RETURN TO q REPORTS DESK nng RESTRICTED WEPIT NDS Kr. Report No. TO-475b WITHIN L t ONE WEEK

Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated 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 The report may not be published nor may it be quoted as representing their views.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

PORTS PROJECT

SPAIN Public Disclosure Authorized

July 6, 1965 Public Disclosure Authorized

Projects Department CURRENCY EQUIVALENTS

1 Spanish Peseta = 1. 7 U. S. Cents 1 U. S. $ = 60 Spanish Pesetas

Units Port traffic is given in metric tons by weight throughout. SPAIN

APPRAISAL OF PORTS PROJECT

TABLE OF CONTENTS

Page Paragraph

SUMMARY i-ii i-viii

I. INTRODUCTION 1 1-4

II. BACKGROUND

A. General 2 5-6 B. Transportation 2-3 7-12 C. Fisheries 3-4 13-15 D. Existing Situation in Spanish Ports i. General 4 16-17 ii. Administration 4-5 18-21 iii. Operations 6-7 22-29 E. Port Devrelopinent Program i. Proposed Amninistrative Reforms 7-8 30-33 ii. Changes in Operating Procedures 8 34-36 iii. Port Investment Plan 8-9 37-39

III. THE PROJECT

A. Description of Project 10-14 40-57 B. Estimate of Cost 14-15 58-60 C. Construction Program 15-16 61-63 D. Design and Procurement 16-17 64-67

IV. ECONCaIIC FUNCTION OF THE PROJECT PORTS; PRESENT AND EXPECTED FUTURE TRAFFIC

A. Barcelona 18-19 68-73 B. Huelva 19-21 74-84 C. La Luz y Las Palmas 21-23 85-95 D. Pasajes 24-25 96-103

V. FINANCIAL ASPECTS

A. Summary 26 104-106 B. General Background 26 107-108 C. Budget-s, .-Accounting, and Auditing i. Budg-ts 27 109-110 ii. Accounting 27-28 111-114 iii. Auditing 28-29 115 -2-

D. Rates 29 116-117 E. New Port Finances Law 29-30 118-119 F. Earnings and Finances - Project Ports 30-38 120-143 i. Present Earnings and Finances 30 121 ii. Future Earnings and Finances 31-38 122-143 G. Financing Investments, 1964-68 38 144-145 VI. BCONOMIC JUSTIFICATION 40-43 146-163

VII. CONCLUSIONS AND RECOMMENDATIONS 44 164-166

APPENDICES

1. Portal Cranes 2. Miscellaneous Cargo Handling Equipment 3. Supplementary Information Regarding Project Items 4. Estimated Cost of Project Items for Which Loan Funds will be Disbursed 5. (1) Estimated Cost of Project Items for Which Loan Funds Will Not Be Disbursed (2) Approximate Cost of Items Supplementary To And Additional To The Project 6. Traffic 1959-1964 and Traffic Forecast 1965-1973 - Barcelona 7. Traffic 1959-196h and Traffic Forecast 1965-1973 - Huelva 8. Traffic 1959-1964 and Traffic Forecast 1965-1973 - La Luz y Las Palmas 9. Traffic 1959-1964 and Traffic Forecast 1965-1973 - Pasajes 10. - 21. Revenues, Expenses and Net Income Actual 1963-1964, Estimated 1965-1973; Balance Sheet Data 1964-1973; and Cash Flow Statements 1964-1973 for Project Ports 22. Modifications in Equipment Procurement and Further Studies Recommended as the result of the Wlork of the Bulk Handling Study Group 23. Spain - Freight Traffic by Mode of Transport 24. Principal Provisions of Proposed Ports Finances Law

MAPS

1. Spain, with Service Areas of Project Ports

2. Port of Barcelona

3. Port of Huelva

4. Port of La Luz y Las Palmas

5. Port of Pasajes SPAIN

APPRAISAL OF PORTS PROJECT

SU1MARY

i. The Government of Fpain has asked the Bank for a loan of US$40 million equivalent to help finance its 1964/67 Port Development Plan. The loan would be made to the Government. The Project essentially con- sists of works and equipment included in the Plan at the four ports of Barcelona, Huelva, La Luz y Las Palmas, and Pasajes, and of equipment to be provided at 17 other important ports and for general port use.

ii. Port traffic is increasing rapidly, but port modernization has been neglected until recently. Not only are extensions needed to provide for increased traffic, but many existing facilities need reconstruction and much equipment should be replaced and supplemented. The Project items will help meet these purposes in the ports concerned.

iii. The estimated total cost of the Project is US$86 million equi- valent. The Bank's loan would be used to finance works to be carried out and equipment to be purchased by the end of 1968 and would approxi- mately cover the foreign exchange component of these items. In addition, the Government has agreed to complete certain items during 1969 and 1970 and to carry out other works essential to the efficient use of the Bank- financed portion of the Project; these items would be financed wholly by the Government. Procurement will be on the basis of international compe- titive bidding and the Government has agreed to several improvements in contracting procedures. iv. The ports are in effect operated by a department of the Ministry of Public lWorks, although local boards exist in the larger ports. The administrative system of the department has been unsuitable from both the operating and the financial viewpoints. Port operations are carried out reasonably efficiently within the limits imposed by the system. v. The Government is taking steps to reform port administration and financial policies in consultation with the Bank. It intends to in- crease the initiative of the local boards and to give substantial auto- nomy to several of the more important ports. In financial matters, the reforms include in their objectives the establishment of remunerative rates and the attainment of financial viability by the larger ports. The Ports Finances Law embodying these principles has been drafted in consultation with the Bank; its enactment and putting into force is a condition of effectiveness of the proposed loan. Principles of Autonomy have also been agreed, and the Government has undertaken that a general law embracing these Principles will be enacted by August 1, 1966 and that at least one of the four project ports will be given autonomy by the end of 1967. vi. In accord with the principles of port management and finances agreed between the Bank and the Borrower, the four project ports are to - ii - take all measures necessary, including increases in the average level of rates, to achieve a return of at least 5% on net fixed assets in use by 1973. vii. The Project is economically sound. Net contribution to national income from increased production in the principal port ser- vice areas and from increased fisheries is expected to be substantial. The benefits which can be quantified, arising largely from a quicker turn-around of ships, yield rates of return of 10 per cent to 30 per cent on the investments concerned. viii. The Project is suitable for a Bank loan of US$40 million equivalent for a term of twenty years including a four-year grace period. SPAIN

APPRAISAL OF PORTS PROJECT

C H A P T E R I

INTRODUCTION

1. The Government of Spain has requested the Bank for a loan to help finance its 1964/67 Port Development Plan. The Project would con- sist essentially of the works and equipment included in the Plan for the ports of Barcelona, Huelva, La Luz y Las Palmas and Pasajes, together with equipment to be provided under the Plan in other ports. The esti- mated cost of the Project is US$86 million equivalent approximately. The amount of the proposed loan is US$40 million equivalent. The Borrower would be the Government. The Government has not yet decided on what basis the loan will be passed on to the four project ports. Since there are a number of other important ports in Spain which are receiving financial assistance from the Government for their investment programs, the Government intends to work out an arrangement which is non-discriminatory. A decision is expected shortly; the financial fore- casts in this report (Chapter V) are made on the most conservative as- sumption, namely that the proceeds will be made available to the project ports on the same terms as the Bank loan.

2. The proposed loan would be the third loan for the improvement of the Spanish transportation system which has stemmed from the report of the 1961/62 Bank economic mission. The earlier loans were Loan 360 (Road Project), US$33 million, October 25, 1963, and Loan 387 (Railway Project), US$65 million, of July 31, 1964.

3. The Bank economic mission considered that the Government's port development plans overestimated the need for new infrastructure and underestimated the need for equipment. This imbalance was corrected in a subsequent revision of the plans. The mission also recommended changes in port administration and financial procedures. Changes of the kind envisaged are now in progress.

4. This report is based on an appraisal made by Bank missions in October/November 1964 and February/March 1965. The basic information was prepared by the government agencies concerned, assisted in certain fields by consultants. - 2 -

C H A P T E R II

BACKGROUND

A. General

5. Spain covers an area of 505,000 square kilometers and is the third largest country in Europe after the U.S.S.R. and France. The cen- tral Government in Madrid governs the fifty-four provinces, seven of which are overseas, including the Canary Islands in the Atlantic Ocean and the Balearic Islands in the Mediterranean.

6. The population of almost32 million is increasing by less than 1 per cent annually. Most centers of population are on the coast. Economic activities in the coastal regions are increasing at a higher rate than in the interior and, consequently, there is a movement of peo- ple from the inland. G.N.P. per capita was about $550 in 1964; it is expected to increase at an annual rate of 6 per cent during the Develop- ment Plan period through 1967.

B. Transportation

7. The relatively sparse population, largely concentrated in centers at considerable distances from each other, emphasizes the im- portance of the transportation system, as does the Government's policy of promoting development in a number of regions. Since the mainland -- together with Portugal-- is a peninsula with a coast line of more than 3,000 kilometers and the coasts are readily accessible, coastal shipping developed at first as the principal mode of transportation. As few in- land waterways are navigable, shipping was supplemented by land trans- port.

8. The road network is in urgent need of improvement and the Government is carrying out a 16-year Development Program to which the Bank is contributing through its first loan to Spain in October 1963. Despite the handicap of inadequate highways, traffic has grown rapid- ly in recent years. As shown in Appendix 23, freight traffic by road has increased by more than 11 per cent annually during the last five years and passenger traffic by more than 10 per cent annually. The re- latively large distances between the main population centers make high annual mileages possible in commercial road transport. As a result, road transport is highly competitive with the railways and coastal shipping under present conditions, and it will remain so in the future when improved roads will allow for the use of larger, more efficient trucks and trailers.

9. Railway services have not kept pace with the needs of the expanding economy. Freight traffic of RENFE in 1963 was 22 per cent under the 1958 volume. Passenger traffic, however, increased 3 per - 3 - cent annually during the last five years. The 1964/73 Modernization Plan of RENFE, for the first stage of which the Bark, made a loan in July, 1964, aims at improving service and lowering operating costs.

10. Because of the widely scattered population centers and the connections with the overseas provinces, domestic air transport of passengers is important. Between 1958 and 1963, the increase exceeded 15 per cent annually.

11. Coastal shipping, between the ports of the peninsula, lost a good deal of its traffic- mainly general merchandise to road transport and is now meeting increased competition from the railways for bulk car- go. It is believed, however, that increased efficiency resulting from the improved facilities to be provided under the 1964/67 Development Plan, simplification of customs procedures, uniformity of labor regula- tions for all means of transportation, and modernization of the fleet and of cargo handling methods, will enable coastal shipping to keep its present share in the transport of bulk cargo. In 1962, domestic shipping (coastal and inter-island) accounted for 47 per cent of total port traf- fic. The annual increase of domestic shipping traffic was 41 per cent between 1958 and 1963.

12. The need for a new approach to transport co-ordination was felt after road transport became important, showing the need for moderni- zation of the railways, domestic shipping facilities at the ports, and the highway network. To make co-ordination between road and rail trans- port more effective, a Superior Council of Land Transport was established in January, 1964, within the Ministry of Public Works. Co-ordination of domestic sea and air transport with land transport is dealt with by the Transport Co-ordination Commission, created in October, 1963. It con- sists primarily of the Undersecretaries of Public Wiorks, Civil Aviation and Merchant Marine. The Undersecretary of Public lWorks is the main co- ordinator of the activities of these two bodies and also of the Trans- port Commission of the Development Plan. Transport co-ordination is being strengthened by the Bank's requirements under the loan for moderniz- ing the national railways. l/

C. Fisheries

13. Fish is a major ingredient in the Spanish diet. The annual catch has exceeded 1.1 million tons with a value of over 10 billion pesetas (US$167 million equivalent). This compares wfith a catch in 1963 for Peru of 6.8 million tons valued at US$71 million and for Norway of 1.3 million tons wcith a value of US$98 million. The value of the catch by Spanish boats equals the value of the production of potatoes, and ex- ceeds the value of wine, olive oil, or citrus.

1/ For a detailed description on this subject see Report TO-420a of July 21, 1964. - 4 -

14. The Spanish fishing fleet is at present the eighth largest in the world and the third largest in Europe (after the U.S.S.R. and Norway). Until the Second World War, it was largely made up of very small vessels fishing in coastal waters only. Despite an increase in the average size of the vessels, making deep-sea fishing possible, the output per crewman and per vessel-ton is low. In 1961 a law was passed to encourage the modernization and development of the fleet. The principal goals are an annual production of 1.8 million tons, a rise in the export of fresh and canned fish, a reduction of sea-going crews, and an increase in the out- put per crewmian. The consumption goal of 20 kilograms per capita compares with consumption of 41 kg. in Norway, 23 kg. in Japan and 21 kg, in Portugal.

15. The program involves replacement of existing boats by larger vessels, improvement of facilities in ports, better marketing and dis- tribution, expansion of fish by-product industries and cold storage plants, research, and training programs. As part of the program, freezer-trawlers of 500-1,500 tons partly operating with mother-ships of 4-5,000 tons will be introduced. Efficient operation of these costly vessels will require adequate shore facilities which most fishing ports do not now provide. Certain ports have been selected under the 1964/67 Port Development Plan to serve as bases for the new deep-sea fishing fleet. Among these are Huelva and La Luz y Las Palmas, two of the ports included in the Project.

D. Existing Situation in Spanish Ports

(i) General

16. Spain, including the Canary and Balearic islands, has more than 300 ports. Twenty-seven are of appreciable size, and in 1962 they handled 93per cent of the total. port traffic of some 64 million 'tons. Seventeen of the larger ports handled over one million tons each; toge- ther they dealt irith 38 per cent of all port cargo.

17. Most of the larger ports are in artificial harbors. Despite the increasing draft of ocean-going shipping, serious problems of depth are fewer than in some other European countries. However, port moderni- zation was neglected until recently. Hence, apart from additions needed to meet increasing traffic, many existing facilities are unsuited to modern requirements and need reconstruction, and much equipment is obso- lete. Thus, the problem is not so much one of present congestion as one of out-dated facilities needing to be modernized and expanded to meet ex- pected traffic increases.

(ii) Administration

18. Port administration is almost entirely in the hands of the Directorate General of Ports and Marine Sigaals (DGPSM), a department of the Ministry of Public Works. DGPSM operates each of the twenty-seven larger ports through a port director, a member of the DGPSM staff wvho is at the same time the chief executive of a local "Junta de Obras y Servicios de Puerto, "1/ (JOSP). These bodies compr-;se variousgox-rrn3nt officials, including the port director, and representatives of the local chambers of mines, commerce, etc., the non-official members be- ing in a minority. Although, theoretically, the JOSP has considerable financial control and the sole power to initiate projects, in practice DGPSM, through the port director, is in full control of both operations and development.

19. The minor ports are administered from Madrid by a director and associated commission, the "Comision Administrativa de Grupos de Puertos" (CAGP), the functions and organization of which resemble those of a JOSP. One other body is involved in port administration, the "Junta Central de Puertos" (JCP). This was set up in 1963 to co-ordinate discussion of port operating problems, to supervise studies and research connected with port operations, to undertake coastal defense works and provide navigational aids outside port limits, and to undertake central procure- ment of equipment. Its director is a member of the DGPSM staff, and the Junta is composed of representatives of various government departments, of labor syndicates, and of the non-official members of the JOSPs and CAGP.

20. Besides the Ministry of Public Works, various other ministries are involved in port matters. The Ministry of Finance has auditing functions in connection with the various Juntas. The Ministry of Labor is responsible for registering and mustering the labor employed by the stevedoring companies. The Ministry of Commerce shares responsibi- lity with the Ministry of Marine for pilotage, towjage, control of ship- ping until it berths, communications, and wreck removal. The Ministry of the Interior is responsible for port health and sanitation.

21. CAGP and JCP appear suitably organized to carry out the func- tions allotted to them. Present arrangements for the administration of the larger ports, i.e. those having local Juntas (JOSPs), are, however, unsatisfactory. The centralization of executive functions in the DGPSM, through the port directors which it nominates, is unsuitable to the long- term management of port operations, into which so many local considera- tions enter. In practice, the local Juntas have little say on policy and do not even constitute effective advisory committees. Moreover, the financial system, as described later in this report, and the general administrative procedures under which the local administrations have to work, inhibit port management and operations on modern lines.

1/ The actual title of the local administrations of three of the twenty- seven ports is "Comisiones Administrativas de Puertos"; hosTever, the fuhictions and organizations of these "Conisiones" differ little from those of a JOSP. -6-

(iii) Operations

22. The port administrations generally provide facilities including quay cranes, some mechanical-handling equipment, minor cargo-handling equipment, and transit and long-term storage. Stevedoring on board ship and handling in the transit area are carried out by independent companies which themselves provide a limited amount of minor equipment.

23. DGPSM provides a basic supply of minor handling equipment, such as mobile cranes, forklifts, etc., which offers competition should the private firms' charges for equipment become excessive, and ensures that sufficient equipment for the needs of the port is available at all times. DGPSM also encourages the leasing of facilities, such as transit sheds, to individual stevedore firms; however, there are in fact few leases.

24. While the stevedoring firms are reasonably well managed in their day-to-day operations, there is an excessive number of minor firms which are too small to be efficient. These small firms lack the finan- cial resources required to supply more than a limited amount of minor equipment. Their size may also explain the small number of lease arrange- ments.

25. The labor used by the stevedoring companies is administered by the "Servicio de Trabajos Pc-rtuarios" attached to the MIinistry of Labor, which registers and allocates longshore labor. Port labor disputes are few, and stoppages have been rare for many years. On the whole, labor relations appear to compare favorably with those in the ports of many developed countries.

26. The productivity of port labor is satisfactory. For miscel- laneous general cargo, the tonnages per gang hour are at about the level found elsewhere in Europe and North America. For bulk dry cargo handled by crane and skip or grab, the rates per crane hour are about normal, but those per meter of berth and per ship/day are low because of the de- ficiency and unsuitability of equipment. The amount of general cargo handled per meter of general cargo berthage compares favorably with averages in many European and North American ports.

27. In Huelva, La Luz, and Pasajes, which are substantial fishing ports, the berthage available for the fishing industry is insufficient, and the tonnage landed at the quays is higher than is considered economic.

28. In general, the port administrations carry out their functions as efficiently as the system under which they work allows. They have competent engineers for design and development work and to supervise con- struction and maintenance, but employ consultants where specialized work is concerned. Construction (excepting some dredging) and a good deal of maintenance is carried out by contract. Structural maintenance is satis- factory and equipment maintenance good. On the other hand, efficiency in the actual port operations carried out or directed by the local Juntas appears to suffer from over-centralization and from the almost complete - 7 - lack of men with a conr;ercial background, practically all the principal staff and operations supervisors being engineers. Although the caliber of the men concerned is generally good, commercial considerations in- evitably tend to receive insufficient weight.

29. The carrying out of the functions exercised by the Ministry of Commerce and the Ministry of Marine is in certain cases unsatisfac- tory. At some ports, pilotage and towiage facilities appear inadequate. Port communications with ships at sea are adequate, but communications with ships in harbor have not always kept pace with modern development.

E. Port Development Program

(i) Proposed Administrative Reforms

30. The Government plans extensive reforms of port administration and has been working closely with the Bank in this regard. It has drafted a law covering the financial aspects of the operations of the JOSP ports (Ports Finances Law). The law will be submitted to the Parlia- ment in the near future. Its enactment and putting into effect will be a condition of effectiveness of the loan. The Government also intends that the more important ports, probably six to eight in number, be given greater autonomy. These ports will be granted autonomy at intervals so that advantage can be taken of the experience gained. The Government has agreed that a law empowering it to decree such autonomy will be adopted by August 1, 1966 and the first autonomous port set up in that year. No decision has yet been made as to which will be the autonomous ports; the first may not be a project port, but the Government has agreed that at least one project port will be given autonomy by the end of 1967.

31. Proposals regarding the Principles of Autonomy have been agreed with the Bank. In general, they envisage an improved composition of the local port Boards and administrations as compared with that of the present JOSPs and a greater degree of independence for the Boards in policy and management. The Boards will include representatives of port users, and government officials will be in a minority. The Boards will have a substantial measure of freedom in modifying their operating bud- gets during the course of the year, without government intervention. They will be able to set port charges within limits prescribed by the Government in the light of the needs of transport co-ordination and of the objectives that charges should cover the costs of services and that total revenues should be sufficient to give a reasonable return on in- vestment. The Boards will also have extensive freedom in contracting procedures and in the hiring and payment of their employees. The Govern- ment has agreed to consult the Bank regarding the general law on port autonomy and the decrees giving autonomy to any of the project ports be- fore they are enacted; in each case, the final version is to be accept- able to the Bank. - 8 -

32. As described more fully in Chapter V, the Ports Finances Law provides for the operation of the remaining non-autonomous JOSP ports on the basis of sound financial principles and for the reorganization of their rate structures. It also gives greater powers of initiative to the local administration in some matters which are not purely financial, e.g. in the awarding of concessions.

33. The Engineer-Director of the autonomous ports will be appointed by the Minister of Public Works on the proposal of the Board and the Board will appoint all other staff. This should enable the Boards to recruit a better-balanced staff and to train personnel as necessary. However, autonomy will be granted over a period of years, and action to improve the quality of staff is needed now. Moreover, the Government's proposals for the JOSP ports which are not given autonomy do not in- volve any appreciable increase in the powers of the local administration as regards staff recruitment. DGPSM has, however, agreed to take imme- diate steps to improve the staffing in all ports by appointing senior personnel with ccmmercial training and experience and by recruiting en- trants to the service with such a background.

(ii) Changes in Operating Procedures

34. The proposed granting of autonomy will enable the larger ports to modernize their operations. To a considerable degree, the non- autonomous ports will also be able to do this when the proposed Ports Finances Law is passed. Accordingly, the prompt passage of the relevant legislation has the highest priority for the improvement of operating procedures.

35. The number of private stevedoring firms should be reduced by merger; however, in the past the Government had no powers to compel mer- gers. Many of the firms, although small, are long-established; moreover, there is a strong prejudice against anything savoring of private mono- poly. The proposed Ports Finances Law will give the necessary power through provisions relating to the granting of concessions. DGPSM and the Directorate General of Navigation in the Ministry of Commerce have jointly undertaken to work for a suitable reduction in the number of firms.

36. The agreed Principles of Autonomy provide for the transfer of responsibility for pilotage, towage and communications, at present dealt with by the Ministry of Commerce, to the Boards of the autonomous ports.

(iii) Port Investment Plan

37. The Government has embarked upon a comprehensive program of port modernization and development to meet the requirements of the rapidly expanding traffic. This program is embodied in a Port Develop- ment Plan, referred to in this report as the Plan. This is summarized as follows (in million pesetas):- - 9 -

Expenditure During 1964/67 Post 1967 Expenditure on Begun Prior Begun During Items Begun to 1964 1964/67 Before 1968 Organization Works Equipment W4orks Equipment Works Equipment Total

J.O.S.P.'s 1,943 417 5,720 1,796 6,127 162 16, 165 C.A.G.P. 365 62 463 72 149 5 1,116 J.C.P. - 135 999 _ _ 1,134

2,308 479 6,318 2,867 6,276 167 18,415

NOTE: These figures are based on 1964 prices, with a small allowance for contingencies and none for escalation so that they do not correspond exactly with those given in the project estimate or financial forecasts.

38. The Government realizes that the present number of ports is ex- cessive, and intends to concentrate development in those ports which are economically most viable, phasing out those which are uneconomic. Final decisions as to the closing of particular ports will be based on the finan- cial results revealed when the Ports Finances Las is in force; in the mean- time, expenditure at ports, the viability of which is doubtful, will be kept to a minimum.

39. The Plan covers the twenty-seven JOSP ports in peninsular Spain and the Canary and Balearic islands, and expenditures by CAGP and JCP. Of the total of Pts 16,165 million to be spent in the JOSP ports, 86 per cent will be concentrated in twelve of the seventeen ports referred to in paragraph 16 as having annual traffic exceeding one million tons. This reflects the Government's policy of concentrating commercial port development in those ports which appear most viable. Equipment to be purchased by JCP for the JOSPs is shown as expenditure by the latter in the above table. The expenditure of 999 million pesetas for JCP equip- ment represents almost entirely expenditure on dredging equipment to be operated by JCP in any of the ports. The Plan was approved in principle by a law of December 28, 1963. - 10 -

C H A P T E R III

THE PROJECT

A. Description of the Project

40. General

The Project comprises the following:

(a) The construction and improvement of existing facilities and the procurement of quay cranes and other port operat- ing equipment in the four ports of Barcelona, Huelva, La Luz y Las Palmas (Canary Islands) and Pasajes. These ports are referred to as the "project ports."

Items in this part of the Project fall into two categories:

(i) The whole of the Plan items initiated during the years 1964/67 in the ports concerned, but excluding those parts of a few items which will be carried out after 1968.

(ii) The remaining part of the fewi partially completed items referred to above and certain additional items, not included in the Plan, which are essential to the efficient functioning of the Plan items.

(b) Quay cranes and other cargo handling equipment, floating equipment and navigational aids, to be purchased by JCP as part of the Plan for use at seventeen JOSP ports other than the project ports ,or generally in the ports of the Borrower. All will be procured before the end of 1968.

It is proposed that disbursement of the loan should be forcatogories (a) (i) and (b). The Government has agreed to carry out the Droject as a whole including (a)(ii) for which it would provide all of the necessary funds. The construction items are described briefly in the following paragraphs, further information being given in Appendices 3, 4 and 5. The equipment is also described briefly, with further detail in Appendices 1, 2 and 3.

41. The project ports were selected with a view to providing a Project of reasonable size and geographical representation and to include ports in which engineering and other preparatory work for the items to be initiated under the Plan were well advanced, and where most or all of the Plan items would be completed by the end of 1968.

42. On first studying the Plan, the Bank questioned the suitability of certain of the quay cranes which form a major part of the equipment - 11 - to be purchased by the JCP for the Project. At the Bank's request,DGPSM set up a study group (comprising its own representative, a representa- tive of the Spanish association of shipping agents, and an independent bulk-handling expert) to review the items concerned. The group's work resulted in a majority report suggesting a re-allocation between six-ton and twelve-ton cranes and the carrying out of further studies. A minority addendum by the independent expert recommended more extensive reductions in the size and number of cranes and suggested that simple conveyor equipment should be provided for loading miscellaneous dry bulk cargo in certain cases. In general, the Bank shared the views of the minority report, and the Government has agreed to put them into effect. Further information regarding the changes is given in Appendix 22.

Barcelona (Map 2)

43. At Barcelona, the construction items comprise an 883-meter main breakwater extension, a new 770-meter marginal wharf for general cargo, the widening of an existing pier to provide two petroleum dis- charging berths, and a number of miscellaneous improvements to access roads and rail tracks, pavings, transit sheds, etc., at existing berths. All items will be completed by the end of 1968, except the superstructure of the breakwater extension which is due for completion in 1970.

44. The principal items of equipment comprise forty-three three- ton quay cranes for general cargo, four twelve-ton quay cranes for mis- cellaneous bulk dry cargo, and four special cranes for handling coal. The coal reception and despatch area at the wharf concerned will be re- modeled so as to minimize handling costs, including the provision of any necessary equipment. All these items are to be provided before the end of 1968. The numiber of coal merchants operating at the coal import wharf is at present thirty-one. This large number of handlers, often ill-equipped, raises the cost of handling coal through the port and has inhibited the installation of modern shore equipment. DGPSM,in colla- boration with the other Departments involved, has undertaken to study how to reduce the number of firms or to co-ordinate their activities at this and similar ports.

Huelva (Map 3)

45. At Huelva, the main purpose is to provide modern facilities for (a) the petroleum traffic, particularly the export of products from the refinery which is soon to be built, (b) the export of minerals, (c) general cargo and the imports and exports associated with the rapidly expanding industrial complex in the area, and (d) the needs of the fish- ing industry. Facilities for (a), (b), and (c) will be located at a new site where the required depth of water can be provided economically, thus permitting conversion of the whole of the existing general cargo facili- ties for use by the fishing industry.

46 . The facilities for petroleum traffic will consist of a two- berth pier with an initial depth of thirteen meters. It will be used by - 12 -

the Rio Tinto-Gulf Oil Corporation subsidiary which is to build a re- finery for the export of products, by CAMPSA (the Spanish Governmentts products distribution agency) and possibly by other firms which may in future import or export bulk liquids. The pier will be owned by the Government, but pipe lines and hose structures will be provided by the users. Detailed designs have been prepared for this pier and a contract awarded for its construction. Although there is a verbal understanding with Rio Tinto-Gulf and CAMPSA that they will use the pier, this has not been formalized. The Government has undertaken to enter into firm arrangements with the companies as to usage of the pier; conclusion of such arrangements will be a condition of disbursement in respect of the project item concerned and they are to be made within nine months of the proposed loan being signed.

47. The nerals-hand1ing installation comprises a pier suitable for berthing one large or two small carriers, with thirteen-meter depth initially, including handling equipment and shore facilities, designed to load pyrites and calcined pyrites. At present, these are exported by the Tharsis Company wTith facilities on the right bank of the river Odiel, by the Rio Tinto Company with its own facilities on the left bank of the Odiel above its confluence with the Rio Tinto, and by various small min- ing companies which use facilities in the same area owned and operated by the Government. All these facilities are old and inefficient; in particular, the depth of water alongside is insufficient to accommodate large carriers. Rio Tinto and the small companies favor the scheme and have expressed their intention to use the new pier. Tharsis, having examined the proposals, have formed the opinion that the new pier pre- sents no advantage to them because of the location of the private rail- way connecting their existing facilities to their mines. The pier and handling equipment have been designed by DGPSM in consultation with the prospective users and equipment building firms, a contract having already been awarded for the civil engineering work. The pier and equipment will be provided and operated by the JOSP. No formal agreement as to use of the installation yet exists between the JOSP and Rio Tinto, the principal prospective user. The Government has undertaken to enter into firm arrangements with Rio Tinto; such arrangements will be a condition of disbtursement for the project items concerned and they are to be made within nine months of the signing of the proposed loan.

48. Road, railwiay, and service connections to the site of the new piers and cargo wharf are included in the Project. Conversion of the existing wharf for fishing industry purposes includes buildings, paving, and the reconstruction of a service road. Except for the minerals han- dling installation at the new minerals pier, only minor items of equip- ment are included, it being intended to transfer the existing cranes and other equipment from the present wharf to the new cargo wharf. All items will be completed by the end of 1968, excepting the new general cargo pier which, for engineering reasons, cannot be completed until 1969.

49. It will be necessary to improve the present entrance channel to provide access to the new facilities, and the necessary dredging will - 13 - be carried out before the end of 1968 as part of (a)(ii) of the Project (paragraph 40). Since it is not yet decided whether the work will be carried out by contract or by using DGPSI'i equipment, the wiork has not been included among the project items to be financed by the Bank.

La Luz y Las Palmas (Canary Islands) (Map 4) 50. At La Luz y Las Palmas, the principal construction items are general dredging in the harbor, a new 300-meter long, nine-meter deep, general cargo marginal wharf (Muelle de Castillo) with transit shed, paving, etc., a new 825-meter long, seven-meter deep, marginal general cargo wharf (Muelle de Ribero) including shed accommodation, paving, etc., and the breakwaters and access road for a new fish basin. No cargo han- dling equipment or quay cranes are included. With the exception of the works involved in the new fish basin, all these will be completed by the end of 1968.

51. The proposed new fish basin will provide a harbor of 430 hectares, protected by main and secondary breakwaters, which constitute the first phase of the program. 750 meters of berthage for fishing vessels including deep draft vessels will be provided in the second phase, together with the associated paving and services and the build- ings to be constructed by the port administration. A third phase would provide further berthage, etc., for the fishing industry. The harbor layout provides a site for a possible future private enterprise ship re- pair installation, but no definite proposals have been formulated. Phases I and II only are included in the Project. Phase I will be com- pleted in 1969, Phase II in 1970.

Pasajes (Map 5) 52. At Pasajes, the principal construction items consist of im- proving the entrance channel to permit the passage of vessels with a draught of nine meters, deepening the principal basin to ten meters, a new 297-meter marginal wharf with ten-meter depth for bulk and general cargo, a new 165-meter marginal quay with five-meter depth for victual- ling and servicing fishing vessels, the reconstruction of a 365-meter-- existing marginal quay with six-meter depth for fish landings and mis- cellaneous improvements at existing berths, All construction will be completed by the end of 1968.

53. Miscellaneous equipment is to be procured by the local adminis- tration and a number of quay cranes and other cargoohandling equipment by the JCP, including eight three-ton quay cranes for general cargo and four six- and three twelve-ton quay cranes for bulk dry cargo. The coal reception area will also be remodeled, including the supply of any neces- sary equipment; and simple conveyor equipment will be provided for load- ing miscellaneous dry bulk cargo. All these items will be completed by the end of 1968. - 14 -

Equipment for Other Ports

54. The Project also includes quay cranes and miscellaneous cargo- handling equipment to be procured by JCP for seventeen other ports: Alicante, Almeria, Aviles, Bilbao, Cadiz,Cartagena, Gijon-Musel, La Coruna, Malaga, Palma de Majorca, Santander, Sevilla, Tarragona, Valencia, Vigo, Pontevedra, and Villagarcia de Arosa. The equipment is listed in Appendices 1 and 2. All will be procured before the end of 1968.

55. The quay cranes comprise 57 six-ton and 21 twelve-ton cranes, principally for handling bulk dry cargo. Simple conveyor equipment will be provided additionally to load bulk cargo at Almeria, Cartagena, La Coruna, and Santander.

56. Urgent studies into various matters regarding bulk dry cargo handling will be made at certain ports. These,together with the studies on remodeling of coal facilities at Barcelona and the provision of con- veyor equipment at Pasajes referred to above, will be carried out by specialist consultants acceptable to the Bank.

Equipment for General Use

57. The equipment for general use included in the Project includes tugs and hopper barges required for the dredging fleet controlled by JCP, minor cargo handling equipment to be allocated in the lesser ports as need arises, and navigational aids. All items will be purchased by JCP. Further detail is given in Appendix 4. B. Estimate of Cost 58. The estimated cost of the Project is summarized below. (a) Items For Which Loan Funds Will Be Disbursed (See paragraph 4O(a)(i) and (b) above) Foreign Ixchange Component Local Costs Total Million US$ millions Million Million US$ millions Pesetas equivalent Pesetas Pesetas equivalent Works & Equip- ment at: Barcelona 514 (8.57) 482 996 (16.60) Huelva 345 (5.75) 379 724 (12.07) La Luz y Las Palmas 355 (5.92) 517 872 (14.53) Pasajes 349 (5.82) 283 632 (10.53) Equipment for Other Ports 699 (11.65) 244 943 (15.72) Equipment for General Use 77 (1.28) 58 135 (2.25) 2,339 (38.99) 1,963 4,302 (71.70) Details are given in Appendix 4. - 15 -

(b) Items For Which Loan Funds Will iNot Be Disbursed pasragph,ee 40 (a.(ii)Tab6ve)

Total Cost US$ Millions Million Pesetas Equivalent Completion of Items at:

Huelva 40 (0.67) La Luz y Las Palmas 185 (3.09) Other W,1orks at:

Barcelona 255 (4.25) Huelva 50 (0.83) La Luz y Las Palmas 309 (5.15) Total 839 (13.99) Details are given in Part I of Appendix 5. The estimated total cost of the Project is thus 5,141 million pesetas (US$85.7 million equivalent). 59. The original cost estimates were based on prices prevailing in Spain in 1964 which were somewhat lowier than those prevailing elsewhere. The estimates given under (a) above have been increased to allow for con- struction contingencies varying between 5 per cent and 15 per cent and for escalation equivalent to about 1 per cent per annum for the foreign ex- change component and about 6 per cent per annum for local costs. The estimates are considered adequate; the estimates given under (b) are more approximate, since the engineering of the items concerned is less advanced.

60. The estimate of the foreign exchange component is based on a detailed examination of all major items. Wkhere international bidding is involved, the foreign exchange appropriate to a Spanish bid was considered, the estimate thus being conservative. The foreign exchange component averages 44 per cent for construction and 74 per cent for equipment. The proposed loan would approximately finance the foreign exchange component. Disbursement is envisaged on a percentage basis, 30 per cent for construc- tion and 100 per cent for equipment.

C. Construction Program

61. The construction program for items to be financed by the Bank will be completed by the end of 1968, except for the cargo wharf at Huelva and Phase I of the new fish harbor at La Luz, which are both due to be completed by the end of 1969. As part of the Project--Para.40(a) (ii)--the Government will finance the completion of these works and also the completion of the breakwater extension in Barcelona (by 1970), the improvement of the entrance channel in Huelva (by 1968), and the com- pletion of Phase II of the new fish harbor at La Luz (by 1970). - 16 -

Investments at Project Ports Initiated before 1964

62. In each project port, certain works and procurement initiated before 1964 are being carried out as part of the Plan. This investment is additional to the Project and forms part of the 1,943 million pesetas for works and 417 million pesetas for equipment shown for the JOSP's under the heading "Begun Prior to 1964" (Para. 37). The amounts involved at the four project ports, broken down approximately between works and equipment, are as follows:

P o r t Works Equipment Total (million pesotas)

Barcelona 575.3 101.5 676.8 Huelva 3.8 17.3 21.1 La Luz y Las Palmas 0.9 40.2 41.1 Pasajes 28.3 33.9 62.2

Total 608.3 192.9 801.2 (US$10.1 million) (US$3.2 million) (US$13.3 million)

All expenditures will be made before 1968. The works concerned were ex- cluded from the Project because procurement procedures were not in keeping with Bank policy and because of their timing.

Investment Supplementar to the Project Items

63. On the basis of the latest traffic forecasts for the project ports certain additional investments may prove to be necessary. Firm decisions as to these items are not possible at present, since they will depend on traffic and other developments in the ports; on the level of productivity achieved with the new facilities already planned; on the willingness of private enterprise to provide certain installations, etc. The items concerned are listed in Part II of Appendix 5. Their approxi- mate total cost would be 1,883 million pesetas (US$31.4 million) of which 366 million pesetas (US$6.1 million) might be spent before the end of 1968. The Government has undertaken to review the position as regards these items from time to time in consultation with the Bank. D. Design and Procurement

64. Design. All construction work has been or will be designed by the engineering staffs of the JOSPs and DGPSM wqhich are competent to do so. Designs are at different stages, ranging from preliminary to final and detailed. For equipment, JCP and the JOSPs have prepared general specifications as a basis for bidding, obtaining specialist advice in the case of fixed installations such as the Huelva minerals-loading in- stallation. - 17 -

Bidding for Construction lWlorks

65. All construction is carried out by contract. Bidding for con- tracts of 50 million pesetas (US$800,000) or more will be on an inter- national basis and in accordance with the Bank's "Guidelines Relating to Procurement". This procedure has also been applied in the case of bids already invited. The Government has agreed to modify certain aspects of contract procedure which the Bank felt to be a handicap to competitive bidding and expeditious execution of the work. Similar modifications in procedure wqill be made in the case of contracts for works less than 50 million pesetas (US$800,000) in value; and, where possible, these works will be grouped with a view to obtaining more competition in bidding and economy in execution.

66. Normally, floating equipment used by dredging contractors work- ing Spanish ports must be of Spanish registry. The Government has agreed to waive this requirement for the Project.

Bidding for Equipment

67. Bids for moveable equipment of 3 million pesetas (US$50,000) or more and for fixed equipment of 9 million pesetas (US$150,000) or more will be subject to international bidding in accordance with the Bank standards. Bids will be compared on the basis of the total price excluding customs duties, but with a preference of 15 per cent for domes- tic supplies. TLe preference would be applied by addin- 15 per cent to thc CIF vallue o-I' imported equipmert or components, :ncludin- the "derecho de compensacion de r.,vemenes interiores" (t,rifa fiscal). Should the custams dut- on the imported equi meiv. or coic)noerts be lcss t?lian 15 per cent, the actual customs duty would be used instead of the 15 per cent preference. With the exception of this last proviso, which was not appli- cable since the then-prevailing customs duties exceeded 15 per cent, the adjudication procedure is the same as that for the road and railway loans (SP-360 and SP-387). It has also been applied for bids already adjudi- cated, but not yet awarded, in anticipation of a Bank loan. - 18 -

C.HAPTER IV

ECONOMIC FUNCTION OF THE PROJECT PORTS: PRESENT AND EXPECTED TRAFFIC

A. Barcelona

At Present

68. Barcelona is the main port for general cargo on the peninsula. In 1964, it handled about 30 per cent of Spain's imports from foreign countries and some 15 per cent of exports. Disregarding the direct imports and exports of the island groups, the proportions related to the mainland only would have been even higher. In domestic traffic, about 57 per cent of the cargo unloaded and some 45 per cent of the cargo loaded passed through the port of Barcelona. In international traffic, the port is included in the regular services of a great number of shipping companies.

69. During the last five years port traffic has increased almost 10 per cent per annum. International traffic increased 18 per cent annually, island traffic 4L1per cent, and coastal traffic 512 per cent. Forty-four per cent of the 1963 traffic was international, 8 per cent was between Barcelona and the island groups, and 48 per cent was coastal traffic.

70. For cargo other than international general merchandise, the service area of the port of Barcelona extends to the north as far as the French border and to the west somewhat beyond Lerida (Map 1). The area to the south and the west is limited by the competition from Tarragona. Population within the service area is about 3.8 million, including more than two million in .Barcelona. The area ranks highest in Spain in manufacturing and commerce. Manufacturing is very diversified and ranges from basic metals and chemicals to final consumption goods of all kinds. The production of textiles is highly developed, representing 70-80 per cent of national output.

In Future

71. It is not expected that there will be major changes in the pattern of port traffic in the next 10 years. Competition for some products, mainly bulk cargo, from other ports - especially from Tarragona - will probably become stronger, but the growth of population and industrial output in the area directly around Barcelona will be such that port traffic in general will continue to increase.

72. A considerable increase is expected in shipments of chemical and oil products. The need for fuel oil and methane will rise very sharply because of the expansion of the production of electricity and gas. At present, 70 per cent of the country's gas is produced in the Barcelona area. - 19 -

73. The traffic forecast for the years 1968 and 1973 has been made by DGPSM, consultants, and the mission, largely on the basis of detailed information collected in the service area. It has been assumed that the competitive strength of the port in relation to nearby ports will not change substantially in the future. The forecast shows an annual increase over the 1963 traffic of 9½ per cent through 1968 and of 7½< per cent thereafter.S.

1963 1968 1973 (in 1,000 tons) Liquid bulk cargo 1,372 3,985 5,860 Dry bulk cargo 1,932 2,560 2,685 General merchandise 2,141 2,390 3,085 Fish 3 5 5 5,4h8 8,9ho 11,635

B. Huelva

At Present

74. The area served by the port of Huelva varies with the kind of cargo handled. For general merchandise the area is limited and - roughly indicated - does not extend beyond the provincial borders, except in the north where the area extends as far as Zafra in the province of Badajoz for freight moved by rail (Map 1). Reasons for this limitation are the Portugese border to the west, the port of Sevilla to the east, and the poor road and rail connections to the north because of difficult terrain. Road connections between the province of Badajoz and Sevilla are better than those with the port of Huelva. Also,because Sevilla is an important trade center with a well-developed port for general cargo, it is in a stronger competitive position for the areas in the north and the east than Huelva. However, considering the better accessibility of the port of Huelva compared with the inland port of Sevilla, its competitive position is more favorable for bulk cargo and, as a result, the Huelva service area comprises a large part of the province of Badajoz along the Portuguese border.

75. The area served exclusively by the port of Huelva contained 325,000 inhabitants in 1960. The number of people in the largest possible area served by the port, including the zones in which it competes with Sevilla, was estimated at 1.9 million. Population density was 35 per sq. km., which is low. Population in the four zones considered increased only 3¼ per cent between 1950 and 1960 whereas the increase for the zone served solely by Huelva was 10C½ per cent.

1/ Traffic data are given in detail in Appendix 6. - 20 -

76. The hinterland is largely agricultural: in 1960,69 per cent of the labor force were employed in agriculture, whereas 15 per cent were in manufacturing and 16 per cent in services. The corresponding figures for the immediate service area of the port were 45 per cent, 30 per cent, and 25 per cent. Mining is also important, especially of pyrites. Pyrites reserves have been estimated at 300-500 million tons, representing 30-50 per cent of the world's presently knowm reserves. Manufacturing is concentrated near the city of Huelva and comprises food and mineral processing, fertilizers, cellulose,and textiles.

77. Fisheries are of major importance. Most of the fish is moved as fresh fish to Badajoz, Sevilla, Madrid, and Valencia. Production in 1963 was 36,800 tons at a value of US$8.8 million equivalent.

78. Although there are indications that the immediate area around Huelva is economically more advanced than the other zones in the hinterland, the income per capita and the economic growth for the service area as a whole have been below the average for Spain. This stagnation is also reflected in port traffic. As Appendix 7 shows, port traffic in 1963 was no more than in 1959. Only oil products and fish increased in volume.

79. In 1963, 51 per cent of port traffic was international, 44 per cent with other mainland ports, and 5 per cent with the island groups. Characteristics of port traffic are: the marked difference between the volume of cargo loaded and unloaded, the large proportion of minerals exports, the small quantity of general merchandise, and the importance of fish. The port's main function has been the export of minerals, especially pyrites.

In Future

80. Since it cannot be expected that communications by road and rail will be sufficiently improved in the near future to change the port's present service area appreciably, Huelva will remain principally a bulk cargo port. The fact that Huelva has been selected as one of seven development areas under the 1964-1967 Development Plan is extremely important. The forecast of port traffic includes the expected additional volumes from major factories for which investment plans will probably be realized . Most of these factories will be chemical plants which will to a large extent complement each other. It can be expected that this will lead to an important concentration of the chemical industry in Huelva. 81. The establishment of an oil refinery in Huelva with an initial capacity of 2 million tons of crude oil is also allowed for in the traffic forecast. According to the agreement with the Government,at least one million tons of oil products must be sold outside Spain, which will add to the port traffic. _ 21 -

82. The e-pected increase in general cargo is largely a result of the plans to build the new chemical factories. Some small additional general cargo traffic may also be expected from other new factories. Recently, the growing of oranges has begun in the Huelva area. If the results continue to be satisfactory, sizeable exports may be expected.

83. The allocation of Huelva as one of the main future bases for the deep-sea fishing fleet, and the proposed improvement of the existing port facilities for fisheries will increase the volume of fish to be handled considerably.

84. The following table shows the traffic volume in 1963 and the expected volumes for 1968 and 1973:1/

1963 1968 1973 (in 1,000 tons) Dry bulk cargo 2,001 4,110 4,920 Crude oil and oil products 318 3,000 3,000 General merchandise 131 240 370 Fish 37 70 105

2,487 7,420 8,395

C. La Luz y Las Palmas

At Present

85. La Luz y Las Palmas is the major port of the island of Gran Canaria and also serves as the main shipping center for some of the smaller islands in the Canary group, such as Lanzarote (Map 1). For many years it has served as the outlet for tomatoes and bananas - the two main export crops of the islands. Since few other goods are produced in the island, the quantity of general cargo imported has always been important. Because of its favorable location on the world shipping routes, and the available depth in the port of up to 13 meters, it is a main bunkering port. Mail ships calling at Las Palmas for bunkering also bring thousands of passengers. With the growing size of oil tankers, the port has become an important transshipment center for oil products, where supertankers transship their loads into smaller vessels for further distribution in Europe and Africa.

86. During the last 5 years, port traffic (excluding fish) increased at an annual rate of 4 per cent. Growth in international traffic was higher and in 1963 accounted for 80 per cent of port traffic,including bunkering and fish. Traffic between the other islands of the Canary group, the Balearic Islands, and the peninsula, did not increase and formed 20 per cent of port traffic in 1963.

1/ Traffic data are given in detail in Appendix 7. - 22 -

87. Fisheries have always been important in the island's economy and in total port traffic. The amount of fish caught by Spanish boats was 105,000 tons in 1963. The value was US$7.0 million equivalent which is relatively very low. This is largely because of a shortage of cold- storage and refrigerated transport facilities, so that most of the fish can be used only for fish meal. Smaller quantities are dried, salted or smoked, but here, too, the value of the product is comparatively low.

88. A recent development is the cleaning and freezing of the fish at sea by fleets operating at great distances from their home ports. The foreign fleets in the area largely follow this system and Las Palmas is increasingly being used by them for cold-storage of cargo or direct transshipment into refrigerated cargo vessels, as well as for bunkering and taking in ship's supplies, changing of crews, and repair. In 1963 foreign fishing boats unloaded 68,000 tons of fish in transit at La Luz.

89. Present population within the zone of influence of the port is about 500,000 of which some 90 per cent are on the island of Gran Canaria, the population density being about 1,000 per square kilometer. Las Palmas has at present 240,000 inhabitants. Between 1950 and 1960 population grew at a rate of 2 per cent per annum which is more than double the national growth rate.

90. Hitherto, agriculture has been the main activity in the archipelago. Major crops are bananas, tomatoes, sweet potatoes, sugar cane, cereals, and tobacco. Soil conditions are generally good and there is still arable land available, but on the island of Gran Canaria the cost of water has been a limiting factor to the expansion of agriculture. Manufacturing is based primarily on certain local materials and products and on the import subti- tution' of a few basic consumer's goods, The island of Gran Canaria has pleasant beaches and a good climate throughout the year, which has in recent years attracted an increasing number of tourists; in 1963 the number of tourists was 100,000 or more than double that in 1960. In Future

91. The future of Las Palmas as a station on the main international shipping routes Till largely depend on the adequacy of its facilities for servicing ships and the prices for Nhich the port will render its services. So far, Las Palmas has offered good services as regards bunkering and shelter, but it competes with other nearby ports and it will be able to stay ahead only by providing more and better facilities. If the necessary improvements are carried out, a modest annual increase in the volume of fuel oil and other oil products can be expected.

92. With the planned expansion of private cold storage facilities and the program for establishment of new canneries and improvement of refrigerated transport facilities between La Luz and other Spanish ports, it can be ex- pected that marketing possibilities for fish caught by Spanish fishermen will improve and that the average price will gradually increase from 4 pesetas - 23 - per kg. in 1963 to 9 pesetas per kg. in 1973. It is further expected that in the near future, as a result of the modernization program, new Spanish vessels will be engaged in deep-sea fishing. Continued use of La Luz as a base for foreign fishing fleets will largely depend on the adequacy of facilities for unloading, cold storage, bunkering and repairing. In the past, La Luz y Las Palmas has been favored by foreign fleets and there are signs that foreign interest is even increasing. Considering the effects that the proposed investments will have on the facilities for fisheries in the port area, it may be expected that the volume of fish unloaded or trans- shipped by foreign vessels will continue to rise, reaching 100,000 tons by 1968 and 130,000 tons by 1973.

93. The cold storage facilities have also opened up better marketing possibilities for the export of tomatoes and, to a lesser extent, of bananas by reducing damage due to temperature changes and, consequently, improving the quality of the produce. They have also facilitated the marketing of tomatoes during winter at higher off-season prices. These developments, supplemented by improved and cheaper transportation, have drawn attention to the possibilities for other crops, such as sweet peas, cucumbers, peppers, and flowers. The only serious limitation to a further increase of agricultural production on Gran Canaria is the lack of water. However, it is expected that regulation of boring for water and its use will result in a better dis- tribution of available resources. By such control methods, and by the dis- tillation of seawater, if this should prove economically feasible, it will probably be possible to increase the future supply of water.

94. The archipelago has good possibilities and considerable reserve capacity for a further increase in tourism encouraged by cheap air charter flights. Since a very large proportion of tourist requirements has to be imported, such an increase has an immediate effect on port traffic.

95. On the forego ,ng basis, the port traffic in 1968 and 1973 has been projected as follows: _/

1963 1968 1973 (in 1,000 tons) Oil products and water 4,802 6,000 7,500 Dry cargo in bulk 213 320 465 General merchandise 1,094 1,510 2,180 Fish 173 280 380

6,282 8,110 10,525

1/ Traffic data are given in detail in Appendix 8. - 24 -

D. Pzsaies

At Present

96. Pasajes is the most eastern of several ports along the north coast of Spain. Its nearest competitor to the west, Bilbao, is only some 125 kilometers distant, so that Pasajes' service area extends mainly to the south and the east; in the south its limits are near Guadalajara and in the east they approach the hinterlands of Barcelona and Tarragona (see Map 1).

97. Population in the immediate zone of influence is over 900,000, with about 2.3 million in the total service area. Between 1950 and 1960 population in the service area increased only 7 per cent. In the area close to Pasajes the increase was 9 per cent, which is equal to the national average.

98. The service area is very heterogeneous. For the area as a whole, 41 per cent of the labor force are employed in agriculture, 32 per cent in industry, and 27 per cent in services. In some provinces income from agri- culture and forestry varies from 45 to 52 per cent, whereas income from manufacturing is as high as 59 per cent in the province of Guipuzcoa which forms the immediate hinterland of Pasajes.

99. Availability of, rich timber resources was one reason for the early development of the metal and paper industries in the area. Forestry is still a major source of income. The main agricultural products are cereals. Min- erals are found in modest quantities, except for potash of which reserves have been estimated at 200 million tons. The most important other minerals are marble, iron ore and lignite.

100. Fisheries are of major importance to Pasajes. The port is the main supplier of fresh fish for Barcelona. Despite insufficient space to berth fishing vessels adequately, and consequently the high cost of unloading fish and loading supplies, production increased considerably from 47,000 tons in 1959 to 72,000 tons in 1963. The value at first sale in 1963 was US$17 million equivalent. In total,215 vessels are engaged, of which 83 per cent are over 100 tons and 22 per cent over 250 tons. Pasajes is one of the four principal bases for the Spanish cod fishing fleet which sails to the Newfoundland fishing grounds.

101. In 1963, most of the traffic handled was dry bulk cargo (see Ap- pendix 9); the volume was more than that of general cargo and liquid bulk cargo together. -Forty-two per cent of total port traffic was international, 7 per cent was between Pasajes and the island groups, and 51 per cent was coastal traffic. Between 1959 and 1963, port traffic increased 27 per cent, from 1.5 million to 1.9 million tons, at an annual rate of 6.2 per cent. Coastal traf- fic decreased 22 per cent, wqhereas international traffic rose 26 per cent, and traffic between Pasajes and the island groups 59 per cent. In Future

102. The port of Pasajes will remain primarily a bulk cargo and fishing port. A large increase in port traffic is expected to result from higher exports of potash and cement and from increased imports of timber and pulp for the paper industry. Unloading of coal and oil products is also expected to rise considerably as a new thermal power plant is being constructed in the port. A further increase in fish production will largely depend on accelerated modernization of the fishing fleet raising its productivity. Under these con- ditions, it can be expected that production will reach 95,000 tons in 1968 and 120,000 tons by 1973.

103. Traffic increase beyond 1968 is expected to be modest, because the possibility of further expansion of the harbor is limited and extensions will be expensive. The traffic forecast for 1973, therefore, in some respects assumes an intensified use of the port facilities which will be available by 1968, including those provided under the Plan. The following table shows the expected traffic in the years 1968 and 1973 as well as the 1963 figures: 1/

1963 1968 1973 (in 1,000 tons) Liquid bulk cargo 494 820 1,325 Dry bulk cargo 811 2,035 2,300 General merchandise 654 700 700 Fish 72 95 120

2,031 3,650 4,445

1/ Traffic data are given in detail in Appendix 9. - 26 -

C4IAPTZR _V. FTINA;NCIAL ASPECTS

A. Summary 1. All Ports

104. It has been the policy of the Government to provide the ports not only with infrastructure, as a national service, but also with superstructures and equipment. A substantial part of the cost of provid- ing port services hss becn defrayed by public funds. No attempt was made to relate charges for service to the cost of providing it, to operate the ports at a profit, or to employ accounting procedures necessary to an evaluation of the real earnings and financial position of the ports. Operations have not been profitable, except in a few cases. 105. However, in 1962/1963, the uovernment decided to put into practice reforms involving, among other things, new concepts pertaining to financial viability, costing, remunerative rates and commercial accounting. The reforms include a new rates and finances law which has been discussed with the Bank and which is soon to be submitted to the Spanish Parliament. As agreed with the Bank, following successive annual increases in rates during 1966-1973, revenues would by the latter year be sufficient to cover all operating costs,including depreciation,and interest and to pro- vide a reasonable return on the net fixed assets.

2. Project Ports

106. Within the framework of these new concepts,financial projections for the project ports have been prepared by the DGPSM. As agreed between the Government and the Bank the forecasts for the project ports are based on the following objectives: (1) coverage of operating expenses, includ- ing depreciation, and of interest by 1968; (2) the ability to earn a return at least by 1968 with the return rising to 5 percent by 1973, which the Bank regards as reasonable progress over the next several years; (3) retention of adequate working capital; and (4) provision for the establishment of general reserves by 1968 by the appropriation of 50 per- cent of net income each year, subject to a maximum of 30 percent of annual gross revenues. To attain these objectives, it is estimated that rates will have to be so adjusted as to increase revenues, on average, by 10 to 12 percent per annum over the next eight years. B. General Background 107. Between 1945 and 1957, operating deficits and capital investment requirements were financed (1) through grants from the general State bud- get without the obligation to pay interest or repay the principal; and (2) in some cases, for capital investments for specific ports, through the issue of government bonds which were generally sold in the service area of the port in question. In the latter case, the interest and repayment funds were channeled by the Government through the port's account in the - 27 -

Bank of Spain. These furnds were not taken into the port's accounts which were confined to recording the receipts and expenditures of the port's "own funds". Since 1945, about Pts 5,446 million of such bonds were authorized and sold. Of this amount, Pts 989 million has been repaid, leaving Pts 4,457 million still outstanding as of December 31, 1963. The bonds bear interest at 4 percent, are for 50 years and will mature in various years up to the year 2007.

108. Beginning in 1957, bond issues were no longer authorized. Instead, the Government in many cases advanced funds for investment through a new Section C of its budget at 4 percent interest, although in practice the interest was not generally paid since most of the ports did not earn it. There has been no obligation for the ports to repay any of the Section C funds, which for the 1958 - 1963 period amounted to Pts 3,000 million. Other State expenditures for works and equipment from 1959 to 1962 totalled Pts 867 million. These latter State budget items bear no interest and are not required to be repaid. There has been no foreign borrowing by or for the ports.

C. Budgets Accounting and Auditing.

1. Budgets

109. Each of the 27 principal ports prepares separate budgets for operations and capital investments, which must be approved by the DGPSM and by the Council of Ministers. Operational budgets may contain alloca- tions for contingencies, but reallocation from one category to another and authority to exceed the expenditure budget has required approval by the Council of Ministers. Budgets are also prepared by the CAGP for minor ports and by the JCP. 110. The present procedures concerning necessary changes in operational budgets are unduly restrictive. Remedial measures have been discussed in connection with the Principles of Autonomy and the operation of the project ports. It has been agreed that for ports to be made subject to the Princi- ples of Autonomy and for the project ports, operating budgets shall contain provisions for meeting with adequate flexibility, out of revenues, increases in expenses attributable to increased traffic or to other important factors, including changes in costs, provided the port is not running a deficit. For the project ports, the degree of flexibility may be up to 25 percent of the amount of the budget items affected by such changes. Ports generally may also make transfersbetween expenditures of a similar nature; but not between unlike categories such as staff and materials. For all ports, the form of budget has been simplified in consonance with the new accounting system.

2. Accounting

111. Up to 1963, the ports engaged in government - rather than commercial - accounting procedures, designed only to indicate how the budget had been - 28 - implemented. Published financial reports a-ve not reflected real earnings. Income accounts have included only expenditures of a port's own funds, with the result that much maintenance expense, met from State funds because of insufficient earnings, has not been charged to operating expenses; depre- ciation wAras not included in expenses since no property accounts have been maintained; and interest only on a part of government capital since 1957, to the exclusion of interest payments made through the State budget, has been included in the accounts. Debt amortization has been met by Government and therefore not recorded. 112. initial steps to establish a commercial type of accounting were taken late in 1962. By December of 1963 tnere had been approved a revised budget model and a new uniform commercial system of accounts. All port agencies began on January 1, 1964 to install the new accounting procedures which are satisfactory. The new methods include revaluation of assets at all ports as of December 31, 1963. The individual revaluation steps for the four project ports are shown below:

Billions of Pesetas

La Luz y Barcelona Huelva Las Palmas Pasajes

A. Gross Replacement Value 12/31/63 4.2 1.4 2.1 3.4 B. Less Depreciation to 12/31/63 1.2 0.4 0.4 0.3 C. Net Replacement Value 12/31/63 3.0 1.0 1.7 3.1

113. In future, depreciation will be based on replacement value, using the straight-line method and reasonable service lives for all depre- ciable assets.

114. A cost accounting system has been in preparation since 1963. It is being designed by consultants. The general plan is virtually completed and will soon be experimentally installed at some four major ports. The costing data so established will be employed as bases for the adjustment of rates. 3. iuditing

An accountant and civil servant of the Ministry of Finance examine port accounts every three months. A report covering finances and accounts is prepared every six months. Annual accounts and financial statements are forwarded to the Tribunal de Cuentas in the IIinistry of Finance which serves as government auditor. For autonomous ports and for the project ports, the - 29 -

Government has agreed to amnual audits by independent qualifiied auditors and to publication of their principal annual statements. Wlith the adoption of the new accounting procedures, sufficient personnel will be made available for the introduction also of internal auditing procedures.

D. Rates

116. Charges are assessed for (1) indirect services, such as for the general use of port infrastructure or harbor dues, wharfage, the embarka- tion or disembarkation of passengers, for unloading of fish and for petroleum products; (2) direct services, such as the berthing and mooring of vessels, the use of cranes and other cargo-handling equipment, temporary occupation of port areas, the use of floating craft, the sale of water and electricity and other miscellaneous services; and (3) rents or leases of long duration for the occupation of port areas or for the privilege of doing business within the port area. The general level of rates has been and is low. A ship using a Spanish port pays very little compared with charges in other European ports. At Pasajes no charges at all are made for berthing ships. In almost all cases, the sale of water produces more revenues than does berthing of ships. Port charges borne by importers-exporters are better adjusted in comparison with other European ports although some important individual rates, such as the rates for the use of cranes, are well below general European charges for the same services.

117. Rates for indirect services have been in the nature of taxes which are subject to the tax laws and uniform for all ports; and their modifica- tion has required approval by the Council of Ministers. The Bank's Economic survey mission recommended that each port have its own indirect tariff related to the cost of its own installations and this recommendation is being implemented. Varying rates have applied for direct services. Lower rates apply for coastal and island than for foreign traffic and lower prefer- ential rates and exemptions apply for the national petroleum company (CAMPSA) and other specified traffic.

E. New Ports Finances Law

118. A new rates and finances law, applicable to ports generally, has been under discussion between the Bank and the Ministries of Public Works and of Finance since August, 196h. During negotiations, agreement was reached on a draft text and the law is to be submitted to the Parliament in time to become effective before the end of January 1966. Enactment of the law is a condition of effectiveness of the proposed loan. The principal provisions of the law are summarized in Appendix 24.

119. Under the proposed Ports Finances Law, the rates for all services will have the character of prices, not taxes. Rates will be set by the Ministry of Public Works, in consultation with the Ministries of Finance and of Commerce, after hearing the views of the port in question; the Council of Ministers may intervene only in case of disagreement between the Ministries. Rat*eo will - 30 - be determined separately for each port in relation to the costs of provid- ing individual services, taking into consideration demand and other factors affecting port traffic, including the Governments transport-coordination policy. The objectives will be to obtain financial viability by providing revenues sufficient to cover operating expenses, including depreciation, to give a reasonable return on the net value of fixed assets, to cover debt service, the provision for adequate reserves and a material part of capital-investment requirements. The level of rates will be increased progressively during 1966-1973 in order to attain these objectives. The law provides that there shall be no exemptions or preferential rates for arn kind of commercial craft.

F. Earnings and Finances - Project Ports

120. For each of the Project ports separately, for the years 1963 to 1973 inclusive, revenues, expenses and net income are shown in Appendices 10, 13, 16 and 19; balance sheet data in Appendices 11, 14, 17 and 20; and cash flow statements in Appendices 12, 15, 13 and 21.

1. Present Earnings and Finances

121. Actual data are shown in the appendices for the years 1963 and 1964. The data for 1963 have been adjusted to conform with the new account- ing procedures. Of the four ports, only La Luz y Las Palmas had favorable results in these two years, as indicated by the condensed income statements shown below, in millions of pesetas:

La Luz y 1963 Barcelona Huelva Las Palmas Pasajes

Operating Revenues 150.1 61.9 83.0 74.2 Operating Expenses 165.6 82.5 72.9 73.7 Net Operating Revenues (Loss) (15.5) (20.6) 10.1 0.5 Interest 11.9 2.3 0.3 5.9 Net Income (Loss) (27.4) (22.9) 9.8 (5.4)

1964

Operating Revenues 155.6 71..6 91.9 80.7 Operating Expenses 173.7 85.9 84.6 80.7 Net Operating Revenues (Loss) (18.1) (14.3) 7.3 _ Interest 14.8 2.5 0.4 6.4 Net Income (Loss) (32.9) (16.8) 6.9 (6.4)

Note: Operating expenses include depreciation; interest is 4 percent on Section C funds. - 31 -

2. Puture Earninps and Finances

a) General

122. On the basis of agreements reached during negotiations, DGPSM prepared estimated future earnings and finances based upon the traffic forecasts, the improvements expected to result from the investment program, and rate increases calculated among other things to earn a return of five percent on net fixed assets by the year 1973. The Government has undertaken that the four project ports shall cover their operating costs, including depreciation, and interest no later than 1968 and that they shall earn a return on net fixed assets of about 0.5 percent in 1968, 1 percent in 1969, 2 percent in 1970, 3 percent in 1971, 4 percent in 1972 and at least 5 per- cent in 1973. To achieve such results, the ports will apply, beginning in 1966, eight successive annual increases in rates which are estimated to average 10.6 percent each year for Barcelona and Huelva, 11.7 percent for La Luz and 11.5 percent for Pasajes.

123. The Ministry of Public Works had proposed a 3% return by 1973 by distinguishing between harbor operations (harbor entrance and anchorage) and terminal operations (berthing and cargo handling), and by holding that there should be no return on assets related to the former, a 2% return on net investment in wharves, and a 5% return on other works and on all equipment. The Bank considers that the assets base should include all facilities used in port operations. From the viewpoint of transport coordination and in the interest of an economic use of resources, port charges should include all operations and services provided by the port and the return should at least equal the cost of capital to the Government. However, the Bank recognized that port assets have been revalued only recently and in some cases there is a question whether the value of assets may be overstated in terms of their use as a basis for calculating the rate of return. Moreover, some ports, notably La Luz, face caopetition from foreign ports which are not required to earn a return on all of their assets. Accordingly, the Bank and the Government agreed that a return of 5% on net fixed assets by 1973 would represent satisfactory progress by then towards achieving a reasonable rate of return, given the circumstances of the Spanish ports.

12h. Revenues to be derived from rate increases are shown separately for each port in Appendices 10, 13, 16 and 19 inasmuch as the specific adjustments of individual rates and charges will be uncertain until the cost analyses are completed. It has been assumed that because of competition from other transport media there will be no change in income from landing and embarkation of passengers, except in the case of Pasajes where the introduction of ferry services between Pasajes (San Sebastian) and Southern England is expected in 1967. - 32 -

125. Projected expenses reflect annual increases of seven percent in total staff costs and ten percent in total expenditure for materials and supplies. These are offset somewhat by greater efficiency inherent in the investment plans. Maintenance expense rises sharply in 1965 and subsequent years inasmuch as maintenance has been largely deferred in recent years. Estimated maintenance reflects the accelerated investments in fixed assets and also takes into account the higher cost of maintaining old as compared with new works and equipment. The contribution to the JCP in order to defray its operating expenses, has been increased from 4 percent as in the past to 5 percent of gross revenues in accordance with recent authorizations. Other expenditure consists of contingencies amounting to 1.5 percent of gross revenues for Huelva, La Luz y Las PaLmas and Pasajes, and to 2.5 per- cent in the case of Barcelona iwrhich has more varied traffic and a more extensive service area.

126. Specific increases in revenues in order to offset increases in personnel costs and in costs of materials and supplies are not included, except to the extent that rate increases are necessary to attain a sound future financial position. The five percent annual contribution to JCP may become excessive as traffic and rates increase, and the Government has agreed to review the level of the contribution periodically.

127. Projected balance-sheet data reflect the establishment, as soon as practicable, of a general reserve at each project port based on appropria- tions of 50 percent of net income, to be accumulated up to a maximum of 30 percent of annual gross revenues. The Ports Finances Law provides for the establishment of similar reserves for thelarger ports generally. Revaluation reserves appear on each balance-sheet on an estimated basis and represent the write-up of fixed assets referred to in paragraph 112. Gift property, included in equity, represents the increase in land or basin areas acquired without cost to the port and without expenditure by the State. It has been stated separately and not included in State capital in the balance-sheets projections. Cumulative cash positions aside from reserves, are not permitted to drop below 10 percent of total operating expenses less depreciation, as the minimum working cash capital required for each port, in any year. The Ports Finances Law provides that government contributions to ports generally in the State general budget shall constitute port equity capital and shall bear no interest. For this reason, the Government has not yet decided on what basis it should make available to the four project ports the proceeds of the proposed Bank loan (paragraph 1). The financial forecasts are drawn up on the conservative assumption that the loan proceeds will be made available to the project ports on the same terms as the Bakc loan.

b) Barcelona

128. A summary of the earnings forecast for Barcelona (Appendix 10) is shown below in millions of pesetas. - 33 -

Net Operating Operating Operating Revenues or Operating Period Revenues Expenses (Loss) Interest Net Income Ratios

1965 162.3 212.9 (50.6) - (50.6) 131 1966 197.2 234.2 (37.0) 4.o (41.6) 119 1967 253.4 263.6 (10.2) 15.4 (25.6) 104 1968 336.1 293.8 42.3 23.0 19.3 87 1969 384.4 329.4 55.0 27.2 27.8 86 1970 440.2 345.5 94.7 26.4 68.3 78 1971 498.8 357.6 141.2 25.2 116.0 72 1972 560.2 373.0 187.2 24.0 163.2 67 1973 629.1 388.4 240.7 22.7 218.0 62

Note: Operating expenses include depreciation.

129. A review of the future financial position indicates that operating expenses would be covered first in 1968 when a small return of 1.0 percent would be earned on the average of net fixed assets in use at the beginning and end of the year; that interest would be covered first in 1968; and that the return would rise as agreed during negotiations progressively to 5 percent in 1973. The operating ratios would become progressively more favorable, improving to 62 in 1973. Interest-earned ratio rises to 10.6 in 1973. Debt service coverage is good. A general reserve fund, Appendix 11, would be established in 1968 and would reach the maximum 30 percent of gross revenues in 1972 and 1973. Gift property in the case of Barcelona appears first in 1967 and is the value of the basin formed by extension of the break- water. The current, liquid and debt/equity ratios, as shown in the Appendix, are satisfactory for each year 1965-1973.

130. The Board's cash needs and sources of funds for the years 1964- 1973 are shown in Appendix 12 and are suumaarized below: Millions of Pesetas Cash requirements

Over-all Capital Investments 2,636.1 Debt Service 282.4 Changes in Non-cash Working Capital 52.2 Staff Advances 1.0 Total Cash Required 2,971.7 Cash Available Net Operating Revenues 645.2 Depreciation 733.5 Subtotal-internally generated 1,376.7 Proposed IBRD loan 494.6 Funds Provided by State 1,228.1 3,101. Increase in Cash Position 129.7 131. Internal cash generation would amount to Pts 1,379 million, would cover debt service and other minor cash needs and leave Pts 1,043 million as a contribution toward capital investments for all works and equipment including those started prior to 1964, the Project and other items. The balance of total investment requirements, Pts 1,593 million, would be met by the proposed Bank loan of Pts 495 million and the funds to be provided by the State, Pts 1,228 million. The over-all cash position would be improved by Pts 130 million during the period. The reserve fund would total Pts,168 million in 1973.

c) Huelva

132. A summary of the earnings forecast for Huelva (Appendix 13) is shown below in mrillions of pesetas.

Net Operating Operating Operating Revenues Net Operating Period Revenues Expenses or (Loss) Interest Income Ratios

1965 76.5 102.2 (25.7) - (25.7) 134 1966 98.7 112.3 (13.6) 1.8 (154) 114 1967 127.1 125.4 1.7 6.4 (4.7) 99 1968 170.5 157.3 13.2 11.9 1.3 92 1969 199.6 173.9 25.7 17.7 8.1 87 1970 233.4 182.7 50.7 17.1 33.6 78 1971 270.5 202.0 68.5 16.4 52.1 75 1972 307.7 210.5 97.2 15.6 81.6 68 1973 337.3 218.8 118.5 14.8 103.7 65

Note: Operating expenses include depreciation.

133. Operating revenues would cover operating expenses first in 1967; and interest would be covered first in 1968. The return would be (.9 per- cent in 1968 and rise progressively to 5 percent in 1973. The interest- earned ratios would be satisfactory in 1970 and thereafter; and debt service coverage would be acceptable in 1969 and 1970 and better in other years. A general reserve would be established in 1968 as shown in the projected balance-sheet, Appendix 14, and wrould reach the agreed ratio in 1972. Gift property at Huelva consists of the land for the new port, first recorded in the accounts in 1968. The current, liquid and debt-equity ratios from 1965 to 1973 are quite satisfactory.

134. The Huelva cash needs and sources of funds (Appendix 15) for the years 1964-1973, are summarized below: - 35 -

Cash Requirements liions of Pesetas

Over-all Capital Investments 1,314.1 Debt Service 168.7 Changes in Non-Cash Working Capital 19.7 Staff Advances 1.4 Total Cash Requirements 1,503.9

Cash Available

Net Operating Revenues 321.9 Depreciation 318.7 Subtotal - internally generated 640. Proposed IBRD loan 321.4 Funds Provided by State 853.8 Total Cash Available 1,815.8 Increase in Cash Position 311.9

135. Internal cash generation of Pts 641 million would cover all cash requirements other than capital investments and would leave Pts 451 million for that purpose. The remaining investment needs, Pts 863 million, would be met in part by the proposed Bank loan of Pts 321 million, and by Pts 542 million of the funds provided by the State which however total Pts 854 million. The excess of State funds would provide for an increase in cash position of Pts 312 million,including reserves in 1973 of Pts 92 million. However, the funds provided by the Statewould be needed prior to 1971 before the cumulative cash position begins to rise to substantial proportions. Some Pts 200 million would be available for transfer to the State Treasury during the period 1971 to 1973.

d) La Luz y Las Palmas

136. A summary of the estimated earnings position for La Luz (Appendix 16) is set forth below, in millions of pesetas. Net Net Operating Operating Operating Income Operating Period Revenues Expenses Revenues Interest or (Loss) Ratios

1965 97.5 101.3 (3.8) - (3.8) 104 1966 115.2 112.8 2.4 1.9 0.5 98 1967 136.6 1-20.9 15.7 6.8 8.9 89 1968 161.9 132.3 29.6 11.2 18.4 82 1969 194.4 l44.9 49.5 14.5 35.0 75 1970 227.5 161.3 66.2 14.0 52.2 71 1971 268.4 176.7 91.7 13.4 78.3 66 1972 319.0 186.6 132.4 12.8 119.6 58 1973 378.2 199.2 179.0 12.1 166.9 53

Note: Operating expenses include depreciation. - 36 -

137. Operating revenues cover operating expenses and interest would be fully covered beginning in 1966. The return on net fixed assets would progressively increase from negligible proportions in 1966 to 5.0 percent in 1973. Operating ratios gradually improve to 53 in 1973. The interest- earned ratio is satisfactory after 1968 and debt-service coverage is good thro'ighout the period. A general reserve would be established in 1966 as shown in Appendix 17 and would reach the agreed ratio in 1971. Gift pro- perty consists of land and basins acquired without cost by the Board, when the new fish sea wall and harbor are constructed. Current, liquid and debt-equity ratios are quite satisfactory.

138. The La Luz y Las Palmas cash needs and sources of funds, for the years 1964-1973, are set forth in detail in Appendix 18 and are summarized below.

Millions of Cash Requirements Pesetas

Over-All Capital Investments 2,050.1 Debt Service 139.6 Changes in Non-Cash W4orking Capital 26.0 Staff Advances 3.6 Total Cash Requirements 2,219.3 Cash Available

Net Operating Revenues 570.0 Depreciation 338.5 Sub-total - internally generated 900.5 Proposed IBRD loan 263.2 Funds Provided by the State 1,099.1 Total Cash Available 2,270.8 Increase in Cash Position 51.5

139. Internal cash generation of funds would provide Pts 909 million, enough to cover debt service and other minor cash needs and about Pts 740 million of capital-investment requirements. The balance of such require- ments,Pts 1310 million, would be met by the proposed Bank loan, Pts 263 million; and by Pts 1,047 of the funds provided by the State totalling Pts 1,099 million. The additional Pts 52 million would be required prior to 1973 and contribution to the State of about that amount could be made in 1973. e) Pasajes

140. A summary of the earnings forecast for Pasajes (Appendix 19) is shown below, in millions of pesetas. - 37 -

Net Operating Operating Operating Revenues Net Operating Period Revenues Expenses or (Loss) Interest Income Ratios

1965 80.1 96.3 (16.2) - (16.2) 120 1966 98.8 104.9 (6.1) 2.1 (8.2) 106 1967 235.7 118.0 17.7 7.9 9.8 87 1968 17M.e 134.7 44.1 13.1 31.0 75 1969 206.8 147.7 59.1 16.1 43.0 71 1970 236.8 155.6 81.2 15.7 65.5 66 1971 271.7 165.0 106.7 15.0 91.7 61 1972 312.6 171.6 141.0 14.3 126.7 55 1973 358.5 180.3 178.2 13.5 164.7 50 Note: Operating expenses include depreciation.

141. Operating revenues would exceed operating expenses, interest would be fully covered and a small return earned, in 1967. The return would improve each year, to 5 percent in 1973. The interest-earned ratio would be satisfactory from 1967 onwards and the debt-service coverage would be quite good throughout the period. A general reserve fund (Appendix 20) would be established in 1967 and would reach the agreed ratio in 1970 and subsequent years. The current, liquid and debt-equity ratios would be satisfactory throughout the period.

142. The cash needs and sources of funds for the port of Pasajes for the years 1964-1974 are shown in Appendix 21 and are summarized below. Millions of Cash Requirements Pesetas Over-all Capital Investments 779.3 Debt Service 162.9 Changes in Non-Cash W1orking Capital 31.2 Staff Advances 1.4 Total Cash Requirements 974.8 Cash Available

Net-operating Revenues 605.7 Depreciation 275.3 Sub-total - internally generated B717 Proposed IBRD loan 293.5 Funds Provided by-the State 303.2 Total Cash Availyable 1,4i7.7 Increase in Cash Position 502.9 - 38 -

143. Internally-generated cash, Pts 881 million, would cover debt service and minor cash needs and would provide Pts 685 million for capital investments. This amount is only Pts 94 million short of total investments of Pts 779 million but these would occur almost entirely during the 1964-1968 period when the proposed Bank loan of Pts 294 million and State funds of Pts 303 million would be required to finance the Pro- ject. It is only after 1969 that the cumulative cash position would assume substantial proportions. About Pts 390 million would be available for transfer to the Treasury in the years 1969-1973. G. Financing the 1964-1968 Investments

144. For each of the Project ports, the funds for investments in the 1964-1968 period will come from three sources: cash on hand at the beginning of the period and earnings during the period; the Bank loan; and government grants. For each port, internally-generated funds are not substantial, a much greater proportion would be supplied by the Bank loan; and the largest share, (ranging from 42 percent of capital investments for Pasajes to 61 percent for Barcelona), would be provided by the State. The following table summarizes the flow of cash for each port for the 1964-1968 period, in millions of pesetas.

La Luz y Barcelona Huelva Las Palmas Pasajes Cash Requirements

Over-all Capital Investments Initiated Pre-1964 676.8 21.1 41.1 62.2 Project Investments 996.5 724.5 872.0 631.8 Other Project Items - (No Bank Disbursement) 51.0 50.0 93.5 - Other - Supplementary to Project 174.0 172.1 - 20.0 1964 - Extraordinary Purchases - - 30.6(') - Total Capital Investments 1,=97 -967.7 1,037.2 714.0 Debt Service 57.8 22.6 20.3 29.5 Changes in Working Capital 33.6 10.2 11.5 18.1 Staff Advances 0.5 0.8 2.6 0.7 Total Cash Requirements 1,990.2 1,001.3 1,071.6 762.3 Cash Available Net Operating Revenues (Loss) (73.6) (38.7) 51.2 39.5 Depreciation 294.9 110.2 130.5 109.6 Subtotal - internally generated 221.3 71.5 181.7 149.1 Proposed IBRD loan 494.6 321.4 263.2 293.5 Funds Provided by the State 1,154.8 574.4 537.2 303.2 Total Cash Available 1,870.7 967.3 982.1 7

Decrease in Cash Position 119.5 34.0 89.5 16.5

Note (1): Actually expended in 196)4, but not included in Plan. - 39 -

145. The foregoing tabu.atL.on includes the othi'r capital investments referred to also in the footnote to Appendix 18 - purchases by La Luz in 1964 not included in the Plan amounting to Pts 30.6 million. Should future review of items supplementary to the Project effect any modification of the related cash requirements, a similar change in the funds to be provided by the State would result. - ho -

CHAPTER VI

ECONOMIC JUSTIFICATION

146. In the four project ports,the Project has the twofold objectives of increasing capacity in order to meet future traffic needs, and of making it possible to carry out port operations more efficiently. These objectives will be attained by providing additional and deeper berthing space and additional cargo handling equipment so as to permit larger ships to enter the ports and to shorten the average stay of ships in the ports through faster cargo handling and avoidance of delays due to lack of berths. The equipment to be provided under the Project in other ports will similarly facilitate economic working by increasing cargo-handling capacity.

1h7. With the decrease of foreign trade in the early 'thirties end the isolation of Spain for about 10 years thereafter, there was little need to expand port capacity. Since the end of World War II, however, international traffic through the major ports of Spain has grown steadily and since 1955 at a high rate. As shown in the traffic forecasts for the project ports, it is expected that for the next 9 years at least rapid growth will continue. The increased competition to coastal shipping from road and rail transport has also shown the need for improved facilities and more economical cargo handling if full use is to be made of low-cost water transport.

1h8. Failure to expand port capacity would certainly be a limiting factor to the expansion of the economy. The functions of the project ports could not be partly taken over by other ports, because there are few ports with spare capacity, and they would need improvements in addition to those provided in the Plan. 11here some traffic could be diverted from the project ports to other harbors, as might be the case for some bulk cargo via Tarragona instead of Barcelonaf, this would lead to increased cost of land transport and a dupli- cation of commercial and industrial organizations.

1h9. Wtlithout increased cargo handling capacity, the growth of traffic in the project ports would cause increasing congestion. Delays for ships waiting for a berth would increase, as would the time required for loading and dis- charging. This would lead to surcharges on shipping rates in international traffic and to an increase in rates in coastal traffic. The latter would result in an uneconomical shift of cargo to road and rail transport.

150. In addition, in the case of fluelva; it would be difficult without the proposed deep-water loading facilities to compete with,-other countries exporting pyrites. The new facilities will make it possible to charter larger bulk carriers at lower rates. The new oil refinery will produce many basic materials for a diversified chemical industry. Adequate marine terminal facil- ities, however, are essential to the effective operation of the refinery. The other industrial plants to be established under the Development Plan will generate traffic that could not be handled with the present port facilities. 151. To illustrate the importance for the national and regional economy of the oil refinery and the main chemical plants to be established in Huelva, an attempt has been made to calculate the additional income that can be expected as a direct effect of the production of the new petro-chemical industry in its first year of full operation. This production is based on the investments to be made in the oil refinery, some major chemical plants, and a number of other factories, largely chemical, as a result of the first application for governmental support under the Development Plan. The calculation shows an increase in net value added in the first year of $37 million; this compares with a total investment of US$200 million, of which about $24 million is in port facilities.

152. For La Luz y Las Palmas, the lack of berthing space for general cargo might lead to increased use of the wharf for mail ships and tankers. Not only is this wharf inadequate for handling general cargo efficiently, but such use would also cause delays for tankers. This would lead to higher costs, and the port might lose its bunkering trade with corresponding loss of income and for- eign exchange earnings.

153. Fish production in Huelva and Pasajes is expected to decline due to over-fishing of the present grounds. To avoid this and to allow also for an increase to meet the growing demand) it is necessary to switch operations to deep-sea fishing. This requires new techniques and larger vessels of which the 1961 Modernization and Development Plan for the fishing Lndustry is intended to promote.

154. To evaluate the proposed investments in fishing facilities in these project ports, it has been conservatively assumed that, without the facilities to accommodate the new vessls, the 1962/63 production level would decrease 25 per cent by 1968 and 40 per cent by 1973. To assess the total loss in the value of fish production, the value of the lower output by 1968 and 1973 has been compared with the value of expected production after modernization less annual depreciation of the new fishing fleet. 1

155. For La Luzg the location of the present and future fishing grounds for the Spanish fleet has been taken into consideration and the estimate is based on increased production over the 1963 level and a higher average price because of better sales possibilities. To this has been added the quantifiable benefits expected from the use of the port by the foreign fishing fleets, such as the port charge (one per cent of the value of fish), and the charges for use of the cold storage facilities. 156. The resulting annual loss in production value if the investments were not carried out would be:

1/ The investment cost averages 40O,000 pesetas per vessel ton. 1968 1973 (million US) Huelva 13.2 22.7 Pasajes 7.3 13.8 La Luz 10.6 27.8

157. Besides use of the port of La Luz by foreign fishing fleets for shelter, transshipment of cargo, and cold storage - the quantifiable benefits of which have been estimated above - the port facilities are used oy these fleets for bunkering, taking in of shipts supplies, repair, and changing crews. Given the lack of basic data, a quantification of benefits from these other activities is not possible. So far, La Luz has been attractive to foreign fishing fleets, but increasing congestion in the port requires expansion of the basin and the berthing space as well as of storage, repair, and other sup- porting facilities. Without such expansion it is likely that La Luz would lose its attraction to foreign fishing fleets with corresponding loss in in- come and foreign exchange earnings. There would also be indirect effects of the proposed investments on tourism since a decline in bunkering activity would decrease the number of liners calling at La Luz and their passengers.

158. Some of the effects of the proposed investment have been quantified in a realistic and, in some respects, conservative way. The results - as presented above - indicate that the primary effect on income is quite con- siderable and in itself would fully justify the proposed investments.

159. In addition, a quantification of benefits that may accrue with re- spect to commercial shipping operations has been made based on 1) lower ship- ping rates as a result of the use of larger ships; 2) a quicker turn-around of ships due to a reduction of time ships have to wait for berthing space and to improved cargo handling; 3) elimination of unnecessary overtime. As a basis for the assessment of benefits,,the pr sent situation has been taken. In 1963, savings would have been as follows: V

Huelva La Luz Barcelona Pasajes (USj per ton of cargo) Reduced shipping rates 0.52 1.31 0.36 0.25

Time waiting for berthing space 0.22 - 0.24 0.33 Ships time saved through quicker cargo handling and reduced cost of overtime 0.93 0.90 1.15 0.52

Average weighted oy applicable 0.58 0.94 1.09 0.38 tonnage)

1/ Savings are applied only to cargo actually benefiting from the new investments. For La Luz y Las Palmas, e.g., liquid bulk cargo is excluded. - 43 -

160. It has been assumed that losses due to congestion would increase in proportion with the growth of traffic, except for La Luz y Las Palmas where a more than proportional increase is expected. Since a further increase of traf- fic beyond 1973 would probably require new investments, no further increase of benefits has been taken into account after this year.

161. In all ports, except Huelva, the traffic growth shown in Appendices 6 to 9 would largely occur even if the proposed investments were not made; accordingly, the above savings per ton of cargo have been fully applied to the expected traffic. For Huelva, however, a traffic growth of only about 4 per cent could be expected without the new investment in port facilities, so that the benefits have been applied only to this level of future traffic.

162. The above unit cost savings applied to the expected traffic during the average life of the project items - estimated at 20 years - have been discounted to present value and compared with the present value of the proposed investment. The resulting rates of return for the four project ports appear satisfactory, as shown below:

Barcelona 19% Huelva 16% La Luz y Las Palmas 10% Pasajes 30%

163. The effect of the investments in equipment to be made in 17 JOSP ports is considered of the same nature as that in Pasajes. It has been calculated that in 1963 savings of US$0.12 per ton of cargo could have been expected from the proposed investment, given the reduction of ships time spent in the port as a result of faster cargo handling. On the basis of DGPSM's forecast of traf- fic for the relevant ports, total benefits, discounted over the estimated life of the equipment - 12 years - as compared with the investment cost, would yield an economic return of 22%. This rate can also be considered satisfactory. - hh -

CHAPTER VII

CONCLUSIONS AND RECOMMENDATIOIUS

164. The Project is technically and economically sound and the changes proposed by the Bank and agreed with the Government strengthen the program as presented in the Plan documents. The estimates of cost are realistic. Execution of the Project will be supervised by competent personnel. Procurement procedures will be in keeping with Bank policy and will represent a further improvement in contract practices for government works and supplies.

165. Port operations are carried out iath reasonable efficiency but are hampered by unsuitable operating and financial policies arising largely from the existing administrative system. The Government is tak- ing steps to reform the system in consultation with the Bank. The draft Ports Finances Law and the draft Principles of Autonomy constitute major progress towards improving the management, operations and finances of the larger Spanish ports. The Government has agreed that these ports should earn a reasonable return on their investment; that they should have initiative in establishing their rates which should be related to the costs of the individual services provided; that the Boards of the major ports should have a large degree of freedom in daily operations, in the execution of works, in rate setting, and in contracting and em- ployment practices. Finally, applying these new criteria of port manage- ment and finances to the four project ports, the Government has agreed that these ports should earn a return of no less than 5% on net fixed assets by 1973 and that at least one of these ports should become autono- mous before the end of 1967.

166. The Project is suitable for a loan of US$40 million equivalent to the Government. A term of twenty years would be suitable, including a four-year period of grace. APPENDIX 1

SPANISH PORTS PROJECT Portal Cranes 3-Ton Portal Crane.

To Be Procured New Cranes onder Exinti Cranee For For Classification of Under Pmlect To Ba Existing New Available Existing Cranes Port Procurement Total Serad Romru. Wharvea Wao In 1968 -JOp JOP JCP Ovoz2 2010 10/

Alicante - - 10 15 - 15 10 _ 25 15 - _ Almerfa 6 - 6 6 - 6 12 - 18 6 - Aviles - - - 17 9 8 - - 8 10 3 4 Barcelona - - 43 39 2 37 43 - 80 25 - 14 Bilbao - - 22 37 2 35 - 22 57 26 3 8 Cartagena - - - .13 1 12 - - 12 1 4 8 GiJ6n-Musel - - - 34 9 25 - - 25 24 - 10 la Coruna - - 2 14 - 14 2 - 16 3 6 5 Malaga - - 2 19 - 19 - 2 21 7 4 8 Palma de Mallorca - - 4 10 - 10 4 - 14 2 8 - Pasajes - - 8 13 - 13 8 _ 21 10 3 - Santander - - - 19 - 19 - - 19 9 - 10 Sevilla - _ 8 24 - 24 ' 8 32 24 - Tarragona - - - - 15 - 15 - - 15 Valencia 11 - 4 12 32 7 25 12 7 20 6 6 TOTAL 18 0 105 307 30 277 91 32 400 193 37 77

6-Ton Portal Cranes

J. C. P. Over 30 20/10 10/0

Alicante 6 6 - - - 12 - 12 Almeria - - - - Aviles - 1 - - - 1 - 1 Barcelona 16 - 2 - 2 8 8 18 - - Bilbao 2 16 16 - - - 21 11 32 Cartagena - 6 12 - - - 18 - 18 Gijon-Musel 12 - 1 - 1 12 - 13 1 La Coruna - 4 - - - 4 - 4 - Malaga - 2 - - - 2 - 2 Palma de Mallorca 2 - - - - 2 - 2 - - - Pa3ajes 10 4 1 _ 1 14 - 15 _ i Santander 4 6 - - - 8 2 10 - Sevilla 8 - - - - 8 - 8 - Tarragona - - _ 6 6 - Valencia 2 -9 _ 13- TOTAL 89 61 4 4 129 21 154 1 1 2

12-Ton Portal Cranes J._C. P. Over 10

Alicante Almeria -

Avil6s - Barcelona 4 - - 4 (a) 8(a)a- - 8(a) Bilbao - 4 1 1 - - . 4 4 1 Cartagena - - La Coruna - Malaga - 2 - 2 - - 2 2 Palma de Mallorca - - - - Pasajes - -3 3 - 3- Santander 5- _- _ - 5 5 - Sevilla - a2 - - - 2 - 2 - Tarragona -- 2' - - - 2 - 2 Valencia = 48 _ 8 _ 8

TOTAL 4 28 4 2 2 23 9 34 4 (a) Plus 4 special cranes for discharging coal at existing wharf SPANISH PONIS PBRJICT

Hiscellaneous Cargo Handling Easipent

P1AWrl2R 7XUZ 1S 8T TRAILM MOSU CRE1 JnIB x.zR

Under lb be jtit- Avail Under To ee _ Wat- Avail- To be Ixist- Avail- Un,er lb be iat- Aval- Qnder T be llit- Avail- Pro- Pro- in ekble Pro - Pro eure Ing able pro- tiSg able Pro- Procured In able Pro- Procured inS able cure- cured in cure- Under in cwed in cure- unar in cur.- under in _nt u-der 1968 ent Prcs s 1968 under 1968 ment Project 1968 _nt Project Projet IProject 1968

P..t.0.1 J O .C _ P J.O.. J.C.P J.O.P..C.P J. C. P. J..P. J CP J.OP. ... JC.P. I

Alicante - - - 30 30 - 2 - - 12 14 - - - 3 - - - 3 - - - - -

Alueria 6 6 - 15 27 - 2 - - - 2 - 3 3 1 - 1 - a 2 - 2 - 4 Barcelo - - 4 - 4 ------4 4-I

Bilbao - - 26 - 26 - 38 - - - 38 33 - 33 18 - - 8 26 6 _ 11 - 17

Cadiz - - 10 12 22 - 6 - - - 6 - _- 2 1 3 - - - - - Cartagea - - - 12 12 10 - 30 - 11 51 - - 1 2 3 2 - 4 - 6 0Jmon, ael - - 6 - 6 - - _- _ - 12 12 - _ 2 3 5 - - -

Huelva - - 6 6 - - - - 2 2 _ - - 2 _ _ 2 4 2 - 2 2 6 La Corur _ _ 6 8 14 - - - _ - - 2 2 - - - - m'J.,p _ 4 - 4 - - - 1 - - - 1 2 - - - 2

Pal de M-llora - - 10 14 - 15 _ _ - 15 -4 - _ 4 - - -

Paajaee - - 25 25 - 15 _ _ 19 34 _ _ _ - _ 7 2 9 1 _ 2 - 3

Santander - - 4 - 4 - - - - 4- - 2 4 10 - - -

Sevinla - - - 14 14 - 9 - - - 9 - 5 5 2 _ 2 - 4 - _ A 1 5

Terra - - 8 14 22 ------4 4 3 - 3 5 11 3 - - - 3

Valencia - 16 16 26 58 - 30 - _ 4 34 - - 4 8 2 1 15 5 3 7 5 20

Vigo - - 6 14 20 - 24 - - 8 32 - 5 5 4 - 2 2 8 - - 2 - 2

Pontevedra - - - 3 3 -1 1 - 3 3 - - 1 2 3 - - - - - Villagreia de Arca - - 2 4 6 _ 2 - _ 1 3 - 5 5 1 - _ 2 3

Unallocated - - 100 - 100 - 7 - 2C0 - 207 67 67 - - _ _ - _ _ _ _ _

ID!L 6 22 196 193 12 10 150 30 200 58 448 100 37 137 49 8 25 -.3 12' 23 3 34 8 68 Appendix 3

SPl'TSJI- POPiTS PROJECT

Supplementary Information on Project Items

1. Barcelona (Map 2)

Construction Items

The i?ort of Barcelona lies in an artificial harbor. Historically, this has been developed from a small harbor with main and secondary break- waters, by extending the main breakwater parallel to the coast, building new secondary breakwaters, and adopting the earlier secondary breakwaters successively for use as piers.

This process is being continued in the present project. Item 1 (c) of the project estimate comprises the underwater part of a main break- water extensior. Item 1 (b) is the conversion of what was originally a secondary breakwater, now replaced by one recently constructed. It will be used initially for discharging petroleum, at a later date for general cargo. The breakwater extension, including its superstructure to be constructed subsequently, will give additional protection to item 1 (b) and to the new general cargo berth, item 1 (a). It will also protect a 2,000-meter fron- tage aloni which future development of the port is foreseen.

Some 3,888 meters of berthage is allocated to general cargo. However, a pronortion of this is of shallow depth and inconveniently laid out and will become increasingly unsuited to modern shipping. In 1961 , an average of 595 tons per meter was handled at this berthage. This figure is aopreciably higher than is often achieved for such cargo under condi- tions resembling those of Barcelora in other European and North American ports. For future planning, DGPSM has used the more conservative index of 500 tons per meter per year, a cormmonly recommended figure.

With the construction of item 1 (a) of the project and the re- lease of the 584-meter YMuelle de San Beltran through the construction of item 1 (b) and allowing for the use of 250 meters of existing general car- go berthage at the M4uelle de Rompeolas for bulk dry cargo, 5,000 meters will be available for general cargo. At 500 tons per meter this corre- sponds to a traffic of 2.5 million tons, the estimate for 1968/69.

Item 1 (b) of the project will provide 417 meters of berthage for the time being for handling CAIPSA oil products and chemical liquids. This berthage should be just sufficient for the h,000,000 tons of such cargo ex- pected in 1970 for which it is envisaged that new accommodaticn will be built alongside the extended main breakwiater and new secondary breakwater, item 1 (b) becoming available for general cargo.

With the completion of the project items, about 1,100 meters will be allocated to miscellaneous dry bulk cargo. This is appropriate for the traffic which is expected to rise frorm 2,560,000 tons in 1968 to 2,685,000 tons in 1973. ADpendix 3 Page 2

Equipment

In 1968, there will be 94 quay cranes allocated for general cargo, assuming that all 22-ton cranes, 3-ton cranes, and fourteen of the 6-ton cranes are so used (see Appendix 1). At the traffic level foreseen, viz. 2,390,000 tons, these would be called upon to handle 25,000 tons each per year. This is a relatively high figure, and it can be expected that the cranes would need to be supplemented by ships' gear.

In 1968, apart from the four special cranes handling an expected 950,000 tons of coal, there will be four 6-ton cranes and eight 12-ton cranes handling miscellaneous bulk cargo. Excluding coal, grain (handled at elevators) and potash (handled at a private installation), there will be about 735,000 tons of this cargo. This represents an output per year of, say, 36,750 tons per 6-ton crane and 73,500 tons per 12-ton crane. Bearing in mind the heterogeneous nature of the cargo and the small parcels in which much of it is handled, this is as much as can be expected.

2. Huelva (Map 3)

Fishing Industry

At Huelva, apart from the mrinerals loading iers described in the text, present port facilities consist principally of an 8-meter deep margi- nal wharf, 1,200 meters long, the Muelle de Levante which is used for gen- eral cargo and fishing industry purposes. The structure does not permit dredging to a greater depth; moreover, the wharf is sited above the conflu- ence of the rivers Odiel and Tinto, where greater depths rapidly silt up. Accordingly, as described in the text, future general cargo and other de- velopment will take place below the Rio Ti.nto; and the Muelle de Levante will be used entirely for fishing purposes. Careful analysis by the mission indicated that the 1,200-meter length of the wharf will be just sufficient for the tonnage of landings expected after 1968, allowing for double berthing.

General Cargo

General cargo will ultimately be handled at the 500-meter marginal wharf, item 2 (c) of the project. Unfortunately, because of the need for hydraulic studies in connectior with the wharf, it will not be completed un- til 1969, by which time general cargo traffic is expected to be 260,000 tons, rising in 1973 to 370,000 tons. The former figure is about the optimum ca- pacity of the wharf. In the meantime and pending further extension, it will be necessary to deal with the traffic by continuing to use the Muelle de Levante partly for general cargo and to adopt special measures to eliminate congestior as far as possible. Appendix. 3 Page 3

Bulk Dry Cargo

The minerals loading installation, item 2 (a), will be equipped with two 1,500-tons-per-hour loaders. It is estimated that with continuous working it could load 2 million tons per year with a berth occupancy of about 30 per cent, the latter being a somewhat low figure. Loadings by Rio Tinto and the small mines are expected to continue at about 1 million tons per annum, and it is also proposed to provide equipment suitable for loading miscellaneous dry bulk cargo (other than cement) of about 0.5 million tons in 1968 and 0.7 million tons in 1973. Should the Tharsis Company finally decide to make use of the installation, as they well may do, their export, estimated at 1.5 million tons per annum, would bring the 1973 total to about 3.2 million tons. This might exceed the economic capacity of the installa- tion as it stands; however, any extensions required would be comparatively inexpensive. Cement loading will probably be dealt with at a new privately- owned facility.

However, no definite provision has yet been made for the dischar- ging of miscellaneous dry bulk cargo (phosphate, coal, copper concentrates, etc.) estimated to amount to 890,000 tons in 1968 and 1,350,000 tons in 1973. This also may be provided for partly by private enterprise. The item will be one of the more important ones to be examined in the review of additional requirements referred to in the text.

Bulk Liquid Cargo

The position regarding the new petroleum pier (item 2(b) of the project estimate) and the related channel requirements are discussed in the text.

Equipment

Only minor items of equipment are included in the project (items 2 (b) and (i)), it being proposed to provide quay cranes at the new general cargo berth iritially by transferring the existing cranes from the Muelle de Levante.

3. La Luz y Las Palmas (Map 4)

Construction Items

Fishing Industry Facilities

The berthage available for fishing vessels is in the existing har- bor and is insufficient. The movement of the many craft involved is begin- ning to congest the harbor and hamper tanker, passenger vessel, and general cargo movements. It is, therefore, intended to build a new basin princioally for fishing vessels, using the area at present occupied by fishing craft for Appendix 3 Page 4

additional general cargo berthage. The sea bed at the site of the new basin shelves steeply, as it does on most parts af the coast of the island and the depth of water at the extreme end of the ma*n breakwater reaches 30 meters.- However, after an extensive investigation of other sites, some at a consid- erable distance from La Luz, this was judged the most suitable.

After examining the project in detail, the mission concluded that about 1,300 meters of fish quay would be needed in 1969 and about 1,800 meters in 1974. 750 meters of quay to be completed in 1970 and included in the part of the project to be financed solely by the Government. A further 900 meters are to be completed in 1972, providing in total 1,650 meters com- pared with the 1,800 meters mentioned above. It is evident that in the mean- time there will be a substantial shortage of accommodation which must be met by improvised measures.

General Cargo

In 1964, 1,379,000 tons of general cargo were handled. It is dif- ficult to arrive at a ton/meter index for this, since some was handled on the main breakwater oil wharf and some at the Espigon de Castillo, used mainly for fish; however, a level of about 650 tons per meter was probably achieved. This is a good performance, but it was achieved at the cost of some congestion and pro bly uneconomic overtime. In future planning, given the nature of the cargo and the disciplined island labor, an index of 600 tons per meter is being used. When project items 3 (b) and (c) are complete, 2,635 meters will be allocated to general cargo, providing a capacity of 1.6 million tons, which is the estimated cargo to be handled in 1968/69. Equipment

The project includes no equipment for La Luz. 4. Pasajes (Map 5) General

The port facilities of Pasajes lie in a small harbbr surrounded by mountains. The possibility of extension is physically limited; should cargo traffic and fish landings increase beyond the levels forecast for 1973, it will Drobably be necessary to establish facilities elsewihere. Fishing Industry

About 850 meters of quay are at present used by the fishing in- dustry; including 450 meters in private hands. This is insufficient for present requirements and much congestion exists. With the completion of items 4 (c) and (d) of the project, about 1,540 meters will be available. After a careful analysis, the mission concluded that this will be sufficient for the activity forecast for 1973, providing vessels are moored in pairs when necessary. Appendix 3 Page 5

General Cargo

At present, 1,077 meters of quay are allocated for general cargo. Much of it is shallow depth and is inconveniently short lengths. In 196h, 716,266 tons of general cargo were handled. This throughput, representing 665 tons per meter, was, however, achieved at the expense of considerable congestion and uneconomic working. For future planning, an index of 550 tons per meter is being used, a figure more suited to traffic and port conditions. Because of its shallow depth, much of the existing berthage will become increasingly less suitable, even for coastal traffic.

With the addition of the portion of item 4 (b) to be used for general cargo, 1,225 meters of quay will be available for general cargo. At 550 tons per meter this gives a capacity of 67h,000 tons per annum, which is close to the 700,000 tons of cargo forecast for 1968-1973.

Bulk Dry Cargo

2.035,000 tons of dry bulk cargo are expected to be handled in 1968, rising to 2,300,000 tons in 1973. Of this, 960,000 tons in 1968 and 1,135,000 tons in 1973 would be handled at privately-operated berths, leaving 1,075,000-1,165,000 tons to be handled by the JOSP. For this, with the addition of part of item 4 (b) of the project, 857 meters will be avail- able. However, in this case also, much of the existing berthage is unsuited to modern requirements.

Equipment

In 1968, there will be about 25 cranes for general cargo, assuming that all the 3-ton cranes, and 4 of the 6-ton cranes are so allocated (see Appendix 1). They would be called upon to handle 28,000 tons per annum each. Bearing in mind the age and obsolescence of some cranes and the short quay lengths available, this is a h-igh figure; it may be necessary to sup- plement the cranes with ships' gear.

Of the 1,075,000 tons of miscellaneous dry bulk cargo expected to be handled by the JOSP in 1968, about 85 000 tons would be handled by the conveyors to be provided under item 4 (hs of the project. The remaining 990,000 tons would be handled by eleven 6-ton and three 12-ton cranes, re- quiring annual handling rates of, say, 58,000 tons per 6-ton and 116,000 tons per 12-ton crane. In view of the heterogeneous nature of the cargo, the small parcels in which it is often carried, and the way in which the quays are divided, this is as much as can be expected.

5. Equipment in Other Ports

Quay Cranes

The project includes cranes to be used in 12 other iports, Alicante, Almeria, Aviles, Bilbao, Cartagena, La Coruna, Malaga, Palma de Majorca, Appendix 3 Page 6

Santander, Sevilla, Tarragona, and Valencia. The allocation of cranes is given in Appendix 1. The totals of the various categories included in the project are as follows:

3-ton 54

6-ton 57

12-ton 21

132

Quay Cranes for General Cargo

Assuming that about 10 per cent of the available 6-ton cranes are used for general cargo, 285 3- and 6-ton cranes will be available in 1968 in these ports to deal with an estimated 6,909,000 tons of general cargo. This represents 24,242 tons per annum per crane. Bearing in mind that 116 of these cranes will then be over twenty years old, many being obsolete in design, this figure is as high a figure as can be expected.

A 25 per cent increase in this traffic is expected by 1973, so that with the write-off of obsolete cranes a further investment may then be necessary.

Quay Cranes for Bulk Dry Cargo

The bulk dry cargo to be handled by the JOSP's of these ports in 1968, excluding cargo handled by special installations or considered more suitable for handling by conveyors, will be about 6,885,000 tons. Assuming that 90 per cent of the JOSP 6-ton and all the JOSP 12-ton cranes are used, there will be 97 6-ton and 23 12-ton cranes available to handle the traffic, mostly new cranes. This would entail the 6-ton cranes handling an average of about 48,000 tons per annum and the 12-ton cranes hardling an average of about 96,000 tons. Bearing in mind the heterogeneous nature of the material and the small consignments in which it is often carried, considerations which often inhibit continuous or even double-shift working, these figures probably represent the most which can be expected.

An increase of 20 per cent in this traffic is expected by 1973 so that further investment may be required. However, this may be made in han- dling equipment other than cranes.

Miscellaneous Cargo Handling Equipment

The project includes miscellaneous cargo handling equipment allo- cated to 16 non-project ports, viz. those listed (exceDt Avlies) together with Cadiz, Gijon,, Vigo, Pontevedra, and Villagarcia de Arosa. Appendix 3 Page 7

The equipment comprises:

145 forklifts

180 platform trucks 85 trailers

15 mobile cranes

32 tractor shovels.

Its allocation is given in Appendix 2. Allowing for the small amount of equipment provided by users, the equipment available in 1968 will be appropriate to the level of traffic foreseen in the oorts concerned.

6. Equipment for General Use

This equipment is described in Appendix 4, page 5. SPANISH PORTS PROJECT

Estimated Cost of Proee¢t Items for Which loan Funds Will Ba Disbursed

Foreign Exchange Local Costs Item Dwscrintvion Cumponent (illion Pesetas Total cunivalent)

Port of Barcelona

1 (a) rum.exgnuion of wharf alongside breakwater with 12-m. depth for genepra- cargo 68.6 119.8 188.4

(b) Widening ;of Contradique pier'to provide petroleum berthage, 419 m. long w1thbl2-m. depth 33*4 56.5 89.9

(c) Submeiged portion Of breakwater extension, 883 m. long 100.0 91.3 191.3

(d) Miscellaneous improvemen W to and now access roads, access railvaya,,;painga,"tran3it sheda, passenger terminals, etc. 83.6 137.4 221.0

(e) Slipway orx-aLs am passenger gangway 14.5 4.0 18.5

(f) 1.12-ton portal cranes, 4 special cranes for handling coal at Costa wharf, 43/3-ton portal cranes for general cargo, and miscellaneous equipment to be puvcased by the Junta Central de Puertos 184.0 50.5 234.5

(g) Reoodelling coal reception and despatch area at Costa wharf, including mechanical equipment 30.3 _22.6 2 Sub-total r Item DWsoription Foreign Exchange Local Costs Total Component (Million Pesetas Ecuivalent) Port ofiiuelva

Facilities' at New Port

2 (a) New two-berth mineraJi pier including handling equipment and shore facilities with 13 rm. depth 140.2. 95.5 235.7 (b) New two-bith prtrleumt pier excluding pipe lines and hose gantries VithC 13-.~ depth 26.9 29.9 56.8 (c) New 50,m.. general parg o,pier with 10-r. depth (prtto.tbe omjletd by end of 1968) 28.2 47.3 75.5 (d) Purchase of land - 10.0 10.0 (e) Road, rail, and service connectiona to facilities of new port including bridges over Rio Tinto and Esterz Domingo Rubio 115.5 152.8 268.3 Conversion of Levante Wharf for Fishing Industry Purposes

(f) Paildings, paving, reconstruction of service road, and miseellaneous items 17.8 29.5 47.3 Miscellaneouw

(g) Fish pier at Punta Umbria and pilotage pier 8.3 11.7 20.0

(h) Two conveyors 3.8 1.1 4.9

(i) Equipment to be procured by J. C. P. .8.2 6.0 Sub-total 345. 37290.2242 Foreign Exchange Local Costs Item esription Conet (Million Pesetes Total Equivalent)

Port of La Luz y Las Palioas

3 (a) General dredging in harbor 38.1 18.2 56.3

(b) New 30O-m.iC&stillo, 4harf with[ 9-m.idepth, including transit shed, paving,- and servicesji for general cargo 42.6 71.4 114.0

(c) Nev 825-m. Ribera wharf with 7-m, depth, including passenger/ cargo shed, paving services, dredging, alongside, and transfer of existing sllpways to new site,. for general cargo 62.1 104.0 166.1

(d) New rnsh dock including: breakwaters and access road only (part to beOcqbmpleted by end of 1968) 194.5 300.0 494.5 (e) Cladding to exicsting sheds, stores building and workshops, canteen, reconstruction of lighthouse, machine tools, and miscellaneous items 17.5 23.6

Sub-total 517.2 872.0

ve(Qm tC In( Iacal Coats Foreign Exchange (Million Pesetsa Item Descri1ption Component Eauivalent) Total Port oti'Pasai s

4 (a) Deepenilng exastlng principal basin to 10 m. including rock removal and. rock removal in iLproveoents to entrance channel 109.2 52.2 161.4

(b) New 297-in. wharf with 10-m. depth at Ribera de Lezo 40.4 67.6 108.0

(c) New 165-a. fish quay with 5-m. depth at San Pedro 20.4 22.9 43.3

(d) Reconstruction of 365-n. Trincherpe fish quay (6-m. depth) 18.3 30.7 49.0 (e) Paving, road access, railway connections and services at existing wharves, storage/general-purpose building, two traasit sheds, foot bridge, railway material, and miscellaneous items 43.8 61.6 105.4 (f) 2 conveyors, 34 grabs, 12 trailers, 1 mechanical screen, and miscellaneous equipment 6.2 1.7 7.9 (g) 8/3-ton, 4/6-ton, and 3/12-ton quay cranes, 7 mobile cranes, 2 tractor shovels, 15 forklifts, and miscellaneous equipment to be purehased by Junta Central de Puertos 77.1 21.5 98.6 (h) Remodelling coal reception and despatoh area, including meebanical equipient 18.5 13.8 32.3

(i) Mechanical equipment for loading miscellaneous bulk cargoes 14.8 ll.1 25.9 Sub-total 283.1 631.8 Local Costs Foreign Exchange (Million Pesetas Item Description Component Bauivalent) Total

EauiL=ent to Be. Purchased by Junts Central de Puertos for Other Ports

5 (a) 54/3-ton portal cranes 340.2 39.1 179.3

(b) 57/6-ton portal cranue 197.2 55.1 252.3

(c) 21/12-ton portal cranes 127.2 35.5 162.7

(d) 15/6-ton mobile aes and 32 tractor sbovel. 41.6 11.6 53.2

(e) 145/3-ton forklifts, 180/3-ton platform trucks, and 85 trailers 103.3 78.4 181.7 (r) Mechanical equipat for loading i-ceollaneon bulk cargoes at Alueria, Cartagena, Ia Coruna, and Santander (associated civil engineering work excluded)

Sub-total 698.5 j49.O

Ieuii,rt to Be Purchaed by Jnta Cenral de Puertos for Genral Usle

6 (a) 3/6-ton mobile cranes, 40 forklifts, 20 platform trucks, and 15 trailers 16.6 21.8 38.4

(b) 2 tug and 2/200-cu. a. hopper barges 40.6 25.9 66.5

(c) Navigational aids 200 9.6 29.6 Sub-total 77.2 -71 134.5

Grand total 2339.1 1.963.2

US$ E:uil t (38,985,000) (32,720,000) (7,705,000) Appendix 5

SPANISH PORTS PROJECT

I. Estimated Cost of Project Iterns Thor wT1iid4 Lno...A'ncs -:l1 not be Disbursed

(million pesetas)

A. Completion of Disbursement Items

Port and Item Expenditure by Post 1968 Total end of 1968 Expenditure Huelva 17 Completion of general cargo wharf -40.0 4O.0 La Luz y Las Palmas 27Completion of break- waters and access road for new fish dock 185.2 185.2 Sub-total 225.2 225.2

B. Other Items

Items essential to the functioning of Banl;-financed Items

Barcelona 1) Breakwater extension superstructure 51.0 203.8 254.8 Huelva 2) Dredging entrance channel 50.0 - 50.0

La Luz y Las Palmas 3) Modificatioft-jn existing breakwater in connection with construction of new fishing basiji-breakwaters 49.5 51.7 101.2 4) 750-meter-fishing industry quay in new.fishing harbor (Phase IIof scheme) 33.0 72.3 105.3 5) Paving, buildimngs and services in new fishing harbor 11.0 91.6 102.6 93.5 215.6 309.1 Sub-total 194.5 419.7 613.9 Total 194.5 644.6 839.1 US$ Equivalent (3,262,000) (10,743,000)(13,985,000) Appendix 5 Page 2

II. Approximate Co-st 0. Items Supplementary to the Project

(million pesetas)

Port and Item Expenditure by Post 1968 Total end of 196_ Expenditure Barcelona 1) Portal cranes for 770-meter general cargo berth 55.0 _ 55.0 2) Transit sheds for 770-meter general cargo berth 44.0 - 44.0 3) Miscellaneous equipment for 770- meter general cargo berth 15.0 - 15.0 4) Two additional bulk liquid cargo berths 50.0 40.0 90.0 5) 740-meter additional general cargo berthage including transit sheds and cranes, etc. - 44b.o 444.0 6) Misce'llaneous 10.0 50.0 60.0 174.0 534.0 708.0 Huelva 7) Possible additional cost of petro- leum pier 30.0 - 30.0 8) Maintenance workshop 5.1 - 5.1 9) Transit sheds at new 500-meter general cargo bertlh 22.0 22.0 44.0 10) 240-meter additional general cargo berth including transit sheds, cranes, etc. 22.0 89.2 111.2 11) Discharging berth for miscellaneous dry bulk cargo including cranes, etc. 66.0 139.2 205.2 12) Additional facilities for fishing industry 5.0 16.0 21.0 13) Miscellaneous 22.0 40.0 62.0 172.1 306.4 478.5 La Luz y Las Palimas 14) Demolition of Santa Catalina pier - 16.2 16.2 15) 900-meter fishing industry quay in new fishing harbor (Phase 3 of scheme) - 85.9 85.9 16) 700-meters new general cargo berthage with sheds, pavings, etc., at proposed Contradique de Las Palmas - m80.0 480.0 17) Miscellaneous - 30.0 30.0 - 612.1 612.1 Pasajes 1&TTrhansit shedding, paving and cranes at part of new Ribera de Lezo wharf - 42.0 42.0 19) 165-meter extension of new fishing industry quay at San Pedro 20.0 23.3 43.3 20.0 65.3 85.3 Total 366=1 1517.8 1,583.0 US$ Equivalent (6,102,000) (25,297,000)(31,383,000) Spanish Ports Project

Barcelona -Actual Traffic Volume 195922964 and Traffic Forecast 1965_.1973. In 1.000 tons.

U9 1960 1963. 1962 1963 1964 1965 U66 196 6o8 369U79u 1972 97 liquid Bulk Cargo

oil products 764 821 934 1,Q33 1,272 1,40ko 1,650 1,950 2,350 2,850 3,050 3,260 3,490 3,740 4,000 metbane ------100 500 700 900 1,000 1,000 1,000 chemicals ).69 4 31 _6 )ioo )n2 )3 0 125 )390 585 620 660 700 745 790 vegetable oils L. . - 454--0~ --- -- 5 60 6.J 70 70 -M 885 45 1097 1.372 1.512 1.760 L207O 34.880 k,21 5._25 5.5 5.860 Dry BuUl Cargo

loaded

pyrites 50 128 - 47 59 65 70 75 80 90 90 90 90 90 90 potash 342 1488 490 423 295 336 360 390 420 455 485 520 555 590 625 miscel1aneous 12 1 1 19 60 _ _- _ _ _ _

404 631 63 489 4314 432 430- 465 500 545 575 610 645 680 715 unloaded

coal 534 443 556 640 777 624 685 750 835 950 950 950 950 950 950 cereals 58 8o 384 267 253 311 335 360 390 420 425 430 440 450 465 fertiliser - - - - 104 313 115 120 125 125 95 65 40 20 - pyrites ) ) ) 65 )99 )104 115 125 135 150 150 150 150 15o 150 misall )372 )332 )395 )l13 )285 )256 90 90 95 95 95 100 100 105 10 miaceUaxua~~~~~~~~~~~~~~~~~~~~~~~~~s~~~~190 23, 24 27 280 285 .290 .295 300.

94 8 1 L 5 1.518 1.408 1530 L660 1.825 2.cS _95 1.80 1.970 1.970 1.970 General Cargo 1.7 0? 21 2.3 2320 21440 22365 2 2 26k 28 2n925 3.-0a

Fish 3 4 3 70 3 3 5 5 5 5 5 5 5 5 5

Total Port 3.Lo3 3.716 4.524 41478 5.4l8 5.668 6.O 6.545 7.53 8.40 29.510 1O020 10 660 5:615

^/ PrincipaUly noaded Spanish Ports Project

Huelva - Actual Port Traffic 1959-1964 and Traffic Forecast 1965-1973. In 1.000 tons.

1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 Liquid Bulk Cargo

loaded

oil products 47 - 65 65 61 - - - - 1.000 1.000 1.000 1.000 1.000 1.000 unloaded

oil products 192 188 228 222 257 399 500 crude oil 650 825 ------2.000 2.000 2.000 2.000 2.000 2.000 -192 188 228 222 257 ___ 500 650 82S 2.000 2.000 2.000 2.000 2.000 2.000 Dry Bulk Cargo loaded

pyrites 1,935 2,000 1,787 1,872 1,784 2,069 2,170 fertilizer 2,390 2,660 2,455 2,455 2,455 2,455 2,455 2,455 - 9 5 3 5 13 cezient 20 20 20 280 300 320 345 370 ------420 sulphur - 280 300 320 345 370 420 - - - - 11 40 miscellaneous 60 90 120 130 140 150 165 180 - 219 _101 88 63 36 20 __. S5. _8 85 8S 95 95 95 1.1 2.228 L9 1962 1.852 2.129 232o- LIU 2.2 la= 3Z70 '3.320 3,90 3.LSS 3570 unloaded

phosnhate 6 - 28 73 32 29 coal 30 30 30 630 690 750 810 870 17 105 77 103 95 139 945 copper (conc.) 90 90 90 90 95 100 110 120 - - - - 20 25 135 miscellaneous 30 40 50 60 70 80 90 90 9 - 31 28 22 30 45 70 5 _120 130 1J lSj0 165 180 32 105 136 204 19 218 190 220 255 80 9 1.060 1.150 1 1.350 General Cargo 261 164 112 105 131 82 100 150 200 240 260 290 320 3.A 370 Fish __2 _32 __9 40 _2 37 4565 70 80 90 95 100 105 Total 2500 277 2.473 2.59 2.487 2.865 3.085 3.S80 4.170 7.420 7.S8 7.760 7.955 8.140 89S Spanish Ports Project

la IU V las Palmas - Actual Port Traffic 1959-196. and Traffic Forecast 1965-1973. In 1.000 tons.

i2u 1960 1961 1962 1963 1964 1965 1966 I%7 1968 1969 1970 1921 1972 197 Liquid Bulk Cargo

loaded

oil products 1,800 1,693 1,757 1,681 1,788 1,794 1,840 1,895 1,945 2,000 2,090 2,185 2,285 2,390 2,500 water 400 Sl 557 605 481 514 590 680 785 900 950 1.005 1065 1130 1.200 2,200 2,204 2,314 2,286 2,269 2,308 2,430 2,575 .2,730 2,900 3,040 3,190 3,350 3,520 3,700 unloaded

oil products lj941 1,730 1,866 1,778 1,959 2,009 2,070 2,140 2,215 2,300 2,390 2,490 2,590 2,700 2,800 treanshibped-

oil products - - 26 .2 S 6 720 745 770 800 835 875 91S 9S0 1OC Total l.b.c. L 1 4 L& 12 4.802 S0 5.220 460 S 6.0066.265 6 6.855 7.170 7L Drv Bulk Cargo loaded

cereals 6 9 8 11 3 11 15 25 35 50 miscellanecous 50 50 50 50 50 10 14 17 28 24 4 S 10 1S -15 20 25 30 40 45

16 23 25 39 27 1S 20 35 __S0 65 -7-0 75 80 90 95 unloaded

cereals 84 86 88 74 96 115 120 125 145 160 165 170 175 180 185 miscellaneous 82 90 86 72 90 79 80 85 90 95 105 120 140 160 185 166 176 174 .146 186 194 200 210 235 270 290 315 340 370 General Garao

loaded 398 490 595 661 534 593 525 unloaded 535 545 560 605 655 705 755 810 340 423 554 516 560 786 820 860 905 950 1035 1-120 1200 128S 1370

738 913 1.149 l.lT-77 1.09-4 1.379 1.345 1.39 1.450 1,510 1,640 1.775 1.905 2.040 2.180 Fish 83 95 114 165 173 178 230 250 _26 280 295 1 340 360 -80 Total S 5.141 5.668 68 6.282 6.7°0 7.015 7.'S0 7.715 8.110 8.540 9.t10 9L9 S 10.000 10.525 Spanish Ports Project

Pasajes - Actual Traffic Volume 1959-1964 and Traffic Forecast 1965-1973. In 1.000 tons.

1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973

Liquid Bulk Cargo oil products 332' 370 390 374 442 483 520 565 665 770 850 940 1,040 1,150 1,270 miscelLaeous 15 - 3 32 38 52 93 50 50 50 50 50 55 55 55 55 147 409 422 412 494 576 570 _65 n5 820 900 995 1,095 1.205 1.325

Dry Bdlk Cargo

loaded

potash -0-8 100 200 325 500 53D 565 605 645 675 fertilizer - - - 20 98 20 20 20 20 is 25 30 30- 30 cenent _ - _ - - - 70 70 180 210 210 210 210 210 215 pyrites 84 193 231 0no 65 10 65 45 35 25 20 15 10 10 3 miscellaneous 77 69 65 50 67 55 35 35 40 40 45 45 50 50 SO 161 262 296 160 152 263 290 370 600 795 830 860 -JD5 945 f

unloaded coal 393 451 442 493 518 450 515 59o 760 980 980 980 98o 980 980 phosphate 34 57 55 18 12 22 40 40 45 45 50 55 55 60 60 pyrites 75 71 50 54 33 48 40 45 45 45 50 55 55 60 60 salt ------45 50 60 70 75 80 85 90 95 miscellaneous 110 60 100 125 95 95 100 100 11O no 120

612 639 647 660 659 645 735 820 l.OQO 1.240 1,265 1.280 1.290 1,310 1

Gen ral Car go 356 439 462 595 654 717 570 610 6 _700 700 700 700 700

Fish 47 60 65 69 72 76 80 85 90 95 100 10o 110 1j5 120

Total Port 1.523 1,809 1.892 1,896 2.031 2.277 2.245 03.070 3.650 37Za 3.940 4.100 4,275 4_445 SPANISH PORTS

Port of Barcelona

Revenues. Emnensem and Net Income Actual 19.6-1964: Estimated 196S-lWl (millions of Pesetas)

Actual Estimated As Of December 31 As of December 31 1961 1964 126Si 1966 1222 6222

I. OPERATINO REVENUES (Excluding Rate Increases)

Indirect Servicei Passengers 6.1 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 Harbor Dues 7.4 8.2 8.8 9.5 11.0 13.0 13.8 14.7 15.5 16.2 16.9 Wharfage 74.0 81.1 83.2 87.2 98.5 115.7 122.7 130.3 136.2 140.5 145.0 Fish 1.6 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 Petroleum S.9 .1 8.6 10.2 12.2 14.8 1S.9 17.0 18.2 19 20.9 Total Indirect Services 95.0 104.6 io8.6 114.9 129.7 151.5 160.4 170.0 177.9 184.2 190.8 Direst Services Berthing and Mooring 1.0 1.1 1.1 1.2 1.4 1.6 1.7 1.9 2.0 2.0 2.1 Portal Cranes 11.3 11.7 12.0 12.5 13.2 13.9 14.3 14.7 15.2 15.7 16.0 Other Cargo-handling Equipment 0.2 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 Occupation of Port Areas 9.7 9.6 9.9 10.4 10.9 11.5 11.8 12.1 12.5 12.9 13.2 Sale of Water 1.8 1.6 1.7 1.9 2.2 2.5 2.7 2.9 3.0 3.2 3.3 Sale of Electricity 0.4 0.8 0.8 0.9 1.0 1.2 1.3 1.4 1.4 1.5 1.6 Floating Equipment 0.9 0.5 o.6 o.6 0.7 0.8 0.9 0.9 1.0 1.1 1.1 Floating Dock and Slipways 6.o 5.8 6.2 6.7 7.7 9.2 9.8 10.4 11.0 11.5 Other 12.0 8.1 3.0 3.3 -1.S 4.0 4.8 S. 5.4 Total Direct Services 39.4 34.2 S.7 5.9 6.2 35.8 37.9 41.3 45.8 47.8 50.0 52.1 54.1 55.9 Concessions 15.7 16.8 17.9 19.4 22.3 26.6 28.3 30.0 31.6 33.0 34.6 Total Revenues (Excluding Rate Increases) 150.1 155.6 162.3 172.2 193.3 223.9 236.5 250.0 261.6 271.3 281.3 Additional Revenues from Rate Increases - - - 25.. 60.1 112.2 147.9 190.2 237.2 288.9 347.8 Total Onerating Revenues 150.1 155.6 123 197.2 253.4 336. 384.4 440.2 498.8 560.2 629.1

II. OPERATING EXPENSES Personnel 80.2 84.0 90.8 98.3 106.7 116.8 124.3 132.0 139.5 147.1 154.6 Office Equipment and Supplies 2.4 2.9 3.2 3.6 3.9 4.1 4.7 5.0 5.4 5.7 6.1 Other Material and Supplies 24.7 24.8 27.5 30.4 33.7 35.4 40.4 43.3 46.3 49.3 52.2 Maintenance 4.4 5.3 28.7 32.5 35.8 38.5 39.7 41.0 41.6 44.1 44.6 Contribution to Junta Central 3.3 6.3 6.5 9.9 12.7 16.8 19.2 22.0 24.9 28.0 31.5 Other Expenses 0.9 0.7 3.9 4.9 6.3 8.4 9.6 11.0 12.5 14.0 15.7 Depreciation 49.7 49.7 52.3 54.6 N64 73.8 91.S 91.2 87.4 84.8 83.7 Total Operating Expenses 165.6 173.? 212.9 234.2 263.6 293.8 329.4 345.5 357.6 373.0 388.4

III. NET OPERATING REVENUES (Lo3s) (15.5) (18.1) (50.6) (37.0) (10.2) 42.3 55.0 94.7 141.2 187.2 240.7

IV. INTEREST State Funds 11.9 14.8 - - - - - Proposed IBRD Loan - - 4.6 15.4 21 27.2 26.4 24.2 24.0 22.7 Total Interest 11.9 14.8 4.6 15.4 23.0 27.2 20 25.2 24.0 22.7 ie

V. NET INCOHE (Loss) (27.4) (32.9) (50.6) (41.6) (25.6) 19.3 27.8 68.3 116.0 163.2 218.0

VI. RATIOS Operating 110 112 131 119 104 87 86 78 72 67 Interest Earned - - 62 - 1.8 2.0 3.6 5.6 7.8 10.6 Return on Net Fixed Assets in Use - - - - - 1.0 1.19 2.03 3.0 4.1 5.0 Debt Service Coverage 2.9 2.1 - 3.8 3.5 5.0 4.0 4.0 4.9 5.8 6.9 SPANISH PORTS

Port of Barcelona

Balance Sheet Data Actual 1964: Etimated 1965-1973 (Millions of Pesetas Actual Estimated ASSETS As of December 31 As of December 31 CURLRENTASSETS 9j2i 669612826 9 97 72m Cash 70.0 16.1 18.0 19.9 22.0 23.8 25.4 27.0 41.2 112.7 Reserve Funds - - - 9.6 23.5 57.7 115.7 149.7 168.1 Temporary Cash Invest~ments 0.6 0.6 0.6 0.6 0.6 o.6 0.6 0.6 o.6 o.6 Accounts Receivable' 18.6 13.0 15.8 20.2 26.8 30.7 35.2 39.8 44.7 50.1 Stores 6.1 6.6 708.0 10.1 10711.3 11.8 12.3 Total Current Assets', 95.3~ 41.4 48.7 68.5 88.7 129-.6 194.4 248.0 343.8

ADVANCES TO STAFF 1.2 1.3 1.4 1.6 1.7 1.8 1.9 2.0 2.1 2.2

FIXED ASSETS Land 929.7 929.7 929.7 929.7 929.7 929.7 929.7 929.7 929.7 929.7 Basin 385.8 385.8 385.8 510.2 510.2 510.2 510.2 510.2 510.2 510.2 Works 2111.2 2167.8 2388.2 2906.3' 3599.1 3599.1 3853.9 3853.9 3853.9 4397.9 Equipment 531.3 566.8 686.0 711.5 1016.0 1016.o 1016.0 1016.0 1016.0 l016.o Miscellaneous Works and Equipment 1. 1.8 1.8 64.7 6-64.7 647 64. 64.7 64.7 Total ~~~~~~~~~~~~4019 ~ ~~~3959-.84391.5 5122.4 6197 6119.7 6374. 5 63745 67.5 61. Less Accumulated Depreciation 11391246.2 1300.8 1365.2 143.01530.5 1621.7 179. 79.2Z87. Net Fixed Assets in Use 276'5.9 2805.7 3090.7 3757.2 4680. 4589.2 4752.8 4665.4 4580.6 5041.0 Works and Equipment in Progress 404.6 640.6 849.2 27OZ.9 61.0 172.9 30.0 188.036o Total Fixed Assets 3170.5 3446.3 3939.9 4465.1 4741.7 4762.1 4782.8 4853.4 441.654. TOTAL ASSETS 326.0343.9 3982.7 455441. 82641.3 509. 191.7 58.

LIABILITIES

CURRET LIABILITIES 72.2 14.5 16.2 17.9 19.8 21.4 22.9 24.3 25.9 27.4

PROPOSED IBRD LOAN 224.7 386.o 494.6 484.8 464.3 442.6 419.7 395.5

TOTAL LIABILITIES 72214.5 2140-.9 403.9 514.4 506'.2 487.2 499422.9

EQUITY

STATE CAPITAL 826.9 1152.1 1466.1 .1737.0 1903.7 1924.8 1937.2 1977.0 1977.0 1977.0

REVALUATION RESERVE 2428.2 2428.2 2428.2 2428.2 2428.2 2428.2 2428.2 2428.2 2428.2 2428.2

GENERAL RESERVE - - - 9.6 23.5 57.7 115.7 149.7 168.1

SURPLUS (Deficit) (60.3) (110.9) (152.5) (178.1) (168.4) (154.5) (120.4) (62.4) 66.8 266.4

GIFT PROPERTY - BASIN - - 124.4 124.4 124.4 124.4 124.4 124.4 124.4

TOTAL EQUITY 319.839.4 3741.-8 4111.5 4297.5 4346.4 447.758.

TOTAL LIABILITIES AND)EQUIT 3267.0 3483.9 3982.? 4515.4 4811.9 4852.6 4914.3 5049.8 5191.7 5387.0

RATIOS Current Assets to Current Liabilities 1.3 2.5 2.5 2.7 3.5 4.1 5.7 8.0 9.6 12.5 Current Assets less Stores t.oCurrent Liabilities 1.2 2.0 2.1 2.3 2.9 3.7 5.2 7.5 9.1 12.1 Debt-Equity 0/100 0/100 6/94 9/91 10/90 10/90 9/91 9/91 8/92 7/93 SPANISH PORTS

Port of Barcelona

Cash Flow Statement Actual 1964: Estimated 1965-1973 (Millions ofapesetas Actual Estimated As of Decer1be"r 31 As of December 31 )1964 1t 191966 1967 1968 1969 1970 1971 1972 1964-1973 A. CASH REQUIRED

Capital Investments' iitited Prior to i,?.4 187.2 197.5 61.9 34.8 _ _ 676.8 Project .,i. 141.0 340.6 321.4 182.5 - - - - - 996.5 Other - 10.0 82.0 133.0 111.9 111.9 158.0 173.0 183.0 962.8 Total Capital Investii64nts . 206,X4 328.2 548.1 465.3 350.3 111.9 111.9 158.0 173.0 183.0 2,636.1 88.7

Debt Service Interest - Letter 'C"V'State Funds 14.8 ------14.8 Interest - Proposed IBRD Loan - _ 4.6 15.4 23.0 27.2 26.4 25.2 24.0 22.7 168.5 Repayments - Proposed IBRD Loan - - 9.8 20.5 21.7 22.9 24.2 99.1 Total Debt Service 14.8 - 4.6 15.4 23.0 37.0 46.9 46.9 46.9 46.9 282.4 9.5

Chanees in Working Capital -30.6 52.5 1.6 3.8 6.3 2.9 3.6 3.8 3.8 4.5 52.2 1.7

Staff Advances 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.0 0.1

Total Cash Recuired 190.7 380.8 554.4 484.6 379.7 151.9 162.5 208.8 223.8 234.5 2,971.7 100.0

B. CASH AVAILABLE

Net Operating Revenues (Loss) (18.1) (50.6) (37.0) (10.2) 42.3 55.0 94.7 141.2 187.2 240.7 645.2 21.7

Depreciation 49.7 52.3 54.6 64.5 73.8 91.5 91.2 87.4 84.8 83.7 733.5 24.7

Proposed IBRD Loan 224.7 161.3 108.6 - - - - - 494.6 16.6

Funds Proiided by the State Deficit including Depreciation 50.6 37.0 10.2 ------97.8 Debt Service - 4.6 15.4 - - 20.0 Capital Investments 78.0 274.6 272.4 Z4.3 166.7 21.1 12.4 19.l,110.3 Total Previded by the State 78.0 325.2 314.0 270.9 166.7 21.1 12.4 39.8 - - 1,228.1 41.3

Cash Available at Beginning of Year Cash Investments o.6 o.6 o.6 o.6 o.6 o.6 o.6 o.6 o.6 o.6 General Reserve Fund - - - 9.6 23.5 57.7 115.7 149.7 Cash on Hand - in Banks 151.1 70.0 16.1 18.0 19.9 22.0 23.8 25.4 27.0 41.2 Total Cash, Beginning of Year 151.7 70.6 16.7 18.6 20.5 32.2 47.9 83.7 143.3 191.5

Total Cash Available 397.5 573.0 505.1 411.9 199.8 246.2 352.1 415.3 515.9 3,101.4 104.3

Cumulative Cash l;osition 70.6 16.7 18.6 20.5 32.2 47.9 83.7 143.3 191.5 281.4

Increase in Cash Position 129.7 4.3 SPANISH PORTS

Port of Huelva

jRt enes Ex`,enese a-nd Net Inoci Acul163-.964: Estie.~ted 1965-193 (Mlillions of Pesetns)

Actual 1~stirnted AR of DepmPTS-, 31 As of December 3-1 '12621964 1961 -~~~1966 .1967 1981969 .)970 1971 1972 1973 I. OPAIN M (Excluding Rate Increase s)

Indirect Services Passengers 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Harbor Dues 0.7 0.8 0.8 0.9 1.1 1.9 2.0 2.1 2.1 2.1 2.2 Wharfage 18.5 21.6 22.5 25.5 29.1 38.6 40.0 41.4 43.1 44.7 46.9 Fish 12.9 15.1 17.0 20.4 23.8 27.2 30.6 34.0 35.9 37.8 39.7 Petroleum 1.3 2.0 2.5 3.3 4.1 11.3 J.1.3 11.3 11.3 11.3 11.3 Special Charge IQ0.3 11.2 1. - -2. Total Indirect Services 43.9 50.8 54.6 63.4 73.2 79.1 84.0 88.9 92.5 96.0 100.2 Direct Services Berthing end Mooring 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 Portal Crones 4.4 4.1 4.3 4.8 5.5 7.3 7.6 7.9 8.2 8.5 8.9 Other cargo-handling equipment 5.7 7.6 7.9 9.2 10.5 16.6 17.1 17.6 18.2 18.7 19.4 occupation of Port Areas 2.1 4.4 4.6 5.2 6.0 7.9 8.2 8.5 9.0 9.3 9.6 Sale of Water 0.8 0.8 0.9 1.0 1.2 2.1 2.1 2.2 2.2 2.2 2.3 Sale of Electricity 0.3 0.4 0.4 0.5 0.6 1.1 1.1 1.1 1.2 1.2 1.2 Weighing 0.6 0.6 0.6 0.7 0.8 1.1 1.1 1.1. 1.24 1.2 1.3 Other 070.1 0.2 0.2 0.2 0.4 0.4 0.Q.4 0.. OL . Total Direct Services 14.7 18.1 19.0 21.7 24.9 36.6 37.7 38.9 40.5 41.6 43.3

Concessions 3.3 2.7 2.9 3.5 4.1 7.3 7.5 7.6 7.8 8.0 8.3

Total Revenues (excluding __ __ Rate Increases) 6-1.9 76. _95 886122173-T 129.2 135. 14o.8 145.6 151.8 Additional Revenues Resulting frem Rate Increases -- - 10.1 24.9 47.5 70.4 98.0 129.7 162.1 185.5

Total Operating Revenues 61.9 71.6 76.5 98-.7 127. 1 170.5 199.6 233.4 270.5 307.7 337.3

IL *OPERATING EXPENSES Personnel 44.8 47.5 51.5 56.5 61.8 75.8 79.7 83.6 87.6 91.5 95.7 office Equipment and Supplies 1.1 1.4 1.6 1.8 2.0 2.5 2.6 2.8 2.9 3.2 3.3 other Materiel and Supplies 13.0 14.7 16.4 18.3 20.4. 25.2 26.9 28.5 30.2 31.8 33.6 Maintenance - - 8.3 8.5 11.6 13.7 15.0 17.7 18.0 18.4 18.6 Contribution to Junta Central 4.8 3.0 3.1 4.9 6.4 8.5 10.0 11.7 13.5 15.4 16.9 Other Expenses 0.3 0.2 1.2 1.5 1.9 2.7 3.0 3.5 4.1 4.6 5.1 Depreciation 18.5 19.1~ 20.1. 20.8 21328.9 36.73.94.7 4.6 45 Total Operating Expenses 82.5 85.9 102.2 11-2.3 125.4 157.3 173.9 182.7 202.0 210.5 218.8 III. NET OPERATING REVENUES (Loss) (20.6) (14.3) (25.7) (13.6) 1.7 13.2 25.7 50.7 68.5 97.2 118.5 IV.' INTEREST State Funds 2.3 2.5 ------Proposed IBRD) Loan -7 1.8 6.4 11.9 17717.1I 16.4 15.6 1- Total Interest 2.3 2.5 -1.8 6.4 1-1.9 17.7 17.1 16.4 15.6 14.8l

V. NET INCoH-E (Loss) (2.) (68 2-5.7) TU5-) (.)13813. 218. O.I VI. RATIOS Operating 133 -120 134 114 99 92 87 78 75 68 65 Interest Earned -- - 0.3 1.1 1.5 3.0 4.2 6.2 8.0 Return on Met Fixed Assets in Use ---- 0.1 0.9 1.4 2.4 2.9 4.0 5.0 Debt Service Caverag'e --- 4.0 3.6 3.5 2.6 2.8 3.7 4.7 5*4 SPANISH PORTS

Port of Huelva

Balance Sheet Data Actual l964: Estimated1965-l973 Actual (Mlin fP 7Esti-mated ASS= T~~~s-of December 31 sofecemqber 31 36A ~~1965 19267 1968 1969 1970 1971 1972 CURRENT ASSETS Cash 49.2 8.2 9.2 10.4 12.8 13.7 14.8 70.0 146.4 267.1 Reserve Funds - - - - 0.7 4.7 21.5 47.5 81.1 92.3 Accounts Receiv-able 2.5 6.1 7.9 10.2 13.6 16.0 18.6 21.6 24.6 27.0 Stores 1.4 1.7 2.0 242.8 2.8 293.0 Total Current Assets 53116.0o9. 23.0 29937.2 57.8 142.125.

ADVANCES TO STAFF 1.6 1.7 1.8 2.0 2.5 2.6 2.7 2.9 3.0 3.1

FIXED ASSETS land 565.8 565.8 575.8 575.9 657.8 714.6 840.0 936.2 936.2 936.2 Basin 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3 Works 4.85.5' 492.2 452.2 893.0 1205.3 1369.8, 1471.4 1471.3 1471.4 3471.4 Equipment 334.9- 34.8.2 354.2 354.2 359.1 359.1 389.8 389.8 389.8 389.8 Miscellaneous Works and Equipment -. Z.------262.2 262.2 262..2. 262.2 Total 1397.5 1417.5 1393.5 1834.3 2233.5 2454.8 2974.7 3070.8 3070.9 3070.9 Lass Accumulated Depreciatian 453553 476.1 497. 526.3 56~. 57 643.5 689.2 734.8 Net Fixed Assets in Use 962.2 962.2 917.4 1336.9 1707.2 1891.8 2376.8 2427.3 2381.7 2336.1 Works and Equipment in Progress 16.6- 55729 189.8 212-.5 263.0 - - - Total Fixed Assets 978.8 1017.9 1216.7 1526.7 1919.7 2154.8 23-76.8 24.27.3 2381.7 2336.1

TOTAL ASSETS 1033.5 1035.6 1237.6 1551.7 1952.1 2194.6 2437.3 2572.3 6--_ 2728.7

IJABILITIES

CURRENT LIABILITIES 17.1 7.4 8.2 9.4 11.6 12.2 13.2 14.z 0 15.0 15.7

PROPOSED IBM1)LOAN - - 77.8 171.1 321.4 31.5.0 301.6 287.5 272.6 256.9

TOTAL LIABILITIES 17.1 7.4 86.0 180.5 333.0 3T27.-2 -31-48 301.5 22'7.6 272.6

EQUIT

STATE CAPITAL 283.1 320.6 459.4 683.7 848.4 1031.7 1127.8 1127.8 1127.8 1127.8

REVALUATICN REFSERVE 773.0 773.0 773.0 773.0 773.0 773.0, 773.0 773.0 773.0 773.0

GENERAL. RESERVE - - - - 0.7 4,..7 21.5 47.5 8 1.1 92.3

SURPLUS (Deficit) (39.7) (65.4) CR0.8) (85.5) (84.9) (00.8) (44.0) (37'9) 9.9 102.6

GIFT PROPERTY.- LAND ---- 81.9 138.8 264.2 360.4 360.4 360.4

TOTAL EQUIT 1016.4 1028.2 1151.6 1371.2 16-12. 107. 2122-.5 227-0 .8 2 35-2.2 25.

TOTAL IJABILITIES AND EQUITY 1033.5 1035.6 1237.6 1551.7 1952.1 2%6 24_37.3 T252.3 263'2.8 2728.7

RATIOS Current Assets to Current Liabilities 3.1 2.2 2.3 2.4 2.6 3.0 .41.0.1 117.0 24,.8 Current Assets Less Stores to Current Liabilities 301.9 2.1. 2.2 2.3 2.2 /,. 29 1(h.8 24.6 Debt-Equity 0/100 0/100 6/94 11/89 17/83 14/86 12/88 11/89 10/90 9/91 SPANISH PORTS

Port of Huelva

Cash Flow Statement Actual 1964: Estimated 1965-1973 (Millions of Pesetas) Actual Estimated As of December 31 As of December 31 1264 ], 12625167 227 J21')6 1970 191 a 1964-1973 CASH REQUIRED

Capital Investments Initiated Prior to 1964 14.4 6.7 ------21.1 Project 3.3 52.4 199.6 271.3 197.9 40.0 - - - _ 764.5 Other . - 20.0 60.0 142.1 175.0 131.4 _ - _ 528.5 Total Capital Investments 17.7 59.1 219.6 331.3 340.0 215.0 131.4 - - _ 1314.1 87.4

Debt Service Interest - Letter *Cn State Funds 2.5 _ ------2.5 Interest - Proposed IBRD Loan - - 1.8 6.4 11.9 17.7 17.1 16.4 15.6 14.8 101.7 Repayments - Proposed IBRD Loan - _ - - - 6.4 13.4 14.1 14.9 15.7 64 1 Total Debt Service 2.5 - 1.8 11.9 24.1 30.5 30.5 30.5 30.5 8.7 11.2

Changes in Working Carital (7.9) 13.7 1.3 1.5 1.6 1.6 1.8 2.3 2.2 1.6 19.7 1.3

Staff Advances (O.1) 0.1 0.1 0.2 0.5 0.1 0.1 0.2 0.1 0.1 1.4 0.1 Total Cash Required 12.2 72.9 222.8 339.4 .2408 3.30 32.8 32.2 1503.9 100.0

CASH AVAILABLE

Net Operating Revenues (Loss) (14.3) (25.7) (13.6) 1.7 13.2 25.7 50.7 68.5 97.2 118.5 321.9 21.4

Depreciation 19.1 20.1 20.8 21.3 28.9 36.7 34.9 45.7 45.6 45.6 318.7 21.2

Proposed IBRD Loan - - 77.8 93.3 150.3 - - - - 321.4 21.4

Funds Provided by the State Deficit including Depreciation - 25.7 13.6 - - - _- - 39.3 Debt Service - - 1.8 4.7 - - - - - 6.5 Capital Investments 9.1 11.8 123.4 219.6 64 183.3 .l- - - 808.0 Total Provided by the State 9.1 37.5 138.8 224.3 164.7 183.3 961 _ - -

Cash Available at Beginning of Year Cash On hand - in Banks 47.5 49.2 8.2 9.2 10.4 12.8 13.7 14.8 70.0 146.4 General Reserve Fund - - - - 0.7 4.7 21.5 47.5 81.1 Total Cash at Beginning of Year 47.5 49.2 8.2 9.2 1 0. 184 13. 117.5 227.5

Total Cash Available 61.4 81.1 232.0 349.8 367.5 259.2 200.1 150.5 260.3 391.6 1815.8 120.7 Cumulative Cash Position 49.2 8.2 9.2 10.4 13.5 18.4 36.3 117.5 227.5 359.4

Increase in Cash Position 311.9 20.7 SPANISH PCRTS

Port of La Luz y Las Palmasa

Revenues, Epnses andi Not IncoreB Actual 196-3-19614; Estimated 1965-1973 (Millions or Pesetas) Actual Estimated As of Decemb=er 31As of December 31 1963 -1-96) 1965 1966 1967 1968 161901971 1972 1973 I. OPERATING REVENUES (Excluding Rate increases) Indiirect Services Passengers 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 Harbor Dues 13.3 ]J4.9 15.3 1-5.9 16.5 17.2 18.1 19.0 20.0 21.1 22.2 Wharfage 18.9 21.0 20.7 21.7 22.9 214.1 27.3 28.1 30.2 32.14 314.9 Fish 10.2 11.2 114.6 15.6 16.7 17.7 18.7 20.0 20.9 22.6 214.0 Petrolewm -15.8 17.6 18.2 18.7 19.3 20.0 20.8 21.8 22.7 23.7 24.7 TotaLl Indirect Services 'T 3O70.1 _73.2 -1C73: 7 do.)-9-0.2 =10I I077I Direct Services er~thing 2.3 2.3 2.14 2.5 2.6 2.7 2.8 3.0 3.1 3.3 3.5 Portal Cranes 1.1 3.6 3.6 3.8 14.0 14.2 14.8 4.9 5.2 5.6 6.1 other Cargo-handiling Equipment 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Occupation of Port Areas 5.8 5.6 5.5 5.8 6.1 6.14 7.3 7.5 8.0 8.7 9.3 Sale of H4ater 8.9 10.0 11.14 13.1 15.1 17.14 18.3 19.14 20.6 21.8 23.2 Sale of Electricity 0.2 0.3 0.3 0.3 0.14 0.14 o.14 0.14 0.5 0.5 0.5 Floatirig Equipment 0.14 0.5 0.5 0.5 0.5 0.5 0.6 o..7 0.7 0.7 0.7 Other 1.14 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Total Direct Services 20.2 2Ii7_f._ --MT -2-- 32-.0 -- 776-7iTF._0= Concessions 3.3 3.3 3.14 3.5 3.6 3.8 14.0 14.2 14.14 14.7 14.9 Total Revenues (Excludiing Rate In_c_r-eases) 83.0 91.9 97.5 103.1 109.14 116.1 1214.8 130.? 138.0 166.8 155.7 Additional Revenues from Rate. Increases - - 2 2.1 27.2 45.8 69.6 96.8 13o..4 172.2 222.5

Total Operating Revenues 3.0 =9 T676 734:4= 2273 **fa7. 3IT. 378.2

II. OPERATING EXPENSES Personnel ~~~~~37.338.5 141.14 1414.6 147.6 50.8 53.9 57.0 60.14 63.8 67.0 Office Equipuernt and Supplias 0.9 1.9 2.2 2.14 2.6 2.8 3.0 3.3 3.5 3.7 3.9 Other M4aterials and Supplies 9.1 16.7 18.5 20.14 22.14 214.1 26.0 27.9 29.8 31.8 33.7 Maintenance 0.1 - 10.2 .11.0 12.6 14.6 17.0 19.2 20.6 21.8 23.3 Contribution to Junta Central 2.1 3.6 3.9 5.8 6.8 8.1 9.7 11.4 J.3.4 16.0 18.9 Other Expenses 0.1 0.1 1.5 1.7 2.1 2.14 2.9 3.4 4.0 14.7 5.7 Depreciation 23.3 23.8 23.5 26.9 26.8 29.5 32.14 39.1 115.u 1414.8 h. Total Operating Expenses 7T2.9 lrB9D I2 I3273 144.9 1617.3 T?5:' 7 199.2

III. NET OPERATING REVENUES(Loesa) 10.1 7.3 (3.8) 2.4 15.7 29.6 49.5 66.2 91.7 132.4 179.0

IV. INrEREST St-a-te huns 0.3 o.14 ------Proposed IBRD Loan - -- 1.9 6.8 11.2 14.5 14.0 13412.8 12.1 Total Interest 0.3 0.14 - 1.9 6.8 _T__ f_013.41281_.

V. NET INCOME(Loss) 9.8 6.9 (3.8) 0.5 8.9 18.4 35.0 52.2 78.3 119.6 166.9

VI. RATIOS Operating 88. 92 104 98 89 82. 75 71 66 58 53 Interest Eai~ned 34. 18. - 1.3 2.3 2.6 3.4 4.7 6.s 10.3 .14.8 Return on Net Fixed Assets in Use 0.6 0.4 -0.01 0.8 1.5 1.9 2.0 2.8 4.0 5.0 Debt Service Coverage 111.3 77.3 -15.4 6.2 5.3 4.2 4.2 5.5 7.1 9.1 SPANISH PORTS

Port of La Luz Y Las Palmaas

Balance Sheet Data Actual 1964: Estimated 1965-1973 (Millions of Pesetas) Actual Estimated As of December 31 As of December 31 ASSETS 1964 1965 1966 1967 1968 126 170 1971 1972 1973

CURRENT ASSETS Cash 95.7 21.6 8.6 9.4 10.3 11.3 12.2 13.2 14.2 69.4 Reserve Funds - - 0.2 4.7 13.9 31.4 57.5 68.2 80.5 95.7 Accounts Receivable 3.1 7.7 9.2 10.9 12.9 15.5 18.2 21.5 25.5 30.3 Stores 4.5 4.8 S.O 5.2 5.5 5.8 6.1 6.4 6.8 7.1 Total Current Assets 103.3 34.1 23.0 30.2 42.6 64.0 94.0 109.3 127.0 202.5

ADVANCES TO STAFF' 2.8 3.0 3.2 3.4 3.6 3.9 4.1 4.3 4.6 4.8

FIXED ASSETS Land 347.8 347.8 347.8 347.8 347.8 530.6 530.6 530.6 530.6 530.6 Basins 518.7 518.7 518.7 518.7 518.7 681.9 681.9 681.9 681.9 681.9 Works 1207.8 1222.7 1300.2 1414.3 1559.1 2340.0 2547.9 2547.9 2650.0 3130.0 Equipment 80.2 120.3 120.3 120.3 120.3 120.3 120.3 120.3 120.3 120.3 Miscellaneous Works and Equipment _ - - 25.0 25.0 25.0 25.0 25.0 5. Total 2154.5 2209.5 2287.0 2401.1 2570.9 3697.8 3905.7 3905.7 4007.8 4517.8 Less Accumulated Depreciation 392.8 416.3 443.2 470.0 499.5 531.8 570.9 615.9 660.7 707.4 Net Fixed Assets in Use 1761.7 1793.2 1843.8 1931.1 2071.4 3166.0 3334.8 3289.8 3347.1 3810.4 Works, Equipment in Progress 6.8 44.8 209.0 382.9 588.0 144.2 144.0 307.9 384.0 - Total Fixed Assets 1768.5 1838.0 2052.8 2314.0 2659.4 3310.2 3478.8 3597.7 3731.1 3810.4

TOTAL ASSETS 1874.6 1875.1 2079.0 2347.6 2705.6 3378.1 3576.9 3711.3 3862.7 4017.7

LIABILITIES

CURRENT LIABILITIES 2.7 7.0 7.7 8.5 9.3 10.1 11.0 11.9 12.7 13.7

PROPOSED IBRD LOAN - 92.4 178.8 263.2 258.0 247.1 235.6 223.5 210.7

TOTAL LIABILITIES 2.7 7.0 100.1 187.3 272.5 268.1 258.1 247.5 236.2 224.4

EQUITY

STATE CAPITAL 135.1 135.1 245.4 417.9 672.3 968.2 1124.7 1191.5 1234.6 1234.5

REVALUATION RESERVE 1720.1 1720.1 1720.1 1720.1 1720.1 1720.1 1720.1 1720.1 1720.1 1720.1

GENERAL RESERVE _ - 0.2 4.7 13.9 31.4 57.5 68.2 80.5 95.7

SURPLUS (Deficit) 16.7 12.9 13.2 17.6 26.8 44.3 70.5 138.0 245.3 397.0

GIFT PROPERTY - LAND AND BASINS - - - - - 346.0 346.0 346.0 346.0 346.0

TOTAL EQUITY 1871.9 1868.1 1978.9 2160.3 2433.1 3110.0 3318.8 3463.8 3626.5 3793.3

TOTAL LIABILITIES AND EQUITY 1874.6 1875.1 2079.0 2347.6 2705.6 3378.1 3576.9 3711.3 3862.7 4017.7

RATIOS Current Assets to Current Liabilities 38 4.9 3.0 3.6 4.6 6.3 8.5 9.2 10.0 14.8 Current Assets less Stores to Current Liabilities 37 4.2 2.3 2.9 4.0 5.8 8.0 8.6 9.5 14.2 Debt-Equity - - 4/96 8/92 10/90 8/92 7/93 6/94 6/94 5/95 SPANISH PORTS

Port of Ia Luz v las Palmas

Cash Flow Statement Actual 1964 B tignted 196 (MilIlions of Pesetas)17.

iActual Estimsted A6i of' December 31 As of December 31 1964 1965 1966 1967 1968 1969 1970 1971 1972 17 1964-66 f

A. CASH REOUIRED

Capital Investments Initiated Prior to, 1964 7.4 33.7 - - - - 1,l.1 Project 1.7 59.3 241.7 287.9 281.4 185.2 - - - - 1057.2 Other 30.6 - 93-_93.5 12.0 907.6 163.9 178.2 126.0 951.8 Total Canital Investments 39.7 93.0 241.7 287.9 374.9 337.2 2n,7 163.9 178.2 126.0 2050.1 92.4

Debt Service Interest letter "C" State Funds 0.4 ------O0.4 Interest-Proposed IBRD Loan - _ 1.9 6.8 13.2 14.5 14.0 13.4 12.8 12.1 86.7 Repayments - Progosed IBRD loan - - _ - . 1 11 12.1 12.8 52.5 Total Debt Service 0.4 - 1.9 6.8 11.2 19.7 24.9 24.9 24.9 24.9 139.6 6.3

Changes in Working Capital 7.2 o.6 1.0 1.2 1.5 2.0 2.1 2.7 3.6 4.1 26.0 1.2

Staff Advances 1.8 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 3.6 0.1

Total Cash Required 49.1 93.8 244.8 296.1 387.8 359.1 234.8 191.7 206.9 155.2 2219.3 100.0

B. CASH AVAIIABJE

Net Operatinr Revenues (Loss) 7.3 (3.8) 2.4 15.7 29.6 49.5 66.2 91.7 132.4 179.0 570.0 25.7

Depreciation 23.8 23.5 2o.9 26.8 29.5 32.4 39.1 45.0 44.8 46.7 338.5 15.2

Pronosed IBRD Loan 92.4 36.4 84.4 263.2 11.9

Funds Provided by t' e State Deficit including Depreciation ------Debt Service ------Canital Investments - - 110.3 172.5 254.4 295.7 156.5 66.7 43.0 _ _ Total Provided by the State - - 110.3 172.5 254.4 295.7 156.5 66.7 43.0 - 1099.1 49.5 -

Cp.sh Available Pt Berinnina of Year Cash on Hand -in Banks 113.7 95.7 21.6 8.6 -9.4 30.3 ]1.3 12.2 13.2 14.2 General Reserve Fund - - - 0.2 4.7 13. 31.4 57.5 68.2 £0.5 - Total Cash at Beginning of Year 113.7 95.7 21.6 8.8 14.1 24.2 L2.7 69.7 81.4 94.7

Total Cash Available 144.8 135.4 253.6 310.2 412.0 401.8 304.5 273.1 301.6 320.4 2270.8 202.3

Cumul-tive Cash Position 95.7 21.6 3.8 14.1 24.2 42.7 69.7 81.4 94.7 165.2

Increase in Cash Position 51.5 2.3

POTE: Other investments of Pts. 30.6 million in 1964 represent extraordinary purchase not included in the Plan. SPANISH PORTS

Port of PamaJes

Revenues, Expenses and Net Income Actua~163-1964.: Es tiated 1965-1973 Actusl (Million3 of Pesetas) Estinted As of December 31 As of December 31 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1. OPERATING REVENUES (Excluding Rate Increases)

Indirect Services Passengers - - - - 2.0 3.0 4.0 4.0 4.0 4.0 4.0 Harbor Dues 0.9 1.0 1.0 1.1 1.4 1.7 1.8 1.8 1.9 2.0 2.1 Wharfage 20.2 23.5 22.5 25.3 31.7 38.1 38.9 39.6 40.4 41.2 41.8 Fish 9.3 10.5 11.2 11.9 12.6 13.2 13.9 14.6 15.3 15.9 16.6 Petroleum 1.7 2.0 2.1 -w 2.7 3.2 3.5 3.M8 .4.2 45.2 Total Indirect Services 32.1 37.0 36.8 40.6 50.4 59.2 62.1 63.8 65.8 67.8 69.7 Direct Services Berthing - - - Portal Cranes 8.3 9.1 9.0 10.1 12.7 15.4 15.7 16.0 16.3 16.6 16.9 Other Cargo-handling Equipment 8.7 10.4 10.3 11.5 14.1 16.8 17.4 18.1 18.8 19.7 20.4 Weighing 0.4 0.4 0.4 0.4 0.5 0.6 0.7 0.7 0.7 0.7 0.7 Occupation of Port Areas 12.3 8.9 8.7 9.8 12.4 14.9 15.3 15.5 15.8 16.1 16.4 Sale of Water 1.0 1.1 1.0 1.2 1.5 1.7 1.8 1.9 1.9 2.0 2.1 Sale of Electricity 0.5 0.5 0.5 0.6 0.6 0.8 0.8 0.8 0.9 0.9 0.9 Floating Equipment 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4 Extraordinary Hours 3.1 3.2 3.4 3.4 3.4 3.5 3.4 3.4 3.3 3.5 3.7 Profit Sharing - Sociedad Auxiliar 0.5 0.5 0.5 0.5 0.7 0.8 0.9 0.9 0.9 0.9 0.9 Other G.8 O9S 5 0.6 0.7 0 8 0.8 0.8 0.9 0.9 0.9 Total Direct Services 35.8 34.8 34.5 38.3 46.9 5 57.1 58.4 59.8 61.7 63.3

Concessions 6.3 8.9 8.8 9.8 12.0 14.3 14.8 15.4 16.0 16.7 17.4

Total Revenues (Excluding Rate - - - Increases) 74.2 80.7 80.1 88.7 109.3 129.1 134.0 137.6 141.6 146.2 150.4 Additional Revenue frmn Rate - 10.1 26.4 49.7 72.8 99.2 130.1 166.4 208.1 Incree ses Total Oerating Revenues 74.2 80.7 80.1 98.8 135.7 178.8 206.8 236.8 271.7 312.6 358.5

II, OPERATING EXPENSES Personnel 41.8 41.7 44.5 48.4 53.4 58.4 61.9 65.3 68.8 72.4 75.9 Office Equipment and Supplies 1.6 1.5 1.6 1.8 2.1 2.3 2.4 2.6 2.8 2.9 3.1 Other Materialsand Supplies 12.4 14.2 15.7 17.4 19.6 21.7 23.3 24.9 26.5 28.2 29.9 Maintenance 0.4 9.4 1p.8 12.4 13.7 14.2 14.6 14.8 15.0 15.2 Contribution to Junta Central 2.5 3.2 3.2 4.9 6.7 8.9 10.3 11.8 13.6 15.6 17.9 Other Expenses 0.9 0.2 1.1 1.5 2.0 2.7 3.1 3.5 4.0 4.7 5.4 Depreciation 19. 20.8 20.1 21.8 27.0 S32. 34.5 Total Operating Expenses 73.7 80.7 9.3 104.9 118.0 134.7 147.7 155.6 165.0 171. 180.3

III. NET OPERATING RHvENUES (Loss) 0.5 - (16.2) (6.1) 17.7 44.1 59.1 81.2 106.7 141.0 178.2

IV. INTEREST State Funds .5.9 6.4 _- - - - _- - Proposed I3RD Loan - 2.1 7.9 131 16.1 ilt15a7 2 L4X Total Interest 5.9 6.4 - 2.1 7.9 13.1 16.1 15.7 15.0 14.3 13.5

V. NET INCOME (Loss) (5.4) (6.4) (16.2) (8.2) 9.8 31.0 43.0 65.5 91.7 126.7 164.7

VI. EATIOS Operating 99 100 120 106 87 75 71 66 61 55 50 Interest Earned 0.1 - - - 2.2 3.4 3.7 5.2 7.1 9.9 13.2 Retur'i Net Fixed Assets in Use - - - - 0.6 1.3 1.6 2.2 2.9 3.9 5.0 Debt Service Coverage 2.5 3.1 - 7.1 5.0 5.4 4.2 4.1 5.1 6.2 7.6 SPANISH PORTS

Port of Pasajes

Balance Sheet Data

Actual 1964: Estimated 1965-1973 (Millions of Pesetas)

Actual Estimated ASSETS 1965 1966 1967 1968 9 1970 1971 1972 1973

CURRENT ASSETS

Cash 25.9 7.6 8.5 9.6 IC.8 15.5 55.3 156.9 289.3 456.8 Reserve Funds _- - 4.9 20.4 41.9 62.0 71.1 81.5 93.8 Accounts Receivable 0.7 6.4 7.9 10.9 14.3 16.5 18.9 21.7 25.0 28.6 Stores 6.5 6.3 7.0 8.7 10.3 10.7 11.2 11.6 12.1 12.6 Total Current Assets 33.1 20.3 23.4 34.1 55.8 84.6 147.4 261.3 407.9 591.8

ADVANCES TO STAFF 1.6 1.7 1.8 2.0 2.2 2.4 2.5 2.6 2.7 2.9

FIXED ASSETS

land 1583.1 1583.1 1583.1 1583.1 1583.1 1583.1 1583.1 1583.1 1583.1 1583.1 Basin 719.0 719.0 719.0 719.0 719.0 719.0 719.0 719.0 719.0 719.0 Works 915.1 941.7 949.5 1025.2 1343.6 1386.9 1414.9 1414.9 1414.9 1414.9 Equipment 126.2 126.2 174.2 208.0 306.6 306.6 320.6 320.6 320.6 320.6 Miscellaneous Works and Equipnent 6.2 6.2 6.2 111.6 111.6 111.6 111.6 111.6 111.6 111.6 Total 3349.6 3376.2 3432.0 3646.9 4063.9 4107.2 4149.2 4149.2 4149.2 4149.2 Less Accumulated Depreciaticn 343.3 364.1 384.2 406.1 433.1 465.6 498.5 533.0 565.8 598.7 Net Fixed Assets in Use 3006.3 3012.1 3047.8 3240.8 3630.8 3641.6 3650.7 3616.2 3583.4 3550.5 Wcrks and Equipment in Progress 56.7 86.3 229.7 254.2 20.0 18.0 - - - - Total Fixed Assets 3063.0 3098.4 3277.5 3495.0 3650.8 3659.6 3650.7 3616.2 3583.4 3550.5

TOTAL ASSETS .3097.7 3120.4 3302.7 3531.1 3708.8 3746.6 3800.6 3880.1 3994.0 4145.2

LIABILITIES

CURRENT LIABILITIES 7.7 6.8 7.6 8.7 9.7 10.3 11.0 11.7 12.5 13.3

PROPOSED I.B.R.D. LOAS _ - 104.7 213.3 293.5 287.7 275.5 262.6 249.0 234.7

TOTAL LIABILITIES 7.7 6.8 112.3 222.0 303.2 298.0 286.5 274.3 261.5 248.0

EQUITY

STATE CAPITAL 416.1 455.9 540.9 649.8 715.3 715.3 715.3 715.3 715.3 715.3

REVALUATICN RESERVE 2685.7 2685.7 2685.7 2685.7 2685.7 2685.7 2685.7 2685.7 2685.7 2685.7

GEN-ERAL RESERVE - - 4.9 20.4 41.9 62.0 71.1 81.5 93.8

SURPLUS(DEFICIT) (11.8) (28.0) (36.2) (31.3) (15.8) 5.7 51.1 133.7 250.0 402.4

TOTAL EQUITY 3090.0 3113.6 3190.4 3309.1 3405.6 3448.6 3514.1 3605.8 3732.5 3897.2

TOTAL LIABILlITIES AliD EQUITY 3097.7 3120.4 3302.7 3531.1 3708.8 3746.6 3800.6 3880.1 3994.0 4145.2

RATIOS:

Current Assets to Current Liabilities 4.3 3.0 3.1 3.9 5.8 8.2 13.4 22.3 32.6 44.5 x Current Assots Less Stores to Current Liabilities 3.5 2.1 2.2 2.9 4.7 7.2 12.4 21.3 31.7 43.5 o Debt-Equity 0/100 0/100 3/97 6/94 8/92 8/92 7/93 7/93 6/94 6/94 SPANISH PORTS

Port of Pasajes

Cash Flow Statement

Actual 1964: Estimated 196S-1973 (Millions of Pesetas) Actual Estimated As of December 31 As of December 31 1964 196S 216Z 1968 1969 1971 1972 1964-1973 f A. CASHREQUIRED

Capital Investments Initiated Prior to 1964 34.0 23.4 4.8 - _ - - 62.2 Project 2.4 32.8 194.4 239.4 162.8 - _ Other _ _ 631.8 - - - 20.0 41.3 24.0 _8. Total Capital Investments 34 3 199.2 239.4 182.8 41.3 24.0 _ _ _ 779.3 80.0 Debt Service Interest - Letter C.- State Funds 6.4 _- _- _ _- Interest _ Proposed IBRD Loan 6.4 - - 2.1 7.9 13.1 16.1 15.7 15.0 14.3 13.5 97.7 Repayment - Proposed IBRD Loan - - - - - S.2_,9 4 . Total Debt Service 7- - 2.1 7.9 13.1 21.9 27.9 27.9 27.9 27.8 162.9 16.7 Changes in Working Capital 2.8 6.4 1.4 3.5 4.0 2.0 2.2 2.5 3.1 3.3 31.2 3.2 Staff Advances 0.1 0,1 0.2 0.2 0.2 O.Y0.1 0.1 0.1 0.2 .401 Total Cash Required 45.7 62.7 202.8 251.0 200.1 65.4 54.2 30.5 31.1 31.3 974.8 100.0

B. CASH AVAILABLE

Net Operatint Revenues (Loss) 0.0 (16.2) (6.1) 17.7 44.1 59.1 81.2 106.7 141.0 178.2 605.7 62.1 Depreciation 19.9 20.8 20.1 21.8 27.0 32.5 32.9 34.5 32.9 32.9 275.3 28.2 proposed IBRD Loan 104.7 108.6 80.2 293.5 30.1 Funds Provided by the State Deficit, including Depreciation - 16.2 6.1 ------22.3 Debt Service .- 2.1 - ______2.1 Capital Investments 4.0 236 76.8 108.9 6__ Total Provided by the State 4.0 39.8 85.0 278.8 108.9 65.5 _ _ _ _ _ 303.2 31.1 Cash Available at Beginnine of Year Cash on Hand - in Banks 47.7 25.Q 7.6 8.5 9.6 10.8 15.5 55.3 156.9 289.3 General Reser,e Fund -. _ 7 - 4'9 20.4 41.9 62,o 71.1 Total Cash at Beginning of 81.5 Year 47.7 25.9 7.6 8.5 14,5 31.2 57.4 117.3 228.0 370.8 Total Cash Available v71. 70.3 2i1.3 265.5 231.3 122.8 171,5 258.5 401.9 581.9 1477.7 151.5 Cumulative Cash Position 25.9 7.6 8.5 14.5 31.2 57.4 117.3 228.0 370.8 550.6 Increase in Cash Position 502.9 51.5 Appendix 22

SPANISH PORTS PROJECT

Modifications in Equipment Procurement and Further Studies Lecommended as a Result of the Work of the Bulk Hand ing Study roup

1. The study group and the rnanner in which it was set up is described in paragraph 42 of the text. The majority report recommended that the totals of 92 six-ton and 43 twelve-ton cranes included in the Plan should be changed to 84 and 51,respectively. The specialist member of the group, how- ever, recommended that the numbers should be reduced to 57 and 29,respectively. The Bank mission concurred generally with his recommendation and, after dis- cussion, agreed with DGPSM that the actual numbers purchased should be 61 six-ton cranes and 28 twelve-ton cranes.

2. The specialist also recommended that 4 special cranes should be provided for coal handling at Barcelona, that the coal reception and dispatch area there slhould be remodeled including the provision of any necessary conveyor equipment, and that simple conveyor equipment should be provided to load miscellaneous dry bulk cargo at Almeria, Cartagena, La Corwna, Pasajes, and Santander. The Bank mission considered that the coal reception and dispatch area at Pasajes should also be remodeled. DGrPSi accepted these proposals. Appropriate amounts have been included in the Project estimate for the whole of the work involved at the two Project ports, and for the equipment only at the remaining ports.

3. The studyr group jointly recommended urgent studies on bulk dry cargo handlingf as follows:

(a) Alicante

Improved access to berths 11 and 14

(b) Aviles

(i) Ieasures to reduce the numbers of grades of coal handled and to reduce the numbers of dispatchlers.

(ii) The full mechanisation of coal receipt, storage, and loading at the Raices wharf.

(c) Bilbao

(i) Consolidation and mechanization of arrangements for dis- charging coal and ore at the Adosado wlharf for the Altos Hornos steel mill and the IBERDUERO power plant.

(d) Giion-i-Iusel

(i) A comprehensive study of bulk handling arrangements, including consolidation and mechanization and arrange- ments for the receipt, storage, and loading of the Langreo Railway and REIJFE coal. Appendix 22 Page 2

(ii) The arrangements for discharging coal and iron ore for the ENSIDESA steelworks.

(e) Santander

Improvements in arrangements for receipt and stora-e of bulk cargo prior to loading.

4. DGPSM has agreed that these studies, together with those necessary in connection with coal handling and miscellaneous bulk cargo loading at the project ports, should be carried out as a matter of urgency and intends to implement their findings as far as practicable. The study of improved access at Alicante (paragraph 3 (a) above) will be carried out by DGPSM staff. The remainder will be carried out by experts acceptable to the Bank. Appendix 23

SPANISH PORTS PROJECT Freight Traffic By Mode of Transport, 1954-63 (in billion tonkilometers) Railway Hi hway Domestic Year (Renfe only) (Intercity only) Shipping Total 1954 7.2 5.8 9.3 22.3 1955 7.1 6.1 1956 9.5 22.7 7.7 6.8 9.7 1957 24.2 8.0 7.3 11.6 1958 8.0 26.9 7.8 12.0 27.8 1959 6.8 8.5 1960 12.0 27.3 5.3 9.3 11.5 1961 5.3 26.1 11.2 12.6 29.1 1962 5.8 12.3 14.3 1963 6.2 32.4 13.4 15.0-/ 34.6/

1/ Estimated

Sources: Renfe Hinistry of Public Works Ministry of Commerce Appendix 24

SPANISH PORTS PROJECT

Principal Provisions of Proposed Ports Finances Law

(a) The distinction between taxes and port charges (rates) will be eliminated. Only rates will remain and these will be related to the costs obtaining at each port for each particular service, to the policy of achieving a reasonable return on net fixed assets, and to demand and other considerations including the transport-coordination policy of the Government.

(b) No privilege rates or exemptions will be granted, except for Spanish warships and foreign warships under reciprocity agreements, for government, police and quarantine ships and for port draft.

(c) Rates will be adjusted annually beginning in 1966 in eight successive steps with the objective that revenues will be sufficient to cover operating expenses, including depreciation, and to provide a reason- able return on net fixed assets by 1973. Rate adjustments, at the pro- poBa-I of the Port Boards or Administrative Commissions or on its own initia- tive, will be made by the Iinistry of Public Works, after reviewing a favorable report from the M1inistries of Finance and of Commerce and after hearing the Board or Commission involved. In case of disagreement between the Ministries, the Council of Ministers will decide the issues.

(d) From January 1, 1965, the Port Boards and Administrative Commissions will be exempt from the payment of interest on State funds to the extent they have been provided in the past or may be provided in the future.*Nor will the Boards and Commissions at ary time be required to pay interest or amortization on the old bonds authorized prior to 1958.

(e) Until December 31, 1970 the State will pay the Boards and Commissions all operating deficits including depreciation not in excess of capital investments by the State in the current year as well as all debt service and working capital not earned.

(f) The profits of each year will be allocated first to ensure adequate working capital equivalent to ten percent of operating expenses excluding depreciation; secondly, to a reserve fund which is to receive fifty percent of net income (after interest) of each year, subject to a maximum fund balance equivalent to 20-h0 percent of gross revenues of the preceding year; and thirdly, to finance new investments approved by the Government. Remaining profits will be paid into the State Treasury. Appendix 24 Page 2

(g) The Port Boards will be authorized to borrowt mone>y subject to approval by the Gove.r.i.nn..n

(h) Subject to the gcter freedom in rate setting to be given a few mnajor ports under the Principles of Autonomy, the Law will apply to all Port Boards and Administrative Coomissions. It will not .ipply to the smaller ports administered by CAGP and the Lawq authorizes the CKne:.nnont to incorporate into CAiGP ports of low traffic volume and low e;oix-o-lZ return. r0 ... - > . - A t/ cn t/c Oce cn E

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APRIL1965 IBR__151 MAP 3

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PROJECT ITEMS D j , s\ FUTURE EXTENSIONS ______\ _ _ _

APRIL 1965 IBRD - 151U SPANISH PORTS PROJECT PORT OF LA LUZ Y LAS PALMAS KF|X5Zt; r.ikC.L,o 9r -t X(CANARY ISLANDS)

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P,OJ. t .teos CE _ a _ o3 \R, - NAVEL /////g~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ '

X .^ jo L ,5 ~ ~~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~W ~ ~// ~~~0),/ R2 a.mw

h _ APRIL 1965 18RD -1514 MAP 5

SPANISH PORTS PROJECT a t X a n t i c o c e o n / PORT OF PASAJES

PROJECT ITEM _~ FUTURE EXTEIYSION ---

-00 50 0 .00 200 500 000 500

.ETERS

R.Corstrocl,ofEnt, Ch.-nIl - _ \ \ / to ~~be-Ip-od to p-rml t ( / DossCie~~~gof 30 It d.ftl -t.sl,

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Aforog. ond tO 0O~OOtO PASAGES DA SAN JUAN

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R.co.,t,rWi.,nofo ACTOepineDEPTHE OF RENTERIAS

TRIN,//HERPER pups 'I?roTo. C-