Documentof The World Bank FOR OMCIAL USE ONLY Public Disclosure Authorized ReportNo. 5432-EGT Public Disclosure Authorized ARAB REPUBLIC OF EGYPT PORT SAID PORT EXPANSION AND REHABILITATION PROJECT STAFF APPRAISIAL Public Disclosure Authorized May 2, 1985 Public Disclosure Authorized Projects Department Europe, Middle East and Nort. Africa Regional Office This documeuat a resricted disbuxim =W may be mod by recipias only in the pefenme of their officil due Its coateoD may not otrwise be disosed withow World Lmk autorbdtlm. CURRENCY EQUIVALENTS Official Foreign Exchange Rate 1 Egyptian Pound (EE ) = US$1.43 1 US Dollar ($) = EE 0.70 Rate for Commercial Bank Transactions 1 Egyptian Pound (EE) = ust0.80 1 US Dollar (US$) = EE 1.25 FISCAL YEAR July 1 to June 30 WEIGHTS AND MEASURES 1 meter Cm) = 3.281 feet (ft) 1 kilometer (km) = 0.621 miles (mi) 1 metric ton (ton) = 0.984 long ton (lg ton) 1 liter (ltr) = 0.264 US Gallons (G) ABBREVIATIONSAND ACRONYMS APA = Alexandria Port Authority CAO = Central Accounting Organization CLUC = Canal Loading and Unloading Company CTOC = Port Said Port Container Terminal Operating Company ER = Egyptian Railways GCSW = General Company for Silos and Warehousing NTS = National Transport Study POMT = Public Organization for Maritime Transport PSPA Port Said Port Authority RBA = Roads and Bridges Authority SCA = Suez Canal Authority TPA = Transport Planning Authority FOR OMCIAL USE ONLY ARAB REPUBLIC OF EGYPT STAFF APPRAISAL REPORT OF PORT SAID PORT EXPANSION AND REHABILITATION PROJECT Table of Contents Page No. I. THE TRANSPORT SECTOR .......................................... 1 A. Economic Geography and the Transport System .... ........ 1 B. Transport Organization, Coordination and Planning ...... 2 C. Previous Transport Projects ............................ 5 II. PORTS AND PORT SAID PORT ............................. 7 A. Port Traffic and Capacity ................ .......... 7 B. Port Said Port .... ........................... 8 C. Organization, Management and Staffing ............. ..... 10 D. Training ................ ................................ 14 E. Operations ... ......................................... 14 F. Budget, Tariffs, Accounts, Audit, Insurance ............ 16 III. THE PROJECT ................. ;.............. 18 A. Background and Master Plan ......... .................... 18 B. Project Objectives ....................................18 C. Project Description ......................... 18 D. Engineering Aspects .................................... 19 E. Project Cost Estimate .................................. 20 F. Project Financing and Disbursement ..................... 22 G. Project Implementation and Procurement ... ..............23 H. Impact on Environment and Employment ................... 23 IV. ECONOMIC EVALUATION ........................................ 25 A. Traffic Projections ...... ... .......................... 25 B. Allocation of Total Traffic Among Ports ................ 26 C. Economic Rate of Return ................................ 28 This project was appraised by Messrs. N. Cengiz Yucel (Senior Transport Economist), Michel Loir (Financial Analyst), N. Venugopal (Research Assistant) and Aladin Fateen (Port Engineer, Cons.) on the basis of missions to Egypt in February and September 1984. IThis document has a resricted ditibution and may be used by repients only in the performanceof | theiroffiil duties. Itsontents may not otherwis be discsoed withoutWorld Bank authorization. Table of Contents (cont'd) - ii - Page No. V. FINANCIAL. EVALUATION ......................... 32 A. Introduction ................... .......... *.*...... ee.............e...32 B. Past Performance and Present Financial Situation ......... 32 C. Prospects and Finarucial Projections ............... .. ...... 34 VI. RECOMMENDATIONS .................................................... 39 ANNEXES I. Organization of PSPA and its Financial and Commercial Dept. 41 II. Port Performance Indicators .............................. 43 III. Details of Project Description ...................... 44 IV. Details of Project Cost Estimate ......................... 46 V. Estimated Schedule of Loan Disbursement ................. 47 VI. Schedule of Implementation .............................. 48 VII. Ports and Port Traffic ................................... 49 VIII. Income Statement (Years ending 6/30/82 thru' 1984) ....... 61 IX. Balance Sheet (Years ending 6/30/82 thru' 1984) ......... 62 X. Balance Sheet (Projections 1985-1992) .................... 63 XI. Income Statement (Projections 1985-1992) ................. 64 XII. Statement of Sources & Application of Funds .............. 65 XIII. Documents Kept in Project File ........................... 66 XIV. Action Plan ...................................... .......... 0....... 68 MAP IBRD No. 18621 - Arab Republic of Egypt MAP IBRD No. 18622R - Port Said Port - iii - ARAB REPUBLIC OF EGYPT PORT SAID PORT EXPANSIONAND REHABILITATIONPROJECT Loan and Project Summary Borrower: Port Said Port Authority - PSPA Guarantor; Arab Republic of Egypt Amount: US$37 million equivalent Terms: 20 years, including 5 years of grace, at the standard variable interest rate. Project Description: The project will assist t.e Government in the rehabilitation of the port of Port Said and will support the objectives of the National Transport Plan. It will strengthen the Port Said Port Authority and improve port operations and maintenance. The project would finance: construction of a berth to handle general cargo traffic; rehabilitationof existing port facilities;mobile cargo handling equipment; and two gantry cranes for handling containers. In addition, technical assistance would be provided for project preparation and supervision and for iuz;'ving port operations and management. Estimated Costs USS Million (mid-1985 prices) Local Foreign Total Civil Works 9.9 16.8 26.7 Handling Equipment 0.1 9.1 9.2 Technical Assistance 1.0 1.3 2.3 Total Base Cost 11.0 27.2 38.2 Physical Contingencies 1.4 3.7 5.1 Price Contingencies 2.2 6.1 8.3 TOTAL COST 14.6 37.0 51.6 These estimates are net of taxes and custom duties. - iv - Financing Plan US$ Million Local Foreign Total IBRD Loan - 37.0 37.0 Government 14.6 - 14.6 Total 14.6 37.0 51.6 Estimated Bank Loan Disbursements FY85 FY86 FY87 FY88 FY89 FY90 FY91 Annual 0.3 4.3 4.8 13.2 7.9 4.8 1.7 Cumulative 0.3 4.6 9.4 22.6 30.5 35.3 37.0 Rate of Return: 22 Project Risks: No substantial risks are associated with the project. - 2 - Table 1.1: Transport Growth Rates in EgyPt (In Z per annum) 1969-1974 1975-1979 1979-1983 1. Railways - Intercity passenger trips 7.3 1.4 8.6 - Freight movements -1.4 1.1 4.4 2. Roads - Number of passenger cars 7.7 16.0 26.0 - Number of buses 8.4 10.0 12.7 - Number of trucks 8.6 25.0 23.6 - Consumption of gasoline n.a. 13.5 16.5 - Consumption of diesel ' n.a. 10.5 13.4 - Road traffic 8.0%(Est.) 12.0(Est/) 18.0(Est.) 3. Ports Total Dry Cargo n.a. 22 14 l/ Includes uses other than on roads. Source: NTS Phase II 1981 and NTS Phase III 1984. B. Transport Organization, Coordination and Planning Transport Organization and Coordination 1.05 At the national level, four principal government agencies are responsiblefor the transport sector: (i) the Ministry of Transport and Communicationsfor main and secondary roads, railways and inland waterways; (ii) the Ministry of Maritime Transport for ports and shipping; (iii) the Ministry of Tourism and Civil Aviation for airports and aviation; and (iv) the Ministry of Petroleum for pipelines. Two other ministries also participate: the Ministry of Development, Housing and Land Reclamation in infrastructure investments in the Suez Canal zone, the Sinai and the western desert and in specific urban development projects: and the Ministry of Industry in ind"strialand mining projects, for the related transport facilities. Coordinationamong all related ministries is achieved through the office of the Deputy Prime Minister for Services where the major policy decisions are made. In principle, the existing organizational structure should make it possible to formulate coordinated investment and policy measures for the sector. However, the actual functioning system is hampered by the lack of clearly defined lines of communications to coordinate top-down decisions and bottom-up policy and investment proposals. The responsibility for the latter is shared by several government agencies without proper coordination. The existing structure needs to be reformed and streamlined. The Transport I. THE TRANSPORT SECTOR A. Economic Geography and the Transport System 1.01 Egypt has a land mass of about 1 million sq. km. However, most of its 43 million population and nearly all economic activity are confined to no more than 4% of this area, the remainder being desert and wasteland. The main active parts of the country are the 900 km long valley of the Nile, especially its Delta, the area adjacent to the Suez Canal, and small areas in both the eastern and western deserts. Nearly half of the population lives in urban centers, of which Cairo with about 10 million inhabitants (and accounting for about half of the nation's industrial output) and Alexandria at the western corner of the Delta with 2.6 million, are the largest. 1.02 The most important transport corridors in Egypt are Cairo - Alexandria, Cairo-Ismailia- Port Said and along the Nile. Other corridors lead to the Suez Canal from densely populated Delta areas, where agricultural development and its potential are considerable,and where urban development is giving rise to increasing