.oAA)J 673- rrAI
RESTRICTED FILE COPY Report No. TO-648b
Public Disclosure Authorized This report was prepared for use within the Bank and its afflliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized
APPRAISAL OF
THE SECOND TUNISIAN PORT PROJECT
REPUBLIC OF TUNISIA Public Disclosure Authorized
October 15, 1968 Public Disclosure Authorized
Projects Department CURRENCY EQUIVALENTS
US$1. 0 D 0.525 US$1. 905 D 1.0
UNITS
Tons are metric tons of 2., 205 lbs .1 Kilometer = 0. 6Z miles 1 Meter = 3. 28 feet 1 Cubic Meter = 1. 31 cubic yards All depths of water are in meters below low water level.
FISCAL YEAR
January 1 - December 31
A C R 0 N Y 1il S
GNP - Gross National Product BC'EOH - Bureau Central d' Etudes pour les Equipements d'Outre Ner SvbT_C - Societe d'Etudes Techniques et Economiques STI4 - Societe Tunisienne d ,Acconage et de Ilanutzntion OPiOT - Office des Ports Nationauc, Tunisiens UNDP - United Nations Deve:Lopient Prograrxne REPUBTLIC OF TINTSIA
SECOND TUNISIAN PORT PROJECT
APPRAISAL REPORT
TABLE OF CONTENTS
SUMMARY i-il
1. INTRODUTCTION 1
2. BACKGROUND 1 A. General 1 B. Transport System 2 C. Existing Loan 380-TUN Port of La Goulette Project 3
3. EXISTING FACILITIES AND ORGANIZATION 4 A. Office des Ports Nationaux Tunisiens h B. Operations (i) General 5 (ii) Cargo-Handling 5
4. TRAFFIC AND PORT DEVELOPMENT 7 A. Shipping 7 B. Present and Future Traffic (i) General 7 (ii) Bulk Traffic 8 (iii) General Cargo 9 C. Port Development 9
5. THE PROJECT 10
6. ECONOMIC JUSTIFICATION 15
A. Capital Dredging 15 B. Dredger and Tug 17 C. Cargo-Handling Equipment 18 D. Breakwater at Bizerte 19 E. Bulk-grain berth and Storage Facility at La Goulette 19 7. TARIFFS AND FINANCES 20 A. Ta-rif-fs-s 20 B. Present Finar es 21 C. Future Finances 24
8. CONCLUSIONS AND RECOMMENDATIONS 29
This report has been prepared by Messrs. Aijt3r (Economist), Clark (Financial Analyst) and Hi'ginbottom (Engineer). TABLE OF CONTENTS (cont'd.)
TABLES
1. Port Data 2. Cargo-Handling Equipment owned by STAM and OPNT 3. Cargo-Handling Equipment to be provided to STAM and OPNT under the Project 4. Ship Calls. 1963 - 1967 5. Total Cargo Traffic all Ports by Major Category; Actual and Forecast 60 Cargo Traffic Tunis-La Goulette; Actual and Forecast 7. Cargo Traffic Bizerte/Menzel Bourguiba; Actual and Forecast 8. Cargo Traffic Sfax; Actual and Forecast 9. Cargo Traffic Sousse; Actual and Forecast 10. Alternative Costs of Purchasing Dredging Equipment versus Maintenance Dredging by Contract 11. Revenue for Years 1964-66, estimated for 1967 and forecast for 1968-1973 12. Estimate of Cash Flow 1967-1973 13. Balance Sheet for 1966 and Forecast Proforma Balance Sheets for 1967-73 14. Forecast of Debt Service 1967-1973
APPENDICES
1. Debt at December 31, 1966 2. Bases and Assumptions used in Financial Projections
MAP
1. Tunisia, Commercial Ports (No. 2264R) REPUBLIC OF TUNISIA
SECOND TUNISIAN PORT PROJECT
SUMMARY i. The Bank has been asked by the Government of Tunisia to help finance improvements to the ports under the control of the Office des Ports Nationaux Tunisiens (OPNT). ii. The project consists of a number of elements designed to ensure more efficient operation in OPNT's ports including: dredging at the ports of La Goulette, Bizerte-Menzel Bourguiba and Sfax; provision of a new dredger and tug; provision of tractors, forklift trucks, and mobile cranes at La Goulette and Sfax and the rehabilitation of the existing portal cranes at La Goulette; reconstruction of the island breakwater at Bizerte; con- struction of a new bulk-grain berth and storage facility at La Goulette; assistance in training OPNT staff in accounting and financial management; and necessary consulting services. The total cost is estimated to be US$10.73 million (D 5.63 million) of which the proposed credit of US$865 million (D 4.46 million) would finance the estimated foreign exchange cost. iii. An earlier Loan (No. 380-TUN of US$7.0 million) was made to the Government of Tunisia in June 1964, for extension of the port of La Goulette. The construction works have been satisfactorily completed and the loan was fully disbursed by the Closing Date of March 31, 1968. The law creating OPNT was passed as one of the conditions of the loan, and the new organization is functioning satisfactorily except for the Accounts Department which needs strengthening. One requirement under the loan has not been complied with: the construction of bulk-grain handling facilities. This is due to lack of finance, and the Bank is now including it in the new project. iv. OPNT controls all shipping entering its ports, but cargo-handling is carried out by concessionaires, the most important of which is the Societe Tunisienne d'Acconage et de Kanutention (STIUi). OPMT provides portal cranes on the quays, floating cranes, and some equipment for use by consignees or their agents on taking delivery of cargo. STAM generally provides the tractors, forklift trucks and mobile cranes for cargo-handling on the quays. v. Total traffic through OPNT ports has grown irregularly from 5.6 million tons in 1963 to 8.2 million tons in 1966 and was 7.5 million tons in 1967 due to the situation in the Middle East. Most of the increase has been in bulk traffic. Future traffic is expected to grow at a modest rate of about four per cent per annum, taking into account the expected increase in economic activity and changes in demand. Future exports of phosphates from southern Tunisian mines cannot be clearly determined at this time. They will depend upon further investment in the mines and Tunisia's share of the world market. vi. The present project covers the immediate development requirements of O?NT. Certain capital expenditure will be incurred by OPTT in the normal - ii - course of operations and a further extension of Tunis/La Goulette is expected to be required about 1972. The Government intends to develop a newJ port at Gabes. Before this port is completed it will be neces- sary to consider incorporation of the new port in OPNT, to review the distribution of traffic between Sfax and Gabes, and to consider the effects on OPNT's finances. vii. All the proposed items in the project are operationally and technically justified. The economic rates of return on the different items range between 10% and 25' and these are considered satisfactory. viii. The cash position of OPNT is satisfactory and is expected to continue to be so. Consultants are reviewJing OPNT's tariff structure and rates and their recommendations, due in 1968, are expected to include changes that will result in increased revenues. The specific changes and expected results are not known but the Bank will require that tariffs be applied to produce revenues sufficient to assure a rate of at least six per cent in 1971 on the average value of net fixed assets and seven per cent in 1973, and increasing thereafter. ix. The project provides a suitable basis for a Bank Loan to OPNT of US$8.5 million, for a period of 30 years, including 10 years' grace at D6, per annum interest. The Government of Tunisia would be the Guarantor. FEPUBMIC OF TUHISIA
SECOND TUIESIAN FORT PROJECT
1. INTRODUCTION
1.01 The Government of Tunisia in August 1966 requested the Bank to assist in financing improvements to the ports operated by the Office des Ports Nationaux Tunisiens (OPNT). The proposed loan of US$8.5 million covers the estimated foreign exchange costs out of a total estimated cost of US$10.7 million equivalent, and will be made to OPNT at 6-Va interest rate for a 30-year repayment period including 10 years' grace with the Government as Guarantor. The project consists of dredging at the ports of La Goulette (Tunis), Bizerte-Menzel Bourguiba and Sfax; provision of a dredger and attendant tug for maintenance dredging; replacement of cargo-handling equipment, provision of additional equipment, and re- habilitation of quay cranes; reconstruction of the island breakwater at Bizerte; construction of a bulk-grain berth and storage facility at La Goulette; training of accounting staff; and the provision of accounting and engineering consultants. Details are given in Chapter 5.
1.02 Tunisia has previously received a Bank loan of US$7.0 million for port improvements at Tunis-La Goulette. Construction of the project was satisfactorily completed in November 1967. Further details are given in paras. 2.09 - 2.12.
1.03 The following appraisal report is based on the findings of a preliminary Bank mission to Tunisia in May/June 1967, an appraisal mis- sion in November 1967, and a follow-up mission in March 1968, to settle the details of the project and to update the information. The missions have included at various times, Messrs. Clark, Dobie, Higginbottom, Muth and Pusar., Tlis report has been prepared by Messrs. Awar, Clark and Higginbottom.
2. BACKGROUND
A. General (see Map 1)
2.01 Tunisia, with an area of 164,000 sq km or about one-quarter of the area of France, has a population of about 4.5 million, estimated to be increasing at an annual rate of 2.3%. It is bordered by the Mediter- ranean to the north and east, Algeria to the mest, and Libya to the south and southeast. The coastline is some 1200 km, and there are four major ports: Bizerte-Menzel Bourguiba, Sfax, Sousse and Tunis-La Goulette all under OPNT control. Tunis is the capital and, mith La Goulette, is the country's largest port. The Government is building a new port at Gabes for the development of southern Tunisia. - 2 -
2.02 The gross national product (GNP) in 1967 amounted to US$963 million, or US$215 per capita. ,eal output grew by about four per cent annually between 1960 and 1967.2J 2.03 Agriculture contributed some 18% to GNP, and provided about one-half of all employment in 1966. The principal agrLcultural products are cereals, olives, vegetables and citrus fruit, and wine. The share of agriculture has been declining as mining, manufacturing and tourism have grown more rapidly. Tunisia's first oil refinery (1963) and steel works (1964) have started production and further increases are ex- pected. The growing volume of tourist traffic has stimulated construction and related activities.
B. Transport System 2.04 Tunisia is served by a relatively well-developed transport system. In 1966, there were about 16,000 km of roads, almost two-thirds of which were surfaced. The road network is best developed in the north where in- dustrial activities are concentrated.
2.05 The railway network consists of 1,110 route-km of standard-gauge and 911 route-km of narrow-gauge track. The two systems link up at Tunis. Until the end of 1966 the standard-gauge system and part of the narrow- gauge system were operated by the government-owned Railroad company, and the rest by a privately-owned company on a concession basis. All systems are now government-operated. Part of the narrow-gauge network serves largely the transport of phosphates from Gafsa to Sfax and is linked to the port of Gabes. The possibility of a direct connection between Gafsa and Gabes is under consideration by the Government and has been referred to the Bank for possible inclusion in the proposed Railway Loan at present under appraisal. 2.06 The Government has a large degree of control over rail and road operations through the fixing of tariffs, licensing of routes for road transport, dispatching of commodities, control of investments, etc. Prior to independence, Government policy aimed to regulate transport by adminis- trative means with little reliance on competition and consumer choice, and favored the railways. The shortcomings of this system are being increasing- ly recognized by the Government. An important development was the establish- ment in 1966 of the Directorate of Transport within the M1inistry of Public Works with responsibility to formulate and recommend transport policies. In addition, a UNDP study of the transport sector, with the Bank as Executing Agency, has been undertaken. One of the objectives of the study was to establish a transport policy offering a better balance between all modes of transport.
1/ Current Economic Position and Prospects of Tunisia (Ma - 3a) dated March 19, 1968. 2.07 The only major airport of the country is at Tunis, which is connected by scheduled air services with cities in Europe, Africa and Asia. 2.08 OPilT's four above-mentioned ports ancd their respective ser- vice areas are in general well served by roads and railroads. The access routes are generally adequate even for growing traffic volumes, with the exception of the existing road linking Tunis and La Goulette, and the access to La Gouletbe from the south, which are being improved.
C. E>dsting Loan - 380-TUNq Port of Tunis-La Goulette ProJect
2.09 A loan of US$7.0 million was made to the Government of Tunisia in June 1964 to improve the general-caxgo facilities at La Goulette. The project consisted of extending the 730 m quay to 1100 m and constructing transit sheds and ancillary works. The originally estimated total cost was D 4.8 million (US$l11.4 million) at the then rate of exchange. Final contract costs have not yet been agreed but are presently estimated at about D 6.2 million. Approximately half of the increased cost is due to the increased Dinar equivalent of the foreign exchange costs following de- valuation of the Tunisian Dinar on September 28, 1964, and the balance to increased quantities and prices. 2.10 The loan did not become effective until June 1965, awaiting passage of the law creating the Office des Ports Nationaux Tunisiens (OPNT) to replace the former "Regie des Ports". (See Chlapter 3). Work was com- pleted in November 1967 and the Closing Date was extended from June 30, 1967 to March 31, 1968. 2.11 OPNT was responsible for carrying out the project which was done satisfactorily with the help of engineering consultants Bureau Central d'Etudes pour les Equipements d'Outre Mer (BCEOM). Accounting Consultants, HoweLl & Co., are helping to establish and operate financial and costing systems, and are training OPNT's accounting staff. 2.12 The Government and OPNT have met the requirements of the loan except for the provision of bulk-grain handling facilities at La Goulette which they have been unable to finance; this item is now included in the present project at the request of the Government. 3. EXISTING FACILITIES AND ORGAI\ZATION
A. Office des Ports Nationaux Tunisiens (OPNT)
3.01 Prior to Loan 380-TUN the ports of Tunisia were controlled by the "Regie des Ports de Commerce", a division of the Ministry of Public Works. The law of February 12, 1965, established OPNT as an independent authority, managed by a Director General who is responsible to a Board of Directors composed of three representatives of the Government and four representatives of port users and related interests. The Government rep- resentatives are appointed jointly by the Ministry of Planning and National Economy and the Mlinistry of Public Works. The M4inister of Public lWJorks is the president of the Board. OPNT is responsible for the opera- tion, development and maintenance of the ports of Bizerte, Tunis-La Goulette, Sousse and Sfax; and the jurisdiction of Bizerte has been ex- tended to cover the adjacent port of Menzel Bourguiba. OPNT also provides pilotage, towage, and navigational aids within the port limits, controls and supervises the quays and harbors and provides railway service within the port limits. OPNT has a satisfactory degree of autonomy in both administrative and financial matters. The Government intends to develop a new port at Gabes and the necessity for its inclusion under OPNT's jurisdiction and the consequent necessity to amend the existing law will be discussed and agreed between the Government, the Bank and OPNT. (See also 4.16).
3.02 With few exceptions (see paras. 3.09 - 3.11) OPNT does not operate cargo-handling services although it provides some equipment for that purpose. Health and immigration services, police and customs are the responsibility of separate government agencies.
3.03 The general organization of OPNT has proved adequate to the tasks required of it. I-lowever, strengthening of the Accounts Department is required, both to enable the new financial and costing systems to be operated efficiently and to enable OPNT to take over responsibility for collecting its own revenue; this latter f2unction is at present under- taken by Customs at a cost of one percent of revenue collected. The accounting consultants provide practical and advisory assistance and conduct training programs for the accounts staff. Loan 380-TUN helped finance the foreign exchange costs of these services up to March 31, 1968.
3.04 OPNT appreciates the importance of providing an efficient ac- counts department, using modern commercial accounting methods, and able to produce financial data for the use of management. This is a relatively long-term process and management must be able to understand and use the reports. Consequently, the present project includes pro- vision for further training and advisory services. B. Operations
(i) General
3.05 The locations of the ports now controlled by OPNT and the port of Gabes are shown on HMap Ho. 1 and details ofOPINT's facilities are given in Table 1. Day and night pilotage is provided at all ports and tug services are provided as necessary either by OP;IT or privately. Bulk- loading facilities are available at La Goulette for iron ore and phos- phates, and at Sfax for phosphates. Crude petroleum is imported in bulk for the refinery at Bizerte and refined products are distributed by coastal tanker. Tunis-La Coulette is the principal port for general cargo. All ports have adequate transit shed and open storage facilities provided by OPMT.
3.06 Cereal imports are handled at La Goulette by discllarging grain in bulc from ship to ordinary transit sheds, where it is bagged by hand for distribution to the flour mills in Tunis. It takes about 28 days for a consignment of 20,000 tons to be handled in this way. Large ships have to be lightered outside the port in order to enter. Bagged export grain is hoisted aboard ship and then emptied into the ship's hold. Such methods are expensive, wasteful of labor, and entail uneconomic use of general cargo facilities. This situation will be alleviated when the new bulk-grain berth and storage facility to be provided in the project (5.02 (e)) are available.
3.07 Now that the La Goulette project is completed, traffic will be diverted from the old congested wharves in Tunis to the extent possible. liaintenance of the Tunis-La Goulette canal has been stopped and the canal will find its own bed-level. This is expected to limit the use of the canal to ships drawing 5.5 m and reduce cargo traffic using Tunis to about 453,ooo tons per annum. Passenger ships have started to use the new passenger terninal at La Goulette.
3.08 OPUT maintains the ports, the breaknjaters, and the entrance channels; dredging is done by one bucket-dredger which is in poor condi- tion and beyond economic repair, and by one grab-dredger for operations alongside the quays. Except for the island breakwater at Bizerte, the breakwaters are in good condition.
(ii) Cargo-Handling
3.09 Movement of cargo from ships and within the ports to the sheds or stacking areas is done by cargo-handling companies which employ all necessary labor. The most important of these companies is STAM, in which Government has a majority share interest, the balance being held privately. - 6 -
STAM operates in all OPNT ports and provides exclusive service at Tunis- La Goulette, where it employs 1,200 permanent and 600 casual dockers. Separate charges are made by the cargo-handling companies for stevedoring and for cargo movement in the ports.
3.10 STM4 normally hires portal or floating cranes from OPNT for its stevedoring operations or uses ships' gear. The reliability of the portal cranes is such th,at their use is limited particularly at La Goulette, and this results in slow handling of vessels. The floating cranes are also old and slow, but their use is generally limited. STAM has its own tractors, forklift trucks, and mobile cranes for cargo movement from ships' side to shed or stacking area but much of this is beyond its economic life. Details are given in Table 2. The regulations governing STAM's operations in the ports require it to obtain approval from OPNT to operate new equip- ment in excess of its present holding. Authorization is not required to replace existing equipment.
3.11 ONT's cargo-handling equipment, also detailed in Table 2,is essentially for hire to consignees and their agents for handling goods onto or from their own vehicles, or to STAM for its operations. Much of this equipment is also beyond its economic life and OPNT has been unable to meet the requirements of importers and exporters in recent years. Con- signees are not normally permitted to use their own equipment except in the case of special consignments. OPNT does not handle cargo in the ports it controls, but recently at Bizerte, Sousse, and Sfax it has undertaken the protection of goods in sheds and on open storage areas; if this proves successful it will probably extend this to Tunis-La Goulette.
3.12 Labor relations in the ports are good. There is, however, a labor surplus in the country and efforts to reduce port labor are resisted. The permanent labor force employed by STAM (1200 men) is consistent with present traffic handled, and may need to be increased, or additional machires purchased, to meet forecast traffic increases. However, the need for casual labor over and above the existing permanent labor force will be reduced by the introduction of more efficient equipment, as is proposed under the project. The need to reduce the existing casual labor force by retirement through natural causes over the next ten years and limitation of recruitment has been discussed with the Government which agrees with the Bani'ts viei% on this matter.
3.13 Port regulations, including those relating to cargo-handling procedures, are presently under review. The new regulations, when pro- mulgated, will give OPNT sole jurisdiction in these matters within the port areas.
3.14 OPNT has taken out and maintains adequate insurance against insurable port operating risks consistent with sound business practice. - 7 - 4. TRAFFIC AiD PORT DEVELOMENT
A. Shipping
4.01 In 1967, 4,112 ships totalling 6.0 million nrtL entered Tunis- La Goulette, Bizerte-Menzel Bourguiba, Sfax and Sousse. Tunis-La Goulette accounted for about 45°, by number and 51% by tonnage, of the vessels. The corresponding figures for Sfax, second in importance, were 37% and 27%.
4.02 At Bizerte the number of ship-calls has increased considerably since the country's first oil refinery began operations nearby in 1963 (Table 4). At Sfax, increasing general cargo and phosphate traffic has caused an increase in ship-calls. No clear trends in number of ship- calls can be observed at Tunis-La Goulette and Sousse.
B. Present and Future Traffic (Tables 5 - 9)
(i) General 4.03 The start of the petroleum refinery at Bizerte in 1963 pro- duced an increase in traffic of about 1.1 million tons in the following year, 550,000 tons in cargo unloaded and about the same in loading (Table 7). In 1964 the steel mill adiacent to Hienzel Bourguiba also started up and importation of coke and iron ore commenced. Growth of overall traffic in 1965 was about five per cent. 1966 produced a significant increase in iron ore loadings of over 40%, 390,000 tons, and a moderate increase in other categories. Importation of cereals in Tunis- La Goulette has increased each year from 95,000 tons in 1964 to 311,000 tons in 1967, but the rate of increase is not steady and depends to a large extent on the domestic harvest of hard wheat. Future average yearly imports are forecast at 200,000 tons. (Table 6)
4.04 There was thus a continuing growth in traffic, without a regular pattern, up to 1967, when the Middle East crisis seriously af- fected traffic through Tunisian ports. Shipping lines imposed a sur- charge on all freight through North African ports, resulting in a fall of about 700,000 tons in total traffic from 8.2 million in 1966 to 7.5 million tons in 1967. This figure, however, was still slightly greater than that for 1965, and is expected to resume its upward trend by 1968.
4.05 Future total traffic through OPNT ports is expected to in- crease at an average rate of a little less than four per cent annually, from 8.2 million tons in 1966 to 12.9 million tons in 1977 (Table 5) based on 1966 figures. The future rate of traffic growth takes into account availability of mineral deposits, developments in economic activity, changes in demand, etc.
1/ nrt - net registered tonnage. - 8-
(ii) Bulk Traffic
4.o6 La Goulette exports sizeable quantities of iron ore and some 200,000 tons of phosphates annually (Table 6); the Government expects to increase exports of phosphates through La Goulette to 0.5 million tons per annum, but no specific date has been fixed, and the increase has not been included in the traffic projections. Since 1963, Sfax and Bizerte-Menzel Bourguiba have emerged as the most important bulk ports (Tables 7 and 8), the former for phosphates (2.4 million tons in 1967) and the latter for crude oil and refined petroleum products (1.4 million tons in 1967), iron ore and steel. Most of the shipments of petroleum products from Bizerte appear as imports in the other three ports, the refinery largely serving domestic needs.
4.07 Exports of iron ore from Tunis-La Goulette since 1963 were steady at an average of about 675,000 tons except for 1966 when a little over one million tons were exported. Future loadings of iron ore from Tunis-La Goulette are to be limited to about 800,000 tons per annum until 1980, including 150,000 tons for Menzel Bourguiba, while new possible sources are explored. To ensure a market for this volume, the Government is negotiating a three-year contract for the supply of 550,000 tons to ITALSIDER, an Italian steel producer. An important condition of the contract is the ability to use bulk carriers of 35,000 deadweight tons requiring 11.6 m depth of water in the entrance channel and 11.0 m at the iron ore berth. The Government's present policy is also to increase phosphate exports through La Goulette and this will be considerably assisted by the availability of a deeper entrance channel.
4.o8 Indications in the Tunisian Transport Survey draft report of ITALCONSULT,dated July 1968, are that the production of phosphates in the Gafsa region might be increased to about 9 million tons of saleable products per annum by 1980 subject to investment by Tunisia of over $30 million in each of the 1969/72, 1972/76 and 1976/80 four year plans; appropriate allocation has been made in the 1969/72 program to be reviewed by the Bank in the Spring of 1969. Exports are expected to increase as follow3s, and may increase beyond these figures:
Year Tonnage of Saleable Products (millions)
1969 3.7 1970 h.0 1972 5.0 1980 8.2 - 9.0 The projections of traffic in this report have not included export tonnages through Sfax in excess of 3.3 million as no assurance of the required invest- ments to achieve higher output has been given to the Bank, and the forecasts quoted by ITALCONSULT require careful checking. h.09 Traffic through Bizerte-Menzel Bourguiba is expected to double in the next decade, largely because of planned capacity increases of both the refinery and the El Fouladh steel works (Table 7). At Sousse, traffic will - 9 - increase in liquid fuel imports and in exports of salt; total traffic is expected to increase from 235,000 tons in 1966 to some 640,000 tons by 1977 (Table 9).
(iii) General Cargo
4.10 Tunis-La Goulette handled about two-thirds of all general cargo traffic between 1963 and 1966, but this decreased slightly during and after 1964 due to reduced Franco-Tunisian trade, while for the four ports as a whole it remained more or less constant.
4.11 General cargo traffic at Tunis-La Goulette (Table 6) is expected to resume growth as the Tunisian economy continues to expand. Commercial relations with France have returned to normal assuring a return of some of Tunisia's important exports (e.g. wine) to their traditional market. Pres- ently the largest share of this traffic goes through Tunis' old port but most of it will be handled by the modern facilities at La Goulette just coming into operation. General-cargo traffic movements through Bizerte-M4enzel Bourguiba and Sfax are expected to continue to increase in line with economic growth in the areas served by these ports (Tables 7 and 8).
C. Port Development
4.12 The Government has a provisional ten-year development plan (1963- 1972) for Tunisia and a more specific four-year plan for the period 1965- 1968. No separate development program exists for OPNT's ports but the Bureau d'Etudes, formed within OPNT's organization, is preparing a program the outlines of which are given below.
4.13 In addition to the works included in the proposed project, future major works are expected to consist of providing additional berths at La Goulette and reconstruction of the existing general cargo facilities at Menzel Bourguiba.
4.14 With the 1,100 m of quay, La Goulette has a capacity of about 900,000 tons of general cargo at a normal handling rate. Allowing for 450,000 tons being handled at Tunis, the combined capacity of the port complex is about 1.35 million tons. General cargo in Tunis-La Goulette is expected to reach about 1.34 million tons in 1972; by 1977 it is expected to have increased to about 1.85 million tons and 3-4 new general cargo berths will be required. If traffic develops as forecast, work on these berths could start about 1972, however, the effects of containerization of general cargo will have to be considered. Estimated cost of construction which will be required at La Goulette is US$8.5 million equivalent including $5.25 million foreign exchange.
4.15 An industrial trading estate is being developed near Menzel Bourguiba, and improvements will be required to the existing port to handle its raw materials and products. The cost has not been estimated and no provisional date has yet been set for commencement of this work.
4.16 The present maximum capacity of Sfax to handle phosphate exports is about 3.3 million tons per annum; beyond this amount nvestments to - 10 -
improve storage and loading capacity and to nerimit use by larger vessels would be required. However, the Bank has been informed that the Government proposes to build a new port at Gabes, and the Government has requested Bank assistance in constructing a new railway line from the Gafsa mining complex to Gabes. The justification for constructing the new railway line is the subject of discussions which are to be held between the Bank, ITALCONSULT and the Government. The Government has undertaken that some 3.0 million tons of phosphates will continue to be exported through Sfax, thus assuring OPINT's proJected financial position. However, depending upon the decision of the Government on the Gafsa to Gabes railway connection, it may be that continued exportation through Sfax will prove uneconomic. Therefore, when the Gabes port is completed, the Bank should review the position and possibly relieve the Government of its commitment to export 3.0 million tons of phosphate through Sfax. In such case the Bank and the Government would also have to discuss whether the port of Gabes should be included in OPNT and on what terms and conditions.
4.17 Following issue of the final report of the Tunisian Transport Survey, just completed, the Government and OPNT will discuss future port investment with the Bank. This will cover the period to 1976 and include the development of the port at Gabes. The Banl will be given the opportunity to comment on these developments. (see 5.12)
5. THE PROJECT
5.01 The Project consists of the following items:
(a) dredging to increase the depth and width in entrance channels and approaches and alongside bulk facilities at La Goulette, Sfax and Bizerte, to permit access of larger bulk oil and ore carriers;
(b) provision of a small suction dredger and attendant tug for main- tenance dredging of OPNT's ports;
(c) provision of cargo-handling equipment including tractors, forklift trucks, and mobile cranes at Tunis-La Goulette and Sfax, and the rehabilitation of seven 7-ton portal quay cranes at La Goulette;
(d) restoration of the island breakwater at Bizerte to insure adequate protection inside the harbor;
(e) provision of a new bulk-grain berth and storage installation on the south side of La Goulette harbor;
(f) training of OPNT staff in accounting and financial management and provision of accounting consultants;
(g) provision of engineering consultants to assist OPNT in the execution of the project.
The total estimated project cost is US$10.73 million equivalent, including US$8.5 million equivalent in foreign exchange.
5.02 The items comprising the project are further described below: (a) Dredging
(i) The entrance channel to La Goulette harbor will be dredged to 11.6 m and a channel leading to the iron ore berth to 11.0 m so that the iron ore berth can be used by bulk carriers of 10.5 m draft and the proposed cereals berth by vessels of 9.5 m draft. About 1.7 million m3 of spoil are to be dredged at an estimated cost of US$1.23 million. The Government has agreed that it will carry out necessary sheet piling of the front of the iron ore berth so that it can be deepened to 11 m now and eventually to 12 m; and has indicated the necessity for this dredging, to meet the requirements of its existing contract with ITALSIDER.
(ii) The 4,500 m entrance channel at Sfax has a width of 50 m over 3,000 m of its length, increasing to 150 m at its seaward end. This is to be widened over the necessary length to 60 m, considered the minimum safe width for passage of single vessels. About 300,000 m3 cf spoil are to be dredged at an estimated cost of US$210,000.
(iii) The petroleum products berth at Bizerte, which serves the refinery, presently has an available depth of 9 m; the main entrance channel from the open sea has a depth of 12 m. Deepening to 12 m alongside the berth will provide accommodation for vessels of about 50,000 dwt, a size currently in regular use in the distribution of crude petroleum. About 230,000 m3 of spoil are to be dredged, including some 30,000 m3 of rock, at an estimated cost of US$410,000.
(iv) Bulk supplies of iron ore and coke for the El Fouladh steel vorks are imported through Menzel Bourguiba; the depth alongside the bulk- cargo wharf is to be increased from its present 7 m to 10.5 m, to permit importation of coke by larger bulk carriers. About 100,000 m3 need to be dredged at an estimated cost of US$70,000.
(b) Provision of Dredger and Attendant Tug
Maintenance dredging in OPNT's harbors will amount to between 210,000 and 2h0,000 m3 per annum. The existing bucket dredger is beyond economic repair and cannot do this work, although the present hopper barges can be used. A 200 m3/hour capacity suction dredger, with 1,000 m of de- livery pipe, is therefore included in the project, together with a 750 HP tug, to position the dredger for work in the harbors, to tow it between ports, and to move the hopper barges when necessary. This tug can also supplement the harbor tugs for ship movements when not in use for dredging operations. Entrance channels to the ports require little annual maintenance dredging and this will be accumulated and done at long intervals by contract; the new dredger can clear local storm accumulations. It will also have a surplus capacity for minor capital improvements or for use in maintaining Government fishing harbors. The estimated cost of the dredger and pipeline is US$700,000 and the tug US$240,000.
(c) Cargo-Handling Equipment
(i) The tractors, forklift trucks, and mobile cranes owned by OPNT and STAM are generally old and uneconomic to maintain and there is need for a 10-ton mobile crane at Tunis and La Goulette. Similar equipment to be procured is appropriate to the needs of OPNT and STAM (Table 3). The equipment required by STAM will be made available upon terms a.d conditions, acceptable to UPVT "TANI aid the Bank, which have been agreed. The estimated cost is US$600.O00. being U13$270.000 t'or STAM and US,)o.uOO0 for OPNT. - 12 -
(ii) The 1,100 meter quay at La Goulette has three portal cranes in service, out of the seven available, due to poor condition of the elec- trical circuits and equipment. The cranes have been under-utilized in the past, due to their unreliability and the small amount of general cargo traffic at La Goulette prior to its modernization. The newly completed port works are expected to increase the use of the quay cranes gradually to an average of about l 500 hours per crane annually, resulting in more rapid turn-around of vessels. The cranes are in good overall con- dition, except for the electrical installations, and still have at least 15 years useful life. Accordingly, necessary improvements to the electri- cal installation, together with ancillary work to bring the cranes into full service, are included in the project at an estinated cost of US$275,000. Spare parts at an additional cost of US$30,000 are also included.
(d) Bizerte Breakwater
The oil berth serving the refinery at Bizerte is located in the outer harbor on one of the two breakwater arms. The entrance is protected by an island breakwater about 610 m long, situated about 500 m from the entrance in 17 m of water. The island breakwater has suffered serious storm damage and requires substantial reconstruction to enable it to con- tinue to protect the harbor generally and the oil berth in particular. The work requires special equipment and will include tests of the stabilit7 of the construction. The estimated total cost is US$700,000.
(e) Bulk-Grain Berth and Storage Facility at La Goulette
The bulk-grain installation to be constructed on the south side of La Goulette harbor comprises concrete storage silos of 30,000 tons capacity with appropriate mechanical equipment for loading or discharging vessels and conveying grain to or from the silo at a rate of 250 tons/hour. The new berth which will serve the installation consists of separate dolphins with the center one supporting the mechanical loader/discharger. It will be dredged to 10.0 m and will be designed for future dredging to 12.0 m. The estimated cost of the grain-handling facility is US$3.3 million and of the berth, Us$455,000 - a total of about US$3.8 million equivalent. The storage facility will be leased by OPNT to the Office des Cereals on terms and conditions which have been agreed.
(f) Staff Training in Accounting and Financial iIanagement and Accounting Consultants
There is need to strengthen the staff of the Accounts Department of OPNT (see 3.03) and the present accounting consultants, Howell & Co., are satisfactorily conducting a training program approved by the- anz. The present phase commenced in January 1968, and is expected to be completed in 1969. The Bank agreed that foreign exchange costs incurred up to March 31, 1968, to a maximum of US$30,000 were to be met from Loan 380-TUIN. Estimated costs of the OPNT training program from April 1, 1968 and the pro- vision of a fellowship abroad for a trainee financial manager (para. 7.13) are included in the present project, together with accounting consultant services to assist OPI'T during the training period of the accounts depart- ment staff. The total estimated costs for training and supervisory work from April 1, 1968 are US$270,000. - 13 -
5.03 OPNT has agreed. to retain engineering and accounting consultants satisfactory to the Bank.
5.04 Cost Estimates
Tne estimated cost of the project is given below:
($ '000) Item Total Cost Foreign Exchange
1. Dredging
(a) La Goulette entrance charnulel to 11.6 m and harbor channel for iron ore berth to 11 m 1,230 1,000 (b) Sfax entrance channel 210 165 (c) Bizerte oil wharf 410 325 (d) Menzel-Bourguiba bulk wharf 70 1,920 60 1,550
2. Dredger and Tug 940 890
3. Cargo-Handling Equipment
(a) Tractors, Forklift trucks, and Mobile cranes 600 580 (b) Rehabilitation of portal cranes 305 905 290 870
4. Bizerte Breakwyater 700 370
5. Bulk-grain installation at La Goulette
Equipment 3,300 2,500 Berth 455 320
6. Accountant Consultants including training programs 270 250
7. Ehgineering Consultants 690 600
8. Contingencies: (a) Engineering (items 1-5) 1,050 780 (b) Price 500 370 10,730 8,500
BEuivalent Tunisian Dinars (thousands) 5,633 4,462 - 14 -
5.05 The cost esti-Mates are consi dered realistic. Dredging costs have been based on recent contracts for similar types of dredged material. The estimated costs of cargo-handling equipment and of consultants' services are in line with those charged recently on contracts or studies with which the Bank has been associated. Engineering contingencies are about 15%0 for the bulk-grain storage and handling equipment 121-g for dredging, 5%+ for cargo-handling equipment and 10% for others. The con- tingency item for increase in prices is equivalent to about 6,% of all project items.
Foreign Exchange Content
5.06 The average foreign exchange component (about 80%) is higher than is normally the case in port projects due to the composition of the project; the cargo-handling equipment and the dredger and tug will be procured abroad and involve little local expenditure, as will the mechan- ical equipment for the bulk-grain handling installation. The foreign ex- change component of dredging is calculated at 80% which is normal.
Disbursement Procedure
5.07 It is recommended that disbursement of the loan be on the basis of actual approved foreign currency expenditures. The estimated schedule of disbursement is as follows:
US$ '000
1968 195 1969 1,715 1970 3,1485 1971 2,655 1972 1450 8,500
Local Currency Costs
5.08 As is indicated in Section 7, OPNT's cash position is sound and it should have no difficulty in providing the local currency costs of the project.
Procurement
5.09 The contracts for procurement of equipment and execution of dredging and other works will be let in accordance with the Bank's pro- cedure for international competitive bidding. OPNT is already familiar with the Bank's requirement in this respect.
5.10 The project is expected to be completed within a period of four years. OPNT is considered competent to execute the project with the help of engineering and financial consultants as indicated. - 15 -
5.11 It is recozmmended that if any funds remain undisbursed on completion of the project, consideration be given to providing additional cargo-handling equipment, subject to a check on the situation by a super- vision mission; some of the equipment which is at present within its normal operating life should need replacement in another three or four years time.
5.12 The Government has agreed to prepare successive port development programs at least until December 1976; it will produce the first four-year plan not later than December 31, 1969 and will give the Bani opportunity for comment. It will take into account the Transport Survey Report at present under revieu. It has also been agreed that, until the project has been ccrpleted, CPNIT shall not incur major capital expenditures, other than on the project,without prior agreement of the Banlc. Thereafter OPNT shall consult with the Bar<{ before undertakin- mnajor capital expenditure.
6. ECONCMIC JUSTIFIGATION
6.01 The objective of the project is to ensuire more efficient opera- tions in the OPNT ports. -7'e. quantifiable benefits attributable to the project take the fc v; D lower shipping costs resulting from the use of larger v'-.,ela, faster turnaround of ships, and improved operating efficiency deriving from new facilities and equipment. In the first instance, most of these savings will accrue mainly to foreign shipping lines although, eventually, they will benefit the Tunisian economy pri- marily in the form of lower shipping rates and reduced transport costs.
A. Capital Dredging
(i) Tunis-La Goulette
6.02 The proposed capital dredging to 11.6 m in the access channel and to 11 m in the harbor channel will permit larger ships to call at this port.
6.03 About 100,000 tons of cereals - or half of total imports - are imported annually from the United States through La Goulette. For this long-haul tonnage, the use of bulk carriers with nearly twice the capa- city of present vessels is estimated to yield annual savings in shipping costs of US$75,000.
6.04 The Government is presently negotiating a three-year contract for the export of 550,000 tons of iron ore per year to Italy (para. 4.07). This will leave about 100,000 tons a year for export to northern Europe, or a total export of 650,000 tons a year estimated for 1971-1980.
6.05 On the basis of escinated unit savings of USjO.10 and US6'0.22 per ton for shipments to Italy and to the U.K., respectively, total annual savings in shipping costs will be US$77,000. - 16 -
6.o6 About 200,000 tons of phosphates are exported anntually from Tunis-La Goulette to various points in the Y'editerranean. Annual savings in shipping costs will be about US$10,000 assuming no further growth in tonnage.
6.07 Given the surrounding tourist attractions, about 12 large cruise vessels a year, which cannot now call at La Goulette, could be expected to do so once the proposed dredging is done. On the basis of a net contribution in foreign exchange of US$10 per tourist, the resulting annual benefits will be US$30,000.
6.o8 Assuming a project life of 25 years and increased maintenance dredging costs of US$5,000 a year, the proposed dredging will yield a return of 10%.
(ii) Sfax
6.09 Widening the entrance channel at Sfax would result in faster ship turnaround. With 500-800 vessels calling annually and unit savings of 20 minutes per vessel, total annual savings will be US$12,000, or the equivalent of 8 ship-days.
6.10 Widening the channel will also enable about 120 vessels, or 2h0 passages, per year to use one tug instead of two. At an estimated saving of US$125 per passage, total annual savings will be US$30,000.
6.11 Assuming maintenance dredging costs of US$14,000 every five years, and discounting the benefits over a period of 25 years, the project will yield a return of 11%. It is possible, that with the development of Gabes the number of vessels calling at Sfax, and consequently the return, will be reduced. However, no benefit has been included for the additional safety of harbor operations in the above calculations and these benefits may be expected to balance the loss due to reduction of shipping.
(iii) Bizerte
6.12 Crude oil shipments to Bizerte are projected to increase from 735,000 tons in 1967 to 1.74 million by 1977 (Table 7). In the absence of data, it is conservatively assumed that only 10% of total crude oil imports will come from the eastern Mediterranean, while 90% of imports will come from La Skhirra (Map No. 1).
6.13 The project would permit the use of tankers almost three times the maximum size of vessels presently operating between Lebanon and Bizerte. The resulting freight cost savings will be US$1.25 per ton, or a total of US$160,000 in 1973, and US$220,000 a year beyond 1977. Discounting the benefits over 25 years, the proposed investment will yield a return of about 25%. - 17 -
(iv) M2nzel Bourguiba
6.14 The limited amount of dredging proposed for this port will permit the use of larger coke carriers, thus eventually reducing pro- duction costs at the El Fouladh steel works. The planned expansion of steel production will result in a corresponding increase in coke imports from 80,000 tons in 1966, to 120,000 in 1971, respectively.
6.15 In estimating the benefits, however, it has been assumed that a constant volume of 40,000 tons a year will continue to come from the U.S., but in larger vessels than at present. The resulting savings in shipping costs, discounted over 25 years, yield a return of 23 ,J. This excludes possible savings on coke imports from European sources.
B. Dredger and Tug
6.16 The Government has requested replacement of the existing uneconomic dredger by a new dredger and tug which will have an annual output of 300-400,000 m3. The annual maintenance dredging required for OPNT ports is between 210,000 and 240,000 m3.
6.17 Over a period of 25 years, the total capital and operating cost of maintenance dredging by OPNT, using its own equipment, will be US$2.2 million, discounted at 10 5 (Table 10).
6.18 The alternative would be to have the maintenance carried out dredging at regular five-year intervals. The unit price of by contract 3 contract dredging is estimated to range between US$0.60 and 0.80 per m , with a probable price of US$0.70 per m3. Table 10 shows the present value of the cost of contract dredging discounted at 10, ior 25 years, at the alternative unit prices. It is concluded from this that contract dredging is a more efficient alternative at unit prices of up to about US$0.75 per m3. At US$0.80 per m3, dredging by OFlT equipment will result in savings of US$112,000 versus a loss of US$178,000 at the most likely price of US$0.70 per m3.
6.19 On the basis of the preceding analysis, contract dredging appears to be the more efficient alternative at a discount rate greater than seven per cent. The Bank discussed the analyrsis *e-th the Govern- ment which desires that the dredger and tug remain in the project. Its reasons are: (a) the surplus capacity can be utilized for dredging and improving other Tunisian harbors, mainly fishing ports; (b) OPNT will be able to meet most emergency needs without incurring possibly high costs and delays; (c) some savings in scarce foreign exchange may be expected if OPNT owned the dredging equipment. The added costs of OPNT's dredger may be regarded as an "insurance premium" to achieve these results. Given the amounts involved, the dredger and tug are considered acceptable for inclusion in the project. - 18 -
C. Cargo-Handling Eauipment
6.20 Without adequate cargo-handling equipment, the project ports would suffer increasing congestion. Delays to ships waiting for berths would arise, and the time required for loading and discharging would increase, leading to surcharges on shipping rates.
(i) Tractors,, 'orklift-trucks, and hobile Cranes
6.21 The quantifiable benefits accruing as a result of the purchase of new equipment are several-fold: (a) Reduced turnaround time for ships; much valuable time is lost by ships loading and unloading without adequate equipment to handle the cargo. (b) Reduced repair and maintenance costs; these savings would take place for a period of about 5 years; afterwards none of the old equipment would be operational and if no new equipment were acquired, additional labor would have to be hired. (c) Increased efficiency of operations; the new equipment would result in increased output. (d) Re- duced breakage, losses due to pilferage, etc; but because of insufficient data no attempt has been made to quantify these savings.
6.22 Total net benefits from cargo-handling equipment, over the expected 10-year lifetime of the equipment, are estimated at US$140,000 for Tunis-La Goulette and US$4O,000 for Sfax annually. These benefits give a return of 177 for Tunis-La Goulette and 20,; for Sfax.
(ii) Portal Cranes
6.23 All of the seven portal cranes at La Goulette are in relatively good condition although only three are operational (see para 5.02(c)(ii)). Repairing and modernizing the cranes is more economical than replacing them with new ones, so the latter alternative has not been considered in the economic justification.
6.24 It is estimated that on the average) the use of portal cranes would reduce ship turnaround time by speeding up loading/unloading operations by 10)', compared oith th-e use o' s-i-ols -:ear, where available. Some 52 ship-days could be saved annually. At an average ship operating cost of about US$1,000 per day, benefits would amount to some US$52,000 annually.
6.25 The portal cranes would increase operating efficiency with more cargo being handled at the same total labor cost. Assuming that some five percent would be saved on the average cost of handling a ton of general cargo, annual savings would amount to some US$20,000.
6.26 Other benefits which have not been quantified include the speedier handling of cargo from the quay to the transit sheds, thus relieving possible congestion. This is not too significant now, but it will increase in importance with increasing traffic. i4oreover, some 25 < of 7editerranean slips wh,iich call at Tunis-La Goulette do not have their own gear and the cranes would facilitate the operations of these vessels. - 19 -
6.27 The above quantifiable benefits yield a return of 17% over a period of 15 years.
D. Breakwater at Bizerte
6.28 The existing island breakwater has suffered considerable storm damage and unless prompt reconstruction is undertaken, further deteriora- tion will occur and the breakwater will fail to provide adequate pro- tection. Without this protection, operations at the oil berth would be subject to delays and interruptions during rough weather. The principal benefit is measured by the value of ship time which would be lost if the breakwater were not reconstructed.
6.29 In 1972 Bizerte will import about 1.3 million tons of crude petroleum. About 90% is assumed to come from La Skhirra (para. 6.12) with 10% from more distant sources in the eastern M4editerranean. Assum- ing that 75% of oil from La Skhirra is carried by 20,000 ton vessels and that all the remaining imports are carried by 50,000 ton tankers, about 42 vessels and 8 tankers would be required per year. It is also estimated that about 190 coastal vessels of 5,000 ton capacity aie required annually to slhip from Bizerte nearly 950,000 tons of refined petroleum products, for distribution along the Tunisian coast. The average daily cost is estimated at US$2,800 per tanker, US$1,600 per vessel and US$700 per coastal vessel.
6.30 Rough weather of the kind necessitating protection by an island breakwater occurs about 150 days a year at Bizerte. Without the break- water, the average delay per ship would be two days for tankers and vessels, and three days for coastal vessels. Assuming that only one-third of ship calls occur during rough weather, the annual benefit would be over US$190,000. It will be twelve years before an additional investment be- comes necessary. Discounting the benefits over 12 years, the investment would yield a return of over 12%, without taking into account the likely growth in traffic between 1972 and 1980.
E. Bulk-Grain Berth and Storage Facility at La Goulette
6.31 It is expected that the construction of a bulk-grain handling and storage facility and related berth will improve productivity. The annual maintenance cost is estimated at about US$100,000 for 25 years, the expected life of the project.
6.32 The principal benefit is the reduction of losses from pests, disease and weather which will result from the improved storage and handling methods. This is estimated as equivalent to three per cent of total grain imports -- an average saving of $450,000 a year.
6.33 The saving in ship turnaround time is estimated at US$300,000 annually on the basis of 200,000 tons of cereal imports. This is based on an estimated reduction in the time required to unload a 20,000 ton vessel, with a daily cost of US$1,500, from the present average of 28 days to 8 days with the new facilities. - 20 -
6.34 ALnother major benefit is the reduction in labor cost. With present methods, it takes 28 days with 100 men per day, at US$2.40 per man-day, to unload a 20,000 ton vessel. This will be reduced to 8 men a day, for only 8 days, or a total of 64 man-days. This reduction, mainly in casual labor, would result in annual savings of US$66,000.
6.35 One general cargo berth is presently devoted to the handling and storage of cereals for 280 days a year. This represents 805 occupancy, the practical capacity. In the light of the prevailing excess capacity of general cargo facilities, the diversion of this berth to cereals does not represent an economic cost. By 1973, however, the demand for general cargo facilities is expected to reach a level that would require the use of the berth. Assuming an 80 % utilization factor and a daily economic cost of US$800 for the berth, release to general cargo uses would have an annual value of US$224,000 which is attributable as an economic benefit to the present project.
6.36 Considering the above net benefits over a period of 25 years, the proposed investment in the cereals berth and handling facilities is justified, yielding a return of 15%a.
7. TARIFFS AND FINANCES
A. Tariffs
7.01 OPNT charges ships for wharfage, harbor dues, pilotage and towage, and consignees for storage. Other charges cover use of the canal between Tunis and La Goulette, hire of cranes and other equipment, supply of fresh water and miscellaneous services. Wharfage based on tonnage loaded and unloaded is the largest source of income at. all ports providing about 32%o at Tuniis-La GCulette, 70" at Biserte, 27' at Sousse and 50'% at Sfax. ;t Tunis-La Goulette, the principal polt for -eneral imports, storage accoui-its_for about 25? of total revenue.
7.02 There has been no general revision of rates since 1952. The only rate increases have been on ships dues in 1953 and 1954 awd wharfage in 1958; there was also a small change in the tariff structure in 1967 when OFNT took over the protection of open storage cargoes at Bizerte, Sousse and Sfax. Under Loan 380-TUN, the Government retained consultants, Societe d'Etudes Techniques et Economiques (SETEC), to study and make recommendations on the tariff structure. OPNT are considering the draft report; its proposals, if adopted, would result in an increase of about 15% in total revenues. - 21 -
7.03 The present tariff structure is inadequate to provide a proper system of rates for the various facilities provided by OPNT, and the rates are not sufficiently related to the costs of providing the facilities. SETEC's draft report does not recommend any change in the structure and does not take costs properly into account in considering the rates. OPNT has agreed to institute a comprehensive system of tariffs which shall be reasonably related to the costs of providing its services and facilities, and that it will not grant any exemptions therefrom, nor any preferential treatment except for certain classes of users.
B. Present Finances
General
7.04 The present cash position oP OPNT is sound and generally stronger than was forecast in the appraisal report for Loan 380-TUN. This is due mainly to a greater total volume of traffic passing through Tunis-La Goulette, and the other OPNT ports. Total operating costs were only slightly higher than projected, largely because of economies introduced by OPNT, and to the hLigh proportion of fixed operating costs.
7.05 Total net operating revenues for the years 1964-1966 amounted to nearly D 2 million, twice the amount forecast; and the present estimates for 1967 show a substantial improvement over the forecast figures. The Regie des Ports and its successor, OPNT, were thus able to provide the local currency costs for the Loan 380-TUN project, service the former Regie's debt, commence service of the Bank loan in 1967, and still have funds available for capital purposes.
Revenue Accounts
7.06 Financial data for the years 1964-1967 are given in Table 11, and are summarized below with comparative forecasts from the 380-TUN appraisal report. The accounts for the year 1967 as submitted have been revised to incorporate the inventory revisions, adjustments to the old Regie account, and completion of the 380-TUN project. -22-
(Dinars '000)
1964 _ _1905 _ 266 _96_ Fore- Actual Forecast Actual Forecast Actual Forecast !.ctual Cast
Revenue 1.596 1 296 1 373 1 337 1,801 1338 1,7 Expenses 6786 '86 690 721 99 731 74 Deprecia- tion 307 306 309 30S 318 306 318 419 1,062 984 9 96 1,039 1n,00 1,49 l,'L3 Net Operating Revenues 534 312 678 341 762 333 822 282
Interest 90 90 86 86 100 82 99 233-1 Times interest covered 5.9x 3.5x 7.9x 4eOx 7.6x 4,cx 8.3x 12x Debt Service 276 276 259 259 251 242 345 44 1/ Times debt service covered 3.Ox 2.2x 3.Ex 2.5x 4.3x 2.6x 3.3* 1.6x Operating Ratio 66 % 76% 59% 74% 58% 75% 56,o 80cO Taxation 20 20 20 20 20 20 20 20 Net Revenue Surplus 424 202 572 235 642 231 703 29
/ T':e di:V2erences in 1967 betveen actual and forecasts a;-e due in arit to the slower drauCdon or Loan 300-TUiP. - 23 -
7.07 Interest and debt service coverage and operating ratios are satisfactory and better than forecast. Adjusted net revenue surpluses for the years 1964-1967, total D 2.341 million, compared with D 0.697 million forecast.
Balance Sheets
7.08 'The balance sheets as at December 31, 1966 and 1967, have been amended to take avcount of the re-vision of fixed assets and other adjust- ments and are -iven in Table 13. The balance sheet as of December 31, 1967, including thie takeover by OP1TT of the 300-TUJN project facilities, is summar-;zed beloT: Dec. 31, 1967 (Dinars '000)
Assets
Fixed assets at net book value 19,618 Deferred project costs, accounts receivable, sundry investments and loans 1,114 Net current assets 21,31?
Capital
Debt: Loan 380-TUN 3,492 Other 6,315 9,807
Equity: December 31, 1966 10,809 Surplus, 1967 703 11,512
21,319 Debt/Equity Ratio 46/54
Existing Assets
7.09 The original valuation of the fixed assets of the former Regie des Ports is being reviewed and brought up to date by a special Government committee following suggestions of the consultants and Bank staff. The net book value as of December 31, 1966, used for the purpose of this report, represents a reasonable value at current replacement costs less accumulated depreciation.
Outstanding Debt
7.10 A schedule of the outstanding debt taken over from the former Regie - D 6.209 million at December 21, 1966 - is given in Appendix 1. The outstanding loans, all due to the Government, are on easy terms, carrying interest at 1½5S per annum iiith maturity dates to 2008. These debts add little to OPNT s annual financial burden. - 24 -
Audit
7.11 The law creating OPNT did not require external auditors to be appointed, but does require the budgets to be submitted to the Government and provides for the Minister of Finance to appoint a Financial Controller. The Controller makes his reports directly to the Miinister who is now pro- viding the Bank with copies.
7.12 So long as the present accounting consultants are retained by OPNT, the Bank may accept the accounts prepared under their super- vision, together with the Controller's Reports, The Borrower has agreed that independent auditors, acceptable to the Bank, will be appointed prior to the conclusion of the services of the accounting consultants.
Accounts Department
7.13 At present the accounts of OPNT are prepared under the super- vision of the accounting consultants, who also provide training in accountancy and financial management to OPNT's staff. The present project includes their services until at least December 1969. The amount included for such services is US$270,000, including US$250,000 equivalent in foreign exchange. OPNT appreciates the desirability of senior management staff being aware of the need for and the practical use of accurate accounting information. OPNT has informed the Bank that it proposes to send abroad for advanced training in financial management a suitably- qualified person with a view to his becoming financial manager. It will consult with the Bank on the program for his training. Accounting consultants will be retained until the appointment of a suitable financial manager in consultation with the Bank.
C. Future Finances
Revenues
7.14 Detailed financial forecasts for 1968-1973, based upon the forecast traffic, are given in Table 11. A projected Cash Flow Statement is given in Table 12, Pro Forma;Balance Sheets in Table 13, and a fore- cast of Debt Service in Table 14. The Assumptions used in preparing these forecasts are detailed in Appendix 2, and include adjustments to the tariffs to produce 10% additional gross operating revenue from January 1, 1970. 7.15 A summary forecast of OPNT revenues and ratios for the alternate years 1968, 1970, and 1972 and for 1973 is given below: - 25 -
(Dinars '000)
1968 1970 1972 1973
Operating Revenues 2,075 2,573 2)994 3,256
Rentals - 6 180 291
2,075 2,637 3,174 3,547
Operating Expenses 825 889 1,009 1,032 Depreciation 486 513 584 645 1,311 1,402 1,593 1,677
Net Operating Revenues 764 1,235 1,581 1,870
Interest 285 423 545 539
Net Revenue Surplus 419 752 968 1,263
Times interest covered 2.7x 2.9x 2.9x 3.5x Total Debt Service 589 742 848 821 Times debt service covered 2.lx 2.4x 2.6x 3.lx Operating Ratio 63% 53% 50% 47%
Return on average net fixed assets 3.9% 6.5% 7.0% 8.0%
7.:6 aIJe esjxaji.:euts aiid total debt ser-vice will each oe covered at least two times, which is adequate. Operating ratios will fall from 63% in 1968 to 47% in 1973. The relatively low, and declining operating ratios are due to the fact that OPMT does not undertake cargo-handling operations, which would entail high dock labor costs and increase the ratio.
7.17 Net revenue surpluses, after depreciation, interest payment, and annual payments to Government of D 20,000 in lieu of taxes, are substantial - 20% of gross revenues in 1968, rising to nearly 40% in 1973.
7.18 Without a tariff increase, and on the basis of the present traf- fic forecasts, the financial rate of return would average a little less than five per cent during 1969-1971 and would be about six per cent for 1973. However, OPNT is now realizing the physical benefits of the new facilities at La Goulette and should be able to obtain a corresponding in- creased benefit in financial terms. As previously mentioned (para. 7.02) consultants are considering tariff changes that will increase OPNT's revenues, but their final recommendations will not be available until later this year. The present forecasts indicate tariff adjustments that would - 26 - increase the gross revenues by 10% from 1970 and give a rate of retuirn on average net fixed assets of 6.4% in that year rising to eight per cent in 1973. An acceptable rate would be at least six per cent in 1971 and OPNT has agreed to adjust tariffs if necessary to achieve this rate, and seven per cent in 1973. Agreement has also been reached that after 1973 rates above seven per cent will be agreed upon from time to time between OPNT and the Bank.
Cash Flow
7.19 The cash flow forecast, Table 12, is summarized below for the years 1967-1973 inclusive:
D'OOO
Funds Required
Project 380-TUN Local Currency Costs 1,082 Second Port Project Total Costs 5,633 Miscellaneous Investmernts, including 2 tugs on Supplier's Credit 1 758 Debt Service 4,841 Payments to Government in lieu of taxes 1i0
13,454
Source of Funds
Net Operating Revenues 8,540 Depreciation 3, 544 Accounts Receivable on Long-Term Credit 247 Supplierts Credit 307 IBRD - Second Port Project 4;462
iz.J00
Surplus of Funds Generated 1967 - 1973 3,646
Balance of Funds Brought Forward from 1966 19000 Balance of Funds remaining at December 1973 4, 646
7.20 Provision has been made in the cash flow statement for expenditure of D 200,000 each year to cover plant replacements and other minor items which should be ample. Annual cash surpluses will total D 3,6 - 27 - million over the years 1967-i973 plus a balance of about D 1.0 million brought forward from 1966. There will be ample funds available to meet foreseeable local currency costs; and provide reserves for contingencies. An indication of future development needs is given in paragraphs 4.11 4.17 the largest of which is a further expansion of La Goulette, and funds would also be available for this purpose.
Balance Sheets
7.21 A summary of the forecast pro-forma balance sheets (Table 13) is given below, as of December 31, 1968, 1970, 1972 and 1973:
D'OOO
1968 1970 1972 1973
Assets
Fixed assets, net of depre- ciation 19,333 19,310 23,542 23,097 Capital work-in-progress 105 2,987 - - Non-revenue-earning project costs less amounts written off 750 670 703 655 Secured loan, long-term credit accounts receivable & loans 220 14 14 14 Net current assets 344 343 343 3143 Capital funds 92Q 1,713 3,172 4,6146 21,67? 25,037 27,774 28,755
Capital
Debt 9,71' ] '1, Ott! 12,842 12,56o Equity 11,931 13,196 14,932 16,195
21,672 25,037 27,774 2S,755
Debt/Equity Ratio 45/55 47/53 46/84 44/50
Average Net Fixed Assets 19,475 19,192 22,619 23,320
7.22 The amended valuation of the fixed assets has been taken into the Balance Sheet at the figure net of depreciation as of December 31, 1966. The depreciation reserves therefore commence with the total charge from 1967 onward, apart from a small figure for depreciation on new acquisitions. Depreciation on assets taken over has been calculated on the gross replace- ment value. - 28 -
Future Debt
7.23 Completion of the transfer to OPNT of debt incurred under Loan 380-TUN is taken as December 31, 1967. The resulting Debt/Equity ratios in Table 13 of less than 50/50 are reasonable, and show a de- clining trend after 1971. The amoumt of debt service in relation to the debt is discussed below (7.26).
Financial Rate of Return and Tariff Covenant
7.24 The tariff covenant for Loan 380-TUN provides that tariffs shall be maintained to produce revenues sufficient to cover all operating costs and interest on debt and to provide cash funds for the renewal of assets and for debt amortization, and to leave a reasonable surplus for financing expansion of port facilities. No rate of return was specified. It is now agreed that a rate of return of at least six per cent in 1971, and seven per cent in 1973, increasing thereafter, be a condition of the Loan.
7.25 Government equity is free of interest and amortization under the law creating OPNT and all taxes are consolidated into a nominal annual payment of D 20,000. The Debt/Equity Ratio averages about 45/55, and of the total debt, about 50% is original debt with interest at 132 % and long periods of amortization (7.10). Average annual interest on average debt is about four per cent; while total debt service is less than seven per cent of average debt.
7.26 It is clear that in earning an acceptable financial rate of re- turn, OPHT will generate considerable cash balances, even after meeting all presently known commitments. However, as stated earlier, (Para. 5.12) the Government has agreed, in cooperation with OPNT, to submit a four- year port development program before the end of 1969 and successive pro- grams thereafter covering the period at least to 1976. Some projects that are likely to be included in the program are referred to in Paras. 4.12 - h.17 and it would appear that the accunulated cash balances will be required for financing those projects. The question of disposal of these balances has been discussed with the Government and it has been agreed that they will remain with OPMIT until the program, including the financing thereof, has been prepared and discussed with the Bank.
7.27 Under present law all surplus funds of OPNT have to be de- posited with the Treasury, which is reasonable. Although it is under- stood that nominal interest of one percent will be credited, this has not been taken into account in the forecast. lIowever, the free availability of these funds to OPNT is important and the Government has agreed that these funds shall be at the disposition of OPHT and may be withdrawn at any time. - 29 -
8. CONCLUSIONS AND T?ECO7i ENDATIONS
8.01 The Second Tunisian Port Project provides for improvements to OPNT's harbors and harbor approaches by dredging and breakwater restora- tion work, for procurement of a dredger, construction of a bulk cereal installation, and improvement in the operations of the ports by provision of cargo-handling equipment, assistance in training OPNT staff in account- ing and financial management and accounting consulting services. The project is technically sound and of economic benefit to the country. The financial situation of OPNT is and will continue to be satisfactory.
8.02 During negotiations of the proposed loan the following matters were discussed and agreed with the Government of Tunisia and OPNT:
A. Loan Conditions agreed with the Government
1) Improvement of the iron ore berth at La Goulette to give 12 m depth of water alongside (5.02 (a) (i)). 2) Production of a port development program in conjunction with OPNT by Deceriiber 1969 and including the port of Gabes, and suc- cessive programs at least until December 1976 (4.17 and 5.12). 3) Availability of OPNT's cash funds on deposit with the Treasury (7.27) and disposal of surplus OPNT balances (7.26).
B. Loan Conditions agreed with OPNT
1) Terms and conditions on which OPNT will make cargo-handling equipment available to STM4 (5.02(c) (i)), and the bulk-grain storage facility to the Office des Cereals (5.02(e)). 2) Appointment of engineering consultants and retention of account- ing consultants acceptable to the Bank (5.03 and 7.13).
C. Other Items
At the time of commencement of operations of the port of Gabes the Bank would have to discuss whether that port should be included in OPNT, and on what terms and conditions.
8.03 The project is a suitable basis for a Bank Loan of US$845 million equivalent to OPNT for a period of 30 years, including a 10 years' grace period, at §6j interest per annum, with the Government of' Tunisia as the Guarantor.
October 15, 1968 SECOND TUNISIAN PORT PROJECT TLBLE 1 PORT DATA
Ship access General car- Depth Specialist PORT Storage and depth go berthage along- Berthage Depth Available RE1ARKS available available side available alongside Covered Open
10 km long ship Lighterage 2 2 TUNIS canal from La Gou- 750 m 6.5 m berth for 6.5 m 14,000 m 61,000 m Road and lette.6.5 m depth mineral traffic rail access 4.6 km channel from Iron ore Rail access to open sea min. iPhosphates 2 2 specialized LA GOUIEITE 8.5 m min. depth 1,100 m 9.5 m t Petroleum 9.5 m 28,000 m 288,000 i bulk berths ______products only
Outer harbor pro- Molasses Road and rail BIZERTE tected by island Sugar 9.0 m 2 2 access- 6,OOOT breakwater. 12 m Petroleum prods. 4,850 m 40,ODO m capacity cereals depth _ 395 m ; 9.0 m fiement Silo 9 km channel Finger MENZEL BOURGUIBA across Lake piers in 7.0 m Iron Ore Road and Bizerte 12 m depth poor rewair Coke 7.0 m - - rail access
4.5 kn channel Phosphate 2 2 SFAX Road and rail from open sea 780 m 10.5 m Petroleum 10.5 m 3,500 m 11,000 m access. Pri- 11 m depth products vate storage .______for phosphates
800 m channel Salt Road and SOUSSE from open sea. 550 m 9 m Petroleum 2 2 rail 9 m depth products 9 m 2,500 m 47,000 m access TkDL"F 2 Page 1
SECOI.D TUiTISIAVT PORT PROJECT CARGu-huhDLhLLEQJQiisT77=4ED BY STAiI v
Number of Port T'vpe Capacity Units Located
Tractors 18 hp to 55 hp 45 Tunis-La Goulette
Forklift Trucks 4 ton to 9 ton 12
Ross-carriers
Mechanical Shovel 2
Conveyors 6
Tractors 3 Bizerte
Tractor 1 Sousse
Forklift Truck 1
Tractors 28 hp 2 Sfax
Forklift Trucks 7 ton, 4 ton, 3.5 ton 3
IMobile Crane 4 ton 1
]1/ excludes bulk-handling and floating equipment
Notes:
(a) 16 tractors and 9 forklifts are 8 years old or more. TABLE 2 Page 2.
SECOTD TUIISIAN PORT PROJECT
Quay Cranes 10 ton 3
** Quay Cranes 7 ton 7
* Mobile Crane (Lorry) .5 ton 1 Tunis/La Goulette
* Mobile Cranes (Kran Kar) 4 ton 3
* Tractor Cram (Linkbelt) 7 ton 1
* Forklift Trucks 3 ton 2
Forklift Trucks 6 ton 1
Floating Crane 60 ton 1
Floating Crane 8 ton 3
Quay Cranes 10 ton 1
Quay Cranes 3 ton 12
Mobile Crane 2½2 ton 1
lMlobile Crane 9 ton 1 Bizerte
Tractor Crane 17 ton 1
Floating Crane 30 ton 1
Nob-le Crane (Kran Kar) 1½~ton 1
Mobile Crane (Kran Kar) 9 ton 1
Fixed Crane 17 ton 1 Sousse
Conveyors 2
* Mobile Crane (Kran Kar) 2.5 ton 2
Fixed Crane 6 ton 1 Sfax
* Forklift Trucks 7 ton 1
Floating Crane 30 ton 1
Floating Crane 8 ton 1
* Equipir.nt to be written off as beycnz econori.c life. *, Equipmenit to be moderrnized.. Only 3 a-e in operating 3odjdi_tion. TABLE 3
SECOND TUNISIAN PORT PROJ;.CT CARGO HANDLING EQUIPMENT TO BE PROVIDED UNDER THE PROJECT FOR USE BY OPNT AND STAM
(1) Equipmen& for use by OP1NT.
(a) At Tunis La Goulette
2 - 7 ton Forklift Trucks
4- 3- ton Forklift Trucks
h - 6 ton MIobile Cranes
2 - 15 ton Mobile Cranes
(b) At Sfax.
1 - 7 ton Forklift Truck
1 - 3½ ton Forklaft Truck
2 - 6 ton IMobile Cranes
(2) Eocipment for use by STAN.
12 - Tractors
5 - 7 ton Forklift Trucks
5 - 3½ ton Forklift Trucks
4- 6 ton Mobile Cranes TABLE i
SECOND TUNISIAN PORT PROJECT
TRAFFIC IN TUNISIAN PORTS
NUIMER OF SHIP CALLS
1963 - 1967
Port 1963 1964 1965 1966 1967
Tunis-La Goulette 1,945 2,046 1,908 2,107 1,825
Bizerte-Menzel Bourgaiba 245 396 459 465 517
Sousse 240 238 312 247 260
Sfax 881 933 1,701 1,413 1,510
Total 3,311 3,613 4,380 4,232 4,112
Source: OPNT, SETEC TABLE 5 =nrrwn TUNISIAN PORT PROJECT
TOTAL CARGO TRAFFIC IN OPNT PORTS
BY MAJOR CATEGORIES
1963-1977 (Thousand Tons)
A c t ua 1 F ore c as t 1963 19614 1965 1966 1967 1968 1969 1970 1971 1972 1973 1977
General Cargo Unloaded 713 770 724 757 761 858 957 1,056 1,150 1,238 1,326 1,682 Loaded 595 663 494 466 430 563 627 688 752 801 849 1,051 Total 1,308 1,433 1,218 1,223 1,191 1,421 1,584 1,744 1,902 2,039 2,175 2,733
Cereals Unloaded 160 112 223 256 413 285 282 279 275 275 275 275 Loaded 112 118 17 123 12 91 86 80 75 75 75 75 Total 27 2 230 240 379 425 376 368 359 35O 35O 350 350
Crude Oil and Petroleum Products - Bulk Unloaded 655 1,270 1,2014 1,359 1,273 1,581 1,685 1,789 1,905 2,046 2,187 2,741 Loaded - 553 628 697 705 777 817 857 898 967 1,047 1,381 Total 655 1,823 1,832 2,056 1,978 2,358 2,502 2,6146 2,803 3,013 3,234 4,122
Iron Ore Unloaded - - 45 89 145 150 150 150 150 150 150 150 Loaded 738 823 906 1,296 686 1,101 1,117 1,133 1,150 1,150 1,150 1,150 Total 738 823 951 1,385 831 1,251 1,267 1,283 1,300 1,300 1,300 1,300
Solid Fuels - Rnlk for Steel Mill Unloaded - - 20 79 79 90 90 90 120 120 120 120
Iron and Steel Products Loaded - - - 33 79 45 60 60 75 75 75 75
Construction Materials Loaded 97 84 51 36 24 32 37 58 63 71 79 L11
Phosphates and Fertilizers Loaded 2,202 2,431 2,669 2,521 2,506 2,975 3,150 3,325 3,500 3,500 3,500 3,5o0
Sulphur - for Fertilizer Plant Unloaded g.c. 67 110 128 126 137 138 139 140 143 145 160
Salt Loaded 297 209 352 289 212 313 328 345 360 360 360 360
Alfalfa Loaded g.c. g.c. g.c. 27 43 43 45 47 49 50 50 50
Totals Unloaded 1,52O 2,219 2,326 2,668 2,797 3,101 3,302 3,503 3,740 3,972 4,203 5,128 Loaded 4,041 4,881 5,117 5,488 4,697 5,94l 6,267 6,593 6,922 7,0149 7,ld5 7,753 Total 5,569 7,100) 7,443 8,156 7,494 9,041 9,56Y 10,096 10,662 11,021 11,388 12,881
Soarce: Actual: OPNT Forecasts based on SETEC projectJorrinterpolated and modified by Bank staff. g.c. = Included in General Cargo, details not available. TABLE 6
SECOND TUNISIAN PORT PROJECT
TUNIS - LA GOUIETTE
CARGO TRAFFIC BY MAJOR CATEGORY 1963-1977 (Thousand Tons)
A c t u a 1 F o r e c a s t 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1977
General Cargo Unloaded 473 499 409 461 484 534 587 639 687 743 800 1,022 Loaded 452 516 294 341 341 419 465 511 555 600 645 826 Total 925 1,015 703 802 825 953 1,052 1,150 1,242 1,343 1,445 1,848
Cereals Unloaded 128 95 145 186 311 200 200 200 20D 200 200 200 Loaded 65 108 15 104 7 75 68 61 55 55 55 55 Total 193 203 160 290 318 275 268 261 255 255 255 255
Bulk Petroleum Products Unloaded 422 435 396 438 411 426 413 400 400 400 400 400 Bulk Iron Ore Loaded 738 604 729 1,027 623 800 800 800 800 800 800 800
Bulk Phosphates Loaded 176 252 325 210 138 210 205 200 200 200 200 200
Totals Unloaded 1,023 1,029 950 1,085 1,206 1,160 1,200 1,239 1,287 1,343 1,400 1,622 Loaded 1,431 1,480 1,363 1,682 1,109 1,504 1,538 1,572 1,610 1,655 1,700 1,881 Total 2,454 2,509 2,313 2,767 2,315 2,664 2,738 2,811 2,897 2,998 3,100 3,503
Source: Actual: OPNT Forecasts based on SETEC projections, interpolated and rodified by Bank Staff. TABLE 7
SECOND TUNISIAN PORT PROJECT
BIZERTE - HENZEL BOURGUIBA
CARGO TRAFFlC BY MAJOR CATEODRY 1963-1977 (Thousand Tons)
A c t u a I F o r e c a st 1963 1961 1965 1966 1967 1968 1969 1970 1971 1972 1973 1977 General Cargo Unloaded 21 81 98 79 80 102 117 132 1146 158 170 222 Loaded 18 12 52 13 24 49 50 51 52 53 54 57 Total 39 93 150 92 1014 151 167 183 198 211 224 279 Cereals Unloaded 13 4 40 3d 27 22 15 8 - - - - Loaded 42 8 - 6 - 10 12 14 15 15 15 15 Total 55 12 40 44 27 32 27 22 15 15 15 15 Iron Ore Unloaded - - 45 89 145 150 150 150 150 150 150 150 Loaded - 219 177 269 63 301 317 333 350 350 350 350 Total - 219 222 358 208 451 467 4837 500 500 500 500 Solid Fuels Unloaded - - 20 79 79 90 9g 90 120 120 120 120 Iron and Steel Products Loaded - - - 33 79 45 60 60 75 75 75 75 Construction Materials Loaded 97 84 51 36 24 32 37 58 63 71 79 111 Crude Oil and Petroleum Products Unloaded lOg 659 615 727 735 885 964 1,043 1,120 1,225 1,330 1,740 Loaded - 553 625 697 705 777 817 857 898 967 1,047 1,361 Total 10' 1,212 1,243 1,424 1,4140 1,662 1,781 1,900 2,018 2,192 2,377 3,121
Totals: Unloaded 1143 7144 18 1,012 1,066 1,249 1,336 1,L23 1,536 1,653 1,770 2,232 Loaded 157 876 908 1,054 8g5 1,214 1,293 1,373 1,453 1,531 1,620 1,989 Total 300 1,620 1,726 2,066 1,961 2,463 2,629 2,796 2,989 3,184 3,390 4,221
Source: Actual: OPNT Forecasts based on SETEC projections, interpolated and modified by Bank Staff. TABLE 8
SECOND TUNISIAN PORT PROJECT
SFAX
CARGO TRAFFIC BY MAJOR CATEGORIES 1963-1977 (Thousand Tons)
A c t u a 1 F o r e c a s t 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1977
General Cargo Unloaded 175 152 179 175 151 170 191 213 234 252 270 347 Loaded 59 79 81 97 56 82 84 84 85 89 91 107 Total 234 231 260 272 207 252 275 297 319 341 361 454
Cereal Unloaded g.c. g.c. g.c. 13 35 35 35 35 35 35 35 35 Loaded g.c. g.c. g.c. 6 5 5 5 5 5 5 5 5 Total g.c. g.c. g.c. 19 40 40 40 40 40 40 40 40
Petroleum Products Unloaded 124 176 186 192 123 206 213 220 227 248 269 353
Sulphur Unloaded g.c. 67 110 128 126 137 138 139 140 143 145 160
Phosphates and Fertilizers Loaded 2,026 2,179 2,344 2,311 2,368 2,765 2,945 3,125 3,300 3,300 3,300 3,300
Salt Loaded 173 124 203 166 90 179 189 200 210 210 210 210
Totals Unloaded 299 395 475 508 435 548 577 607 636 678 719 895 Loaded 2,258 2,382 2,628 2,580 2,519 3,031 3,223 3,414 3,600 3,604 3,606 3,622 Total 2,557 2,777 3,103 3,068 2,954 3,579 3,800 4,021 4,236 4,282 4,325 4,517
Source: Actual: OPNT Forecasts based on SETECpro e,t,iT,interpolated and modified by Bank Staff. g.c. = Included in General Cargo, details not available. TABLE 9
SECOND TUNISIAN PORT PROJECT
SOUSSE
CARGO TRAFFIC RT MAJOR CATEODRIES 1963-1977 (Thousand Tons)
A c t u a 1 F o r e c a s t 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1977 General Cargo Unloaded 44 38 38 42 46 52 62 72 83 85 86 91 Loaded 66 56 67 15 9 13 28 42 60 59 59 61 Total 110 94 105 57 55 65 90 114 143 144 145 152 Cereals Unloaded 19 13 38 19 40 28 32 36 40 40 4D 40 Loaded 5 2 2 7 - 1 1 - - - - - Total 24 15 40 26 40 29 33 36 40 40 40 40 Petroleum Products Unloaded - - 7 2 4 64 95 126 158 173 188 248 Salt Loaded 124 85 149 123 122 134 139 145 150 150 150 150 Alfalfa Loaded g.c. g.c. g.c. 27 43 43 45 47 49 50 50 50 Totals Unloaded 63 51 83 63 90 144 189 234 281 298 314 379 Loaded 195 143 218 172 174 191 213 234 259 259 259 261 Totals 258 194 301 235 264 335 402 468 540 557 573 640
Source: Actual: OPNT Forecasts based on SETEC projections, interpolated and modified by Bank Staff. g.c. - Included in General Cargo, details not available. TABLE 10 SECOND TUNISILN PORT PROJEICT
ALTERMIUTIVE COSTS OF PURCHASING DREDGING E(IPMENT
VERSUS MAINTENANCE DREDGNG BY CONTRACT
(US Dollars '000) Increased Dredger unit cost for Dredging Total Cost Volume to Purchase & dredging 500.D0O m3 Total Cost Discaonted be dredged Cost of Dredgine Contract Cost DiscaLinted at 10O Year Operation channel back loe Dredeer at 10% '000 m3 at 600 m3 at 70¢ m3 at 800 ml 6 at Dd at 700 m at 800 m3
1968 198 198 198 1969 715 35 780 709 1550 930 1085 1240 843 986 1127 1970 105 10 115 95 1971 140 10 150 113 1972 140 10 150 102 1973 140 10 150 93 1974 195 35 10 240 135 1050 630 735 840 355 413 474 1975 140 10 150 77 1976 140 10 150 70 1977 140 10 150 63 1978 140 10 150 58 1979 195 35 10 240 84 1050 630 735 840 221 257 294 1980 140 140 44 1981 140 140 1i 1982 140 140 37 1983 140 140 33 1904 195 35 230 50 1050 630 735 840 137 160 183 19d5 140 140 28 1986 140 140 25 1987 140 140 23 198d 140 140 21 1989 195 35 230 31 1050 630 735 840 85 99 113 1990 140 140 17 1991 140 140 15 1992 140 140 13 1993 140 140 11 2188 1641 1915 2191
5% for contract preparation and supervision 82 95 109
Total 1723 2010 2300
DISCOUNTni) COST DIFFERENCE BETWEEN ALTERNATIVES
$ '000
If Dredging cost 60 cents/m3 + 465
If Dredging cost 70 cents/m3 + 17d
If Dredging cost 60 cents/m3 - 112 SECOND TUNISIAN PORT PROJECT
OFFICE DES PORTS NATIONAUX TUNISIENS TABLE 11 STATEmENT SHOING REVEUES, EXPENSES. 3URPLUSES AND OTHER PINANCIAl DATA 1964-1966 ACTUAL. 1967 ETIDATED. 1968-1973 FORECAST
INCLUDING ADJUBThETS OF TARIFMS PRODJCING 10% ADDITIONAL GROSS OPEUTING REVDIIE FROM JANUARY 1. 1970 D'OOO A c t u a 1 F o r e c a s t 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973
Operating Revenues. All Forts 1,596.0 1,673.0 1,801.3 1,871.3 2,074.8 2,218.7 2,573.1 2,762.8 2,993.7 3,256.0 Rentals from leasing equip- ment and silos - - - - _ 19.6 63.8 100.6 180.6 291.4
1,596.0 1,673.0 1,801.3 1,871.3 2,074.8 2,238.3 2,636.9 2,863.4 3,174.3 3,547.4 Operating Expenses. All Forts: General Port Operations 512.5 590.8 606.2 592.1 688.7 711.5 745.1 762.5 783.1 803.1 Acmhinistration 242.9 95.3 114.9 138.6 136.5 139.9 143.4 147.0 150.7 154.5 Maintenance Dredging - 75- 75.0 75.0 755.4 686.1 721.1 730.7 825.2 851.4 888.5 9a4.5 1,008.8 1,032.6 Depreciation 306-9 385 318.0 318.6 485.4 459.3 51374 537.9 584.6 645.0
1,062.3 99t.6 1,039.1 1,049.3 1,310.6 1,310.7 1,401.9 1,522.4 1.593.4 1,677.6
Net Operating Revenues 533.7 678.4 762.2 822.0 764.2 927.6 1,235.0 1,341.0 1,580.9 1,869.8 Operating Ratios 66% 59% 58% 56% 63% 59% 53% 53% 50% 47%
Interest EKpense 90.0 86.o 100.0 99.0 285.0 35b.0 123-o 505.0 545.0 539.0 Tiaes Interest Covered 5.8x 7.9x 7.6r 8.3x 2.7x 2.6 x 2.9x 2.7x 2.9x 3.5x
Cash Generated. Net Operating Revenaues Plus Depreciation 840.6 986.9 1,080.2 1,140.6 1,249.6 1,386.9 1,748.4 1,878.9 2,165.5 2,514.8 Total Debt Service 276.0 259.0 251.0 345.0 589.0 665.o 742.o 831.0 848.o 82L.0 Tines Debt Service Covered 3.Ox 3.8x 4.3x 3.3x 2.lx 2.lx 2.4x 2.3x 2.6x 3.lz Return on Average Net Fixed Aaseta n.a. n.a. n.a. 5.8% 3.9% 4.8% 6.4S 6.5% 7.0% 8.0%
Net Operating Revenues 533.7 678.4 762.2 822.0 764.2 927.6 1,235.0 1,341.0 1,580.9 1,869.8
Deduct: Interest 90.0 86.o 100.0 99.0 285.0 354.o 423.0 505 .o 545.o 539.o Write-off non Revenue Earning Project Costs 40.0 Io.o 40.0 48.0 48.0 48.0 Payment to Government in lieu of Taxes 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
110.0 106.o 120.0 119.0 345° 4140 483.0 573.0 613.0 607.0
Net Revenue Surplus 423.7 572.4 642.2 703.0 419.2 513.6 752.0 768.0 967.9 1,262.8
Source: Howell & Co., modified by Bank Staff n.a. = Not applicable for comparison SECOND TUNISIAN PORT PROJECT
OFFICE DES PORTS NATIONAUX TUNISIDNS TABLE 12 KSTIMTh OF CASH FLOW 1967 - 1973
INCLaUDING ADJIUSTMENTS OF TARIFFS PRODJCING 10% ADDITIONAL GROSS OPERATING REVENUE FROM JANUARY 1, 1970
D' 000
1967 1968 1969 1970 1971 1972 1973 TOTAL
Funds Required Investment Project Costs. Loan 380 TUN Local Currency 986.0 96.2 1,082.2 Second Port Project 105.0 1,100.1 2,331.3 1,855.6 241.0 5,633.0 rugs. On Supplier's Credit 383.3 383.3 Miscellaneous 175.0 2DO.0 200.0 200.0 200.0 200.0 200.0 1.375.
1,544.3 401.2 1,300.1 2,531.3 2,055.6 441.0 200.0 8,473.5
Debt Service: Interest 99.0 25.0 354.0 423.0 505.0 545.o 539.0 2,750. 0 Repayment 246.0 304.0 31. 319.0 326.0 303.0 282.0 2,091.0
345.0 589.0 665.o 742.o 831.0 848.0 821.0 4,841.0
Payments in lieu of Taxes 20.0 20.0 20.0 2D.0 20.0 2o.0 20.0 10.0
1,909.3 1,010.2 1.985.1 3,293.3 2906.6 1. 3o.0 1.04.o 13454.5 Sources of Funds Net Operating Revenues 822.0 764.2 927.6 1,235.0 1,341 .0 1,580.9 1,869.8 8,540.5 Depreciation 318.6 485.4 459.3 513.4 537.9 584.6 645.o 3,544.2 Accounts Receivable on Long-Term Credit (-61.8) 102.8 102.8 102.9 246.7
Total Internally Generated Funds 1,078.8 1,352.4 1,489.7 1,851.3 1,878.9 2,165.5 2,514. 8 12,331.4
Supplier's Credit 306.6 306.6 IBED: Second Port Project Loan 102.0 900.0 1,830.0 1,394.0 236.0 4,462.0
1,385-4 1,454.4 2,389.7 3,681.3 3,272.9 2,Wl.5 2,514.8 17,100.0
Annual Surplus (Deficit) (-523.9) 444.2 404.6 388.0 366.-3 1,092,5 1,473.8 Cumulative Surplus For Period (-523-9) (- 79-7) 324-9 712.9 1,079.2 2,171.7 3,645.5 3,645.5
Balance of Funds Available for Investment Brought Forward 1,000.0 476.1 920.3 1, 324,9 1,712.9 2,079.2 3,171.? 1,000.0 Carried Forward 476-1 920.3 1,324-9 1,712.9 2,079.2 3,171.7 4,645.5 4,645.5
Source: Bank Staff. SECOND TUNISIAN PORT PROJECT
OFFICE DES PORTS NATIONAUX TUNISIENS TABLE 13
PRO FORMABALANCE SHEETS AT DECEMBER31
INCLUDING ADJUSTMENTS OF TARIFFS PROUJCING 10% ADDITIONAL GROSS OPERATING REVENUE FROM JANUARY 1, 1970
D'000 Actual Actual 1966 1967 1968 1969 1970 1971 1972 1973
ASSETS
Fixed Assets Taken over rrom Regie des Ports, at replaceient cost less accumulated depreciation. Net value at December 31, 1966 13,722 13,722 13,722 13,722 13,722 13,722 13,722 13,722 Miscellaneous Acqaisitions at Cost 165 846 1,046 1,246 1,446 1,646 1,846 2,046 Loan 380 TUN at December 31, 1967 5,382 5,382 5,382 5,382 5,382 5,382 5,382 Second Port Project 549 3,273 La5 W7 19, 9'50 2010 20,_350 21,099 24,023 26,44 26,654; Deduct Depreciation 13 332 817 1,276 1.789 2,327 2.912 3.557 Net Fixed Assets 13,618 21, 19,333 19,074 19,310 6 96 23,542 23,097
Capital Work in Progress 123 - 105 1,205 2,987 1,990
Deferred Project Costs, Non-Revenue-Earning Expenditure, less Aounte Written-off 791 750 710 670 751 703 655
Secured Loan, other Investments and Loans, and Long-Term Credit Accounts Receivable 261 323 220 117 114 14 14 14
Advances for Local Currency Coat. Loan 380 TUN 1,417 2,501 Deduct: Transfer to Project Settlement Account 2,501
Current Assets Accounts Receivable, Less Accounts Payable 48) Cash and Bank Balances 190) 343 341, 34h 343 343 343 343 Balances vith Treasury l1;S 476 920 1n2_ 2.072 2 1,343 819 1,264 1,669 2,0>0 2,422 3,515 4,989 Deduct. Expenditures Outstanding on Loan 380 TUN 232 Nut Current Assets 1.343 27 1,264 1669 2,05 2422
17.0)8 21,319 21672 2037 3 , 875
CAPITAL
Debt State Loans taken over 6,209 6,039 5,888 5,735 5,580 5,423 5,264 5,103 Government in respect of Loan 380 TUN 3,492 3,536 3,439 3,336 3,229 3,116 2,995 IBRD. Second Port Project Loan 102 1,003 2,833 4,226 4,462 4,462 Supplier's Credit 276 215 153 92 31
6,209 9,807 9,741 10,3 11,841 12,909 1 12,560
Equity As at December 31, 1966 10,809 10,809 10,809 10,809 10,808 10,8Q8 10,808 10,808 Net Revenue Surpluses since December 31, lO66 _703 1, 122 1 636 2,388 3,156 4,12h 5,387
10,809 11,512 l1,?31 12,445 13,196 13, 966 14,932 16,195
17,018 21,319 21,672 22,77r 25.03 26,873 27,774 28,755
Debt/Equity Ratios 36/64 46/54 45/55 45/55 47/53 48/52 1h6/54 44/56
Average Net Fixed Asset,s 14,055 19,475 19,204 19,192 20,503 22,619 23,320
Source: Bank Staff. 1966 and 1967 Figures adaPted from Q?iT's Accounts SCOND TUNISNFPORT PROJCT
OFFICE DRh PORTS RATIONAUX TUNISIE:S TAWL 14~ FORXCAST OF MOT SERVIC: D'OOO
1967 1968 196 1970 TOT-AL INTEST PRINCIPAL TOTAL IN(TM T PRICIPA TOTAL WT PRINCIPAL TOTAL IJTERiK RINCIPAL
C.lN.E.P. 23 1 22 155 State Loars 20 92 14l 24s0 89 151 240 87 153 2tO 85 6 62 Credit -Tg 37 6 31 72 11 61 70 9 61 68 Supplier's 290 18 102 riovernwent ror Loan 380 TM 45 - 45 267 175 92 290 193 97 14 1_ IBM. Second Port ProJect Loan ____10 10 _ 65 6 - 319 99 2306 3014 665 35h 311 _72 223
1971 1972 1973 TODTAL DIRT PRINCIPAL TOTAL InTEMT PRICIPAL TOTAL InTlRET PRIlCIPAL
State Loans 240 83 157 240 81 159 2LJ 79 161 Supplier"s Credit - Tugs 65 61 32 1 31 - - - Government for Loan 380 TUN 290 162 10 289 176 113 291 170 121 IBRD. Second Port Rroject Loan 2 236 - 287 287 - 290 290 -
a31 505 326 __4_ Sh5 303 2.1 539 282
Source: HoweU A Co., mdified by Bank Staff APPENDIX 1
Page I
SECOND TUINISIAN PORT PROJECT OFFICE DES PORTS NATIONAUX TUNISIENS DEBT AT DECEIBER 31, 1966 D'OOO
Balance Date of Loan Maturity Interest Dece31.1966 Due to Government
Consolidated 1946-1955 1955 10-50 14 4,700
1956 10-50 1½ 207
1957 25-50 i½ 180
1958 25-50 1i 180
5,267
Add Adjustment - re rate of exchange French Francs 924 6,191
Compagnie Nationaux d'Escompte de Paris
1947 18
6 209
Source: OPNT and Howell & Co.
Note: For further information regarding the Government Loans see Page 2. Page 2
SECOND TUNISIAM PORT PROJECT
Information Regarding Debt to Government Taken over by OPNT
The total original amount of the debt was D) 8,580,000, all of' which originally derived from French sources. Of this total D 500,000 obtained by the Government in 1947 from the Comptoire Nationaux D'Escompte de Paris (CHEP) was fully paid off in 1967.
The balance of D 8,080,000 was made available to the Regie by the Tunisian Government out of funds provided by the French Government in French francs. The balance outstanding at December 31, 1962 was D 6,861,000, Because ff the devaluation of the French franc in 1958, which was not followed by Tunisia, the Tunisian Government had agreed to devalue these loans and convert them at the new rate as from September 1, 1960 However, during 1967?, the Goverrment decided to 're- value these loans at the old rate of exchange as of December 31, 1966- This resulted in an increase of L 924 635 in the amount of these deltse This adds relatively little to the annual burden on OPNT, since tht whole of this debt is on generous terms, the interest rate being lv per annum. Of the original D 8,080,COO, D 6,631,000 was for a period of 50 years, D 1,088,000 for 25 years and D 361,000 for ten years. The balance outstanding.after re-valuation as of December 31, 1966 was D 6.187 million, APPENDIX 2
SECOND TUNISIAN PORT PROJECT
BASES ANI ASSUNIPTIONS USED IIi TINANCIAL PROJECTIONS
1. Operating revenue has been estimated on the basis of new traffic forecasts recently completed by consultants and revievwed and modified slightly by Bank staff in the light of later information. The possibility of the possible transfer of traffic from Sfax to Gabes has not been taken into account.
2. Operating revenues have been calculated on the present tariff to 1969. For 1970 and onmard tariff adjustments are assumed to earn an additional 10%7 gross operating revenues.
3. Estimated rentals from leasing the grain silo and associated equipment to the Office des Cereales, and cargo-handling equipment to STA1, have been calculated so as to recover the original capital cost over the expected lives of the assets plus a reasonable return on the average net value. No provision has been made for additional revenues that may be earned from the projected cash surpluses either from interest on deposits or revenues from other investments.
4. Provision has been made for maintenance dredging to start in 1971 the year after the expected completion of the project dredging, at an estinmated cost of D 75,000 annually.
5. It has been assumed that in each year commencing in 1968 OPMT will spend D 200,000 on plant replacements and miscellaneous additional fixed assets.
6. It is assumed that the project in Loan 380-TUN was transferred to OPNT at December 31, 1967, and that at that date OPIIT assumed a debt to the Government of the equivalent of US$7.986 million, less US$85,ooo repayed to the Bank by OPNTT on behalf of the Government in August 1967. 7. Provision has been made for a Bank loan to OPNT of us$i8.5 million equivalent at 6V for - a period of 30 years, including a grace period of ten years. TUNISIA
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