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Documtertof The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 7851 PROJECT COMPLETIONREPORT Public Disclosure Authorized INDONESIA NATIONAL FERTILIZERDISTRIBUTION PROJECT (LOAN 2120-IND) JUNE 19, 1989 Public Disclosure Authorized Industry and Energy OperationsDivision Public Disclosure Authorized Asia Regional Office Thisdocument has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization. COUNTRYEXCHANGE RATES Name of Currency (abbreviation) Rupiah (Rp) Appraisal Year Average 1982 US$1 - Rp 625 Intervaning Years' Average 1983-85 US$1 - Rp 862 Completion Year 1986 US$1 - Rp 1,650 Average 1982-86 US$1 - Rp 1,138 ABBREVIATIONS AND ACRONYMS Fertilizer Companies AAF - PT ASEAN Aceh Fertilizers, Lhokseumawe, Aceh GRESIK - PT Petrokimia Gresik, Gresik, East Java KALTIM - PT Pupuk Kalimantan Timur, Bontang, East Kalimantan PIM - PT Pupuk Iskanda Muda, Lhokseumawe, Aceh PUSRI - PT Pupuk Sriwidjaja, Palembang, South Sumatra Pusri Nomenclature Line I - Point of production or import Line II - In or near port areas Line III - District level (usually storage) Line IV - Retail or village level Fertilizer TSP - Triple superphosphate DAP - Di-ammonium phosphate AS - Ammonium sulphate MOP - Muriate ^f Potash, Potassium Chloride; Potash SOP - Sulphate of Potash, Potassium Sulphate; Potash Others DGSC - Directorate General of Sea Communications dwt - Deadweight of ship, in long tons FMDSS - Fertilizer Marketing and Distribution Strategy Study GOI - Government of Indonesia ISD - Inland Storage Depot (Line III) KUD - Koperasi Unit Desa. (Village Cooperative) mt - million tons MSDP - Maritime Sector Development Plan PJKA - Perusahaan Jawatan Kereta Api. (State Railway Organization) PUSKUD - Head Office for a group of KUDs RLS - Regular Lin;r Services; the Inter-island general cargo shipping system. UPP - Unit Pengantongan Pupuk. (Port Bagging Station) FOROMCIAIL USEONLY THE WORLD BANK Washington.DC 20433 USA Offce of DC,redto.G.neral Ope°atfons (vdIIhti4J June 19, 1989 MEMORANDUMTO THE EXECUTIVEDIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Indonesia National Fertilizer Distribution Project (Loan 2120-IND) Attached, for information, is a copy of a report entitled "Project Completion Report on Indonesia National Fertilizer Distribution Project (Loan 2120-IND" prepared by the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Yves Rovani by -am K. Chopra l Attachment This document has a rcstric.ed distribution and may be used by recipients only in the perforrnance i ~~~~~~~oftheir official duties. Its contents may not otherwise be disclosedwithout World Batikcauthorizalion. FOR OFmFCALUSE ONLY PROJECT COMPLETIONREPORT INDONESIA NATIONAL FERTILIZERDISTRIBUTION PROJECT (LOAN 2120-IND) TABLE OF CONTENTS Page No. Preface. * * * .....* * * * * * * * * * *...................... i Basic Data Sheet... ................................................. ii Summaryand Highlights..................................... .* iii I. INTRODUCTION ........................ 1 II. PROJECT FORMULATION............. ............ 3 III. PROJECT IMPLEMENTATIONAND COST......... 7 IV. OPERATIONS................... .. ................. 10 V. FINANCIALANALYSIS .................. ............. 14 VI. INSTITUTIONALDEVELOPMENT . ...................... 15 VII. ECONOMIC REEVALUATION................................. .. 16 VIII. THE ROLE OF THE BANK................................ 17 IX. CONCLUSIONS................... ....................................... is TABLES 1. Developmentof ProductionUnits ............. ............19 2. Summary of Expected and Actual Completionof Project Components.... ................................20 3. Summaryof ConsultantServices ...................... .. * 21 4. Appraisal and Actual Costs .......... 22 5. Forecast and Actual Disbursements. 23 6. Projected and Actual Consumptionof Urea, TSP, AS, and NH3 for the Period 1981 to 1986 24 7. Urea Bulk Carrier Performance........ 25 8. SummarizedIncome Statement for 1982-86. 26 9. Statementof Changes in Financial Position 27 10. SummarizedBalance Sheet .. .... **. ......... 28 11. Compliancewith Loan Conditions. .... 29 12. Summary c'-Project Benefit and Cost Streams 30 MAPS IBRD 15763R(PPA)R IBRD 15764R This documenthas a restricteddistribution and may be used by recipientsonly in the performance of th,:ir officialduties. Its contents may not otherwise be disclosedwithout World Bankauthorization. i PROJECT COMPLETIONREPORT INDONESIA NATIONAL FERTILIZERDISTRIBUTION PROJECT (LOAN 2120-IND) PREFACE This is a Completion Report on the National FertilizerDistribution Project for which Loan 2120-IND was approved in March 1982 for the sum of US$66.0 million. The PCR was prepared by the Asia Infrastructure5 Division and is based primarily on the draft completion report which was submittedby P. T. Pupuk Sriwidjaja,Jakarta Indonesia. The loan was closed on June 30, 1986. This PCR was read by the OperationsEvaluation Department (OED). The draft PCR was sent to the Borrower on December 27, 1988, for comments by February 14, 1989, but none were received. ii PROJECT COMPLETION REPOPT BASIC DATA SHEET INDOtNESIA NATIONAL FERTILIZER DISTRIBUTION PROJECT (LOAN 212_-IND) KEY PROJECT DATA Appraisal Actual or Iteam expectation current estimate Total Project Cost (USS million) 185.3 135.1 Underrun (2) - - 27.1 Loan/Credit Amount (USS million) 66.0 37 .6 Disbursed - 37 .6 Cancelled ) 28.4 Repaid to ) Aprl 15, 1988 4_4 2.6 Outstanding to ) APril 15, 198 61.6 35.0 Date Physical Components Completed 12/85 10/86 Proportion Completed by Above Date (2) _ 90 Pr)portion of Tiee Overrun (2) - 24 Economic Rate of Return: 215 Return on Assets (t) 20 12 Institutional Performance Cood Good OTHER PROJECT DATA Original Actual or item Plan Revisions Est. Actual First Mes.tton in Files 11/29/75 / / / / Xegotiations 02/01/2 02/01/82 Board Approval 03!730i82 / / 03/30/82 Loan Agreement Date 04/05/82 04/05/82 Effectiveness Date 77/07/82 09/27/82 Closing Date 06/30/86 06/30/86 Borrover Government of Indonesla Executing Agency FT. Pupuk Srividlala (PUSRI) Fiscal Year of Borrower April 1 - March 31 Follov-on Project Name -_-__ _- Loan Number _ Amount (USS million) ___ Loan Agreement Date _ - MISSION DATA No. of No. of Date of Item Month, Year Weeks Persons Man-veeks Report Identification 01/80 .0 1 1.0 02/19/80 Preparation 03/80 2. 1 0 -. 04/07/80 Preappraissl 01/81 2.0 1 2.0 02/18/81 Appraisal 04/81 3. 0_ 4 12.0 03/10/82 Total 8.6 17.0 Supervision I 06/82 1.0 1 1.0 08/0l/82 Supervision 1I 11/82 1.0 n.5 0.5 01!26/83 Supervision III 077/8 _____ 1--T 04/05/83 Supervision IV 09/83 1.0 1 1.0 10/15/83 Supervision V /a 02/84 n.a. na n.a. 025/854 Supervision VI 07/84 1.0 1 1.0 09/06/84 Supervision VII 04/85 1.0 3 _ 3.0 05/05/85 -'mpletion 07/87 1.0 1 1.0 06,15/PR Total 754° STAFF INPUT 1981 1982 1983 1984 1985 1986 1987 1988 Total Preappraisal 13.5 13.5 Appraisal 37.3 30.3 67 .6 Negotiation 0.7 15.1 15.8 Supervisior 1.9 5.0 3.3 5.4 3.9 1.7 12.1 33.4 Other 7.1 3.5 10.6 Total 58.5 50.8 5.0 3.3 5.4 3.9 1.7 12.1 140.9 /a Desk reviev. iii PROJECT COMPLETIONREPORT INDONESIA NATIONAL FERTILIZER DISTRIBUTION PROJECT (LOAN 2120-IND) SUMMARYAND HIGHLIGHTS PT. Pupuk Sriwidjaja(Pusri) is Indonesia'slargest fertilizer producingcompany. In addition to distributingand marketing its own products, GOI, in 1979, assigned Pusri responsibilityfor distributingand marketing of all fertilizersin Indonesia. This responsibilityincludes both domesticallyproduced and importedfertilizers (para. 1.2). ii. The objective of the projectwas to provide the additional facilitiesneeded for distributingthe products from the planned expansion of the domestic fertilizerindustry during the period 1982-1986. Fertilizer productionin Indonesiamore than doubled during 1982-1986,with an increase of almost 3.0 million tons, and domestic consumptionincreased by a factor of about 1.5 over the same period. The project included (i) procurementof three urea bulk carriers and one refrigeratedcarrier for liquid ammonia; (ii) procurementof 200 rail box wagons and constructionof a 21 km railway line to Mteneng;(iii) new fertilizerbagging facilitiesand piers at Meneng and Cilacap; (iv) expansionof the existing bagging facility at Belawan, North sumatera;(v) improvementsto existing urea ships and the purchase of ships' spares; and, (vi) consultancyservices (para. 2.2). iii. The Bank loan (US$66.0m) financedthe new bagging facilities, specializedpiers, railway wagons, the FertilizerMarketing and Distribut-n Study, and the ports and maritime studies. Export creditswere used to finance the four ships and Governmentfunds were used for the railway line extension(para. 2.8). iv. No major problems were encounteredduring the project implementa- tion, which was carried out well by Pusri. However, the planned backhaul of bulk TSP from Cresik did not occur. Thus, the expansionat Belawan for handling bulk TSP and improvementsto the urea carrierswere deleted from the project. Also, constructionof the bulk terminal and bagging facilities,and procurementof the rail box wagons were delayed by the slow tender evaluation process (paras.3.2-3.8) v. Due to the deletion of componentsand overestimatesat appraisal, the total project cost was US$135.1 million, a reduction of some US$50.2 million from the appraisal estimates. The loan was closed as originally scheduled(06/30/88) and approximatelyUS$28.4