World Bank Document
Total Page:16
File Type:pdf, Size:1020Kb
----:-.: . ; . Document of The World Bank FOR OFFICIAL USE ONLY -~~~~~~~ -<2z3-6/4 Public Disclosure Authorized Report No. 5505-BR Public Disclosure Authorized STAFF APPRAISAL REPORT BRAZIL FEDERALRAILWAY - EXPORT CORRIDOR - PROJECT Public Disclosure Authorized May 7, 1985 Public Disclosure Authorized Projects Department Latin American and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents Currency Unit - Brazilian Cruzeiro (Cr$) Official Rate US$1.0 - Cr$ 4,850 (April 30, 1985) The March 1985 average exchange rate (US$1.0 - Cr$ 4,162) was used throughout the report unless otherwise indicated Fiscal Year January 1 - December 31 Weights and Measurements Metric: British/US Equivalent 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) - 0.62 mile (ml) 1 kilogram (kg) - 2.20 pounds (lb) I metric ton (m ton) - 2,205 pounds 1 liter (1) - 0.26 US gallon (gal) Abbreviations and Acronyms AGEF Armazens Gerais Ferroviarios S.A. Railway's General Warehousing Company BNDES Banco Nacional de Desenvolvimento Economico e Social National Economic and Social Development Bank CBTU Companhia BrasileLra de Trens Urbanos Brazilian Urban Train Company CFP Comissao de Financiamento da Producao Agricultural Production Financing Commission CIP Conselho Interministerial dos Precos Interministerial Committee for Price Control CrRIN Comissao do Trigo Nacional National Wheat Commission CVRD Companhia Vale do Rio Doce Rio Doce Valley Company DER Departamento de Estradas de Rodagem (Estatal) State Roads Department DNER Departamento Nacional de Estradas de Rodagem National Federal Roads Department EBTU Empresa Brasileira de Transportes Urbanos Brazilian Urban Transport Enterprise EFVM Estrada de Ferro Vitoria-Minas Vitoria-Minas Railway Company FEPASA Ferrovia Paulista, S.A. Sao Paulo Railway GEIPOT Empresa Brasileira de Planejamento de Transportes National Transport Planning Agency INPC Indice Nacional de Pregos ao Consumidor National Consumer Price Index IRK Internal Rate of Return MBR Mineragoes Brasiieiras Reunidas United Brazilian Mining Company MIS Management Information System MT Xinisterio dos Transportes Ministry of Transport OiS Operations Information System PORTOBRAS Empresa de Portos do Brasil, S.A. Brazilian Port Enterprise RFFSA Rede Ferroviar.a Federal, S.A. Federal Railway SAP Bank Special Action Program SEPLAN Secretaria de Planejamento Federal Planning Secretariat SUNAMAK Superintendencia Nacional da Marinha Mercante National Agency for Merchant Marine FOROMCUL USE ONLY STAF APPRAISAL rKPER BRAZIL FEDUAL R&UMAY- WXPourco1OP - PRO]! TABLJEaFt? !E! PROJECT SUMMARY*....... ....... ********* ........... (i) I. THE TRANSPORT SECTOR 1 A_ Sectoral Context ... ,.. .... 1 B. Sector Management ...................... .... .. ** **.. 2 C. The FederalRailway ................... *..CS***...*S 3 D. Bank Experience in the Sector .......................... 4 II. THE FEDERAL BAILWAY ........................................ 5 A. RFFSA's Organization and Finances ...................... 5 B. The Economic Role of the Railway ....................... 7 C. The Rationalization of Operations and Network .......... 9 D. Costs and Tariffs, Marketing and Cost Control .......... 10 E. Operations and Maintenance . .... ...... b e****** 12 (i) Operating Performance *...*..* .......... ........... 12 (ii) Operations Management* ............................. 13 (iii) Motive Power, Rolling Stock and Workshops .......... 14 (iv) Track Maintenance.. **....**........ ... ** 15 F. Investment ........******************** ........ 16 G. Planning and Management, Training ....................... 17 SIlI THE PROJECT .................................... 18 A. Project Objectives and Rationale .......................18 B. Project Description ................................... 19 (i) The Policy and Institutional Development Action Plan 19 (ii) The Export Corridor Projects ....................... 22 C. Project Implementation ..o ............................ 23 D. Project Cost and Financing ............................. 23 E. Procuremnent ................................... 24 F. Disbursements ........ ......****...*.. *.............. 25 G. Accounts and Audits * ............. ... ............. 26 This report is based on the findings of preparatory and appraisal missions which visited Brazil in 1984 comprising Messrs. J. Cellier (Transport Economist), J. Baigorria (Railway Engineer), and T. Markus (Financial Analyst). The missions were assisted by Messrs. N. Tcheyan (Loan Officer), K. Viswanathan (Railway Engineer), S. Spencer (Railway Management Consultant), W. Thompson (Operations Systems Consultant), IL Carruthers (Costing and Tariff Consultant), M. Prehn (Railway Operations Consultant), and D. Burns (Traction and Rolling Stock Consultant). The report has been edited by Ms. Virginia R. Foster. This document has a rtricd distnbution and may be used by repieats only in the performanceof their ofic duties Its contents may not otherwise be dicosed without Wodd Bank autborizatios. - li - TABLE OF CONTENTS (continued) Page No. IV. RFFSA's FINANCIAL PROJECTIONS *. ...................09............ 26 V. ECONOKIC EVALUATION 29 A. General 29 B. Traffic ......... se. 30 C. Benefits ............................................. 31 D. Risks and Sensitivity Analysis ..... ..................... 32 VI. AGREENENTS REACHED AND RECOMMENDATION ........ ................ 33 TABLES 1.1 Federal Investments in the Transport Sector, 1976-1984 ...... 35 1.2 Petroleum Automotive Fuels: Price Structure and Adjustment .. 36 2.1 RFFSA's Past and Projected Traffic, 1970-1990 ............... 37 2.2 Summary of RFFSA's Costs and Tariffs, and Truck Tariffs, 1984 38 2.3 RFFSA's Operating Statistics, 1979-1983....................... 39 2.4 RFFSA's Diesel Motive Power, 1984 ........................... 41 2.5 Estimates of Life Cycle Costs of Remanufactured vs. New Locomotive ............................................. ... 42 2.6 Summary of RFFSA's Diesel Locomotive Requirements, 1985-1989. 43 2.7 RFFSA's Rolling Stock, 1984 44 2.8 Su_mary of RFFSA's Freight Wagon Requirements, 1985-1989 .... 45 2.9 RFFSA's Investments, 1980-1984 46 2.10 RFFSA's Investment Plan, 1985-1989 ...... 47 2.11 RFFSA's Investment Financing Plan, 1985-1989 48 3.1 RFFSA's Operational and Financial Targets, 1985-1989 *@SeS**S 49 3.2 Project Cost Summary ........................................ 50 3.3 Policy and Institutional Development - Cost Table .... ....... 51 3.4 Goias-Minas Gerais Corridor - Cost Table .................... 52 3.5 Parana Corridor - Cost Table ............................... 53 3.6 Project Financing Plan *....................................... 54 3.7 Policy and Institutional Development - Financing Table ...... 55 3.8 Goias-Minas Gerais Corridor - Financing Table ........ 6.......6 56 3.9 Parana Corridor - Financing Table ........................... 57 3.10 Estimated Schedule of Disbursements ......................... 58 4.1 RFFSA's Income Statements, 1979-1989 ...... 59 4.2 RFFSA's Average Working Costs per Traffic Units, 1979-1989 60 4.3 RFFSA's Projected Fund Flow Statements, 1985-1989 ........... 61 4.4 RFFSA's Balance Sheets, 1979-1983 .......... 62 4.5 RFFSA's Projected Balance Sheets, 1984-i989 ................. 63 ANNEXES 1. Bank Assistance in the Transport Sector 64 2. RFFSA's Freight Traffic Forecasts 69 3. Design Features of the Two Corridor Projects 75 4. Financial Forecast Assumptions 84 5. Economic Evaluation of the Two Corridor Projects CSS*SSCOSS@@ 86 6. Selected Documents and Data Available in the Project File 92 - iii - TABLE OF CONTENTS (continued) Page No. CHARTS 26226 Organization of the Ministry of Transport ...... ............94 27150 Organization of the Federal Railway (RFFSA) ............... 95 27093 Project Implementation Schedule ...........................96 MAPS IRRD 18760 - BRAZIL - Railroads IBRD 18761 - BRAZIL - Goias-Manas Gerais Corridor IBRD 18762 - BRA2IL - Parana Corridor BRAZIL FEEAL RAUAMh- EXPORT CORRIDOI- PROJECT Borrower: Rede Ferroviaria Federal S.A. (RFFSA) Guarantor: Federative Republic of Brazil Amount: US$200 million Terms: Repayment in 15 years, including three years of grace, at standard variable interest rate. Project The project would provide assistance to RFFSA in the implementation Description: of (i) a set of action plans and programs aimed at its financial rehabilitation and at improving its commercial performance,and (ii) two rehabilitationand improvement projects designed to increase transport efficiency in the Parana and Goias-Minas Gerais export corridors. The policy and institutional development component includes action plans for rationalizing the railway's operations and network; upgrading tariffs, marketing and cost control; improving operations and maintenance efficiency; strengthening planning and management systems; and improving transport coordination in the Southeast corridors. The two corridor projects essentially include the rehabilitation and improvement of the most critical sections of main lines, of yards, of workshops and of intermodal facilities. Beneficiaries: Quantifiable project benefits would be realized by RFFSA in the form of cost savings on train and yard operations and on track maintenance, and, because of the competition with the trucking industry, to a large extent they would have to be passed over to the users. Substantial benefits would accrue,