Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 2109

PROJECT PERFORMANCE AUDIT REPORT Public Disclosure Authorized TUNISIA FIRST RAILWAY PROJECT (LOAN 606/CREDIT 150-TUN)

June 23, 1978 Public Disclosure Authorized Public Disclosure Authorized

Operations Evaluation Department

Tis 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

TUNISIA FIRST RAILWAY PROJECT (LOAN 606/CREDIT 150-TUN)

Table of Contents

Page No.

PREFACE

PROJECT PERFORMANCE AUDIT BASIC DATA SHEET

HIGHLIGHTS

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. Introduction 1

II. Main Issues 2

III. Conclusions 5

ATTACHMENT: PROJECT COMPLETION REPORT

I. Summary and Conclusions A.1

II. Project Preparation and Appraisal A.2

III. Project Implementation and Cost A.4

IV. Traffic and Operations A.7

V. Financial Performance of the Borrower A.9

VI. Institutional Development A.11

VII. Economic Reevaluation A.12

VIII. Role of the IB'RD/IDA A.13

Tables

1. Actual and Expected Physical Completion 2. Actual Costs Compared with Appraisal Estimates 3. Appraisal Forecasts Compared with Actual Traffic 1968-1975 4. Selected Operating Statistics 1968-75 5. Adjusted Income Account - Appraisal Forecasts and Actual Results 6. Balance Sheets at December 31 - Appraisal Forecasts Compared with Actual Results 7. Appraisal Expectation Compared with Actual Financing of Project 8. Economic Reevaluation

Map

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.

PROJECT PERFORMANCE AUDIT REPORT

TUNISIA FIRST RAILWAY PROJECT (LOAN 606/CREDIT 150-TUN)

Preface

This report presents a performance audit of the Tunisia Railway Project for which Loan 606-TUN and Credit 150-TUN, each in the amount of US$8.5 million, were closed fully disbursed in 1976 and 1973, respectively. The report consists of a Project Perfor- mance Audit Memorandum prepared by the Operations Evaluation Depart- ment (OED) and a Pioject Completion Report (PCR) prepared by the EMENA Region.

The memorcandum is based on the PCR and on discussions with Bank staff members; the transcript of the Executive Directors' meeting of April 29, 1969 has been read, and the project files have been reviewed.

An OED mission to Tunisia was undertaken in January 1978 and its findings are reflected in the Audit Memorandum. The assistance ren- dered to the mission by Tunisian authorities is gratefully acknowledged. The Government and the Borrower have not commented on the draft report.

The audit agrees with the principal conclusions of the PCR but amplifies on certain aspects of the project which appear to be of particular significance.

PROJECTPERFORMANCE AUDIT BASIC DATASHEET

TUNCSIA: RAILWAYSPROJECT (LOAN 606/CREDIT 150-TUN)

SOCIRTE NATIONALEDES CHEMINSDE PER TUNISIENS(SNCFT)

KEY PROJECT DATA

Original Actual or Item Plan Current Estimate

Total Project Cost (US$ million) 29.2 35.45/2 Overrun (%) 52 1 Loan/Credit Amount (US$ million) (606-8.5, 150-8.5) 17.0 17.6 Disbursed Cancelled Repaid to ) . I Outstanding to ) April 30, 1978 Date Physical Componenta Completed 12/31/72 6/30/76,1 Proportion Completed by Original Date () 6 - Proportion of Time Overrun ()100 Economic Rate of Return (7.) 2 and 25 10 Financial Performance 4 7.(1971). 7 7.(1973), Negative 7 %. (after 1973)

OTHER PROJECT DATA 17.

Original Ites, Plan Revisions Actual

First Mention in Files or Timetable InformalApproach Q/ -/66 6/29/66 Govermentes' Application -- 8/17/67 Negotiations 12/ -168 2/ -/69 3/ -/69 Board Approval 2/ -169 3/22/69 4/29/69 Loan/Credit Agreement 3/ -/69 -- /-6/ 4/69 Effectiveness 6/ -/69 -1 9/16/697 Closing Date 12/31/73 12/31/75 9/ 1/76 Borrower Loan 606 - SNCFT Cr. 150 Republic of Tunisia Executing Agency SNCPT Pistol Year of Borrower January I - December 31 Follow-on Project Name No request likely to be made for a second project to he financed by the Bank

OTHRPION DATA

lent Month No. of 8 No. of Date of Item PlYear eevssone ManweeAs c ual

Identification - - /-1 /7 Preparation 11/67 0.5 4 2 12/21/61 Preappraisal 6/68 3 3 9-9 /9 Appraisal 10/68 2 3 6 Yellnw 1/22/69 Sub-total 9 5-.65 - Gray 4/11/69 Supervision I 6/69 1 2 2 7/2/69 Supervision 11 3/70 2 1 2 5/14/7 Bupervesion IL 9/70 1 6 2 2 10/20/70 Supervision IV 12/70 0.5 2 1 1/27/71 Supervision V 6/71 2 2 4 8/17/71 Supervision VI 4/72 2 3 6 5/10/72 Supervision VII 3/73 2 2 4 5/15/7.3 Fupervisione Vic 12/73 1 1 1 1/18/74 Supervision IX 12/74 1 2 2 3/10/75 Supfrvision X 2/76 s d 1 1 3/11/76 Sub-total 13.5 25 Completion 4/76 -/ 2 3 6 8/- 7 Total 21 48

COUNTRYEXCHANGE RATES Name of Crency (Abbreviation) (TO) Tunisian Dinar Appraisal Sear Average US$ 1 TO 0.525 6 Intervening Year Average7$ 1 T2 0.450 1970S- US1 - TO 0.525 1973- US$1. TO 0.420 1971 - 0$ 1 - T 0.521 1974 - TO 0.437 2$7 1972u-US$1. T 0.477 1975- US$ I TO 0.402 Completio Year, 1976 2 S$ 3T 0.429 6

/1 The estimate, excluding duties and tomes (which were waived) sad project item cancelled, was 01$23.3 million. 52 Overrun on project itsN actually carried out, including interest during construction. /3 including US$1.6 million for exchange adjustments. /Z Repayments refer to Loan 606-TUB; repayment of Credit 150-TUN coemences in 1979. /3 Based on principal components of project. /A Northern and Southern region, respectively. If Final disbursement date. /8 Number of 5-day weeks shown in the mission report plus travel time. /9 Numiber of weeks times number of persons. Excluding time spent in report-writinR.

PROJECT PERFORMANCE AUDIT REPORT

TUNISIA FIRST RAILWAY PROJECT (LOAN 606/CREDIT 150-TUN)

Highlights

This project contributed as intended to the first stage of a renewal and modernization program for the Tunisian Railways (SNCFT), through the financing of track renewal, procurement of motive power and rolling stock, renewal of workshops, consulting services and interest during construction. However, the agreed financial performance objec- tives for the Borrower were not realized.

The project had a 100% time overrun and a 52% cost overrun. The former was primarily due to serious floods which diverted SNCFT's resources at the start of the project, while the delays during a period of inflation and some underestimates of unit costs were responsible for the cost overrun.

The re-estimated economic return on the project is 10% against 12% and 25% (for the northern and southern regions, respectively) at the time of appraisal.

Points of particular interest are:

- the serious financial difficulties of SNCFT and reasons for the Government's reluctance to increase rates (paras 7-9, 16; PCR, paras 3.03, 5.04-5.05);

- SNCFT's reasons for using other than World Bank financing for further investments (paras 12-13); and

- delaying procurement to effect progress towards meeting the financial covenants (para. 8).

PROJECT PERFORMANCE AUDIT MEMORANDUM

TUNISIA FIRST RAILWAY PROJECT (LOAN 606/CREDIT 150-TUN)

I. Introduction

1. Tunisia is about one-quarter of the size of France and has a population of some six million. Its principal exports (by value) are crude oil, rock phosphate and phosphate products, olive oil and tex- tiles. The Tunisian transport system consists of well developed road and railway systems and six ports, one of which only serves for oil ex- ports. By the end ok 1977, the Bank Group had financed 41 projects in Tunisia for a total of over US$500 million. Six projects, for an amount of US$92 million, were in the transport sector (two ports, two highways, one pipeline and one railway project).

2. The Societe Nationale des Chemins de Fer Tunisiens (SNCFT) is responsible for virtually all rail transport in the country. It has about 500 route km of standard gauge and about 1,500 route km of meter gauge track. Some one-third of the traffic units of SNCFT consists of passenger traffic, with suburban traffic playing an important role. Freight transport consists predominantly of bulk commodities such as phosphate, cereals, iron ore and cement, while only about 15% is gen- eral merchandise (see PCR, Table 3). At the time when discussions on a Bank loan started in the mid-sixties, it was clear that for many years investments for renewals had been insufficient. This was specially evi- dent where diesel railcars had an average age of almost 20 years, pas- senger cars were all over 40 years old, and 57% of the freight cars were over 50 years old. Track renewal was also urgently required.

3. Lending for railways was informally discussed between the Government and the Bank in 1966, and an official request was received from the Government in August 1967. The Bank felt, however, that a transport study of the country was required to establish investment priorities, and the project was not financed until almost two years later. The project was to cover urgent replacements, to be followed soon by further loans for continuation of the renewal program as well as expansion to meet anticipated traffic growth. A loan and credit for US$8.5 million each were signed on April 29, 1969. The proceeds of the credit were on-lent to SNCFT on the same terms as the Bank loan (interest rate 6 1/2%, duration 25 years, with four years' grace). The project in- cluded track renewal, procurement of motive power and rolling stock, re- newal of workshops, consulting services and interest during construction (details in PCR, Table 2). So far, there has been no second Bank Group- financed project for SNCFT.

4. Implementation of the project has met with difficulties. Floods in 1969 caused substantial damage and repairs absorbed SNCFT's civil works capacity, thus delaying the track renewal program financed under the proj- ect, while managerial resources were also diverted away from the project. - 2 -

SNCFT experienced problems with the Bank's procurement procedures, which were the result of its unfamiliarity with Bank procedures and the lack of Bank staff time to provide more detailed guidance. Some procurement was complicated by complaints from suppliers whose bids had not been se- lected, which involved lengthy correspondence between Washington and Tunisia, in order for Bank staff to ascertain whether Bank guidelines had been adhered to. SNCFT also claims to have experienced disburse- ment difficulties where some French banks were not familiar with the Bank procedures. These delays during a period of inflation, combined with unit price estimates for rolling stock which were too low, led to a cost overrun of 52% on project items actually implemented and interest during construction. Local expenditures stayed well below expectations mostly because bridge reinforcements were deferred and local assembly of freight wagons did not take place as planned (see PCR, Table 2). The cost overruns were financed out of bilateral loans and suppliers' credits for locomotives and freight wagons.

5. The Railway suffered serious financial constraints specially from the delays in payment by the phosphate company and in the introduc- tion of tariff increases. The combination of the effects of the floods and the financial constraints has led to a 100% time overrun in the im- plementation. However, in spite of these difficulties, the project has made its intended contribution to the modernization of SNCFT.

II. Main Issues

Institutional Objectives and the Bank's Approach

6. In 1969, SNCFT was a much weaker organization than it is at present; the division of financial responsibilities between the Govern- ment and SNCFT was not fully defined, and the Government did not give railway investment and improvement high priority. Since 1956, very little money had been made available for renewal, which is shown by the age of much of the equipment. As a result, no clear investment criteria existed, and the staff of SNCFT had little experience in competitive procurement. The major institutional objectives related therefore to the financial posi- tion of the Railway, to its management of investment planning and to the improvement of procurement procedures. a. Financial Situation of the Railways

7. The financial target adopted for the railways was a 7% return on investment by 1973. However, the financial problems of the railways persisted and a positive financial return was not achieved (see PCR, para. 5.04). The major reasons for this were that traffic did not increase whereas it had been expected to double and costs increased because of inflation. To compensate for these factors, a substantial increase in tariffs would have been required, in order to meet the financial targets. The Government had serious reservations about the tariff increases arising from the fact that phosphate traffic could not bear any increase of freight costs because of the depressed market conditions, but the Bank made it clear - 3 -

that the Government, rather than the Railway, should subsidize the phos- phate industry. The problem was solved when prices went up in 1973 and then rates were also increased. For much of the other freight and pas- senger traffic, there was a fear that traffic would divert to road trans- port; in addition, some rates were kept low for social reasons.

8. In addition to these factors, the Railway's cash position also came under considerable pressure because of delays in payments due to it by the Government-owned phosphate company. In mid-1972, the Bank became increasingly concerned over the financial situation of SNCFT and much staff time was devoted to urging the Government to take steps to increase tariffs and settle the phosphate company's debts. As a result of discus- sions and correspondence between the Bank and the Government between April and November 1972, various solutions were reviewed and it was understood that the Bank would receive an official communication from the Government confirming its intentions regarding the specific measures to be taken. While this question was still under discussion, the Bank was requested, in September 1972, to approve the award of a contract for railcars amount- ing to US$5.3 million. To finance the whole of this contract would have required Bank approval of a reallocation of about US$100,000 to the cate- gory for rolling stock in Schedule 1 of the Loan Agreement. Although al- most the whole of the contract could have been financed without a change in Schedule 1 (since unallocated funds (about US$750,000) could be applied to any category at the request of the Borrower), the Bank informed SNCFT that, while it had no objection in principle to the award, its approval of the contract and the reallocation of funds would be conditional upon its receiving the Government's agreement to the proposed solutions to SNCFT's financial problems. The financial solutions were eventually agreed on in February 1973 and the award of the contract was therefore held up for five months. Although the Bank may not have been acting strictly within its legal remedies in holding up the award of the procurement contract in this manner, the Bank did have a Legitimate concern over the weakened financial position of SNCFT and how best to deal with it; in any event, there were no untoward consequences from the Bank's procurement action in this case.

9. While it was reasonable for the Bank to require improvements in the financial situation of SNCFT, in retrospect, the 7% financial return target seems to have been overoptimistic. Although at the time of appraisal, the southern part of the system (originally a separate company) was earning a 16% return, the northern portion was losing money, and the return for the SNCFT in its entirety was about 0%. Moreover, the risk of traffic diversion in reaction to higher railway rates was real. The effect of the rate cove- nant was one of the tactors cited by both the Government and SNCFT as rea- sons why SNCFT did not wish to consider further borrowing from the Bank (see below). The Government took the view that if they wished to subsidize the railways either for economic or social reasons, they should be frea to do so even if this was reflected in a negative financial return. On tjhe other hand, the Bank's position was that reasonable progress should be made towards meeting the financial target that had been agreed to earlier by the Govern- ment, for reasons whi'ch still remained valid. -4-

b. Additional Investments

10. The Loan Agreement included a covenant which required Bank ap- proval for new investment projects not included in the agreed investment plan, which at the time was small because consultants were to study fur- ther priorities. This covenant was intended for the duration of the proj- ect, which was expected to be completed by December 1973, but owing to de- lays in implementation, it remained in force until December 1975. By mid- 1973, the Railway's financial status had improved, and further investments were required to modernize and cope with additional traffic. All these in- vestments were approved by the Bank but it involved administrative work and some delays. SNCFT officials expressed particular dissatisfaction with this covenant requiring prior Bank approval on individual investments in light of the constraints it turned out to have imposed upon them. c. Consultants' Services

11. The project also included consultants' services, to assist with the planning for equipment renewal and expansion; advise on the layout and organization of some stations and marshalling yards and the reorganization of workshops; and establish a cost accounting system and tariff policy. As pointed out in the PCR (para. 3.07), the consultants' services were completed satisfactorily. SNCFT, however, is of the opinion that a much smaller consultants' input would have sufficed. They generally felt that the study on costing and tariffs was a useful contribution. It also ap- pears that the consultants' help with some very specialized matters, such as recommendations on technical merits and specifications of the most suit- able types of equipment, were positive points. However, SNCFT felt that the consultants have also done much work that could have been carried out by the staff of SNCFT. This would have included the rolling stock inven- tory, scrapping policy and other work which did not require highly special- ized technical knowledge. It was not possible for the audit mission to determine whether eight years ago sufficient staff with the appropriate experience would have been available within SNCFT, to carry out most of the more routine work done by the consultants, nor to what extent SNCFT endeavored to modify the consultants' terms of reference.

The Question of a Second Railway Project

12. Originally, the Bank Group intended to finance further railway projects in Tunisia. A second project was tentatively scheduled for about 1972, but had to be postponed because SNCFT's financial situation had badly deteriorated. When it became clear that loan and credit funds were not suf- ficient to cover the first project as originally defined and the Bank could not indicate if and when additional financing might be made available on account of the Railway's rapidly deteriorating financial situation, SNCFT looked for other sources.

13. The availability of cheaper loans was a significant factor in SNCFT's decision not to approach the Bank for further financing. But another equally important factor apparently was SNCFT's objection to the - 5 -

Bank's lending conditions. The management of SNCFT has for several years been unhappy with what they called the Bank's "tutelage". SNCFT officials recognized the value of the Bank's assistance in improving the Railway's financial situation, but they felt in retrospect that the loan conditions were too numerous, affecting their freedom of action in virtually every field, and objected, in particular, to the rate covenant and the necessity to obtain the Bank's approval for any expansion of the investment plan. SNCFT also felt that procurement and disbursement procedures were very complicated, specially when compared with their present sources of finance.

III. Conclusions

14. The project was successfully implemented, in spite of substan- tial delays and cost overruns, and is serving Tunisia as intended. The agreements reached during negotiations contributed to the improvements which have taken place since 1969 in all facets of SNCFT; however, com- pliance with the financial understandings was poor.

15. In retrospect, the Borrower apparently did not share the objec- tives of key loan covenants, especially the investment covenant and the rate covenant. Because of this and the availability of cheaper loans with fewer conditions, SNCFT is presently not contemplating further World Bank loans.

ATTACHMENT

TUNISIA

RAILWAY PROJECT - LOAN 606/CREDIT 150-TUN

COMPLETION REPORT

I. SUMMARY AND CONCLUSIONS

1,01 The project, although timely for railways albeit implemented with some delay, was essentially a holding operation prepared and supervised in too narrow a context. Inter-modal considerations, should have been followed up more actively after the 1968 Transport Survey as the relative roles of road and rail transport emerged during supervision. The survey is to be updated by the end of 1978 to guide investments for each mode.

1.02 The project, based on a 1968 Transport Survey, was well-timed to maintain the railways capacity after amalgamation of its two sections in 1967. (paragraphs 2.01 - 2.10)

1.03 The project, was implemented satisfactorily, although with delays largely outside the Borrower's control, particularly the disastrous 1969 floods and severe financial constraints. (paragraphs 3.01 - 3.12)

1.04 Rail traffic forecasts were unduly optimistic about railways' participation in overall traffic growth which, due to short hauls involved,has clearly gone pri- marily to road, although supporting data is lacking. (paragraphs 4.01 - 4.09)

1.05 With little growth in traffic, the cost savings resulting from the project investments (paragraph 1.07) were not sufficient to offset other cost increases. mainly wages, and costs increased significantly in real terms. On the other hand, tariffs have lagged behind costs and the rate of return targets have consequently not been achieved. However SNCTF's financial stability has been maintained by increased State contributions. (paragraphs 5.01 to 5.08 and 6.05)

1.06 The project has encouraged the development of management information systems, cost related tariffs and the planning function, but inter-modal con- siderations have, so far, received little attention from railways. (paragraphs 6.01 - 6.05)

1.07 The economic return re-evaluation for the project as a whole is about 10%.. Appraisal forecasts were 12% for the Northern-Central network and 25% for the Southern network but were not calculated for the project as a whole. Increased investment costs were the principal reason for the lower results.

1.08 The Bank was instrumental in starting the 1968 Transport Survey, but during supervision of the Railways Project did not secure full consideration of inter-modal factors to guide investments. (paragraphs 8.01 to 8.03) - A.2 -

II. PROJECT PREPARATION AND APPRAISAL

2.01 The project originated with informal discussions between the Bank Group and the Tunisian Government in 1966. At that time some studies to be used in the preparation of highway projects had been commissioned and the Bank felt, and the Government agreed, that a study of the entire transport sector would be desirable to guide the formulation of projects for each mode. UNDP was requested to finance the study with the Bank as executing agency.

2.02 Both the study and the project were timely for railways because on January 1, 1967, the separate and profitable southern rail system -- the"Compagnie des Phosphates et du Chemin de Fer de Gafsa" -- was, in accordance with its concession agreements, taken over by the SNCFT which operated the relatively unprofitable northern and central system. Both systems, but particularly the SNCFT, suffered from lack of investment and arrears of maintenance.

2.03 The Tunisian Government expressed a preference that the study be carried out by SETEC (France) and BCEOM. BCEOM learned of this and informed the Bank that while they would not object to cooperating with SETEC, they would refuse to accept a number two position. Bank staff finally concluded that since the firm carrying out the transport study would have to evaluate ongoing studies, it would be best to consider none of the firms that were doing any transport studies in Tunisia. The Bank then prepared a short list consisting of CADIC (Belgium), Italconsult (Italy) and NEDECO (Netherlands). Tunisia suggested the addition of METRA (France). Invitations for proposals were sent on April 28, 1967. The Bank's evaluation team found Italconsult's proposal to be the best and so informed the Tunisian Government.

2.04 The Government acknowledged that while they could have voiced their objections at the time the short list was being approved, they elected instead to withhold their comments until later. The Government suggested, and the Bank agreed, that the Bank explore the possibility of having Italconsult join with another firm to perform the study. On November 8, 1967, the Bank signed the study agreement with Italconsult and METRA. The eight-volume Transport Survey was completed in July 1968. The railroad volume (Vol. V) became the basis of the appraisal of the First Railway Project. In fact, the economic evaluation section of the Appraisal Report was taken directly from the Transport Survey.

2.05 The usefulness of the Transport Survey seems to have been short-lived and, in the railways particularly, very few of the present staff were aware of it. Its principal shortcoming appears to have been its overestimation of rail traffic for both freight and passengers. It is possible that the Government's earlier difficulties with Italconsult caused the authorities to place so little reliance on the survey but its impact on the transport sector has been disappointing in relation to the scope and size of the study. The Government has now decided to update the study and results are expected in 1978.

2.06 The project formed part of the railways' Four-year Plan 1969-72 and consisted essentially of high-priority items of the Plan which were replacement items urgently required and fully justified at the then existing traffic levels, together with consulting services intended to identify future needs. It was summarized as follows: - A.3 -

Estimated Costs (1969)

------(D'000)------(US$ '000)------% of Local Foreign Total Local Foreign Total Total

1. Track 4270 4000 8270 8134 7620 15754 53.9

2. Motive power, rolling stock & spare parts 1630 3420 5050 3105 6515 9620 32.9

3. Workshops 60 190 250 116 360 476 1.6

4. Consulting services 150 210 360 286 400 686 2.4

5. Contingencies 5% 310 390 700 580 745 1325 4.5

6. Interest during construction - 715 715 - 1360 1360 4.7

Total 6420 8925 15345 12221 17000 29221 100.0

a/ D 4,250,000 for local works and D 2,170,000 for customs duties. 9/ US$ 8,090,000 for local works and US$ 4, 131,000 for customs duties.

2.07 The full plan for 1969-72 included other items and totaled:

Estimated Costs

D million US$ million a. The project as described above 15.3 29.2 b. Gafsa-Gabes line 6.0 11.4 c. Signaling works and equipment 2.0 3.8 d. Tunis railway station 1.4 2.6 e. Manoubia tunnel 0.3 0.6 f. Bypass of Sousse 0.3 0.6 Totals 25.3 48.2

Although not without merit, proposals under "b" to "f" were considered to be of lower priority or for items for which adequate justification had not been adduced at that time and they were consequently excluded from the Bank-financed project. - A.4 -

2.08 Until the project was completed, the Borrower covenanted not to under- take any new project or development not included in the Plan except with the Bank's agreement. The principal changes agreed during the originally expected 1969-72 project period,were:

(a) Renewal of the Graiba-Gabes line in place of the proposed direct Gafsa-Gabes line (para. 2.07(b) above), utilizing French bilateral finance.

(b) 22 additional locomotives with Canadian (CIDA) finance.

(c) 5 additional railcars and trailers with French suppliers credits.

2.09 The delay in completion of the project until 1975 resulted in a continuing dialogue with the Borrower after 1972 on a number of other developments and the Bank's agreement was given to the following principal additions:

(a) track maintenance equipment, financed by Tunisian Government.

(b) 700 phosphate wagons financed by African Development Bank (ADB).

(c) Track and signaling improvements for phosphate traffic also financed by ADB.

(d) 33 passenger coaches utilizing suppliers credits.

2.10 The additions agreed by the Bank were primarily intended for the expanding and Bank-financed phosphate mines served by the southern network (paragraph 4.05) and for increasing suburban and main-line passenger traffic (paragraph 4.06).

III. PROJECT IMPLEMENTATION AND COST

3.01 Implementation of the project was generally satisfactory taking into account several adverse factors:

(a) The disastrous floods of September/October 1969 just after the Loan/Credit became effective.

(b) Financial constraints, including both a shortfall in SNCFT's internal resources and the under-estimation of costs, particularly for rolling stock;

(c) Inexperience of staff in planning and executing major investments and accommodating to the Bank's procedures.

3.02 The 1969 floods absorbed all available track materials and management and manpower resources for at least a year. This diverted management from planning the execution of the 1969-72 investment plan. In addition to the emergency repairs, - A.5 -

costing about TD2 million in 1969/70, the work of replacing temporary by permanent works has continued through 1977 and the final cost is expected to be about TD7 million (US$15.5 million).

3.03 The financial constraints arose firstly from the inability of SNCFT's principal customer, the Sfax--Gafsa Phosphate Company, to pay for the services provided to it and, secondly, from the unwillingness of the Government to increase tariffs in line with costs. From 1970 to 1972 the Bank exerted considerable and continued pressure on the Government which early in 1973 assumed the phosphate company's debts and increased the existing subsidies to SNCFT pending tariff increases which were finally approved for January 1, 1974.

3.04 The Government's constructive actions enabled a reallocation of proceeds to be made in April 1973 which in turn enabled procurement of rolling stock to be resumed. Altogether the floods (1 year), financial constraints (1 year) and resultant procurement delays probably set the project back by at least two years. Nevertheless the project was ultimately completed in its entirety and on the whole the Borrower did a good job within its powers and the difficult circumstances prevailing.

Timin ,

3.05 Table 1 (Sheet 1) shows the actual timing achieved for the various items in the project with supplementary detail on Sheet 2 for the track renewal program. Only the consultant studies fwhich were not affected by the physical impact of the 1969 floods) were completed on time. About a third of the track renewal program was completed by the original target date of 1972 mainly because of the impact: of flood damage. Locomotives were received three years and railcars (and trailers) and freight wagons five years later than expected mainly because alternative financing had to be arranged to cover the cost which far exceeded the estimates.

Procurement

3.06 SNCFT experienced some difficulty initially, being unfamiliar with the Bank's ICB procedures. They still believe that the review and approval of specification, bidding arrangements, evaluated bids and final contract are unduly long and burdensome but a joint examination of a few selected cases of procurement did not reveal any delays on the Bank's part. On the other hand, SNCFT was meticulous in preparing specifications and in evaluating bids, their detailed points system for locomotive bid evaluation having been commended by the Bank to other borrowers. Their evaluation of bids for railcars/trailers was also comprehensive enough to withstand complaints from the lowest bidder who was passed over for technical reasons. Services of Consultants

3.07 The consultaqcy services have been tabulated in the first sentence as follows:

The Bank-financed consultancy services comprising:

(a) Motive Power and Rolling Stock (ITALCONSULT) containerization was later added.

(b) Workshops (SOFRERAIL)

(c) Reorganization of Tunis and Metlaoui Stations (ITALCONSULT)

(d) Costing and Tariff Policy (SOFRERAIL) - A.6 -

were on the whole completed satisfactorily. SNCFT remain dubious about the value of the studies, except for that on costing and tariffs (paragraph 6.03), maintaining that the studies did no more than confirm their own views. The rolling stock study (Italconsult) again overestimated freight traffic but for motive power replacement it was adequate enough to justify the Bank's agreeing to a further 20 locomotives (22 allowing for the shortfall of two financed by the Bank)and five railcars and trailers being purchased in additionto the 1969-72 plan (paragraph 2.08). Studies were also helpful in refining specifications and analyzing the layout and equipment of work- shops and in preparing maintenance schedules. Other studies such as Tunis Station and modernization of signaling also included detailed recommendations for the future. Whereas the Borrowers may feel they could have done most of this them- selves, it is doubtful whether sufficient management or specialists' time could have been made available. The use of external consultants also adds more weight to the recommendations. Project Costs 3.0 Table 2 compares the actual costs of the project with the appraisal forecasts (including 5% contingencies spread over each item) and distinguishes betweei those investments completed with the help of Bank/IDA finance (Part A), those completed with supplementary finance (Part B) and those,fortunately mainly small items, deferred (Part C). The appraisal forecasts included customs duties, from which SNCFT was subsequently exempted. Interest during the project period was capitalized until April 1975, but was much less than estimated due to the slower rate of disbursements. Excluding these two items the total project costs exceeded forecasts by about 46%. Excluding also the investments deferred, (bridge reinforcements and workshops improvements, or about 8% of the original project), costs were 58% above estimates. Costs for track renewal (54% of the appraised value) were close to estimates and the excess was entirely due to the costs of locomotives and rolling stock (35% of the project) being underestimated, parti- cularly the costs of railcars and trailers and of specialised mineral wagons which were 2-1/2 times those estimated.

3.09 The consultants and the Bank had shared these optimistic forecasts for mobile assets, although some of the increased cost resulted from other project delays (paragraph 3.05) accentuated by the incidence of inflation in the early 1970's. Also the savings anticipated from importing wagon components for assembly locally were not realized because local facilities could not be mobilized in time and complete wagons had to be imported instead. More recently, the requirements for containers and other wagons (outside the project) are being met by importation of components and satisfactory local assembly.

3.10 The cost overruns on investments completed with Bank/IDA finance (excluding capitalized interest) were about 27% and this finance enabled about 72% of the appraised project (in terms of the appraisal estimates) to be completed. A further 20% was completed with the aid of Spanish and Canadian finance and with aid from a local bank consortium pending negotiations with the African Development Bank. The cost overrun for.these items was about 89%. The remaining 8% (paragraph 3.08) was deferred mainly on technical grounds and not for financial reasons.

3.11 Of the investments originally scheduled for Bank finance (for each category):

1. track renewals were completed except for some bridge reinforcements which needed further study by SNCFT; all were financed by the Bank except some urgent work on the Gafsa-M'Dilla line which had to be carried out before Bank finance was available.

2. all motive power and rolling stock purchases were made, but two (out of seven) locomotives and 614 (out of 674) wagons were financed from' other sources; - A.7 -

3. the workshops, following SOFRERAIL's report, were satisfactorily reorganized and, as only a few items of over-age equipment had to be replaced in the short-term,Bank finance was reallocated to other items. Further modernization was deferred to later plan periods;

4. all consultancy services were completed.

Disbursements

3.12 Disbursements, forecast to be completed by December 31, 1972, were less than 20% at that date and were not completed until January 9, 1976 for an effective closing date of December 31, 1975, three years behind schedule. To accomodate the increased costs of the items finally financed by the Bank, the allocation of pro- ceeds was twice revised as follows:-

Original Ist Revision 2nd Revision Final (6/4/69) (11/5/70) (4/19/73) (1/9/76) Category Description ------US$ thousand------

1 Track renewal 7620 7477 7220 7300

2 Motive power and rolling stock 6515 6515 8410 8467

3 Workshops 360 360 - -

4 Consulting services 400 543 570 430

5 Interest during construc- tion 1360 1360 800 803

6 Unallocated 745 745 - -

Total 17,000 17,000 17,000 17,000

IV. TRAFFIC AND OPERATIONS

Freight Traffic

4.01 SNCFT was and is primarily a carrier of bulk commodities, three quarters of the total traffic being minerals. The following table shows the distribution of traffic by commodity, which did not change significantly during the project: ----- 1968------1975------Tons Ton-km Tons Ton-km

Phosphates 57 64 53 63 Iron ore 16 15 17 11 Grains and flour 6 5 8 6 Other 21 16 22 20 Total 100 100 100 100 - A.8 -

4.02 The phosphates move primarily from mines at Metlaoui through Gafsa to Sfax, a distance of 243 km although lesser amounts move from mines at Ain Kerma and Kalaa Khasba over Line 6 to Tunis, a distance of 234 km. The iron ore moves from mines at Djerissa to Tunis, also over Line 6, and thence to Menzel Bourguiba over Lines 1 and 4. The distance from Tunis to Menzel Bourguiba is 75 km. Thus, three quarters of SNCFT's traffic moves over only 30% of its route mileage. When the remainder of the traffic is spread over the entire network, it means that traffic density on the remaining lines is exceedingly low.

4.03 Freight traffic statistics are shown in Table 3. Total freight traffic has not grown but rather has fluctuated from year to year about a constant mean. The Appraisal Report had projected an annual growth rate of 6-1/2%. During this same period, however, the Tunisian economy grew at an average rate of 9%. Tunisia experienced a boom in the midst of world recession.l/ The resulting increase in freight movement was clearly picked up primarily by trucks, with some going to coastal shipping, although detailed supporting data is not collected. SNCFT has so far picked up very little of the increase in general traffic.

4.04 Iron ore traffic was fairly constant over the project period. The Appraisal Report had forecast 1% annual growth, but even this was not achieved. Phosphate traffic fluctuated widely from year to year with the state of the world markets, and consistently fell below forecasts. Grain traffic grew slightly, with tonnage generally being above estimates and ton-kilometers being below, hauls between areas of supply and demand being shorter than expected. Flour shipments were quite steady through most of the project period, but then declined somewhat near the end. Other traffics were also quite constant, running slightly above forecasts on the North-Central network, but only about half of forecasts on the Southern network where developments were less than expected.

4.05 Because of Tunisia's size and the nature and location of its resources, it appears unlikely that there will be any significant growth in traffic of com- modities other than phosphates and possibly iron ore. The Bank is supporting the phosphate industry through the Gafsa Phosphate Project (Loan 1042-TUN) which should result in a 40% expansion of mine capacity from 1975 to 1980. This would result in 1.6 million additional tons of phosphate to be carried by SNCFT, representing a 24% increase in SNCFT's total tonnage. Other commodities are not expected to show any significant growth. The Appraisal Report forecasts, which were based on the Transport Survey by Italconsult, reflected an optimism which, in retrospect, does not appear to have been justified. For general freight, in particular, the short hauls involved make road the more attractive carrier although SNCFT hopes to regain some of the traffic using small containers to provide more effective door-to-door service. Tee marketing function has been significantly strengthened since 1975.

1/ Tunisia: Economic Position and Prospects of Tunisia; Review of the Fifth Development Plan, 1977-81, Report No. 1539-TUN, May 2, 1977 - A.9 -

Passenger Traffic

4.06 Passenger traffic forecasts in the Appraisal Report were even more optimistic than the freight forecasts. Main-line passengers and passenger- kilometers were expected to increase at an annual rate of 10%, and suburban passengers and passenger-kilometers were expected to increase at an annual rate of 9%. The actual figures, shown in Table 3, reveal that the increase in main-line passengers was 1% per year; in main-line passenger-kilometers, 3% and in suburban passengers and passenger-kilometers, 7-1/2%.

4.07 Undoubtedly, the forecasts were made on the assumption that new rolling stock to be procured under the project would be in service in the early 1970's. Unfortunately, the new equi.pment was not placed in service until 1976. While ridership cannot be expected to grow significantly when the equipment is old and out-mtoded the main-line traffic forecasts would have been overly optimistic even if the new equipment had been delivered on schedule. A country with Tunisia's geographical characteristics and with its well developed road network would not appear to be a place where large rail ridership increases could be expected, but following the introduction of the new equipment improved schedules are attracting more custom. Operations 4.08 -Table 4 contains selected operating statistics for 1968 through 1975. As with traffic, the principal feature is the lack of any significant improvements, particularly for operations primarily concerned with freight where traffic density declined from 670,000 to 650,000 ton km per route km and freight train km from 4.2 million to 3.6 million.

4.09 The indices of overall operating efficiency such as car turnaround time and productivity in terms of traffic units per staff employed remained virtually unchanged at five: days and 220,000 units respectively. The line from Mateur to Beja was closed as agreed but other uneconomic lines continued in partial operation although without investments. Without the project, operational efficiency would undoubtedly have declined and this is reflected in the economic reevaluation (paragraph 7.02).

V. FINANCIAL PERFORMANCE OF THE BORROWER

5.01 Table 5 shows the actual operating results and those forecast at appraisal for the years 1968-75. The two sets of figures are not strictly comparable because the appraisal forecasts were at constant prices, receipts reflecting expected increases in traffic at then existing tariffs and expenditures being increased in respect of then existing costs estimated to vary with traffic volume (about 40% of total costs). The actual results have been adjusted to maintain comparability where practicable, e.g., depreciation has been charged throughout at 17% of revenue.

5.02 Despite-inflation, fully distributed costs were maintained at about the 1968 level of 6 millimes 1/ (mms) per traffic unit until 1972. In 1973 and 1974 they increased slightly to 6.5 mms and in 1975 wage increases led to a sharp increase to 8.6 mms or about 50% above the 1968 costs. During this period traffic units increased by only 6.5% so that no significant economies of scale were practicable. The general price index rose by a comparable 52% so that no change in real terms has resulted from the project and other planned expenditure through 1975. The appraisal forecast, based on a traffic increase of 65%, envisaged a reduction of 20% of fully distributed costs in real terms to about 4 mms per traffic unit. - A.10 -

5.03 Receipts per traffic unit were forecast to remain around 5 mms per traffic unit. Actual receipts declined slowly to about 4.75 mms by 1973 (partly because the phosphate rate was.reduced to help the mining company), but increased sharply to 5.75 mms in 1974 and 7.0 mms in 1975 as Government authorized tariff increases took effect.

5.04 Even so, receipts still fell well short of the 8.6 mms cost per unit and SNCFT finished the project period with an annual operating deficit of over TD2 million (TD3 million excluding a Government contribution of TD1 million for overdue tariff increases). This represented a negative return of 6% on net fixed assets compared with the 7% required by the Loan Agreement, Section 5.12. Only in 1970 did the actual return of 3.6% exceed the forecast of 3.1%, the worst year being 1973, immediately prior to the first tariff increases, when the return was - 6.4%.

5.05 The adverse financial results are a combination of stagnant freight traffic and the way in which tariffs have lagged behind costs. However, it is doubtful whether any further increases would have produced more revenue, except for phosphate traffic for which current export prices enable a rate to be chargedwhich yields a return of 7% or more on the net value of assets involved. For general freight and passenger traffic higher rates would probably lose more traffic to road and the basic role of railways in a country of such short hauls needs to be carefully reexamined in the forthcoming review of the Transport Survey. Meanwhile the Bank has not attempted to enforce the covenant but has urged Government to make progress towards it and the position since 1973 has slightly improved.

Balance Sheets

5.06 The actual balance sheets, adjusted where practicable to maintain comparability are shown in Table 6 with the corresponding appraisal forecasts. The following summary shows that current and liquid ratios have improved since appraisal, but not to the extent forecast: 1968 1975 Forecast Actual Forecast Actual

Current ratio 1.2 1.2 4.7 1.7 Liquid ratio 0.8 0.7 3.5 1.1

The debt/equity ratio in 1968 was a very favorable 18/82 and was forecast, even with the borrowings for the project, not to exceed 30/70. The project delays kept the ratio below 30/70 until 1975 when, with heavy borrowings to complete the project and other borrowings for additional facilities (including those required to serve the phosphate mining expansions also being financed by the Bank), the ratio de- teriorated to 41/59 and would have been worse without state subsidies.

5.07 The accounts for SNCFT have been prepared promptly and well according to the Tunisian National Accounting Code (which closely follows the French system) and submitted annually to the Bank. Under Article 16 of SNCFT's statute, audit reports are prepared by the Financial Controller, but at the Bank's suggestion reports have also been prepared by a local firm (CABINET FINOR) which is developing a useful role as an independent auditor. - A.11 -

Project Financing

5.08 Table 7 compares the actual with the proposed financing of the project. Contributions from each source are summarized on a percentage basis as follows:

Forecast Actual

Bank Group .58 48 SNCFT 28 20)b/ Government 14 a/ -

Local banks - 14)c/ Other intl. agencies - - Bilateral sources - 18

Total 100 100

at/ Customs duties; subsequently remitted. / Contributions effectively from Government to extent of subsidies. c/ Funds from local bank consortia, pending negotiations with ADB.

The financing of the additional costs of the project from other external sources almost doubles the debt service involved.

VI. INSTITUTIONAL DEVELOPMENT

6.01 The principal institutional developments encouraged by the project concern:

(a) Management information systems. (b) Cost-related tariffs. (c) Planning functions.

6.02 The development of management information systems and of the planning function was fostered without external assistance and a separate department was created headed by an able, younger engineer with specific interests in these matters. Good progress has been made with preparation, marshalling and presentation of management data but the planning section is as yet inadequately staffed, particularly to assess inter-modal considerations.

6.03 The development of a costing system and preparation of a cost-related tariff -- based generally on the "loadability" 1/ of freight traffic -- was perhaps the most productive of the consultancy efforts. The tariff system adopted on Sofrerail's recommendations was quite new to SNCFT and required considerable training of staff and preparation of customers.

6.04 In addition to the four consultancy services (paragraph 3.07), Side Letter No. 1 required SNCFT to employ two experts to advise the Director General on the overall efficiency of SNCFT's operations. In the event, the Bank accepted the Director General's view that sufficient consultancy advice was being obtained from the four Bank-financed assignments (to which advice on containerization was added), particularly as a Deputy Director General had been appointed in accordance with the Loan Agreement.

17 In the sense of securing the maximum load per wagon - A.12 -

6.05 The statutory regulations for SNCFT were incorporated in Law No. 69-31 of May 9, 1969 including, as required by the Loan Agreement, an increase from two to four in the directors representing major classes of users, raising the total number of directors from eight to ten, the other six comprising four from management and two from staff. The reconstituted.Board appears to have maintained a close interest in SNCFT's affairs, particularly the annual operational and capital budgets. The Government has, however, retained responsibility for tariffs and the so-called "transitory article" (No. 26) in the Statute has become semi- permanent. This requires a "State Contribution" (originally TD1 million p.a. but subsequently increased in practice to cover the accounting deficit) to be made when tariff increases are refused (or reductions are imposed) by the State. The forthcoming review of the Transport Survey should make recommendations on the relative roles of road and rail transport and the need to continue the "State Contribution."

VII. ECONOMIC REEVALUATION

7.01 The economic evaluation in the Appraisal Report was based on an analysis done by Italconsult, and estimates the economic rate of return on the portion of the project affecting the previously separate Northern-Center network to be about 12% and on that affecting the separate Southern region, about 25%. It recognized that because of a "high degree of interdependence of track renewal and motive power and equipment renewal on these four lines (of the Northern-Center network) ," rates of return on investments in these separate categories could not be calculated. Instead, rates of return were calculated for investments on individual lines in the network and for the previously separate networks.

7.02 Eight years later, the Completion Mission confirmed the judgment of the appraisal mission that the nature of this project precluded the separate evaluation of track, motive power, and equipment investments. Also the amalgamation of the two networks has reduced the availability of data for each network separately. Even though preliminary analyses indicated a high rate of return on the motive power and freight wagon purchases, and low rates of return on track renewal and passenger equipment expenses, it must be noted that only through the renewal of the track could the full benefits of the new locomotives and freight wagons be obtained. Consequently, all the investment categories were combined in the analysis which now yields an ex-post economic rate of return of about 10%.

7.03 Costs and benefits are shown in Table 8. The detailed investments in locomotives, equipment and track renewal are shown in Table 2. The benefits from locomotive investment are based on one new locomotive with an operating and maintenance cost of 0.34 TD/km replacing three old locomotives, each with an operating and maintenance cost of 0.565 TD/km. It was furthermore assumed that the locomotives would accumulate about 90,000 km annually.

7.04 The benefits from investment in new freight wagons are based on maintenance costs of those in mineral service being reduced from 800 to 320 TD per year, and of those in general freight service from 400 to 160 TD per year. The benefits from investment in track renewal are based on annual track maintenance costs being reduced from 1608 TD/km to 965 TD/km. The locomotive and freight wagon operating and maintenance costs and track maintenance costs are all based on SNCFT experience before and after project implementation and are all based on 1977 prices. The passenger railcars have not been in service long enough for adequate cost data to be developed; annual savings are meanwhile estimated to be 5000 TD for each powered railcar and 1000 TD for each trailer. - A.13 -

7.05 Sensitivity tests indicate that a 10% decline in benefits from loco- motive investments would reduce the economic rate of return by 0.8%, and that a 10% decline in benefits from track renewal investments would reduce the economic rate of return by 0.2%. Ten percent reductions in benefits from freight wagon and passenger railcar reduce economic rates of return by 0.2% and 0%, respectively. The reduction in the rate of return from the appraisal estimate is mainly due to delays in the purchase of freight wagons and passenger railcars which raised their costs by a factor of 2.4 while not significantly affecting benefits.

7.06 Both the original economic evaluation and this re-evaluation are based only on an examination of narrowly defined costs and benefits attributable only to components of the project. No determination was or has since been made of costs or benefits that would accrue if traffic were shifted to other modes. This should be possible following the completion of updating of the Transport Survey.

VIII. ROLE OF THE IBRD/IDA

8.01 The Bank was instrumental in starting the 1968 transport survey but more consideration should have been given during supervision of the Railway Project to inter-modal factors. The Bank should also have more effectively challenged the optimistic forecasts for railways' traffic bearing in mind the short hauls involved.

8.02 The project, as appraised, was largely a holding operation, for urgent rehabilitation and studies of additional requirements. There was no specific provision for later review of the transport sector as a whole and the investments justified for each mode. The difficulties encountered in implementing the project to some extent may have obscured the need to review the results of the original survey but this has now been recognized by the Government and results of the review (being financed from Loan 1188 for the Second Highway Project are expected about the end of 1978.

8.03 The implementation difficulties referred to (para. 8.02 above) tended to focus staff attention, during supervision, on the physical and financial problems. Earlier attention could have been given to inter-modal factors on which misjudgments on investments could have been made but probably, due to the project delays, have not been made. Due to staff constraints, supervision in the latter years of the project was too infrequent and did not include an economist.

COMPLETION REPORT TUNISIA ABLE 1 (Page 1) RAILWAY PROJECT LOAN 606/CREDIT 150-TUN Actual and Expected Physical Completion

% of Original Works Units of Completion Dates of Com- or Components Com- Major Works or of Major Works pletion of Major pleted by Expected Components or Works or Completion KM Components Components Date

Actual Expected Actual Expected

Track Renewals 13 97 - 70 13.3 (Details on Sheet 2) 57 182 71 71 31.3

67 200 72 72 33.4

109 352 73 73 [31.0]

200 352 74 74 [56.8]

344 352 75 75 [97.7] /C 352 352 76 7&:C [100.0]

Locomotives 7/A 7 73 70 0

Railcars + Trailers 10+5 10+5 75 70 0

Freight Wagons 674A- 674 75 70 0

Consultant Studies as Originally Proposed - - 70 70 100

Additional (Signals/ Containers) - - 71 71 100

NOTES: /A 5 financed by IBRD and 2 (out of 22) financed by Canada. /B 60 financed 'by IBRD and 614 financed by other sources. IC, Final completion in 1976 resulted from substitution of section of Ain Ghelal-Natsur line for previously scheduled TA line section to be submerged and realigned under Sidi Salem Barrage Scheme Source: SNCFT and IBRD Mission. August 1977 - 17 -

COMPLETIONREPORT TUNISIA TABLE 1 (Page 2)

RAILMAY PROJECT LOAN 606/CREDIT 150-TUN

Track Reneval

year year Kind of Section Actual Expected Renwal Line KM. Length of Renewal

1971 1969 RP 5 78 + 100 122 + 100 Total 44 KM.

1972 1969 RP 5 28 + 600

38 + 600 Total 10 KM.

1973 1969 RP 5 47 + 700 30 KM. 400

78 + 100

1971 RP 5 270 + 700 7 IN. 500 278 + 200 Total 37 KM.900 1969 CR 11 (South) 16 + 594 4 KM. 156 20 + 750 Total 4 KM. 156

1974 1971 RP 5 187 + 500 4 KM. 800

192 + 300

1971 RP 5 214 + 900 20 KM. 600

235 + 500 1971 RP 6 162 + 200 17 KM. 800

180 + 000 Total 43 KM. 200

1969 CR 11 (South) 20 + 750 5 KM. 950

28 + 700

1970 CR 15 (South) 0 + 350 16 KM. 712

17 + 042

1972 CR 4 0 + 000 2 KM. 400 2 + 400

1970 CR 5 192 + 300 22 KM. 600

214 + 900 Total 47 KM. 662

1975 1972 RP TA 49 + 900 22 KM. 800

72 + 700

1972 RP TA 74 + 800 10 KM. 400

85 + 200 Total 33 KM. 200

1970 CR 5 142 + 300 45 KM. 200

187 + 500

1971 CR 6 206 + 400 29 KM. 300

235 + 700 1972 CR 1 24 + 700 24 KM. 500 49 + 200

1969 ca 11 (South) 26 + 700 8 KM. 807

35 + 507

- ca i Ain Ghelal Natour 2 KM. 900 Instead of TA Total 110 KM.707

1976 - CR 1 (Dane) 8 KM. 300

Total 8 KM. 300 Total 339 KM. 225

NO'ES: L CR Complete Renewal RP Rail Replaceoent L Appraisal Prolet Total 351.9 KM. GAWSA-MIDILA13.0 KM. not financed by IBRD.

Source: MCFTrand IBRD Mission August 1977 COMFLETIONREPORT

TUNBT

RAILPR~JRCT - 1,AN 606/CRED;T 150-TUN

ACTUALOOSTS11 CCOWAREDWXTH APP~AISAL ESTMATES

a a....a.sg .... Actu- 1 g ag ntssAtual L0ca1 Foreign Total Local Foreign Total 0f Appraal l.cal Foreign Total Local. Foreign Total of Appraisal ------TD '000------5------7------U ------(at TD 0.525$l) ---- US$------(at TD 0.451$1) --

Category

1 Soack reneals and equipment lGafsa-M'D111& - see B. Bridge. - see C) 2760 3540 6500 2380 3285 5665 87 5255 7125 12380 5290 7300 12590 102 2 Noftive Pover & Rolling Stock

5 loomo.tive. (GW) - 595 695 - 900 900 129 - l325 1325 - 2000 2000 151 (ea 2 in Section B)

10 ra-lears and 5 trailer. - 1145 1145 - 2760 2760 241 - 2180 2180 - 6135 6135 281 6 0 agon 75 120 195 - 150 150 77 145 230 370 - 330 330 89 (also 574 in Section B)

SUB-TOTAL 75 160 2035 2380 3810 3810 187 145 3735 3875 - 8465 8465 21b

3 Workshop. (see 6 below) ------

4 Consulting Services 160 620 380 - 195 195 51 305 420 725 - 430 430 59

TOTAL 2995 5920 8915 2380 7290 9670 108 5705 11275 16990 5290 16195 21485 127 B. INVEST5ETS COMPLETEDWITH oTE FINANCE-

i renewals (Gaf.a-M'Dilla) Irack 135 130 265 18512 2 5 511 440 238 255 250 505 410 565 975 193 2 ýotive Power 6 Rolling Stock

2 1ocomotiv' (Canadian fince) - 280 280 - 330 330 118 - 535 535 - 735 735 137

484 wago1 (Spaish finance) 485 535 1320 - 2945 2945 231 925 1590 2515 - 6545 6545 260

130 mineral care (Spanish finane) 200 515 715 - 2160 2160 302 380 980 1360 - 4800 4800 353

SUB-TOTAL 685 1630 2315 - 5435 5435 235 1305 3105 4410 - 12080 12080 274

TOTAL 820 1760 2580 185 5690 5875 228 1560 5355 6915 410 12645 13055 189

A+B. TOIAL FOR INVESTHENTSC~iPLETED 3815 7680 11495 2565 12980 15545 135 7265 14630 21895 5700 2840 34540 158

C, INVESTHENTSDEFERRED /6 i Bridge reinforcements - 425 330 755 5 - 5 1 810 630 1440 10 - 10 3 borkshop. 60 200 210 - - - - 20 380 400 - - -

TOTAL 435 530 965 5 - 5 1 830 1010 1840 10 - 10 -

AB+C. TOTALFOR PROJECT 4250 8210 12460 2570 80 15550 125 8095 15640 23735 5710 28840 34550 146

Cote Eluded frn C-oparleo

ComS .rar 2170 - 2170 - - - - 4135 - 4135 - - - -

Capitalized Incerest - 715 715 - 365 365 51 - 1360 1360 - 805 805 59

Apprail Report Total 6420 8925 15345 2570 13345 15915 104 12225 17000 29225 5710 29645 35360 121

LOan 606/Credit 150(A+C) 17000

NOTES. /1 Actual co.tderived fr.m page 3 of Table 11 Op.apaed by SNCFTfor vorks colleted with Bank/IDA fioanc,e (ection A) and for Works completed with other fiance have ben ad ju.ted ae show in Note 2. All oeunto shown to nberet 5,000 TO or i1nterest (Secon C). Cofor /2 For investe~nt- completed ith other fi,ane th 500 phoOphate wngons ~(EG) -nd 10 wagonø (CODER)shown by SNF!T have been ecluded olt boIng in original project but the 130 (?135) mineral car. he bemn included at a coat of TO 2,158,407. The cot. for 484 Spanish wa8ons have be0n ameded fr, TD2>631,478 to TD2,947,717 to include 1976 paymnts. /3 Actual vxpenditure on Gafsn-M'Dilla line ame to c oprise local and forelg. cur el et 1n e p rtonsa ain track costt(Se.cion l) Materfolo for thi. vrk, due to Its urgncy, were purchased by SNPCFTbefore the Bak/I fund. bame aval le. /4 As Bank financed only 5 of the 7 loo~otives in the project, the coat of the raLing 2 in inluded as prorata coat of 2(out of 22) Canadi.,oomotives subaequently purchased vith ca.,adia finance a additionø to the project agreed with the Bank. /5 484 ortginally Intandal to be wagona, financed by the Bank vare with the Bnk's agre~nt financed fr= a Span.h Goverenent line of credit. 130 aineral aleo origiaally for Bank f vnaneo,were first car, deferred but 4ub.equently reincluded in the project and understood to be financed by a Bank conýoartu pending ne8otiation with other source, notably the African bevelopment Bank. /6 The bridge reinforcenta were ot iplenented luring the project period becau0e of the need of further study by SNCFT. /7 The planned reneal of vorkehop aquipment was firthet inveatigated by ITALOSULT during the project period ad the expenditure 0n Improveenta was deterred to the next inves,tnt plan. Source SNCT and Bank Misnion

AuguBt 1977. - 19 - COMPLETIONREPORT 5ABLE 3 TUNISIA

F1RST RAILWAYPROJECT - L~0N 606/CREMIT 150-7UN

APPRAISALFORECASTS COHPARED WITR ACTUALTRAFFIC 1968.1975

FREIGHTTRAFFIC 1973 67 1975 1969 1970 33 1971l"T2 1968 Appeai. al a,prcl.a Appel. .1 Appr.'--I Appr.l..1 APoe-1-1O Appe.i..i 1973 Actua poreca Actual Foreca1t Actual AlpraeaFor Actul A..1 6 0ua 70 Actual Actual oaat Actua

Thounad& of Tons 1140 Nothora -teri, 1340 1131 1340 1076 1350 1085 1350 111 1230 970 1270 112 1310 1106 243 hnra 1120 290 236 310 257 340 350 360 22 230 167 250 320 285 137 453 Phonpb-e. 220 491 400 463 410 424 420 126 370 43 380 4ZI 390 Phoshe 350 263 360 119 102 162 184 17 186 157 188 152 190 160 192 151 945195 1084 FrIr 150 160 1169 872 1127 880 1009 908 1051 820 1048 828 96 846 1040 654 2989 Flour 2990 2060 3137 3120 2965 3200 3061 3270 Subnotal 2690 2794 2830 '521 2920 30 3015

Southern Network Ph .ph. 3700 3254 3700 2831 41004400 3998 5000 3588 3700 2963 To Sf : 3400 3858 2600 108 1600 371 2100 471 2300 516 T. Saxe4 1500 504 541 1070 582 1210 577 1290 554 1410 571 TLoGb 350 469 630 950 4296 7500 3851 4008 5470 4580 6210 4165 6590 3888 7210 SJbotal 4150 4327 4430 5050 10,770 6840 8485 7570 9290 7302 9710 6853 10.4t0 7357 Grad Total 6840 7121 7260 S061 7970 1098 MilIonI of ton-kilometer* N.r, -Ceniral N-le,r 203 251 192 252 193 252 143 210 199 230 173 237 207 245 208 251 r Ore 57 82 79 86 52 53 40 60 74 68 28 70 51 76 Ph-sphate, 53 42 83 45 89 1 62 30 66 39 70 32 75 53 78 67 82 60 Go e 35 40 33' 41 26 55 3 37 33 38 32 39 194 32 57 53 5% 168 233 176 234 179 203 190 192 200 O.our7""or 146 171 15 170 160 209 466 555 613 587 625 547 649 542 668 S.bt~oal 503 479 515 656 562 579 593

Southern Net-ork Ph..pha-e 944 502 944 482 944 632 876 795 91Q 593 1045 700 1122 770 1275 813 To SE- 312 297 410 445 440 1530 To Cabe, 46 145 45 155 46 169 53 180 55 ab 90 45 100 44 114 49 128 Oth 816 1420 858 1411 845 1523 980 1572 817 Sutobtal 957 840 1018 637 1159 749 1250 1371 2033 1445 2036 1392 2172 1522 2240 1283 Grond Tot.l 1460 1319 1553 1093 1721 1328 1843

PASSENCERTAFFIC

Pa-senger- (.illion.) 6.3 3.7 6.5 3.7 6.8 3.8 7.1 451 Line 3.6 3.8 4-6 3.5 5.4 3.2 5.9 3.5 Main 16.6 12.9 17.8 14.3 19.2 15.0 20.4 15.9 suburban 10.9 9.6 12.3 10.8 13.8 11.5 15,3 12.2 22.9 16.7 24.3 18.0 26.0 10.0 27.5 20.0 To1 14.5 13.4 16.9 14.3 19.2 14.7 21.2 15.7

Pa0Lenger-kilometer (604ill3ons) 575 341 605 340 635 301 304 312 383 299 460 293 506 312 544 330 SainLUne 232 185 249 194 265 207 142 125 160 140 179 149 199 158 216 168 Suburban 506 807 526 854 534 900 588 Total 446 437 543 439 639 442 705 470 760

Total Traffic Ulite (TU) 1906 1756 2096 1532 2360 1770 2548 1841 2793 1951 2843 1918 3024 2056 3140 1871 TKM+ Ih (mIllion.) 6898 9875 L 'l 8408 No. of Snployec 0000- 7724 8320 7552 8760 7215 9080 6975 9490 6887 9575 8 4 39 10 0 70

Product'ivty 240 225 250 205 270 245 280 265 295 285 300 280 305 245 310 225 TU '000. Per Eployee

NOTES /_ Eployee forecatel were not made for appraal purpo.es andthe tofal o 000I fr 1968 1 based on 7850 act.a for 1967. For all øub,equent yeare, taff tsa.sumed to increase by aboot 40. of the rate of increae t raff" vol-e. /b Actual staff figur.. for 1974 end 1975 were increa-ed In coepartwon wIth carlier yeare by incluglon of certain t-Porry staff previouly excluded.

Sorce. SNCFTand Appraisal Report

Jun. 1977 - 20 -

COMPLETIONREPORT TABLE 4 TUNISIA

RAILWAYPROJECT - IDAN 606/CREDIT 150-TUN

SELECTED OPERATING STATISTICS 1968-75

19613 1969 1970 1971 1972 1973 1974 1975

SYSTEM

Total Rte k. 1971 1978 1978 1978 1978 1978 1978 1978 Total staff 77214 7551 7215 6975 6887 6898 8439 8408 Staff per Rte km. 3.9 3.8 3.6 3.5 3.5 3.5 4.3 4.3 TRAFFIC DENSITY

Pass. ln./Rte lns. (thousand) 220.S 211.8 223.4 237.6 255.8 265.9 269.9 297.2 Net ton ln./Rte km. (thousand) 670.. 553.0 671.3 693.6 730.5 701.7 768.9 648.6

OPERATIONS

Train Ion. - pass. (thousand) 361E 3058 2980 3202 3285 3530 3793 4013 Train kn. - freight (thousand) 4200 3635 4239 4410 4538 4002 4055 3614 Total train km. (thousand) 7816 6693 7219 7612 7823 7532 7848 7627 Loco. kan. (thousand) 6839 5857 6531 6939 7087 6634 7042 6653 Loco. in fleet 101 101 98 93 95 112 108 103 Autorail km. (thousand) 3476 3255 3345 3217 3223 3102 2952 3248 Autorcil in fleet 51 50 50 49 49 49 36 37 Av. Pase. Journey (KM.) 32.7 29.7 30.1 29.3 30.5 29.2 28.4 29.3 Av. freight haul (KM.) 210.5 197.6 203.3 202.6 203.4 203.2 206.5 194.4

OPERATING EFFICIENCY

Loco. ln./loco. day in fleet 185 159 197 204 204 162 179 176.9 AutorEil lan./av. day in fleet 186 178 174 180 180 181 225 237 Net ton km./train km. 169.6 163.4 183.9 180.2 184.7 184.2 193.8 168.2 Car turnaround time (days) 5.2 6.2 5.6 4.7 4.6 4.5 4.4 5.4 Traffic units/staff (thousand) 228.2 200.8 245.3 264.0 283.0 278.0 243.5 222.5

AVAILABILIIY

Locomotives (%) 81.2 80.2 80.6 78.5 77.9 75.0 85.1 83.5 Freight cars () ------90.8 91.8 Autorails (%) 62.7 68.0 68.0 61.2 61.2 59.6 77.7 69.3

NOTES: L Including temporary staff not prev:.ously included in totals.

Source: SNCFT

August 1977 - 21 - COMPLETIONREPORT WULNII TABLE5 RAUMAY PROJRCT - LOAN606/C EDT 15-TO

ADJUSTED/ INCO ACCOUT - ApRAISAL OE13CASTS (F) AND ACTUALRESULTS (A)

1975 1968 1969 1970 1971 1972 1973 1974

Ri Rv F A F A P A TUNFISAAF A A Traffito Revenue ------TUNISIAN28NA85 Goo--0 -

Passengers /2 1923 1884 2343 1722 2756 1771 3027 1890 3253 2056 3445 2113 3623 2689 3819 2983

Freight /2 8075 7052 8549 6146 9330 7286 9926 7409 10778 7510 10984 6926 11661 9177 12121 9972

12995 Sub-Total 9998 8936 10892 7868 12086 9057 12953 9299 14031 9566 14429 9039 15284 11866 15940 100 288 Non-Traffic Revenue 100 113 100 381 100 268 100 304 100 (16)/ 100 960 100 (130)

State Contribution /4 - 1162 - 1000 - 100 - LO0 - 1880 - 188 - 1000 - 1000

Gross Total 1098 10211 10992 9249 12186 10325 13053 10603 14131 10550 14529 10999 15384 12736 16040 14243

Lees Tax on Gross Revenue /1 555 451 605 429 670 491 718 338 777 352 799 340 846 431 883 426

Total Operating Revenue 9543 9760 10387 8820 11516 9834 12335 10265 13354 10198 13730 10659 14538 12305 15157 13817

EXMESES

Working Expenses / 7984 8331 8335 7581 8745 7392 9053 8423/ 9383 93086 9510 10606/± 9777 11770 9971 3682 '

Depreciation /7 1622 1659 1766 1499 1958 1671 2097 1745 2270 1733 2334 1870 2472 1812 2577 2349

Total Operating Expenses 9606 9990 10101 9080 10703 9063 11150 10168 11653 11041 11844 12476 12249 13582 12548 16031

OPEATING SUR821JS(DEICIT) (63) (230) 286 (260) 813 771 1185 97 1701 (843) 1886 (1817) 2289 (1277) 2609 (2214)

INTERESTCHARGES /_8 170 155 204 163 178 182 155 206 128 320 389 375 648 500 614 750

NET SURPLUS (DEFICIT) (233) (385) 82 (423) 635 589 1030 (109) 1573 (1163) 1497 (2192) 1641 (1777) 1995 (2964)

REIMBLIREMENTOF DEFICITS (1969 onmards

Net surplus (detitit) per SNCFT's Accounte /9 (141) (168) (210) (948) (2670) (2646) (3414)

Reimbursement of deficits by Goet. - - - 2843 3723 2000

Cumulatine deficit to be reimbursed (141) (309) (519) (1467) (1294) ( 217) (1631) RATIOS

Woring (Wkg. Exp - Op.Rev.) 84 85 80 86 76 75 73 82 70 91 69 99 67 96 66 99

Operating (Op.Exp. Op.Ray.) 101 102 97 103 93 92 90 99 87 108 86 117 84 110 83 116

Times interest Earned (Op. Surplus Interest ChaSges) - 0.4 -1.5 1.4 -1.6 4.6 4.2 7.6 0.5 13.3 - 2.6 4.9 - 4.8 3.5 -2.6 4.2 -3.0

Rate of Return (Op.Surplus )of Average Value Not Pined 7.2 -6.0 AMets in of Fxe - 0.3 -1.1 1.3 -1.3 3.1 3.6 3.7 0.5 4.7 - 3.8 5.0 -6.4 6.2 -4.1

NOTES

/1 Adjustments to SNCFT's accounts have been made in respect of depreciation charges (Note. 6 & 7) and other provisions (Note 3). Also tax on gross revenue has been shown as a deduction from revenue instead of as an expense. /2 Appraisal Forecasts as in Report P-683 dated April 7, 1969 Aich included depreciation charges at 17% of revenue. A nominal TD 350,000 other traffic revenue per annum has been reallocated to passengers (TD 100,000) and freight (TD 250,000). /3 SNCFT's working expenses for 1971 and nen-traffit revenue for 1972 both reduced by TD 760,000 by eliminating provision for reduction in phosphate rate expected to be applicable to 1971 but subsequently not agreed. /4 State Contributions for 1968 were for reimbursement of eapenditure en trak; for 1969 and subsequent years the contriationa were TD 1 million pending adequate tariff increases, being uthorize4. / Workingh expenses not analysed because bases of distribution to passengers and freight, other traffic to these used in SNCPT'e acousest.. and non-traffic items a need in the Appraisal Report are not comparable /6 Supplennary depreciation charges included by SNCFTunder working expenses have been eliminated 1975 TI 726,000. in the following amounts:- 1972 ID 1,258,000, 1973 TD 960 000; 1974 TD 968,000, /7 Normal depreciation charges shon throughout as 17%of revenue to maintain comparability between forecast. (Note 2) and results. SNCTE accounts sho only a linear provisin for intrest, equaling Paymente ever the life of eab leon, and the actual payments /! SNCPr's accounting deficits after receipt of basic TI 1,000,000 Gonveent ontrbution pending tariff innreases. (estimated for 1974 and 1975) have been substituted. /10 Rates of Return shown in Appraisal Report have been adjusted to take account of estimated values of assets in course of construction.

SOURCE. SNCFT and Bank Mission August 1977 - 22 -

COMPLETIONREPORT 6 RAILMAYPROJECT - LOAN606/CREIT 1-TUN TABLE

AALANCEBHETS AT DECOMEMR31

APPRAISALFORECASTS (F) CCKIPABZDW1TH ACTUAL RESULTS (A)

1968 1969 1970 1971 1972 1973 1974 1975

P A F A P A F A F A F A F A F A ASSETS ------TONISIANDINARS '000------CURRENEASETS

Cash, sak snd Station Accounts /1 545 916 2103 (228) 2513 (1434) 1356 368 464 (484) 2722 20 5191 1246 8103 (643) Receiv-blea /2 4000 3284 1(00 3454 1100 7487 1200 6752 1300 9193 1400 7097 1500 7065 1600 10015 Stores and Investents 2800 2669 2S00 2812 3000 2804 3100 3868 3200 5202 3300 6335 3400 4867 3500 6361

Total Current Assets 7345 6869 6(03 6038 6613 8857 5656 10988 4964 13911 7422 13452 10091 13178 13203 15733 FIXED ASSETS

Gross /3 80633/ Value 80309 84(63 80513 /3 94263 83845 100593 96298 105978 102259 106978 107539 107978 111823 108978 125465 Less Accamulatd Oepreciation, 58222 57833 59-86 59112 /A 61944 60108 64043 75579 / 66313 72772 68647 74212 71119 75867 73696 77837

Total Net FixedAssets- 22411 22476 24075 21401 32317 23737 36550 20719 39665 29487 38331 33327 36859 35956 35282 47628

Total Assets 29756 29345 30078 27439 38930 32594 42206 31707 44629 43398 45753 46779 46950 49134 48485 63361

LIABILITIES

CURRENTLIA/ILITIES 6000 5662 2(00 2966 2300 3908 2400 4924 2500 5885 2600 6073 2700 6748 2800 10593 LONGTERM DEBT /7 4273 4347 4980 2891 10197 3156 11973 5406 12723 8023 12250 10904 11706 11442 11146 21645 EQUITY

CapitalContributions /8 3000 3000 6933 5387 9233 8187 9603 8187 9603 15992 9603 15992 9603 15992 9603 18358 Revaluation Reserve /9 15639 15639 15i39 15639 15639 15639 15639 11695 15639 11695 15639 11695 15639 11695 15639 11695 Other Reserves and Revenue 844 697 126 556 1561 1704 2591 1495 4164 1803 5661 2115 7302 3257 9297 1070 Account Balances /10

Total Equity 19483 19336 23+98 21582 26433 25530 27833 21377 29406 26490 30903 29802 32544 30944 34539 31123

Total Liabilities 29756 29345 30578 27439 38930 32594 42206 31707 44629 43398 45753 46779 46950 49134 48485 6361

AVERAGENE FIXED ASSETS IN USE/ 21000 20871 21500 20195 26000 21409 32000 20622 36000 22253 38000 28309 37000 30963 36000 37121 Value of Work-in-progress need in clclations of average net fixed assets in se 2133 1353 966 2245 3454 2741 4616 4726 RATIOS

Current Assets to Current Li- bilities 1.2 1.2 3.0 2.0 2.9 2.3 2.4 2.2 2.0 2.4 2.9 2.2 3.7 2.0 4.7 1.7 Current Assete less Stores sod InvesCtents to Current Lis- bilities 0.8 0.7 1.7 1.1 1.6 1.5 1.1 1.4 0.7 1.5 1.6 1 2 2.5 1.2 3 5 1.1 Debt to Equity 18/82 18/82 17/33 12/88 28/72 12/88 30/90 20/80 30/70 23/77 28/72 27/73 26/74 27/73 24/76 41/59

NOTES: /1 Bank overdrafts included as current liabilities in SNCFT's acceouts have ben delduoted from Cash, Bank & Station Account Balsooos (soe also Note 6 on Cerrent Liabilities) /2 Current receivables include suspense AcCont balances, but excludelloan amounts not yet dran (see also /3 Gross value of fixed asets Increased by TD68,935,000 Note 7 on Long-Tere Debt). as at December 31, 1967 for revaluation from TD1O,409,000 in SNCPT's accunts Appraisal Report P-683, to TD 79.394,000 in Table 16 of and further increased bf TB 10,139,000 to cover revaluation derived frosm SOPERAIL to Supervision Report dated Report March 1973 pp 6/7 andAnoaxes 3 and 3(2) (see also Table 6 January 18, 2974). Additions to gross vIue otserwise d shown in SNEPEs aounts. to equali-e interest charges (ste Noe 10) baa seen refleoted hy reduoing Far years 1969 o 1975 the elimination of the provision corresponding oapital meet (gross) and depreciation (net) nouts (ace also Sate 4). /4 Cusulative depreciation increased by TB 53,3460,00 at December 31, 1967 and a further TB 14,083,000 Additioos to depreciation at Decoseber 31, 1971 an account of revaluation of asset. (see NoC 3). otherwise as shown In SNCF'. accnts. ep astIn of capitalized interest NeOt fixed assets intludes assets in course of construction oharges (see also Noted 3 sod 10) is deducted for years 1969 to L975. sat separstely Identified do appraisal foteoast asd sverage set fixed assets in aCs hon. ior soteal ue have therefore heen eticusted resalts the w crk-in-progrese shown for each year hrs heab taken into aeouet /6 Current Liabilities include suspense secount iecs sod eaclade in calculatg the average values of net fixed onets in use. honk oerdrafts vetted with cshb, hank sod station accont halances (see also Nte 1). 7 loeg-Teon Deht exeludes liahilities fer loans, set yen drasnt (son alo Rote 2). /8 Capital Contributions tepresent valuation of asets of Northern and Southern systems as estiasted contrihutions to capital instsenst. at Decenber 31, 1967 (and subsequently adjusted) and later Governntt /9 Revaluaties Reserve represent. the set effectof the end on suhsequoently revaluationsof onse oid accussulated depreciation asetimated estiasted hy SOFRZBAfL.(sm at Decausher 31, 1971) far coasting ad tariff purposes. by the Bank at appraisal (as at December 31, 1967) /1 Other Reserves and Revenue Account Balances exclude the provision to equalize interest charges (see also Notes 3 and 4).

SOURCE SCFT and Bank Mission August 1977 - 23 - COMPLETIONREPORT T1BLE 7

RAILWAYPROJECT - LOM 606/CREDIT 150-TN APPRAISALEXPgCOAION COWPAREDWITH ACTU FINACING OF PROJECT

Fito ing Plia at Appraissi Actual Finacing of Project ianactg Plsa at Appraa Actual FiLaing of Project

Local Foreign Total Local Foreign Total Local Foreign Total % Local Foreign Total 1 ------TD '000------S$ 000------at TD0.525$1------at TDO.45-$l------

SOURCEOF FUNDS

Original Souces

Self-Inancing 4250 - 4250 2570 ~~ 635 ~ 3205 8095 - 8095 28 5710 1 1410/2 7120 20

Governmet 2170 - 2170 - -_ - 4130 - 4130 14 - /2 -

IBRD/IDA - 8925 8925 - 7650 7650 - 17000 17000 58 - 17000 17000 48

Sub-Total Original 6420 8925 15345 2570 8283 10855 12225 17000 29225 100 5710 18410 24120 68

Supplemntary Sources /3 /1 /3 f13 Locol Banks etc. - - - - 2200/" 2200 ------4885~ 488 14 /3 International Ancies~------

Bilateral Sources.

Canada - - - - 395 395 - - - - - 875 875 3

Spin- - - - 2465 2465 - - - - - 5475 5475 15

Sb-Total Supplementary - - - - 5060 5063 - - - - 11235 11235 32 Sources

TOTALFIANCED 6420 8925 15345 2570 13345 15915 12225 17000 29225 100 5710 29645 35360 100

NOTES: /1 Actual local financing as-ed to be fro SNQT's itrnl funds althoughscot may have tot froa Govoroata or local bank support. /2 Balace of foreign currmcy requirent assumed to be purchased from SNCFT's Uternal resources although stat may have coe from Goernoent aupport. /3 Actual cost of TD2,200,000 derived from Annea III 1 to SCFT paper "Politique om atiere de Transport Ferrovaire (Jao. 1976). Finance sumed to be provided by Bank Coosortia pending negotations with African Development Bank (see also Nota 5 to Table 2). /4 Canadian contribution equivalent to the coat of 2 (out of the 22) Cenadian locotives to make good the sbortfall of 2 ocomtivs finaced by IBRD/IDA (sts also Note 4 to Table 2). Total co.t of 22 locmotives derived froa Canadian loss total shown in SNCF's Table 19. /5 484 wagos were financed from a anish lite of credit as IBRD/IDA fod. otre insuffitimt to megt all foreign cost (See Note 5 to Table 2). Aont of Spanish finca deriv from SNCPT' Table 19.

Source SNCFT and Bank M1ssion

August 1977 COMPLETIONREPORT - 24 -

TABLE 8

TUNISIA

RAILWAY PROJECT - LOAN 606/CREDIT-TJN

ECONOMICREEVALUATION

COSTS BENEFI TS

------TWD0------TD'000------Reduction in Reduction in Reduction in Freight Passenger Reduction Locomotive Wagon Railcar in Operating & Operating & Operating & Track Year Freight Passenger Track Maintenance Maintenance Maintenance Maintenance Locmotives Wagons Railcara Renewal Cost Cost Cost Cost

1971 886 1972 193 28 1973 1230 1005 35 1974 2499 854 6L 1975 5255 2760 488 122 1976 210 293 55 214 1977 218 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1990 2000 Econo,nic Rate of Return - 9-1/2%

Source Bant staff Augost 1977

IBRD 10001 R SEPTEMBER1975

M D . T E R R A lN E AN F E A T U NiSI Ale TR ANSPORTATION NET WO K elBo rguibo

Tabarka Di Ab.od CAP BON Go.lelr.- Kel ,b,o Tøbourbo, L-a E T.EfA Bej. ,- MedeBenobTUNiO 0 0 à~ El Bob ohmon

SD ndobo Nb ul

Gof.urBouAr.ao c 'H o~mt

-_O 1t, OF HAMAI - e Se,$

- Ebbo Ksour

C7 El Djem IKas

Fensona n

- KERKENNA sa ISLANDS

la Skhirro

-Ø--GULF Of GA8ES

Houmt Sovk -. k .'snytn Menouna Gofsa M.h.re - KebbJERBA

r...... Meden-r,n

Kebi,l,r

- IIIe

Gas P,pe.'n

e .. nare sh..nm n -hsmp donRemca , - -endorsemenr c eptance b, the WItnd B-nk a-du-ffM-.e~