations of both parties for the operation of the programmed trains andprovide for an arrangement to be made with STPA for t'ne integration of STPA'sexisting 12 cars into the Gabes-Sfax programmed train. It is expected that theNational Freight Transport Company (STM), the main road transport company in theTunis region, or OC itself would handle the increased trucking of grain fromBizerte to the Tunis mills (a small increment to STM's total traffic) (paras.2.29 and 2.30).

4.02 Project Coordination Committee. Overall coordination of the projectwould be provided by a Project Coordination Committee (PCC), already functioningduring project preparation, and including the Ministry of Agriculture, OC,SNCFT, and OPNT under the chairmanship of the Director of Projects of theMinistry of Plan and Finance. The committee would meet as necessary but atleast once every six months to review OC's work program and progress, to ensurecoordination among the agencies and ministries concerned and to resolveinter-agency questions. During negotiations, assurances were obtained on thesepoints, and since then the PCC has been formally established by the government.

4.03 Silo Construction: Project Management Unit (PMU). Management of siloconstruction and coordination with other project agencies on a day-to-day basiswould be provided by a Project Management Unit (PMU) which has been formallyestablished in OC for the period of project implementation and reports to OGCsPresident Director General and his deputy. The director cL PMU serves assecretary of the Project Coordinating Committee. Management of siloconstruction by PMU would cover remaining preparation of bid documents, bidevaluation and award, erection and start-up. It would be carried out primarilythrough PMU's supervision of OC's engineering consultants, ATI and OTEP. Underthe terms of the OC-ATI contract and the ATI-OTEP subcontract, ATI has primaryresponsibility for design of silos, preparation and evaluation of bids, anderection of silos, while OTEP has responsibility for detailed design of civilworks and day-to-day site supervision of erection. PMU would also beresponsible for the monitoring of training and studies under the project.During negotiations, agreement was obtained on a satisfactory staffing plan,including, in addition to the director, who is a qualified engineer withmanagement experience in major infrastructure contracting and construction, atleast one qualified technician posted at each of the seven silo sites to monitorconstruction on a full-time basis. During negotiations assurances were obtainedthat OC would make suitable arrangements with CCGC providing for OC managementof the rehabilitation of CCGC's Manouba silo and reimbursement by CCGC of thecosts on appropriate terms and conditions.

B. Operation of Silos and Management and Planninigof Grain Distribution

4.04. Technical assistance would be provided and organizational modificationsintroduced to help OC improve the maintenance of silos, management of imports,control of grain stocks, scheduling of transport and planning of investment(para. 2.33). During negotiations, assurances were obtained that, to improve

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maintenance, a central silo maintenance service would be established by December31, 1982 with technical assistance support to set standards for silo andwarehouse preventive maintenance, introduce a silo inspection system, carry outmajor repairs, and organize a training program in maintenance and minor repairsfor silo managers and technicians. Technical assistance in import managementwould be aimed at strengthening the knowledge and capacity of OC's existingexport-import service in domestic harvest forecasting and long term planning ofimport needs, import contracting, ship contracting and scheduling, port silomanagement, and patterns of domestic transport of grain, with the objective ofachieving better contract pricing, avoidance of demurrage charges, andcoordination of port of destination with domestic requirements. Technicalassistance in grain stock management would be designed to strengthen OC'sexisting marketing division and, following evaluation of SCET's proposals (para.2.41), to help introduce more systematic stock recording and informationretrieval aimed at permitting better utilization of storage facilities,reduction of losses, more effective transport planning, and preparation of thecollection center network for a transition to bulk handling under thesecond-stage project.

4.05 To improve transport scheduling, and in particular to ensure effectiveinitiation and operation of programmed trains, a transport unit would be createdby June 30, 1983 with technical assistance support to manage requests to SNCFTand the trucking companies for grain transport, establish transport productivitytargets, monitor and evaluate transport performance, and undertake long termtransport planning. To improve investment planning and facilitate thepreparation of a second-stage storage project, a planning and evaluation unitwould be established in OC by March 31, 1982 with technical assistance supportand staff qualifications in silo engineering, transportation economics and grainproduction and marketing. During negotiations assurances were obtained that OCwould employ management consultants by April 30, 1982 to furnish expertadvisors, prepare related training programs (which would be furnished by OC tothe Bank for approval), and help launch the institutional improvements describedin paras. 4.04-4.05. Consultant services would total an estimated 42 man-monthsand overseas training an estimated 40 man-months. Assurances also were obtainedthat OC would, by April 30, 1982, make suitable ar-rangements with CCGC andCOCEBLE for their participation in the new maintenance service and stock controlsystems and the related training programs.

C. Studies

4.06 OC would carry out the following two studies:

(a) Cost Control and Financing. Drawing on the work already done by BAC(para. 2.40-2.41), a comprehensive cost-control and financing study ofOC's operations would be carried out and a plan of action for improvingcost control and OC's financing system prepared, discussed with theBank and presented to the government by September 30, 1983. Assurances

were obtained that the government and UC would implement the plan ofaction by March 31, 1984. To assist in the preparation of the studyand plan of action, assurances were obtained that OC would hirefinancial consultants by April 30, 1982 on terms and conditionssatisfactory to the Bank. The consultant services would total anestimated 24 man-months and would be in addition to the 42 man-monthsreferred to in para. 4.05.

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(b) Preparation of a Second-Stage Projec. This study would be carriedout by the planning and evaluation unit, in close collaboration withthe Ministry of Agriculture, CCGC, COCEBLE, SNCFT and otherinterested agencies and with the support of an estimated 12 months ofconsultant assistance included in the services proposed in para.4.05. It is expected that the study, which would focus especially onthe storage and distribution of local grain, would span theJune-October harvest-collection period in 1982 and that a finalreport would be transmitted to the interested agencies and the Bankby June 30, 1983.

D. Monitoring, Reporting, and Evaluation

4.07 These functions would be carried out as follows;

(a) Monitoring and Reporting would be the responsibility of PMU (para4.03). With the assistance of the consultant engineers, PMU wouldprepare a quarterly report on the progress of procurement andconstruction of silos. PMU would obtain a similar quarterly reportfrom OPNT on construction of dolphins and dredging at Bizerte, fromthe Ministry of Equipment on construction at berth four at Gabes,from SNCFT on construction of sidings and procurement of bulk grainrail cars, and from the responsible units of OC on staffing, studiesand training. PMU would compile these reports and prepare a summaryassessment for transmittal to the members of the Project CoordinationCommittee and the Bank. The second and fourth quarterly report eachyear would be discussed at the semi-annual meeting of the ProjectCoordination Committee, and minutes of the Committee's discussionwould be promptly sent to the Ministers of Plan and Finance,Agriculture, and Transport and Commmunications and to the Bank.

(b) Evaluation would be performed by OC's planning and evaluation unit,which would maintain close contact with PMU and participate in themeetings of the Project Coordination Committee. The planning andevaluation unit would prepare and present for discussion at theProject Coordination Committee by no later than June 30, 1984, aninterim evaluation of the progress of works, studies, institutionalimprovements, and financial reforms provided for under the project.This evaluation together with the minutes of the committee'sdiscussion would be transmitted to the Ministers of Plan and Finance,Agriculture, and Transport and Communications and to the Bankpromptly after the Committee's meeting. Within six months aftercompletion of the project, the planning and evaluation unit wouldprepare a project completion report, also for submission to theinterested ministers and the Bank.

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E. Accounts and Audit

4.08 The Office of Cereals, OPNT, and SNCFT would maintain separateaccounts for expenditures under the project. OC's accounts are currentlyaudited by an independent auditing firm (para. 2.40). Assurances wereobtained that OC would continue this auditing practice and would furnish itsauditea accounts and a report of the audit to the Bank for the fiscal yearending in September 1980 by December 1981, for the fiscal year endingSeptember 1981 by July 1982, and thereafter within ten months after the closeof each fiscal year.

V. PROJECT BENEFITS

A. Benefits

5.01 Introduction. In broad terms the main project benefits are improvedefficiency of the grain distribution and storage system and a greatercapability for that system to deal with a potential crisis in grain supply.More specifically, the project would generate a series of benefits in the form

of economic cost savings as compared with the grain storage and distributionsystem which would prevail in the absence of the project. The profile usedfor the "without project situation" starting in 1986 resembles the currentpattern of grain handling and distribution with the exception of certainpalliative improvements which OC would be expected to make. The risingpressure of congestion is expected to force OC to find substitutes in severalports for the traditional method of unloading ships by sending teams ofworkers into the holds to fill grain into bags with small shovels. By 1986ships arriving at Bizerte are expected to be unloaded instead through anintermediate technology involving mobile pneumatic equipment for bulkunloading into a hopper on the quay which could serve to load trucks in bulkor be connected to a bagging machine. This equipment already exists atBizerte but had not been successfully used as of early 1981 because ofmechanical difficulties and worker resistance. It is assumed that thesedifficulties would be overcome by 1986. This system would allow faster shipunloading and reduced handling costs. Shipments out of the port area wouldthen be made in bags and in bulk trucks. It is expected that in the absenceof the project this type of mobile system would also be introduced to unloadabout half the imported grain arriving at Sfax by 1986. At Sousse andGabes/Ghannouch, where volumes are smaller, the traditional unloading methodwould be continued. These improvements would be expected to permit these fourports to handle all increments in total imports, but not to lead to anyreduction in the present high level of imports and quay occupancy at LaGoulette.

5.02 The major project benefits are closely related to the volume of

imports, and the measurement of those benefits is affected by the behaviour ofimports in two important ways. First, imports of grain in years of averageweather are projected to increase to 1.2 million tons in 1986, 1.5 milliontons in 1991 and 1.6 million tons in 1996. However without the project, it isestimated that the limit of effective handling capacity of the palliativeinvestments described above would be about 1.4 million tons. At about thatvolume, the government would essentially have to choose between making majorinvestments like those under the project or curtailing further increases in

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grain imports, which would constrain consumption. Second, within a generallyrising trend, imports are expected to fluctuate substantially from year toyear in response to weather and the level of official collections from thelocal harvest. Thus project benefits would also fluctuate from year to year.However, some benefits from avoidance of congestion, such as reduceddemurrage, accrue after a certain threshhold level and tend to risegeometrically as congestion increases. As a result, the fall in benefits inyears of below-trend imports is expected to be less than the rise in benefitsin years of above-trend imports. In view of these considerations and theuncertainty of the pattern of fluctuations, the basic analysis of benefits andcosts has been made on the simplifying assumption of constant imports of 1.2million tons from 1986 through the life of the project. An assumption ofrising imports is treated in the sensitivity analysis in para. 5.16.

5.03 Under these assumptions, the major savings under the project would beobtained from (a) reductions in freight charges resulting from the capacity tounload a greater number of large ships, (b) reductions in demurrage charges asa benefit of better scheduling and more rapid unloading of ships, (c) savingsin the labor costs of grain handling, and (d) savings from the elimination ofquay storage. These and other benefits and their relative importance areshown in the following table. Because these benefits depend upon anintegrated package of investment components designed to improve the efficiencyof the imported grain circuit from the ports to the mills, separate rates ofreturn for these components have not been calculated.

Benefits Share

Savings in freight with more large ships (in foreign exchange) 0.27Savings in ship demurrage (in foreign exchange) 0.27Savings in grain handling (labor costs) 0.29Savings from eliminating quay storage 0.10Savings in bags 0.04Avoided palliative investments in import handling 0.01Avoided investments in boxcar fleet 0.02

1.00

5.04 Beneficiaries. The savings created by the project in both foreignexchange and local currency would accrue first to OC and the government,making it possible to reduce the operating deficit of OC as well as the CGC'ssubsidy transfers that finance that deficit. It is not expected that savingswould be passed on directly to the consumer in the form of lower prices forgrain and grain products, given that consumer prices for these products arefixed at levels roughly in line with world prices and below in the case ofanimal feed grains (para. 2.42). Consumers would benefit indirectly bygreater certainty of a steady delivery of grain products, especially in theevent of a breakdown of one of the port silos.

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5.05 Savings in Freight Cost of Imports. With the project Tunisia would

have three 30,000-ton port silos, without the project only one. The projectcapacities together with improved scheduling would permit OC to order a largerproportion of its imported grain in big ships and to increase average cargosize substantially above the current average of 15,800 tons. Although freightrates fluctuate in response to many factors, over the long run it is estimatedthat the average premium paid in freight costs for receiving a 15,000-tonrather than a 25,000-ton ship is about US$15 per ton. Without the project,some 606,000 tons of imports not going to La Goulette would be likely toarrive in small lots. With the project, it is estimated that OC would succeedin buying one-half of this volume in larger cargo sizes, for which the annualfreight savings would be US$4.54 million.

5.06 Savings in Ship Demurrage. Tunisia's grain imports are carriedalmost entirely in chartered foreign ships, so that the virtual elimination ofdemurrage charges that is envisaged under the project would be a directforeign exchange benefit. OC has been paying large and increasing amounts ofdemurrage. At the merchandise quays at Bizerte, Sousse, Sfax andGabes/Ghannouch, demurrage stems from the time required for bag unloading of

ships well in excess of standard contract unloading periods which are based onbulk handling. Factors such as priorities for general merchandise andpassenger ships (at Bizerte), and prohibition of even temporary quay storage(at Sfax) all tend to lengthen bag unloading periods and generate additionaldemurrage for ship waiting time in the harbor despite OC's best efforts atscheduling. At La Goulette demurrage reflects OC's aim to maximize the use ofTunisia's only port silo, which has resulted in nearly 90% quay occupancythere the last two years (compared to a normal maximum of 60-65%) and muchconsequent ship waiting in the harbor despite bulk unloading usually withincontracted periods. OC's efforts to trade off demurrage at La Gouletteagainst high bag handling costs at other ports has also resulted in muchredirecting of ships (at a cost) and partial unloading at two ports. As grainimport volumes have risen, the compounding effect of port congestion hastended to result in a rise in average demurrage payments per ton of grainimported as seen in the table below. Between 1977 and 1980 average demurrageper ton tended to increase by about US$0.13 per ton for each increase of100,000 tons in imports. Without the project, it is estimated that averagedemurrage payments per ton would continue to increase in the same ratio torising imports, an otherwise expected acceleration being averted by OC'spalliative investments (paras. 5.01-5.02). With the project, the eliminationof bagging and the improvement of ship scheduling resulting from the increasedport silo capacity and technical assistance are expected to reduce demurrageto nominal levels. Annual savings are estimated at US$4.41 million, beginningin 1986.

Years Grain Imports Demurrage('000 t) (Us$M) (US$/t)

1977 742 2.26 3.051978 825 2.21 2.681979 904 2.62 2.901980 1,091 3.83 3.511986 (Projected) 1,226 4.41/a 3.68/a

/a Without project estimates.

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5.07 Savings in Grain Handling. It is estimated that the project wouldcompletely eliminate grain handling in bags in ship unloading and largelycomplete the conversion to bulk handling for truck and train transport fromthe ports to mills and from the ports to storage silos. The expansion of bulkhandling would lead to savings in the labor costs associated with filling,weighing, carrying and emptying bags of grain. Savings were calculated usingactual wages paid to workers for various tasks on a per bag basis, adjusted toreflect the shadow wage of semi-skilled and unskilled labor. Total annualsavings from conversion of grain handling to bulk is expected to be aboutUS$4.82 million.

5.08 Savings from Eliminating Quay Storage. By the construction of bulk

port silos, the project would eliminate storage of bags of imported grain onthe quays ("stationnement"). OC now pays to the Office of Ports (OPNT) feesfor prolonged quay storage, which represent OPNT's estimated opportunity andinconvenience cost of having the quay blocked with merchandise. Aggravated bylack of available transportation to move grain from the quays to silos, thesefees also include the cost of covering the piles of bags with tarpaulins andguarding them from theft. There are no quay storage costs when grain isunloaded from the ships in bulk directly into a silo. Without the project,it is estimated that quay storage costs would be cut in half at Bizerte (wheresome improvements in port handling would be made) but would continue atcurrent levels at Sousse and Gabes/Ghannouch. With the proiect, these reducedcosts, amounting to US$l.58 million per year, are expected to be eliminated.

5.09 Savings in Bags. Bulk grain handling would lead to savings in jutebags, most of which are imported. It is estimated that the 80-kilo bags areused on average about twelve times before being discarded and that the projectwould eliminate about 536,000 tons/year of bag handling. These savings wouldamount to about US$0.71 million annually.

5.10 Savings in Port Handling Equipment. The project would avoid costsestimated at US4-250,000 recurring every 6 years for mobile bulk unloadingequipment and US$1.0 million every 8 years for trucks as well as nominalannual operating and maintenance costs.

5.11 Savings in Rail Box Cars. Because of their two-day turn-aroundtimes, the programmed trains proposed under the project would be able totransport an estimated 404,000 tons of grain per year on their itineraries.In the absence of the silos provided under the project, programmed trainswould not be feasible, and the existing 12 nearly new bulk cars of STPA wouldbe operated in regular trains with estimated four-day turn-around times andwould transport an estimated 44,000 tons. The remaining 360,000 tons of grainwould be transported in bags and would require about 220 forty-ton box carsoperating under an estimated eight-day turn-around time. It is assumed thatSNCFT would use box cars representing a cross-section of the age distributionof the entire fleet. At an estimated cost of US$40,000 per box car, savingsof US$8.8 million from avoided periodic purchases of replacement box cars aretherefore estimated to accrue with the project, in three equal tranches at10-year intervals over the life of the project.

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B. Economic Analysis

5.12 Costs and Rate of Return. Project costs include all investments in

silo construction and rehabilitation, port infrastructure, rail cars andsidings, and technical assistance, phased over the five years beLween 1982 and1986. The annual operating and maintenance costs of the new silos and theincremental costs expected at the rehabilitated silos have also been chargedto the project. On the basis of these costs and the benefits as discussedabove, the economic rate of return is estimated at 16%. The economic analysisis not substantially affected by changes that have occurred in the exchangerate since the time of the appraisal mission.

5.13 Other Benefits. The project would create a number of additionalbenefits for Tunisia which have not been included in the rate of returncalculation because they are difficult to quantify. The expansion of portfacilities and storage capacity together with technical assistance would giveOC more flexibility and skill to arrange the purchase of imported grain whenprices in international markets are advantageous. Reduced congestion in theports would provide relief to non-grain traffic, reduce operating costs andpossibly permit postponement of other port investments. The technicalassistance to be provided to OC in stock control and silo management wouldlead to improved use of existing silo capacity, minimized outdoor storage, andless double handling of grain (transfers from one storage silo to anotherbefore shipment to a mill). Losses due to spills or spoilage during baghandling and quay storage would also be reduced. The use of programmed trainswould release locomotive time for traction of other goods. Use of rail carsfor storage of imported grain (currently occurring for up to two weeks in somelocations) would be eliminated. Construction and rehabilitation,of storagesilos would permit increased amounts of local grain to be shipped and handledin bulk at lower cost.

5.14 Sensitivity Analysis and Risks. The economic analysis is most

sensitive to the import forecast, given that the return on project investmentsdepends directly on the volume of grain handled. Import levels will continueto fluctuate, reflecting the swings in Tunisia's harvest output due to weathervariation. While such fluctuations would affect the capacity utilization ofproject facilities in. any given year, they would tend to be mutuallyoffsetting over a longer period, and average annual import levels havetherefore been used for the economic analysis.

5.15 Under a low import scenario, in which average imports level off atthe current volume of about one million tons per year, the ERR would drop to11%. This scenario would be likely to unfold only if: (a) local productionwere to attain an average of 1.3 million tons per year in the 1980's, meaninga consistent 30% improvement over the harvests of the past decade, and (b)animal feed consumption were to be held essentially constant at currentlevels, which would mean a decline in per capita consumption.

- 36 -

5.16 A more likely scenario is that imports will continue to rise beyondthe projected 1986 level of 1.2 million tons. Allowing for a growth rate of3Z per year, grain imports would reach a volume of over 1.4 million tons by1991, and the project ERR would increase to 17%. Because 1.4 million tons isestimated to be the limit on imports without the project (para. 5.02), higherimport volumes have not been used in the calculation of project benefits.

5.17 Over the longer term, Tunisia's physical capacity to meet its grainimport requirements without the project is uncertain. Forecasts show demandfor imported grain increasing to 1.6 million tons by 1996. Without the majorinvestments in import handling and storage included in the project, thesefuture levels of demand could not be met. The government would be forced toincrease grain prices to establish an equilibrium between limited supply andincreasing demand. The costs of this outcome would be borne directly byTunisian consumers in low-income groups for whom grain products are the staplefood.

5.18 The technical assistance and training included in the project areexpected to minimize any risks of poor management of handling, storage andtransportation facilities which might affect benefits. The greatest risk inthe grain sub-sector appears to arise without the project, in particular thefailure to construct the proposed new port silos. In this case, a breakdownat the La Goulette port silo would reduce Tunisia's capacity to receiveimported grain by 60%, and national food security would be threatened.

C. Employment Impact

5.19 The major civil works investments associated with the project wouldcreate construction and administrative jobs at the silo locations. Once theproject is onstream, the introduction of bulk handling would mean theelimination of the equivalent of an estimated 250 full-time jobs for pieceworkers who presently fill, weigh and carry bags of grain at the four ports ofBizerte, Sousse, Sfax and Gabes/Ghannouch. This effect would be partiallyoffset by the creation of an estimated 140 jobs for technicians,administrative personnel, and skilled workers to operate and maintain theproject silos at the new sites of Beja, Gafsa, Sfax, and Gabes/Ghannouch. Thesocial costs of a small net reduction in the long run of employment in thissector is more than offset by the advantages of increased labor productivity,foreign exchange savings, and greater food security.

VI. SUMMARY OF RECOMMENDATIONS AND LOAN CONDITIONS

6.01 During negotiations, assurances were obtained from the Republic ofTunisia that it would:

(i) cause the Ministry of Equipment to complete by December 31, 1982 the

construction of the quay at Berth four at the new port of Gabes atGhannouch and upon completion to transfer ownership of the quay toOPNT (para. 3.10);

- 37 -

(ii) communicate to the Bank by June 30, 1982, for the purpose of anexchange of views, the strategy adopted for the livestock sector forthe Sixth Plan period (1982-1986), and take all measures necessaryfor the progressive elimination of price subsidies on animal feedgrains in accordance with a schedule to be agreed on with the Bank byDecember 31, 1982 (para. 2.42);

(iii) maintain in operation the existing Project Coordination Committee forthe duration of project implementation (para. 4.02);

(iv) cause CGC to transfer all future arrears to OC within three monthsafter the due dates, or failing the availability of resources in CGC,to make such transfers itself on a basis satisfactory to the Bank,such payments to be recorded in OC's separate "market support"account (para. 2.39);

(v) implement by March 31, 1984, a plan of action to improve OC's

financing system (para. 4.06(a)); and

(vi) provide local cost financing for the project through the annualbudget in the form of grant contributions to OC (para. 3.13).

6.02 During negotiations, assurances were obtained from OC that it would:

(i) maintain in operation the Project Management Unit for the duration ofproject implementation (para. 4.03);

(ii) arrange procurement of silos under single-responsibility contractingthrough ICB in accordance with the Bank Guidelines for Procurement(para. 3.14);

(iii) hire management consultants by April 30, 1982 and with theirassistance carry out a program of institutional improvement andtraining in maintenance of silos, management of imports, control ofgrain stocks, scheduling of transport, and planning of investment(including the preparation of a study for second-stage grain storageproject) (paras. 4.04, 4.05 and 4.06(b)j;

(iv) hire financial consultants by April 30, 1982 and with theirassistance carry out a cost-control and financing study of OC'soperations, present a plan of action to the government and the Bankby September 30, 1983 and implement said plan by March 31, 1984(para. 4.06(a));

(v) maintain separate project accounts, and have its accounts audited byan independent auditing firm (para. 4.08).

(vi) ensure that grain in excess of the capacity of the programmed trainswould be transported in an efficient manner (para. 2.30);

(vii) prepare quarterly project progress reports, an interim evaluation ofthe project by June 30, 1984, and a project completion report (para.4.07(a) and (b)); and

- 38 -

(viii) make suitable arrangements with CCGC and COCEBLE by April 30, 1982for their participation in the silo maintenance service, stockcontrol system and training programs (para. 4.05).

6.03 During negotiations, assurances were obtained from OC and SNCFT that

they would:

(i) arrange for procurement, ownership, management, maintenance, repair,and operation in programmed trains of the bulk hopper cars inaccordance with specific guidelines which were agreed on duringnegotiations (paras. 3.16 and 4.01);

(ii) arrange with STPA for the integration of STPA's 12 existing bulkhopper cars into the Gabes-Sfax programmed train (para. 4.01).

6.04 During negotiations, assurances were obtained from OC and OPNT thatthey would enter into an agreement satisfactory to the Bank for theprocurement and maintenance of dolphins and dredging at Bizerte (paras. 3.16and 4.01).

6.05 Conditions of Effectiveness of the Bank's loan are the authorizationand ratification of the Project Agreement by OC, OPNT, and SNCFT and of theSubsidiary Loan Agreement by the government and OC (paras. 3.13 and 4.01).Conditions of disbursement for the Manouba silo rehabilitation, constructionof port works at Bizerte, and implementation of the rail siding and hopper carcomponent are, respectively, the entry of OC into satisfactory arrangementswith CCGC, OPNT, and SNCFT (para. 3.19).

6.06 Subject to the above assurances and. conditions, the project issuitable for a Bank loan of US$42 million equivalent with a term of 17 years,including a four-year grace period.

- 39 -

ANNEX 1Page 1

TUNISIA

STAFF APPRAISAL REPORT OF THE

GRAIN DISTRIBUTION AND STORAGE PROJECT

DOCUMENTS IN PROJECT FILE

A. Implementation Volume of the Grain Distribution and Storage ProjectAppraisal Report (see Table of Contents for Annex titles).

B. Selected Reports and Studies Related to the Grain Sub-Sector in Tunisia

1. "Projection de la Demande Intérieure des Produits Agricoles àl'Horizon 1986", Ministère de l'Agriculture, mars 1980.

2. "Statistiques Céréalières", Ministère de l'Agriculture, mars 1980

3. Note sur la Campagne Céréalière 1979-80", Ministère de l'Agriculture,aôut 1980.

4. "Perspectives de Développement du secteur céréalier de 1979 à 1986",

Ministère de l'Agriculture, février 1980.

5. "Méthodologie et Organisation des Enquêtes Agricoles 1975-1980",Ministère de l'Agriculture, avril 1980.

6. "The Tunisian Cereal Distribution and Milling System", ChristopherAllen Mock, Case Study: Tunisia from "Global Malnutrition and CerealFortification", James Austin, Editor, Ballinger Press, Cambridge,March, 1979.

7. "Memorandum: June Field Trip to Tunisia", Marko and Winkelmann,CIMMYT, August 17, 1977.

C. Selected Reports and Studies Related to the Transport Sector

1. "Etat Analytique du Trafic", SNCFT, décembre 1980

2. "Ventilation du Trafic Marchandises Diverses des Gares", SNCFT, 1980

3. "Tableau de Bord, Division du Transport Sud", SNCFT, janvier 1981

4. "Etude de la Coordination des Transports: Rapport Préliminaire,Volume 4: Economic des Transports", Louis Berger International, Inc.Mars 1979

5. "Besoins en Wagons, Vleme Plan: 1982-1986", SNCFT, juillet 1980

6. "Trafic Maritime", OPNT, 1979

- 40 -

ANNEX 1Page 2

D. Studies and Reports Directly Related to the Project

1. "Rapport d'idendification d'un projet de stockage des céréales enTunisie", rapport FAO/Banque Mondiale No. 27/9 TUN 11, 15 juin 1979

2. "Rapport de la mission de préparation du projet de stockage descéréales en Tunisie", rapport FAO/Banque mondiale No. 6/80 TUN-14, 18janvier 1980

3. Rapport de la mission ferroviaire de M. Pierre Severin, 20/77,septembre 1980

4. "Localisation d'un Silo Portuaire", note de la Banque Mondiale,février 1981

5. Dossier d'Appel d'Offres pour les silos de Beja, Gafsa, Sfax, KalaaSeghira, et extension du silo de Bizerte, Office des Céréales,décembre, 1980

6. "Silos de Tunisie", rapport technique de M. Albert Surier, mars 1981

TUNISIASTAFF APPRAISAL REPORT OF THE GRAIN DISTRIBUTION AND STORAGE PROJECT

IMPLEMENTATION SCHEOULE

15RD-FY82 IBRD- FY83 | IBRD-FY84 | IBRD-FY85 J 1BRD FY86i

CY81 CY82 CYE3 CY84 CY85 CY86

Bank Loan

Sl-natare O

Effect,uenene

CIosmgq Pane

Silo Contractef

Deign ad Tender Prnparetion

Cuir for . endern A

Preparat«non niide __ _

A-ord, Contract Sig..ng

Breert td Nea ergi io

Manoba t _

Confreetor Prepararionr Motrîlîmatron ra Sa * _ - -X

Exceat,n. Foundatons_--_

Slîpforrrmnf W 55s

Rerna,nrq SuprentriaCrtenll«__ -_K

Handlng Equrpment -

EWc,,idca Fq..p-etliC_ _ -- _ |lll FWr S~~mr

GoQormtpi9tjon *5 n,.:_«

Ptnnionîl Acp-îtanceI

Frnal Apeptance ll; ~ I

Binn-t. Port Vo-ke. nclrd,n§ Dredg,gi

Rail Sîdmn , Cns, tction -__

Pari Car Prarchane

Tender Preptarabon $7 |

Bid Praetprat-o

Award Coetraf signinO-

, Manuf,acture -

Tecrnk-l Ass-stance

TOR PreprotionT

Rnquest for Proposais

Preparatron of Proposaist; § § ]

ACY 81C Y 82 -_ CY 83 C_4Y _4 c_ 85 CY86

c FY 2 OC-FY 83 O C -FYB= OC-FY

Wo-id 8ank - 23073

- 42 -

ANNEX 3Table

TUNISIA

STAFF APPRAISAL REPORT OF THE

GRAIN DISTRIBUTION AND STORAGE PROJECT

Prnject Cost Estimates

D ThousandUsS - Thousandhousands- …- Total as X ForeignProject Components Local Foreign Total Local Foreign Total of Base as Z of

Cost Total

Port SilosBizerte 2,261.5 2,232.0 4,493.5 5,653.8 5,580.0 11,233.8Gabes/Ghannouch 3,618.8 2,738.0 6,356.8 9,047.0 6,845.0 15,892.0

Sub-total 5,880.3 4,970.0 10,850.3 14,700.8 12,425.0 27,125.8 39.9 45.8

Storage SilosBeja 1,158.7 649.0 1,807.7 2,896.7 1,622.5 4,519.2Gafsa 1,133.9 629.5 1,763.4 2,834.8 1,573.7 4,408.5Sfax 1,571.9 961.4 2,533.3 3,929.8 2,403.5 6,333.3Kalaa Seghira 1,718.5 1,134.4 2,852.9 4,296.2 2,836.0 7,132.2

Sub-total 5,583.0 3,374.3 8,957.3 13,957.5 8,435.7 22,393.2 33.0 39.0

Silo Rehabilitationhanouba 822.4 898.5 1,720.9 2,056.0 2,246.3 4,302.3 6.3 52.2

Sub-total, Silos 12,285.7 9,242.8 21,528.5 30,714.3 23,107.0 53,821.3 79.2 42.9

Port WorksBizerle 255.0 350.0 '^5.C 637.5 875.0 ,'12.' 2.2 57.9

Railway InvestmentsSidingsBizerte 162.6 94.6 257.2 406.5 236.5 643.0Gabes/Ghannouch 352.7 200.0 552.7 881.7 500.0 1,381.7Beja 84.0 76.0 160.0 210.0 190.0 400.0Gafsa 176.4 100.0 276.4 441.0 250.0 691.0Sfax 143.9 68.1 212.0 359.8 170.2 530.0Kalaa Seghira 108.7 84.6 193.3 271.8 211.5 483.3Manouba 70.6 40.0 110.6 176.5 100.0 276.5

Sub-total 1,098.9 663.3 1,762.2 2,747.3 1,658.2 4,405.5 6.5 37.6

Rail Cars 298.7 1,000.0 1,298.7 746.8 2,500.0 3,246.8 4.8 77.0

Sub-total, Railways 1,397.6 1,663.3 3,060.9 3,494.1 4,158.2 7,652.3 11.3 54.3

EngineeringConsultants 880.0 520.0 1,400.0 2,200.0 1,300.0 3,500.0 5.2 37.5

Technical AssistanceConsultants 248.8 229.7 478.5 622.0 574.2 1,196.2Training 52.0 48.0 100.0 130.0 120.0 250.0

Sub-total 300.8 277.7 578.5 752.0 694.2 1,446.2 2.i 48.0

Total, Base Cost 15,119.1 12,053.8 27,172.9 37,797.8 30,134.4 67,932.2 100.0 44.3

Physical Contin-gencies (15%) 2,267.9 1,808.1 4,076.0 5,669.7 4,520.2 10,189.9 15.0 44.3

17,387.0 13,861.9 31,248.9 43,467.5 34,654.6 78,122.1Price Contingencies 3,346.1 2,973.1 6,319.2 8,365.2 7,432.9 15,798.1 23.3/a 47.3Total Cost with

Contingencies 20,733.1 16,835.0 37,568.1 51,832.7 42,087.5 93,920.2 138.3 44.8

/a Price contingencies are 20.2% of base costa + physical contingencies.

-~~~~~~~~~~~~~~~~~S lI

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T.-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

TUNJISIA MONN

PROJECTED GRAIN DISTRIBUTIONAND STORAGE, 1986

3Tons Tronsported by Truck Nyte Ail I-nnages are shown

Tos Trao spooded by Troc 5 Tosn in 0

hrouusnd oîn

" Tons Transported by Programmea Tran Y 'f rRegSA-ial MMl Demond (Tons) -

e Storoge Silos (Ccpocrty'Thr'roighpot)inTonsPort S'los (C.asat 7 n Tons)

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rn,ports (Tons IIlJ

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-32' Roîlwoy Under Construction Tly-~ r,yyuiy~- ~ -~~ Mal., Roods ern,,,,oiiy',---,or-,,,.,ou,,,ir -U4E1Internutionol Bounduries LI RYA Â~e' 9' o' "s~~~~~~~~~~~~~~~~~~~~~~~~~~~~0