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World Bank Document FILECOPY ReportNo. 1029a-SU Appraisalof a Domestic Public Disclosure Authorized Aviation Project Sudan June3, 1976 EasternAfrica RegionalOffice HighwaysDivision FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS Currency Unit = Sudanese Pound (SE) US$2.87 = SE 1.00 (official rate) US$1.00 = SE 0.34 (official rate) US$2.50 = SE 1.00 (effective rate) US$1.00 = Sb 0.40 (effective rate) WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 2 1 square kilometer (km ) - 0.386 square mile (sq mi) 1 kilogram (kg) = 2.2 pounds (lbs) 1 metric ton (m ton) = 2,204 pounds (lbs) GLOSSARY OF ABBREVIATIONS CAD - Civil Aviation Department DME - Distance Measuring Equipment HF - High Frequency ISB - Individual Side Band MOD - Ministry of. Defense MTC - Ministry of Transport and Communications NDB - Non-Directional Beacon ODM - Overseas Development Ministry OPAS - Operational Assistance p.a. - per annum P&T - Ministry of Posts and Telegraphs SSB - Single Side Band UK - United Kingdom UNDP - United Nations Development Program VHF - Very High Frequency VOR - Very High Frequency Omnidirectional Radio Range REPUBLIC OF THE SUDAN FISCAL YEAR July 1 - June 30 FOR OFFICIAL USE ONLY SUDAN APPRAISAL OF A DOMESTIC AVIATION PROJECT TABLE OF CONTENTS Page No. SUMMARYAND CONCLUSIONS ........ ...................i-ii.. 1. INTRODUCTION ......................... I.................1 2. THE TRANSPORT SECTOR .. .................... .......... 1 A. Effects of Geography and Economic Growth on Transport ....................................... 1 B. The Transport Modes .............................. 2 Railways .................................................... 2 Highways 9.. .*............ ....... 3 Inland Waterways. 3 Ports . 3 Pipeline. 3 C. Transport Planning and Coordination ............ 4 3. SUDANAVIATION . ............................ .... ........ 4 A. Aviation Policy ...... ............................ 4 B. Aeronautical Administration .... .................. 5 Sudan Airways . ............ .................... 5 Civil Aviation Department ...... 6 C. Aviation Infrastructure ........... 7 Airports ...... O*............................................ 7 Aeronautical Communications and Navigational Aids ........................... 7 D. Traffic Forecasts .... ......................... 7 Passengers ......... ........................... 8 Freight ....... ................................. 8 Aircraft Movements ..... ....................... 9 E. Additional Aviation Investment Planned ........... 9 4. THE PROJECT ........................................... 9 A. Objectives .......................................... 0... ... 9 B. Description ..... ............ .......... 10 C. Special Requirements of the Project ......-...... 11 Airport Access at Wau and Port Sudan .. ....- 11 Electric Power Supply ....... .................. 12 Potable Water Supply ........ .. .. ... .... 12 D. Cost Estimate and Financing . ....... -.... 12 E. Execution ........ ..... 14 This report was prepared by W.B.R. Zetterstrom (Aviation Engineer), B. Bostrom (Aviation Economist), S.B. Rollins (Financial Analyst) and M. Garcia-Zamor (Technical Editor). This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -2- Page No. F. Procurement .......... ........ .................... ...... 14 G. Disbursement *.**.**.**.**. **.***......... ......................... 14 H. Ecology .............-.. 15 5. ECONOMIC EVALUATION ...... ............................ 15 A. Major Benefits .... ....... *. ............ *......... 15 B. Economic Analysis ........ ................ ..... 16 C. Total Return ... ................................. 18 6. FINANCIAL EVALUATION ..... ........ ................... 18 A. General ........................-............... 18 B. Financial Objectives . ................... 19 C. Financing Plan for CAD ...o.................... 20 D. Financial Projections .................... 21 Operating Results .. *...*................. 21 Cash Flow ... ...... 22 7. AGREEMENTS REACHED AND RECOMMENDATION .... ........... 24 TABLES 1. Comparative Air Fares, 1975 2. Forecast Passengers (Embarking and Disembarking) and Freight at Project Airports 3. Forecast Aircraft Traffic 4. Airport Construction Cost Estimates 5. Estimated Schedule of Disbursements 6. Aircraft Operating Costs and Performance Data 7. Quantified Project Benefits, 1979-98 8. Estimated Aircraft Cost Savings in 1980 9. Estimated Passenger Time Savings in 1980 10. Benefits of Navigational Aids and Lighting 11. Economic Rates of Return 12. Civil Aviation Department, Statement of Revenue 13. Civil Aviation Department, Projected Operating Statements 14. Juba Airport, Projected Operating Statements 15. Malakal Airport, Projected Operating Statements 16. Port Sudan Airport, Projected Operating Statements 17. Wau Airport, Projected Operating Statements 18. Civil Aviation Department and Sudan Airways, Combined Projected Operating Statements 19. Civil Aviation Department, Base Case, Projected Operating Statements 20. Civil Aviation Department and Sudan Airways, Combined Operating Statements, Base Case 21. Civil Aviation Department and Sudan Airways, Comparison of Base Case and Project 22. Civil Aviation Department and Sudan Airways, Financial Internal Rate of Return 23. Civil Aviation Department,Projected Cash Flow 24. Civil Aviation Department,Projected Balance Sheets 25. Civil Aviation Department, Schedule of Selected Financial Indicators ANNEXES 1. Bank Group Projects in the Transport Sector 2. Effects of Existing Infrastructureon Airline Operations 3. Project Airports: Current Conditions and Project Works 4. AdditionalAviation InvestmentsPlanned by the Government of Sudan 5. Airport Maintenance EquipmentProvided Under the Project 6. Project ImplementationSchedule 7. Economic Background of IndividualAirports 8. FinancialAssumptions MAP Aviation Project (IBRD 11871) SUDAN APPRAISAL OF A DOMESTIC AVIATION PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a project comprising: (i) the construction of two regional airports, at Wau and Port Sudan, and upgrading of Juba and Malakal Airports; (ii) supervision of the construction/reconstruction in (i); (iii) the provision of maintenance and navigational and communications equipment to the project airports; and (iv) technical assistance and staff training for the Civil Aviation Department (CAD). ii. The Sudanese Government is attempting to integrate its widely dispersed southern communities into the economic and social life of the country by developing a dependable air transport system capable of meeting domestic transport demands. The Government also wishes to improve the inadequate airport facilities at Port Sudan, the country's second largest city. With the exception of Juba, the airports in question have short, dry weather runways with aeronautical obstructions which limit aircraft size and takeoff weights and require excessive airport and aircraft maintenance. iii. The project will enable the domestic airline to use its larger, more efficient and productive aircraft at a higher daily utilization rate, with correspondingly lower unit costs, and to improve schedule reliability. It will also provide the equipment required to maintain the project airports. The technical assistance and staff training element is designed to strengthen CAD's newly organized airport engineering design and construction unit. iv. The proposed US$20 million Bank loan and US$9 million IDA credit represents about 34% of total project costs (US$86.1 million) or 45% of the foreign exchange element (US$65 million). The Government will exempt project items from taxes and duties. The Saudi Fund is expected to finance the airport at Port Sudan and the Government has undertaken to finance the airport at Juba as part of its Six-Year Plan for the period commencing July 1, 1977, and may seek additional foreign exchange from external agencies to help finance this part of the project. The Government will also meet the cost of the risk contingency, should it be required, and the local costs of the project. v. During negotiations, agreement was reached on CAD financial objec- tives. For this purpose, CAD was treated as a separate corporation, although it is a Government department. The financial analysis contained herein re- flects these objectives and this assumption. The Government will make avail- able to CAD, which will execute the project, US$35 million at 8-1/2% interest and about US$38 million as Government equity; US$7.2 million will be in- ternally generated by CAD. The balance of project costs comprises the risk contingency, which Government has agreed to provide, if required. - ii - vi. The main project benefits are cost savings to Sudan Airways from better utilized, more efficient and productive aircraft. Additional benefits include passenger time savings and foreign exchange income earned by more reliable communications and navigational aids to foreign aircraft overflying Sudan. Additional unquantified benefits comprise increased flight reliability, improved air safety, better inter-regional integration of the country and increased development potential
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