Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 1589 PROJECT PERFORMANCE AUDIT REPORT GUINEA BOKE BAUXITE PROJECT (LOANS Si-GUI, 557-GUI, & 766-GUI) Public Disclosure Authorized May 11, 1977 Public Disclosure Authorized Public Disclosure Authorized Operations Evaluation Department 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. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT GUINEA BOKE BAUXITE PROJECT (LOANS Sl-GUI, 557-GUI & 766-GUI) TABLE OF CONTENTS Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEETS i - iii HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background 1 II. Project Performance 3 III. Main Issues 5 IV. Conclusions 8 ATTACHMENT: PROJECT COMPLETION REPORT 1. Project Data A.1 2. Summary A.3 3. Background of Project A.4 4. Physical Execution of the Project A.5 5. Operating Forecasts and Results A.10 6. Organization and Performance of the Borrower A.12 7. Economic Impact A.13 8. Criticisms by Borrower A.15 9. Complaints of the Consulting Engineer A.20 10. Mission Conclusions A.21 APPENDICES 1. Rate of Return Calculations 2. Secondary Effects and Economic Indicators MAP Guinea Boke Bauxite Project This document has a restricted distribution and may be used by recipients only in the performance of their offcial duties Its contents may not otherwise be disclosed without World Bank authorization. PROJECT PERFORMANCE AUDIT REPORT GUINEA BOKE BAUXITE PROJECT (LOANS Sl-GUI, 557-GUI & 766-GUI) PREFACE This report is an audit of performance under the Boke'Bauxite Project, for which Loans Sl-GUI of March 30, 1966 in the amount of US$1.7 million, 557-GUI of September 18, 1968 in the amount of US$64.5 million and 766-GUI of June 25, 1971 in the amount of US$9.0 million were closed, fully disbursed, on May 31, 1967, December 31, 1972 and March 31, 1974, respectively. UNDP Grant GUI/72/006 of US$49,000 for technical assistance for the management of railway, port and townsite,and for which the Bank is executing agency,is still being disbursed. This report is based on a review of the attached Project Completion Report (PCR)P/of March 1976 issued by the Western Africa Regional Office, reviews of the project files and transcript of the Executive Directors' meeting which considered the project, and discussions with Bank staff members. A joint OED/Regional staff mission visited Guinea in October 1975 in connection with the preparation of the PCR and the performance audit memorandum. OED staff contributed to the preparation of the section of the PCR dealing with the economic impact of the project and commented on earlier PCR drafts. These comments are reflected in the attached PCR, with whose main findings OED is in agreement. The audit memorandum ex- pands on the question of the split of economic benefits of the project, the long-run returns for Guinea and the institutional development aspects. The valuable assistance provided by officials of the Guinea Government in the preparation of this report is gratefully acknowledged. 1/ Annexes on the Port, Railway Component, Mine and Factory, and OFAB Management and Organization are not attached and are available in OED on request. PROJECT PERFORMANCE AUDIT BASIC DATA SHEET GUINEA BOKE INFRASTRUCTURE PROJECT (LOAN Sl-GUI) Amounts (in US$ mln) Original Disbursed Cancelled Repaid Outstanding Loan Sl-GUI 1.7 1.7 - Consolidated in Loan 557-GUI Project Data Oria Actual or P ana_ Revisions Est. Actual Conception in Bank 1965 during 1965 10/ 65 Board Approval 1/ 18 /66 3/ 7/ 66 3/ 29 /66 Loan/Credit Agreement -, 3/ 30/ 66 Effectiveness 6 / 30 / 66 6/ 27/ 66 Physical Completion 5/ 67 11/ 67 / of orig>inal project actually completed 80% 100. Loan/Credit Closing 5 /67 5/67 Total Costs (mln) US$ 1.7 us$ 1.7 Econ. Rate of Return not calculated not calculated Mission Data Month, No. of No. of Olate of Year Weeks Persons Manweeks Report Identification 4/65 1 5 5 5/13 & 5/25/65 Preparation Preappraisal Appraisal 8/65 1 3 3 8/11/65 Subtotal 2 8 Follow-on Proiect Loan 557-GUI of US$ 64.5 mln, signed in 9/68 for Boke Bauxite _ Project. Date of Conception in Bank is date Bank first recorded project was being considered for financing and began to follo'wup that decision in a serious continuous way (Project Negotiations or Country General Files). Actual Loan/Credit Closing Date is date of last disbursement out of the loan andalr credit, as given by Controller's Department data. - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET GUINEA BOKE BAUXITE PROJECT (LOAN 557-GUI) Amounts (in US$ mln) As of 12/31/76 Original Disbursed Cancelled Repaid Outstanding Loan 557-GUI 64.5 64.5 6.5 58.0 Project Data Orignal Actual or Plan Revisions Est. Actual Conception in Bank 1966 6/66 Board Approval 9/ 17/ 68 Loan/Credit Agreement 9/ 18 / 68 9/ 18/ 68 Effectiveness 12 / 11 / 68 12/ 11/ 68 Physical Completion 12 / 72 3 / 73 '. of original project actually completed 50% 100j;, Loan/Credit Closing 4 / 1 / 72 12/ 72 Total Costs (mln) US$123 numerous (see 766-GUI) Econ. Rate of Return 18 % (see 766-GUI) Mission Data Month, No. of No. of I)ate of Year Weeks Persons Manweeks Report Identification 1966 1 2 2 Preparation 1966/67 7 4 28 Preappraisal 5/67 3 3 9 Appraisal 11/67 | 3 3 8/30/68 Subtotal 12 42 Supervision I 5/70 1.0 1 1 n.a. Supervision II 11/70 1.0 2 2 12/70 Supervision III 3/71 1.0 2 2 3/71 Supervision IV 10/71 1.0 2 2 11/71 Supervision V 2/72 0.5 2 _ 3/72 Subtotal 4.5 8 Follow-on Proiect Loan 766-GUI of US$9 min, signed in June 1971 for Boke Bauxite Project. Date of Conception in Bank is date Bank first recorded project was being considered for financing and began to follow up that decision in a serious continuous way (Project Negotiations or Country General Files). Actual Loan/Credit Closing Date is date of last disbursement out of the loan and/or credit, as given by Controller's Department data. - iii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET GUINEA BOKE BAUXITE EXTENSION PROJECT (LOAN 766-GUI) Amounts (in US$ mln) As of 12/31/76 Original Disbursed Cancelled Repaid Outstanding Loan 766-GUI 9.0 9.0 0.8 8.2 Project Data Orifinal Actual or PIan Revisions I.st. Actual Conception in Bank 1966 numerous (see 557-GUI) 10/ 70 Board Approval 6/ 22 / 71 71 Loan/Credit Agreement - 6/25_/ Effectiveness 9 /28 /71 9/29_/ 71 Physical Completion 4 / 73 7/ 73 I of original project actually completed 80% 100l. Loan/Credit Closing 3/ 31/ 74 3/31/74 Total Costs (mln) US$165- numerous US$275 /a Econ. Rate of Return for 26% 32% /a Guinea Mission Data Month, No. of No. of 1ate (4i Year Weeks Persons Manweeks _Reprort Identification 10/70 1 (headquarters) 2 10/23/70 Preparation ) Preappraisal ) 11/70 6 " 4 24 n.a. Appraisal 11/71 1 3 3 5/28/71 Subtotal 8 29 Supervision I 4/72 1 4 4 6/72 Supervision II 11/72 1 2 2 2/73 Supervision III 1/74 1 2 2 5/74 Supervision IV 9/74 1 1 1 12/74 Supervision V 10/75 2 4 8 3/76 Subtotal 6 17 Date of Conception in Bank is date Bank first recorded project was being considered for financing and began to follow up that decision in a serious continuous way (Project Negotia- tions or Country General Files). Actual Loan/Credit Closing Date is date of last disburse- ment out of the loan and/or credit, as given by Controller's Department data. /a Refers to total project financed by Loan 557-GUI and this loan. PROJECT PERFORMANCE AUDIT REPORT GUINEA BOKE BAUXITE PROJECT (LOANS Sl-GUI, 557-GUI & 766-GUI) HIGHLIGHTS This project provided a total of US$75.2 million in Bank loans to the Republic of Guinea to help finance the infrastructure part of a bauxite mining project. This part included port and railway facilities, housing for the staff, and general services for the townships. The final cost of the project in constant prices is close to the appraisal fore- cast. First bauxite shipments took place about 13 months later than expected. The economic rate of return of the project is higher than ex- pected, mainly because of higher prices for bauxite exports. The project has given rise to some criticism by the Government, chiefly concerning the general Bank approach to the project and the townsite design. However, given the complexity of the project and all the major difficulties en- countered, the Bank's role can be considered a success. The following points may be of particular interest: Reinvestment of economic benefits (paras. 3.09-3.11 and PCR, Section 7 and Appendix 2); Issue of the split of economic benefits of the project (paras. 3.01-3.08, 4.02 and PCR, Appendix 1); Performance under the institutional agreements for the opera- tion of the project (para. 3.12 and PCR, paras. 4.03, 5.06-5.08 and 6.01-6.07); Expatriate manpower and inadequate training of local personnel (paras. 3.13-3.14 and PCR, Appendix 2); Question of townsite size and services provided (paras.