Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 9540

PROJECT COMPLETION REPORT

ETHIOPtA

PORT ENGINEERING AND CONSTRUCTION PROJECT(CREDIT 1676-ET)

APRIL 30, 1991

Infrastructure Operations DivisionEastern Africa DepartmentAfrica Region

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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PROJECT COMFLETION REPORT

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(Credit 1676-ET)

CURRENCY EQUIVALENT 1/

Currency Unit - Ethiopia Birr (Br)US$1.00 - Br. 2.07Br. 1.00 - US$0.48

FISCAL YEAR (FY)

Government: July 8 - July 7

WEIGHTS AND MEASURES

Hetric System

1 meter (m) - 3.28 feet (ft)1 kilometer (km) - 0.62 mile (mi)1 kilogram (kg) - 2.20 pounds (lb)1 metric ton (m.ton) . 2,205 pounds (lb)

LIST OF ABBREVIATIONS AND ACRONYMS USED

ASC - Audit Services CorporationEIB - Europan Investment BankMTA - Marine Transport AuthorityHTC - Ministry of Transport and CommunicationNCCP - iTational Committee for Central Planning

1/ The currency equivalent between the US dollar and the Ethiopian Birrhas been constant from 1973 to the date of this report.

THE WORLD SANKIWashington, O.C. 20433

US.A.

01k. of oDrlw.Gepalop"uaweSva

April 30, 1991

MEMOANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on Ethiopia Port Engineering andConstruction Prolect (Credit 1676-ET)

Attached, for information, is a copy of a report entitled *ProjectCompletion report on Ethiopia Port Engineering and Construction Project (Credit1676-ET)" prepared by the Africa Regional Office with Per.t II of the reportcontributed by the Borrower. No audit of this project has been made by theOperations Evaluation Department at this time.

Attachment

I This document has a restricted distribution and may be used by recipents onir In the performance |or their official duties. Its contents may not otherwis be discksod without World Dank authoriton.

FOR OFFICIAL USE ONLY

PROJECT COMPLETION REPORT

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(Credit 1676-ET)

Table of Contents

Page No.

Preface i

Evaluatior Summarv ii

PART I: Main Findings and Lessons Learned (prepared by IDA)

Project Identity ............................................ 1A. Background ........................................ 1B. Project Objectives and Description ............................. 2C. Project Design and Organization ............................ 3D. Project Implementation ..... so..# .............................. 3E. Project Results ................... ................. 3F Economic Re-evaluation .............. ................... 4G. Project Sustainability ........................................ 4H. IDA Performance ....................................... 5I. Borrower Performance ............................. .. .... 5J. IDA/Borrower Relationships ..................................... 5K. Consulting Services ... . ... .. .............................. 5L. Project Documentation and Data ...................... 6

PART II: Main FindinRs and Lessons Learned (prepared by Borrower)

A. Comments on Project Tmplemntation .......... .................. 7B. Overall View ........ *.. ....... ................... 7C. IDA Performance .................................... 8D. Borrower Perspective of its Performance ....................... 8E. Project Relationship . ....................... .......... .. 9F. Consulting Services ............................. 9

PART III: Basic Data

Project Timetable .......................... ..... 10Use of IDA Resources ................ ............ ...... .................. . 11Project Costs and Disbursement ........ ..................... 12Project Results .................. .*................ .. 13Credit Covenants .... .*.********. .�**....O**.......****** 16

MAPS

2095719430

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

i -

PORLT ENGINEERING AND CONSTRUCTION PROJECT. CREDIT 1676-ET

PROJECT COMPLETDON REPORT

PREFACE

This is the Project Completion report (PCR) for the Port Engineeringand Construction Project in Ethiopia, for which Credit 1676-ET in the amount ofUS$5.5 million was approved on April 1, 1986. The project was completed inJanuary 1991. The disbursements were extended a little further into 1991 becauseof extension of the closing date till March 31, 1991.

The PCR was jointly prepared by the Infrastructure OperationsDivision of the Africa r.egional Office (Preface, Evaluation Summary, Parts I andIII) and the Borrower, (Part II).

Preparation of this PCR was started during the Bank's finalsupervision mission of the project in September 1990, and is based, inter alia,on the supervision reports; correspondence between the Bank and the Borrower; andinternal Bank memoranda.

* iL -

PROJECT COMPLETION REPORT

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(CREDIT 1676-ET)

EVALUATION SUMMARY

Obiectives

1. The project was designed to be of limited scope and to addressthe most urgent problems in the Port of Assab following devastating droughtin 1985. This was the fLrst Bank group financed project in subsector. Itwas aimed at providing a modest increase in the port capacity and incarring out preparatory work for the major port expansion (now carried outunder the Transport Project).

2. The Project was successfully carried out and it fulfilled itsobjectives laid out at appraisal (para. 5). Although small in size, theproject encompassed a variety of component ranging from civil works andprocurment of equipment to studies and overseas training of local staff(para.6).

Imlementation Esperience

3. In the absence of an Apr-- .sal Report (para.10) no projectimplementation schedule was origin.lly prepared. The construction of tugberth and procurement of cargo handling equipment was carried out withoutmajor difficulties. However, mainly due to lack of MTA experience in theBank group procurement procedures caused certain delays in the execution ofsome project components.

4. The project covered all the components as envisaged atappraisal. It is relevant to note that during its implementation there wasclose coordination and communication between the Government and IDA.Ministry of Transport and Communications and MTA were fully committed tosuccessful implemantaiuoon of the project.

Results

S. The quality of the civil works (tug berth construction) was verygood. It is estimated that with the tug berth additional capacity of about200,000 tons (annually) was created in the port which had been badlycongested for years. Also, procurement of cargo handling and workshopequipment will contribute to improve efficiency of the port operations.

6. The studies carried out under the project were highly needed, inparticular the engineering studies for extension of Assab Port and costaccounting and tariff study. The costs of the project components werewithin the original estimates. Minor savings in the Credit funds (due tohigher value of SDR vis-a-vis US Dollar) were achleved; they were used forprocurement of needed additional vehicles (Part III, Annex 3).

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Sustainabilit,

7. The project was consistent with priorities set for the sector bythe Government and agreed by IDA. It was wvll justified and is likely tomaintain the level of anticipated benefits throughout its economic life.Actually economic rate of return in the PCR is higher than estimated atappraisal (para 15).

Findingst and Lessons Learned

8. The success of the project was achieved mainly due to the fullcoitment of the borrower i.e. of the agency (HTA) responsible for projectimpl_emnation. Lack of familiarity with Bank's procedures on the part ofMTh created some delays in the processing of the project. A procurementworkshop in Ethiopia (carried out by IDA staff) was found to be useful.Namely, following IDA initiative, the Government agreed and a procurementworkshop took place in November 1990.

PART Is MAIN FINDING AND LESSONS LEA-NED(prepared by IDA)

Proiect Identity

Project Name X Port Engineering and ConstructionLoan/Credit No. I Credit 1676-ETLoan/Credit Amount i US$5.5 million (SDR 5.0 million)Co-financing I NoneTotal Project Costat Appraisal 8 $8.50 million

Actual Project Cost i $9.50 million

RVP Unit a AF2-Infrastructure Operations DivisionCountry a EthiopiaSector a Transport -

Sub-sector a Ports

A. BackKround

1. Ethiopia has been relying on imports to sustain its rapidlygrowing population. Increasing production for export is one of keyelements in the Government economic strategy. However, higher level ofeconomic activity expected particularly in agriculture will be impededunless there is an improvement in transport services. The transportinfrastructure with congested ports and shortages of trucks has beeninadequate to cope with the growing demand. The transport corridor AddisAbaba - Assab, including the port of Assab, the backbone of the country'stransport system deserves priority as it is essential to Ethiopia'seconomy, since efficiency of its operations has major impact on the cost ofimports and on the pricing of exports. In recent years, the corridor hasbeen handling over 0S of total Ethiopian's external trade.

2. The inadequacy of the transport sector became evident during thedroughts in 1985 and 1987. The large increase in food imports put anenormous strain to the country's transport capabilities, in particular onthe port of Assab and trucking industry. Ships laid at anchor for dayswaiting to get into the port which has been operating at capacity aroundthe clock. In September 1990, well after the major flow of incoming aidcargo is over, the port of Assab was still struggling with a backlog cargoof about 200,000 tons. It should be noted, however, that the backlog wascreated partly by insufficient capacity of the trucking industry which wasunable to increase off-take from the port.

3. The Bank is pursuing a lending program in Ethiopia consisting ofinvestment projects which alleviate poverty and enhance long term growthcapabilities through human resource and physical infrastructuredevelopment. The transport sactor has been an important .mponent of thisprogram because of its central role in facilitating the economic activitiesof the country.

4. After the completion of the National Ports Stutdy in 1982 (fundedby the Governm2nt), the Bank Group has had continuous dialogue withMinistry of Transport and Comunications (MTC) and Marine TransportAuthority (MTA) on possible Bank Group involvement in aessisting the "core"development of Ethiopia's port subsector. Originally, the Bank Groupinvolvement was planned for Phase II (construction of Larths 13 and 14) ofthe port development. However, in view of the Government's shortage offoreign exchange to complete Phase I (tug berth) aftd particularly becauseof the urgency of the need to quickly reduce the congestion ut Assab port,the Government and the IDA agreed in 1985 to an urgent port project whichwas named Port Engineering and Construction Credit.

B. Project Objectives and Description

5. The project was designed to be of limited scope and to addressmost urgent issues in the port of Assab -- country's principal deep waterport. As the first Bank Group financed project in the subsector, theproject was to improve the capacity of the port of Assab through theconstruction of a new berth and procurement of equipment for the port, thusincreasing throughput capacity to handle the traffic. Thus, the projectprovided modest increase in port capacity (annually about 200,000 tons overtotal 1.4 million tons for dry cargo) without a major investment in marinecivil works. At the same time, it carried out the preparatory work anddetailed engineering for Phase II, involving a major port expansion whichis included under the Transport Project (1989). In addition, the projectaddressed certain deficiencies in MTA staffing, training, cost accountingand tariffs.

6. The Port Engineering and Construction Project included thefollowing components:

(i) site investigation and detailed engineering for the constructionof two berths including the necessary dredging and landreclamation under the Phase II development of Assab port;

(ii) studies to update the economic and the financial analysis forthe Phase II development;

(iii) the construction of the tug berth to provide the needed berthfacilities for tugs and coastguard and thus liberate theexisting berth No. 8 for general cargo traffic;

(iv) the procurement of urgently needed port handling equipment;

(v) the procurement of port workshop equipment for the newlyconstructed port equipment and crane workshops;

(vi) a study of MTA's manpower development to identify developmentand training needs of MTA staff (to be addressed under therecently approved Transport Project;

(vii) a cost accounting and tariff study to introduce cost accountingsystems to the MTA to be followed by introduction of a tariffsystem that is cost related; and

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(viii) priority training fur the MTA staff, particularly in portaccounting and finances, port planning and workshop technology.

C. Proiect Design and Organization

7. Due to the urgency caused by inflow of drought relief cargo (para.2), the project was swiftly prepared and five months after appraisalmission departure it was approved by the Bank's Board. The project wasdesigned to address only urgent matters in the port of Assab and in MTA andto pave the way to a major project in the sector (Transport Project wasapproved by the Bank in April 1989). Therefore, the project was intendedto be of a limited scope and size; only the President's Report was produced(No. P-4218-ET of March 1986).

8. The project was well prepared in spite of the urgency under whichit was put together. MTA, the sole .gency in charge of its implementation,was well organized and staffed and provided full surpor! il. the projectpreparation, design and in subsequent implementation. MTA was fully,.ommitted to carry out the project in such a way as to make it a fullsuccess.

D. Project Implementation

9. MTA was responsible for the implementation of the Project. It wasassisted by consultants for the procurement, supervision of civil works fortug berth construction, and for the various studies carried out -- detailedengineering for berth 13 and 14, economic and financial analysis, costaccounting and manpower development of MTA.

10. In absence of an Appraisal Report (para. 7), no projectimplementation schedule was originally prepared. The President's Reportstated, however, that the project was expected to be completed by June 30,1988. The project was mainly completed on schedule except construction ofthe tug berth (completed in April 1989), procurement of a few vehicles andtraining of MTA staff abroad (completed in January 1991). Due to somedelays in shipment of vehicles and computer equipment the Credit closingdate was extended until March 31, 1991.

11. All the project components were successfully completed and withinthe cost estimates including contingencies. Those information onimplementation of specific project components is given in Part III of theReport. No major issues were encountered during the projectimplementation.

E. Proiect Results

12. The Project was successful and it achieved its objectives. Theconstruction of 7 v tug berth 74 meter long with a quay depth of 4.5 m wascompleted by e iril 1989; it will be used for berthing tug boats andsmall marine craits, thus releasing the existing berth No. 8 for generalcargo use. The quality of civil works was very good. It is estimated thatadditional capacity of about 200,000 tons will be created in already badlycongested port. Procurement of cargo handling and workshop equipment washighly needed to alleviate shortage of equipment in the port. It will

undoubtedly improve cargo handling and increase efficiency of the portoperations.

13. Site investigation and detailed enginieering for berths 13 and 14including tender documents were completed in December 1987 and October 1988respectively. They paved the way for a major and highly needed portproject -- extension of the Assab port, which was included in the recentlyapproved Transport Project.

14. All the three studies achieved their respective specificobjectives and there were no changes of objectives during implementation.The three studies have significant impact on the resource allocation,operation and development activities of MTA and beyond in several ways. Inparticular, the existing manpower management and training policies of MTAare expected to be affected by the recommendations of the manpowerdevelopment and training study; changes are expected in port tariff andcosting policies of MTA as a result of the adoption of the new costaccounting and tariff systems in FY1990t91. It should be noted that thetariff revision was not completed on time; some additional resources wererequired and they provided by EIB (under separate arrangement). Trainingof MTA staff abroad was carried out successfully and as planned; about 15of RTA staff are participating in the training. The disbursements from thecredit were slower than projected at appraisal. Although in FY89 thedisbursements were catching up, the availability of some uncommitted fundcaused MTA to seek extension of the Closing date. The Credit Closing datewas extended three times, i.e. until March 31, 1991, i.e. cumulatively 21months beyond original date.

F. Economic Re- ,--a,1uation

15. The Project, labeled at appraisal as an emergency one, was welljustified yielding an overall economic rate of return of 30Z which exceedsthe one at appraisal of 23Z. More about economic impact of the project isin Part III (pages 13 - 14).

C. Proiect Sustainability

16. Implementation of the Port Project was fully corsistent with MTAand the Government priorities and objectives set for the port subsector.Moreover, the Project was considered both by the Government and IDA to bean urgent one. The latest drought in 1987 and transport difficulties whichemerged thereafter -- in the course of transport of additional cargo (foodrelief aid) confirmed the necessity for assistance to the port of Assab.The project was, however, of limited scope to address only part of theneeds.

17. The outcome/results of Manpower Development Study and CostAccounting and Tariff Study could be maintained for a period of time untilthey would require further updating or revision. The level oftechnological progress, the pattern of trade and to some extent change inGovernment policies may affect the future impact of these studies. Ifthese studies were not implemented fully or substantially, the risk thatmay follow is great. Namely, it could result in possible HTA financial

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losses, resource mismanagement and other inefficiencies that wouldseriously threaten the competitive position of Ethiopian ports.

H. IDA Performance

18. IDA has quickly reacted to urgent needs of the port subsector(later followed in a more comprehensive way in the Transport Project) andwith MTC and MTA full support prepared the project in a rather short time;it took only seven months between the Project Brief and Board presentation.Since the project was IDA's first operations involving MTA, IDA staffprovided necessary assistance to MTA in explaining and guiding MTA staff inorder to ensure smooth implementation of the project. Due to staffconstraints, however, supervision missions were not always made on regularbasis, e.g. no formal supervision mission took place between November 1987and January 1989. Nevertheless, when IDA staff made field visits toEthiopia under different transport mission assignments, direct cortact withthe project and the executing agency was maintained.

I. Borrower Performance

19. MTA and MTC were fully cnmmitted to successful implementation ofthe project. Adequate resources were assigned to the project executing andeven attention was given to all project items. MTA was actively involvedin assessing consultants work; formal comments made on consultants reportswere substantive and helpful in improving the consultant's output.

20. With regard to procurement it was observed, however, that lack offamiliarity with details of the Bank guidelines caused some delays in theproject processing (e.g., procurement of cargo handling and workshopequipment). This in turn caused the first extension of the Credit closingdate. It was considered that a procurement workshop in Ethiopia (not onlyfor MTA staff) assisted by IDA procurement specialists would be helpful ineliminating this shortcoming. The workshop was successfully carried out inNovember 1990. It should also be noted that. reevaluation of HTA assetswas not carried out on time since there was a change/delay in follow upwork on the cost accounting study. The borrower has been also late inproviding to IDA audited MTA accounts for PY's 88 and 89 due toshortcomings of Audit Services Corporation (ASC).

J. IDA/Borrower Relationships

21. The success of the project is also due to productive and smoothrelationships which existed continuously between HTC, MTA and IDA from theproject preparation throughout the end of the project implementation. Itis expected that this relationship will continue under the TransportProject (1989).

K. Consulting Services

22. A number of different contractors and consultants were engagedduring the project execution. Overall, their performance was good in somecases very good. Major studies were carried out: (i) detailed engineeringof Assab port extension; (ii) MTA manpower development; and (iii) MTA cost

accounting -- all of them will have an important and long standing effecton the port and HTA operations. With one exception (see Part III), therewere no disputes between the borrower and contractors/consultants.

L. Project Documentation and Data

23. The PCR was prepared from data contained in the project files,information provided by MTA and the Government in general during IDAcupervision missions and from a brief paper on the project implementationprepared by MTA.

PART I1: Main Findings and Lessons Learned(prepared by Borrower)

A. Comments on Proiect Imolementation

1. The factual information contained in Part III of this Report isadequate and accurate. The analysis and statements contained in Part Itoo, reflect what actually happened from the project preparation up to theend of the implementation process.

B. Overall View

2. The roles and responsibility of the firms, their study teams andcounterpart staff and departments responsible for each sub-project wereclearly defined in the terms of reference, supplementary information forconsultants and contract documents under which they had to operate, webelieve, that the consultants have clearly understood their respectiveresponsibilities before the commencement-of their studies without which thesuccess of the projects would have been hampered. In order to facilitatethe smooth functioning of the consultants and see to it that they are doingtheir job in accordance with the terms of reference agreed upon, MTAorganized the following committees: (a) Policy Committee; (b) Executivecommittee; and (c) Professional Counterpart Staff. The duties andresponsibilities of these Committees have been clearly stated in theProject Organization document submitted to the Bank together with theorganizational structure set up for this purpose. Such an organization anddelegation of responsibilities benefited not only HTA but also the firmsinvolved for it facilitated easy access to correct information and to maketimely corrections of mistakes or misunderstandings that might arise in theprocess of the studies. It is believed that this aspect of projectorganization and concise nature of project design contributed most to thesuccess of these studies. The maximum care taken in the selection ofconsultants and the good will and enthusiasm of most of the consultantsinvited are also very wignificant.

3. In order to make these studies meet their respective ends, eachproject was separately initiated and its conceptual foundation was clearlylaid down in the basic documents prepared and submitted to the Bank for itsconsideration. In the meantime, all the concerned parties discussed andclearly understood the objective, scope and merit of each project so thatthey can participate more effectively in the study process.

4. The project concept can be estimated to be partly innovative andit is strongly believed that the scope and scale of these projects arerelevant in the light oi their objectives. Their timing, too, are veryappropriate when viewed from the on going urgent drive to modernize theEthiopian Ports through rational allocation of highly meager resource3.

5. With regard to project implementation, we believe that due to thetimely monitoring of the works done, as indicated abovo, there were nocritical variance between what is planned and actual project performances.The project risks were correctly identified and realistically calibrated,though not stated in the projects documents in financial terms. No actions

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or decisions that affect the normal functioning at the implementationprocess were taken either by the Bank or MTA.

C. IDA Performance

6. With regard to the Bank performance, we could see no weakness fromthe beginning up to the end of the project's implementation. Their helpingideas and suggestions right from project identification through completionof the project preparations were very impressive. The constructivecriticiom, if there were any, during the appraisal and supervision processhelped to improve the quality of the work at hand and contributed a greatdeal to the success of these studies.

7. The Bank's performance during the evaluation and implementation ofthe Projects were exceptionally good as far as HTA is concerned. Thetimely supervision and constructive advice given by the Bank's staff duringthe implementation periods of each of the projects concerned has led to thesuccessful completion of the projects. Without. mutual understanding basedon the appreciation of the problems and ispiration of the borrower,satisfactory results cannot be guaranteed. By upholding these rat'.onalfactors, we believe the Bank did play ant exemplary role during theimplementation of these projects and we trust that such a relation willcontinue in its future similar operations.

S. Close monitoring of the project performance and prompt and timelyreply to the inquiries of the beneficiary are the main lessons ofexperJence that may be relevant to other Bank-financed projects.

D. Borrower Perspective of its Performance

9. As far as NTA is concerned, we believe that its performance duringthe evolution and implementation of the project was up to standard. In itscapacity as a borrower and beneficiary of the fund allocated to it MTA wasmare than anything concerned about the outcome of these studies. From ourpast expe..ience, we learned that proper organization and close monitoringof the works of the consultants right from the beginning to the end ofimplementation of the project was very important. To this end, MTA paidserious attention to the capability of the firms and qualification andability of the consultants, selected by adapting a rather strict criteria.It made sure that the consultants got the correct information theyrequired by assigning able and experienced counterpart staff and by makingall relevant sources of information open to them. By doing this, HTA notonly closely worked with the consultants involved but also seriouslyscrutinized their approaches wherever necessary with the objective toarriving at fr,itful and realistic results. This means that theconsultants were not left in the dark in their endeavor of analyzing theexisting system of operation, they were free to express their findingswhether negative or positive as far as it contributed towards theresolution of existing problems. Our staff learned a great deal from theconsultants involved in working together during the study period.

10. MTA strongly believes that such an approach together with theBank's cooperation helped the final outcome of our projects which turnedout to be a success. In this regards, our good and effective relationship

with the Bank during the evolution and implementation of the projectsdeserve to be maintained.

11. As indicated above, we have set up various levels of committeesand have assigned professional counterparts who worked closely with thevarious consultants and experts. This, we think, has contributed to thetimely completion of the project.

E. Proiect Relationshin

12. A good working relationship and mutual understanding existedbetween HTA and the Bank at all stages of the project implementationprocess. This in turn helped to facilLtate not only the timely start andcompletion of the projects, but also the normal functioning of theconsultants involved and prompt resolution of procedural errors. MTA andthe Bank had similar good relatton with other relevant parties involved inthese projects.

P. Consulting Services

13. The consultants involved played a major role each in theirrespective areas of discipline in studying the existing system andsuggesting valuable ideas. Mantion must be made of the consultantsdeployed by the following firms classified in terms of their seniorityrather than their performances

--Bertlin and Partners Consulting EngineersPeat Marwick McLintock Management ConsultantsRPT Economic Studies GroupOcean Hackenzie Limited

MTA is indebted to these consultants for their highly valuable andrealistic approach to the problems of MTA.

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Part III: Basic Data(prepared by IDA)

PROJECT TIMETABLE

Date of Executive Project Summary 09/10/85Date of Appraisal Hission 10/02/85Date of Loan Negotiations 2/03/86Date of Board Approval 04/01t86Date of Credit Signature 07/03/86Date of Credit Effectiveness 11/03/86Planned Closing Date 06/30/89Actual Closing Date 03/31/91Planned Date of Project Completion 06/30/88Proportion of Project Completed at Above Date 80ZActual Date of Project Completion 01/31/91

Cumulative Estimated and Actual Disbursements(US$ million)

FY87 FY88 FY89 FY90 FY91

Estimated (at-appraisal) 3.8 5.2 5.5 - -Actual/Revised Estimate 1.32 2.97 4.62 5.5 6.4 '/Actual/Estimated (Z) 34.7 57.1 84.0 100.00 116.3

1/ Due to exchange rate fluctuations between US$ and SDR, actual amount inUS$ equivalent is higher than at appraisal.

Project Implementation

AppraisalIndicators Estimate Revised Actual

(NOT APPLICABLE)

Note: Due to emergency nature of the project and its size, Staff AppraisalReport was prepared and consequently there was neither projectimplementation schedule nor specific physical annual targets developed atthe time of appraisal.

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PART IIIAnnex 1

ETHIOPIAPORT ENGINEERING AND CONSTRUCTION PROJECT

(Cr. 1676-ET)USE OF IDA RESOURCES

A. Staff Inputs in(Staff-weeks)

Stag' ofProject Cycle Planned Revised Final Comments

Through Appraisal - - 29.1

Appraisal throughEffectiveness - - 7.6

Supervision - - 24.2

Total - - 60.9

B. MISSIONS

Number Days Performance TypesStage of Honth/ of in Specialization Rating ofProject Cycle Year Persons Field Represented 1/ Status2/ Problems

Through 06/85 2 14 1ECO/lEGR - -

Appraisal 10/85 3 14 lECO/lEGR/lFAN - -

AppraisalThrough BoardApproval - - -

Board ApprovalThroughEffectiveness 03/86 2 5 lECO/lFAN - -

Supervision 11/86 1 6 lECO 1 -02j87 1 5 lECO 1 -10/87 1 8 lECO 1 -03/88 1 7 lECO 1 -10/88 2 8 2ECO/FAN 1 -02/89 2 10 2ECO/lEGR 2 -11/89 1 6 IECO 2 -02/90 1 6 lECO 2 -09/90 2 8 lECO/lFAN 2 -

1/ Key to Specialization:ECO - EconomistEGR - EngineerFAN - Financial Analyst

2/ Key to Statust1 - Problem free or minor errors

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IIART IIIAnnex 2

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(Cr. 1676-ET)

PROJECT COST AND DISBURSEMENT(As of end February 1991)

ITEM CONTRACT ACTUAL DISBURSEMENTNO. DESCRIPTION ---------___- -----------------------

FOREIGN LOCAL I/ FOREIGN LOCAL v(US$) (BIRR) CUS$) (BIRR)

1. TUG BERTH

1.1 Construction 1,542,600 790,582 1,758,513 1,686.721

1.2 Supervision 184,317 131,330 255,917 60,124

1.3 Retention of 21,130 14,400 28,186 19,032

of Res. Eng.2. BERTH 13 & 14

2.1 Site Investigation 592,498 291,379 506,915 221,059

2.2 Detailed 520,288 69,850 536,677 223,373

Engineering3. PORT EQUIPMENT

3.1 Vehicles, Equipment &Workshop Tools 2,437,124 4,064,033 1,980,487 1,840,455

3.2 CommunicationEquipment 452,150 774,102 424,615 404,570

4. MANPOWER DEVELOPMENT 100,237 87,279 106,586 39,112

5. COST ACCOUNTING & TARIFF 211,606 152,335 237,520 82,073

6. UPDATING ECONOMIC & FINANCE 96,859 57,100 87,805 30,101

7. TRAINING MTA STAFF 252,439 - 256,588 59,435_________ --------- -__-------21

T 0 T A L 6,411,248 6,432,390 6,179,809 4,666,055…---------------------------------

SOURCEs MTA and mission estimates

1/ Local costs also include customs duties and other taxes.2/ Another U811214,000 equivalent Is being disbursed; the total

foreigr cost In USS,893,109.

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PART IIIAnnex 3

I. PROJECT FINANCING(in US $ 000)

Planned ActualForeign Local Foreign Local

1. IDA 5.50 - 6.41 -

2. Domestic Financing - 3.00 - 3.13

3. Other - - - -

Grand Total 8.50 9.52

Final project costs are USS 9.52 million or about 11.8Z higherthan originally estimated at appraisal. The modest cost increase inforeign exchange is covered by higher US dollar equivalent of the creditamount approved in SDR (5.0 million). The local costs funded by MTA areabout US$ 130,000 equivalent higher than originally estimated; however, HTAbeing a financially sound authority had no difficulties to meet the minorcost increase. The claims by Afcons has been settled amicably and thefinal payment has increased the construction costs as anticipated.

°:. PROJECT RESULTS

A. ECONOMIC IMPACT

Economic Return Appraisal Estimate Actual

Construction of Tug Berth 15Z 312Port Equipment 462 29Z

Notes The economic reevaluation of the major project components was donein 1989 prices.

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In economic reevaluation, it was taken that newly available berthNo. 8 (liberated by the constructed tug berth) will handle about 65ships/year up to 2,500 dwt each. Reduced ship waiting time is expected (asat the appraisal) to be the main benefit. Over 20-year economic life,savings of five days per ship were assumed; benefits in ship queuing timewere modestly estimated at USS 2,500 per day (502 of $ 5,000 estimated shipvalue time per day). Taking the final construction costs and the cost ofconsultants' services the ERR is 30.8?

Economic rate of return for cargo and workshop equipment wasrecalculated takings (i) 8-year economic life; (ii) about 302 of increasein productivity in cargo handling in the port was assumed to be attributedto the new equipment; (iii) modest savings (one-fifth of the equipmentaffected) in equipment repair costs were also included. Overall return forthe project is about 302 as compared to the President's Report of 23?.

B. FINANCIAL IMPACT

FinancialRate of Return Estimate (Average) Comments

(NOT APPLICABLE)

Comment: No financial rate of return was originally cal(.?lated for theproject. However, HTA financed performance during the projectimplementation was very good and annual returns on its net fixedassets in FY's 87, 88 and 89 were 42?, 412 and 362. That aexceededthe minimum of 10? set in the Project Agreement.

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PART IIIAnnex 4

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(Credit 1676-ET)

Schedule of Disbursements

Cumulative Disbursements as of March 1, 1991(SDR million)

-_---------- -------------------------------------------------------------------------

END OF APPRAISAL ACTUAL/NEW ESTIMATEIBRD FY ACTUAL ESTIMATES AS X OF APPRAISAL ESTIMATE

1987 1.2 3.4 35

1988 2.7 4.7 57

1989 4.2 5.0 84

1990 4.7 .1 - 94

1991 5.0 100

a____________________________________________________________________________________.1/ By October 1, 1989

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PART IIIAnnex 5

ETHIOPIA

PORT ENGINEERING AND CONSTRUCTION PROJECT(Credit 1676-ET)

Orgnanization, Management and Performance of Borrower

A. Organization

There were no organizational changes in the Marine Transport Authority(MTA) during the period under review.

B. Management

The performance of management has continued to be satisfactory.

C. Compliance with Covenants

REFERENCE COVENANTS STATUS OF COMPLIANCE

DeveloDment Credit Agreement

Section 5.01(b)-- MTA to furnish to IDA Conformed.the audit reports ofFY83 and F4

Proiect Agreement

Section 2.06 By December 1986, MTA Conformed; 18 middle andshill submit to IDA seaior management levellist of staff for staff have been selected.training and atraining program

Section 2.07 By December 1987, MTA Cost accounting andshall complete study tariff study wason tariff revision completed in May 1988.

Tariff revision was completedby end of 1990.

Section 4.01 (ii) Copy of provisional Conformed. Copy of theaccounts for FY86187 provisional accountslater than 3 months were given to IDA.after the end of thefiscal year, and

Furnish to IDA audited Confori,ed with majoraccounts for FYs 86, 87 delays; &adit reportsand 88 not later than for FYs 88 tnd 89 were

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7 months after the end completed in Januaryof the fiscal year 1991.

Section 4.01 (iv) MTA shall revalue assets Conformed with delay.by December 1987 Revaluation process was

completed in November 1989.

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