Document of The World Bank FOR OFFICIAL USE ONLY /12/- >< 3 Cco Report No. 5530b-CO STAFF APPRAISAL REPORT COLOMBIA PORTS REHABILITATION PROJECT October 24, 1985 Pro ects Department Latin America and the caribbean Regional Office LThis documnent has a restricted distr;bution and may be used by recipients onlv in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Colombian Peso (Co0$) Col $l = 100 centavos (ctv) Col$152.06 = US$1.00 (September 1, 1985) Col$1,000 = US$6.58 (September 1, 1985) AVERAGE EXCHANGE RATES 1980 1981 1982 1983 1984 47.3 54.5 64.1 78.9 100.8 SYSTEM OF WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilogram (kg) = 2.205 pounds (lb) I ton = 2,205 pounds 'lb) ABBREVIATIONS COLPUEkTOS Empresa Puertos de Colombia S.A. 'MOPT Hinistry of Public Works and Transport FVN National Highways Fund FNCV National Rural Roads Funds DNP National Planning Department DAAC Civil Aeronautic Administrative Department FAN National Aeronautic Fund SENA National Service of Traineeship Fiscal Year January 1 to December 31 FOR OFFICIL USE ONLY STAFF APPRAISAL REPORT COLBIA PORTS REHABILITATION PROJECT TABLE OF CONTENTS Page No. I. PROJECT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . I II. THE TRANSPORT SECTOR AND THE POR SUBSECTOR . . . . . . . .. . 2 A. The Transport Sector . . . . . . . . . . . . . . . . . . . 2 (i) Characteristics . . . . . . . . . . . . . . . . . . . 2 (ii) Infrastructure . . a . . . . . . . . . . . . . . . . . 3 (iii) Transport Planning, Coordination and Investment . . . 4 (iv) Fuel Pricing . . . . . . . . . . . . . . . . . . . . . 5 B. The Port Subsector . . . . . . . . . . . . . . . . . . . . 5 (i) The Port Authority and the Public Port Operations . . 5 (ii) Labor Relations . . . . . . . . . . . . . . . . . . . 7 (iii) Port Planning . . . . . . . . . . . . . . . . . . . . 8 C. Bank Involvement in the Transport Sector and lending Strategy 8 D. Experience with Past Lending . . . . . . . . . . . . . . . 10 III. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . 10 A. Objectives . . . . . . . . . . . . . . . . . . . . . . . . 10 B. Description . . . . 11 C. Equipment Situation and Port Productivity Targets . . . . 13 D. Project Cost, Implementation and Financing . . . . . . . . 14 E. Financial Aspects . . . . . . . . . . . . . . 15 (i) Financial Information Systems . . . . . . . . . . . . 16 (ii) Past Financial Performance . . . . . . . . . . . . . . 16 (ii') Future Financial Performance . . . . . . . . . . . . . 19 F. Economic Justification and Benefits . . . . . . . . . . . . 21 (i) Port Infrastructure Rehabilitation and Improvements . 22 (ii) Cargo Handling Equipment . ... . . . . ... . . . . . 23 (iii) Tugboats . . . . . . . . . . . . . . . . . . . . . . . 23 (iv) Overall Project Economic Justification . . . . . . . . 24 G. Project Risks and Sensitivity Analysis . . . . . . . . . . 24 This report is based on the findings of an appraisal mission which visited Colombia during October/November 1984. The mission comprised Messrs. G. Unda (Senior Port Engineer); J. Bigosinski, and J. Hello (Consultants) and Ms. Rios (Financial Analyst). Ms. K. Sierra (Economist) assisted the mission in the economic evaluation. The report has been edited by Ms. V. Foster. This document has a retricted distnbution and may be used by recipients ondy in the performnc of their offida dues Its contents may not otherwise be disclosed without Wodd Dak authorniati - ii - TABLE OF CONTENTS (Continued) Page No. IV. PROJECT IMPLEMENTATION DETAILS . . . . . . . . . . . . . . . . . . . 25 A. Cost Estimates, Finance and Disbursements . . . . . . . . . . . . 25 B. Execution and Procurement . . . .... .. ......... .. ... 25 C. Special Account . . . . . . . . . .. . . ... . . ... . . . . 28 D. Project Monitoring, Semi-Annual Consultations and Kid-Term Review 28 V. AGREEMENTS REACHED AND RECOMMENDATION. . . . . . . . . . . . . . . . 29 TABLES 2.1 Summary of Port Traffic in 1983 and 1984 . . . . . . . . . . . . . 32 2.2 Actual and Forecast Public Terminal Traffic, 1978-2000 . . . . . . 33 3.1 Existing and Proposed Equipment . . . . . . . . . . . . . . . . . 34 3.2 Proposed List of Equipment and Procurement Schedule . . . . . . . . 35 3.3 Existing COLPUERTOS' Tugboat Fleet . . . . . . . . . . . . . . . . 36 3.4 Economic Evaluation and Sensitivity Analysis . . . . . . . . . . . 37 4.1 Detailed Cost Table - Buenaventura . . . . . . . . . .... . 38 4.2 Detailed Cost Table - Cartagena. . ....... . 39 4.3 Detailed Cost Table - Barranquilla . . . . . . . . . . . . . . . . 40 4.4 Detailed Cost Table - Santa Marta . . . . . . . . . . . . . . . . * 41 4.5 Detailed Cost Table - Institutional Development . . . . . . . . . . 42 4.6 Detailed Cost Table - Project Supervision of Construction and Studies 43 4.7 Project Cost Sulmmary . . . . . . . . . . .. .. a . . . . . . . . . 44 4.8 Estimated Schedule of Disbursements . . . . . . . . . . . . . . . . 45 ANNEXES 1. Port Traffic Analysic . . .................... . 46 2. Financial Evaluation . . . . . . . . . . . . . . . . . . . . . . . 55 3. Labor and Equipment Situation and Productivity Targets . . . . . . 79 4. Detailed Project Description . . .. *6*** 93 5. Details of the Training Component . . . . . . . . . . . . .. a 96 6. Economic Evaluation . . . . . 101 7. Project Monitoring and Reporting . . . . . . . . . . . . . . . . . 116 8. Related Documents and Data Available in the Project File . . . . . 121 CHARTS World Bank 27106 - Project Implementation Schedule World Bank 27107 - COLPUERTOS Organization Chart World Bank 27108 - Port Terminals Organization Chart MAPS IBRD 18406 - Colombia Transport System IBED 18729 - Ports Rehabilitation Project - Cartagena IBRD 18730 - Ports Rehabilitation Project - Santa Marta IBRD 18731 - Ports Rehabilitation Project - Buenaventura COLOMBIA PORTS REHABILITATION PROJECT I.' PROJECT SUMMARY Borrower: Empresa de Puertos de Colombia, S.A. (COLPUERTOS) Guarantor: Republic of Colombia Amount: US$42.8 million Terms: Repayment in 17 years, including four years o' gratLe, with interest at the Bank's standard variable rate. Project This would be the first Bank involvement in the port sub- Description: sector. The project's objectives are to (i) strengthen COLPUERTOS' managerial, financial, administrative and operational capabilities to improve port services and reduce operational costs and (ii) upgrade port capacity by restoring port installations and increasing port productivity to enable the public port system to cope with future traffic demand and ensure adequate support to Colombia's foreign trade. The proposed project consists of (a) civil works to rehabilitate existing port installations and to upgrade port utilities; (b) provision of heavy cargo handling equipment, workshop machinery and tools, second hand tugboats, training equipment and material, and computer hardware; and (c) management, operational, engineering and training consulting services. Risks: The main risks associated with the project are the uncertainty regarding traffic levels and COLPUERTOS' failure to achieve productivity targets. The civil works components are not par- ticularly sensitive to these risks, and, in the case of the equipment components, the risks have been minimized by concentrating on replacement of obsolete items. The project is associated with institutional changes aimed at restructuring the terms of compensation to port labor and establishing a new pension system for port workers, to free COLPUERTOS from the heavy financial burden imposed by the current practices. The changes envisaged will permit COLPUER- TOS to reduce substantially labor costs and long-term pension obligations, while improving manpower efficiency, thereby enabling the enterprise to transfer these benefits to port users through better service and lower port charges. The Government and COLPUERTOS have already shown their commitment to these objectives by pursuing actively, through negotiations with the port labor unions, the necessary changes to legally binding labor agreements, and by initiating the legal process to establish a pension system self-sufficient in the medium term and financially separated from COLPUERTOS. -2- Estimated Project Costs Local Foreign Total (US$ million) Civil Works 12.10 11.10 23.20 Equipment - 17.20 17.20 Institutional Development 0.60 3.00 3.60 Project Supervision and Studies 0.90 3.60 4.50 TOTAL BASE COST 13.60 34.90 48.60 Physical Contingencies 1.40 2.80 4.20 Price Contingencies 2.20 5.00 7.20 TOTAL PROJECT COST 17.20 42.80 60.00 Financing Sources: Proposed IBRD Loan - 42.80 42.80 COLPUERTOS' Own Resources 17.20 - 17.20 TOTAL FINANCING 17.20 42.80 60.00 Disbursements: Bank FY 86 87 88 89 90 91 (Project Only) Annual 5.0 11.0 13.0 7.0 4.0 2.8 Cumulative 16.0 29.0 36.0 40.0 42.8 Rate of Return: 38% 1/ Rounding up to the nearest integer. II. THE TRANSPORT SECTOR AND THE PORT SUBSECTOR A. The Transport Sector (i) Characteristics 2.01 Colombia's advantage of having coast lines on both the Pacific Ocean and the Caribbean Sea is largely offset by the difficulty of movement between the coasts and the interior. The three massive ranges of the Andean Mountains running the length of two-thirds of the country present formidable obstacles to communication among its main population centers, which, until recently, developed as separate and somewhat isolated regions. The Magdalena River, until the mid-century, provided the only overland route between the Central region and the Caribbean coast and, even so, with serious naviga- tional problems during the dry season. In the 1950s, however, under a drive toward integration and modernization, the transport system began to evolve into a national network. The development of the country's railways, trunk highways and civil aviation has greatly improved inter-regional communication and national integration. 2.02 The effort to establish the basic transport infrastructure absorbed a considerable proportion of the country's public investment. Transport rep- resented about half of the Central Government's investment in the late 1950s. More recently, with the basic infrastructure in place, transport's share has declined, and, since the late 1970s, it has been around 13%. In 1984, the transport sector accounted for some 8% of the GDP, compared to about 5% in 1950. In the same year, the country's domestic surface transport system moved 25.4 billion ton-km of freight, of which 88% by road, 5Z by inland navigation, 4% by coastal shipping and 3% by railways. Roads and aviation dominate passenger traffic, accounting respectively for 71% and 27X of total demand, estimated at 17,250 million passenger/km in 1984. (ii) Infrastructure 2.03 Colombia has a road network of about 100,000 km (10,500 km paved), of which about 25,000 km comprise the national highway system, about 48,000 km are departmental roads, about 24,000 km are rural roads and about 2,000 km are private roads. The planning, construction and maintenance of the road network are performed under the Ministry of Public Works and Transport (Y-JPT) through its National Highway Fund (FVN) and National Rural Roads Fund (FNCV), in charge, respectively, of the national highways and the rural roads. The Departments perform their own road maintenance through their Secretariats of Public Works. 2.04 The railways system consists of 3,403 km (2,822 km currently .o service) of single track narrow gauge (0.914 meters) lines administered by the Colombian National Railways, a semi-autonomous state-owned agency. The trunk line between the Caribbean port of Santa Marta and Medellin-Bogota in the central highlands is 1,287 km long and carries over 70% of the total railway traffic. The Pacific line (187 km) serves only the Department of Valle, connecting the port of Buenaventura to the city of Cali. 2.05 The Magdalena and Cauca rivers, together with the man-made Canal del Dique (connecting the Caribbean port of Cartagena with the Magdalena river), constitute a major transport system totaling 1,366 km of navigable waterways, which account for almost all inland shipping. The traditional importance of inland waterway shipping, however, has decreased with the development of road and rail transport; the remaining river traffic is mainly hydrocarbons and other bulk commodities, such as cement and fertilizers, which originates at, or is destined for, the ports of Cartagena and Barranquilla. River transport moved about 2 million tons of freight in 1984, roughly the same volume as 30 years ago. Administration and maintenance of inland waterways are under the jurisdiction of MOPT. Freight services are privately operated. 2.06 Aviation transport in Colombia developed early in the 1920s, induced by the adverse topography and the inherent difficulties of surface transport. Air traffic is now a major passenger transport mode for both international and dcomestic traveling. There are presently in the Colombian territory 70 airports whose standards vary widely. Seven of the airports in mainland Colombia and one on the Caribbean Island of San Andres are equipped for international flights. Aviation is governed by the Administrative Department of Civil Aeronautics (DAAC), which is directly responsible to the President of the Republic. DAAC is financed by the National Aeronautics Fund (FAN), whose revenues originate mainly from user charges. - 4 - 2.07 Maritime transport supports most of the volume of Colombia's foreign trade, which is moved mainly through its public and private sea- ports. Empresa Puertos de Colombia (COLPUERTOS), the national port authority responsible to the Ministry of Public Works and Transport, controls all the public ports, namely Buenaventura and Tumaco on the Pacific coast, Cartagena, Barranquilla and Santa Marta on the Caribbean Coast and Leticia on the Amazonas River. Besides the two private ports of Turbo and Puerto Bolivar on the Caribbean coast, there are privately operated berths at the public termi- nals of Cartagena and Barranquilla. There are no private port facilities on the Pacific Coast. The private ports and privately operated berths special- ize in certain own-user bulk traffic, mostly coal, petrochemicals, hydro- carbons, fertilizers and cement. Total traffic at the public ports amounted to 9.7 million tons in 1984, of which 5.8 million moved through private berths and 3.9 million, basically general cargo, moved through the public terminals (Table 2.1). Most of Colombia's seaborne trade is, and will likely remain, with the U.S., the industrialized European countries and Japan. (iii) Transport Planning, Coordination and Investment 2.08 MOPT is directly responsible for sector planning matters, including the preparation of the National Transport Plan. The Plan, which is periodically updated by MOPT's Sector Planning Office, defines the relative role of the distinct transport modes based upon demand projections by commodity type. It also outlines investment programs and the corresponding financing sources for each subsector. The objectives of the Plan are formulated in accordance with the broader goals established in the National Development Plan, prepared by the Olational Planning Department (DNP). DNP also coordinates, with MOPT and otner sector agencies, the programing and budgeting processes for investments in all transport modes, except pipelines. 2.09 The sector priorities in place, largely shaped to accommodate the transport investment needs with the constraints arising from the reduced inflow of external resources and the tight fiscal situation, emphasize rehabilitation and maintenance of existing infrastructure and equipment, motor fuel substitution, transport safety and intermodal coordination to reduce transport costs and improve efficiency. They also call for investment policies consistent with supporting productive and external trade-oriented activities, coordinated with cost-based pricing policies to mobilize resources through recovery of investments. 2.10 The financing of the transport sector is arranged through a combination of (a) operating revenues (38%); (b) earmarked taxes on oil products (35%); (c) budgetary contributions (13%); (d) domestic and external credit (7%); and te) other sources (7%). Overall, sector funding policy emphasizes financial self-sufficiency for each subsector. In practice, however, its implementation has been weakened. The case of the railways--which have had to resort to budgetary contributions to finance operating deficits caused by declining demand and operational inefficiency-and the existing cross-subsidies (between import and export tariffs in the ports, between freight and passenger tariffs on the railways, and between user charges for light and heavy vehicles on the highways) are becoming of major significance. -5- (iv) Fuel Pricing 2.11 Colombia has maintained, in recent years, a policy of annual increases in fuel prices to adjust for domestic inflation and to reflect the corresponding opportunity costs. As of November 1984, the time of the last price increase, regular I/ and premium 2/ gasolines were priced, respectively, at US$0.82 and US$0.93 (equivalent) per gallon, in line with the relevant international levels. However, the accelerated pace of devaluation since then brought current domestic fuel retail prices down to an average 25% below the equivalent international levels. Retail prices are expected to be adjusted toward the end of this year, and more frequent increases are expected during 1986 to compensate for the exchange rate adjustment policy currently in place. Fuel price developments in Colombia are being monitored through specific provisions in a Bank loan to ECOPKTROL, the National Petroleum Company. B. The Port Subsector (i) The Port Authority and the Public Port Operations 2.12 The National Port Authority, COLPUERTOS, was created in 1959 as the public entity in charge of the management and operation of public ports in the country, and supervision and regulation of private berths located in the vicinity of the country's Atlantic ports. COLPUERTOS does not have jurisdiction over the private ports of Turbo (operated by the Federatioa of BARnAna Growers) and Puerto Bolivar (operated by the Colombian Coal Enterprise) since their regulations and supervision rest directly with the Government. In 1975, COLPUERTOS became a state-owned commercial and industrial enterprise under the Ministry of Public Works and Transport, with financial and administrative autonomy. The entity is governed by a Board of Directors in charge of the overall policy matters at national level and a General Manager with executive management functions. Each of the ports has its own Board and Manager with corresponding functions at the local level. The central office is charged with policy, budgetary, development and investment functions, while each of the ports is responsible for its own operations and administration. COLPUERTOS' organization is shown on Charts 27107 and 27108. 2.13 COLPUERTOS' relations with its labor force are regulated by collec- tive labor agreements negotiated periodically between the enterprise and the port labor unions. These collective contracts are legally binding, and their terms and provisions prevail over the national labor legislation, which establishes the minimum standards that labor contracts must comply with (minimum salaries and benefits) and gives freedom to the parties to negotiate terms above the minimum legal requirements. Once formalized, the collective I/ 80 RON (Research Octane Number) 2V 92 RON - 6 - labor contracts can bB amended only by agreement between the parties and, as last resort, by the ruling of a tripartite arbitration tribunal in which the parties and the Government are represented. 2.14 The four major public ports in Colombia are Buenaventura on the Pacific and Cartagena, Barranquilla and Santa Marta on the Caribbean coast. All four ports are fundamentally general cargo terminals, even though Buenaventura and Santa Marta have specialized facilities for bulk cargo handling and storage. The ports terminals provide services of pilotage, towage, bunkering, stevedoring, on-slhore cargo handling, lighterage and storage. 2.15 Buenaventura is the main port on the Pacific and also Colombia's largest public deepwater and container port. It lies in a tropical zone with a heavy rainfall, which interfereR with port operations. Its terminal facilities cover an area of 1,175,000 m2. Its 13 berths, totaling 2,150 meters, are naturally protected and offer draft up to 32 feet. In addition to 10 warehouses, the terminal has specialized facilities for grain (32,000- ton capacity silos), sugar and bulk liquids. The port traffic does not interfere with the city, and the access to the port area is adequate, even though possibilities for further physical expansion are limited. The terminal is connected with the hinterland by rail and road and, together with coastal shipping, serves all the western part of the country. Buenaventura competes with the terminals on the Caribbean coast for the seaborne freight originating in, or destined for, the Bogota metropolitan area. All sugar, molasses, an important share of coffee exports, and most imports from the Far East move through Buenaventure. In 1984, this port handled nearly 2.1 million tons of freight, equivalent to 55Z of the total moved through public ports. 2.16 Cartagena, situated in the best natural port locatiun on the Caribbean coast, is Colombia's second container port and premie- cruise ship port-of-call. Its hinterland includes the important agricultural and industrial region of Medellin, in the Department of Antioquia. The port links with its hinterland by road, air and inland waterways through the Canal del Dique to the Magdalena River. Port facilities cover an area of 289,000m2 with five deepwater berths and two berthing areas for smaller roll-on/roll-off ships totaling 1,218 meters; the port offers draft up to 35 feet alongside its berths. There is some room for physical expansion at the port site, although access to the port is through the city streets. Addi- tional port areas can also be developed elsewhere in the bay. Cartagena moved 0.8 million tons in 1984, equivalent to 21X of the total freight through public ports. 2.17 Barranquilla is located at the estuary of the Magdalena River and is essentially a regional deepwater and river port. It serves primarily the city of Barranquilla and its area of influence, with some transshipment of cargo for upriver transport. The port is connected with the interior by road, river and air transport. The public port facilities cover an area of 1,030,000 m2. Barranquilla has six berths with 1,058 meters and one berth for river vessels. Although its berths offer draft up to 34 feet, Barranquilla has the most serious sedimentation and dredging problems of all public ports. Physical expansion of port facilities is possible, although not envisaged. Access roads to the terminal area are adequate. Barranquilla -7- moved 0.48 million tons in 1984, equivalent to 12% of total freight through public ports. 2.18 Santa Marta lies in a natural deepwater bay on the Caribbean coast. The port occupies an area of 133,0nO m2. It has five berths with 1,300 meters offering draft up to 50 feet. Even though the terminal has four warehouses and mechanized grain handling facilities (32,000-ton capacity silos), they have limited use for unloading vessels because of tne low unloading capacity of the conveyor. Potential for further physical expansion is limited. Road access to the port area is through the main city atreets, which at times causes congestion. This port links with the Interior by road, air and rail connections. The rail access to the terminal is adequate, but the lack of a marshaling yard disturbs the traffic in the port area. Santa Marta moved 0.49 million tons in 1984, equivalent to 12% of the total for public ports. 2.19 Seaborne traffic through Colombia's major public ports grew fast in the late 1970s, peaking at 4.9 million tons in 1980. Declining exports- caused mainly by reduced world demand for some Colombian agricultural exports, the diversion of coal exports to a private port and decreasing imports as a result of balance of payments restrictions-brought the public ports traffic down to 3.9 million tons in 1984. Because of improved prospects for economic growth, this trend is expected to be reversed, and traffic at these ports is forecast to increase at an average rate of 1.8% p.a. over the 1985-1990 period (Table 2.2). The highest traffic growth is expected at Santa Marta (7.6% p.A.) while, at Buenaventura, it is expected to remain at current levels, with declines in bulk traffic offset by increases in general cargo (Annex 1). 2.20 COLPUERTOS is a financially independent enterprise and receives no budgetary support from the Government. Most of its revenues come from tariffs for services provided by the public port terminals End a small portion from charges (ad valorem charge on traded goods) from the private wharves. The Central Office is financed by the charges on the private wharves plus 20% of the revenues generated by the public terminals to finance its administrative expenses, capital investments at headquarters and the ports and debt service. Each terminal retains 80% of ils revenues to cover the cost of its own operations (Annex 2). (ii) Labor Relations 2.21 Over the years, until 1983, COLPUERTOS' institutional and financial situation deteriorated sharply as the result of a combination of several fac- tors. First, COLPUERTOS' management had been generally weakened by excessive political interference, which resulted in high turnover in upper management positions, which, in turn, contributed to lack of continuity and absence of clear institutional objectives. Second, influential port labor unions (one in each port and three in Barranquilla) took increasing control of labor and equipment assignment functions at the port terminals over the years and successfully generated significant overstaffing and unrealistic compensation terms. Third, COLPUERTOS' pension obligation to retirees, paid entirely by the enterprise out of its own operational resources with no funding provision, has become an unbearable financial burden upon the enterprise. Finally, the short-term-focused management concerns, coupled with continuous financial deterioration and recurrent labor problems, resulted in poor long-term planning, which weakened COLPUERTOS' operational capabilities. -8- 2.22 By end-1982, however, in an effort to reverse these trends, a strong management took over and initiated, backed by the Government, a series of corrective measures to recover control of operations at the terminals and to bring down excessive costs (Annex 3). Substantive progress was made in the negotiation of new and tuoce sustainable labor agreements, and important concessions with regard to linking payment to manpower productivity were obtained from the labor unions. Staff was reduced by 23% to 9,411 employees (through induced attrition coupled with a freeze in hiring). The cost re- duction measures so far undertaken by COLPUERTOS' management have had an Important impact upon the financial position of the enterprise, changing the nearly endemic operating losses of 1979-1982 into an operational surplus for the first time in 1983. 2.23 COLPUERTOS and the Government are committed to continue their efforts to rationalize payments to workers, relating payments to productivity during future labor agreements. This commitment is stated in the terms of the letter of representation submitted by Colpuertos on July 31, 1985 stating its labor policies approved by the National Council of Economic and Social Policy. Targets for further adjustments of personnel by attrition would be ratified by a side letter to be signed simultaneously with the loan agreement, agreed with COLPUERTOS at negotiations. (iii) Port Planning 2.24 Since most management members of COLPUERTOS' current administration were appointed during the last 12-18 months, there is need to strengthen several areas, particularly project planning and execution, and to make fin- ancial and operational information available for management and corporate planning. In order to fulfill these needs, the proposed project would in- clude a major technical assistance component consisting of: (a) improved financial information systems to allow an effective control of operating costs and the institution of cost-based tariffs; (b) improved cargo handling procedures and repair and maintenance practices to increase efficiency in port operations; (c) improved management information systems to improve plan- ning and operational activities; and (d) training at managerial, administrative and operational levels. 2.25 The consolidation of COLPUERTOS' basic top- and medium-level mana- gers to ensure their stability and the continuity of the enterprise's pro- grams is included in the po.iicy statement referred to in paragraph 2.23 preceding. The proposed project, in addition to providing technical assistance in training to strengthen COLPUERTOS' managerial capabilities (para 3.08(f)), would include rehabilitation of the port system (paras 3.05 and 3.06). COLPUERTOS would be required to review with the Bank any investment item not included in the project, resulting in a capital expenditure in excess of US$2 million. Notwithstanding, COLPUERTOS would not commit itself to any such expenditure unless it were economically, technically and financiallv justified. C. Bank Involvement in the Sector and Lending Strategy 2.26 The Bank has played an important role in the development of Colombia's transport sector. Its involvement dates back to 1949, whea a transport sector mission reported the transport system to be in an -9- exceptionally bad condition. Since 1950, the Bank has lent about US$551 million in 23 loans to the sector. These investments supported the construction of an integrated highway network and, more recently, have contributed to the rehabilitation and maintenance of the national network and to the development of an improved highway organization. They have also contributed to the construction of over 670 km of the main railroad line, as well as to the rehabilitation of other lines. A domestic aviation project helped to improve basic aviation infrastructure and subsector efficiency and planning. The proposed project would be the first Bank operation in the ports subsector. 2.27 The Bank's lending strategy for the transport sector emphasizes the timely provision of development finance in support of policy reform and institution-building objectives, including: (a) policies targeted at achieving a more balanced use of existing transport alternatives, through adequate price signals to consumers and improvements in marketing and distribution arrangements for key commodities; (b) equitable treatment for the distinct modes of transport, and for each user of public infrastructure, by pursuing the development and adoption of cost-based pricing policies for each mode, to cover marginal costs of use; (c) reduction of total transport costs, by improving modal interfaces and the efficiency of operations within each mode; (d) public sector funding and expenditure mechanisms to reflect the costs of use of existing infrastructure and facilities; (e) investment planning to give adequate priority to export development, agriculture diversification, and energy conservation and substitution, with emphasis on maintenance and rehabilitation programs; (f) further integration of the public planning, budgeting and programing processes and strengthening of the financial and personal management practices of sector agencies; and Cg) institutional and human resources development, through comprehensive training programs at the upper and middle management, and operating levels. 2.28 At the project level, this lending strategy is presently supported by: (a) the Rural Roads Project (Loan 1966-CO, 1981, US$33.0 million) for construction, rehabilitation and maintenance of rural roads; institutional objectives sought with the project include the strengthening of FNCV's technical and economic capability for identifying, programing and implementing rural roads subprojects; (b) the Seventh Railway Project (Loan 2090-CO, 1982, US$77.0 million) for rehabilitation and modernization of the railways; the project supports the implementation of Colombian National Railways' (CNR) 1983-1987 investment program and the improvement of financial and operational management; and (c) the Highway Sector Project (Loan 2121-CO, 1982, US$152.3 million) for rehabilitation, paving and maintenance of the primary road network; the project pursues the improvement of transport sector management and other subsector objectives, including the development of a balanced pluriannual highway expendi'ture program, more systematic use of economic appraisal methodologies, the implementation of a pavement management system and training actions at the managerial and operating levels. - 10 - D. Experience with Past Lending 2.29 The performance of these projects so far has been mixed. While the results with the Rural Roads and Highways Projects have been positive and the respective loans have contributed significantly to sector management improvements, building up of investment appraisal capabilities and institutional strengthening, as well as physical improvements, the activities involving the Railways subsector have fallen short of expectation. The capacity of the Railways Authority (CNR) to overcome operational deficiencies and, thus, to recuperate credibility with users of cargo services has not yet materialized, partly because of internal management and operational problems, such as slow procurement and poor operational planning, as well as insufficient Government counterpart funding for needed capital investments. The fiscal constraints have prevented the Government from making a significant financial contribution to project investments and have limited its financial support to covering CNR's mounting pension payments, which are not backed by any funding provision. A restructuring or deferral of the Railways project is presently being discussed with the Government. CNR's pension problems have served as a basis for the approach followed in consideration of the proposed Ports Rehabilitation Project. 2.30 The proposed Ports Rehabilitation Project described in the following section would be the first Bank operation in the port subsector, and it would strengthen COLPUERTOS' management and operational capabilities while achieving reductions in port operating costs and ship waiting times through better utilization of existing quay structures and equipment. It would also introduce the mechanisms for establishing a cost-based tariff structure and improved planning of port activities to accommodate future traffic increases. III. THE PROJECT A. Objectives 3.01 Three of the four main commercial ports administered and operated by COLPUERTOS-namely Buenaventura, Cartagena and Santa Marta-have reached a serious degree of deterioration due to poor maintenance, old age, and, in some cases, poor construction. Deterioration at the port of Barranquilla is not critical and should be taken care of through COLPUERTOS' regular maintenance. Port equipment maintenar^-e has been neglected because of inappropriate maintenance facilities, shortage of spare parts and lack of a consistent equipment maintenance policy. This situation, coupled with inadequate port operation planning, has affected port productivity and efficiency. 3.02 The main objectives of the Bank support for the proposed Ports Rehabilitation Project are to: (a) ensure sufficient port capacity to cope with traffic demand up to 1990, facilitating Colombia's foreign trade; and (b) strengthen COLPUERTOS' (i) managerial, administrative and operational capabilities to enable the enterprise to increase port productivity and reduce port costs; (ii) financial capabilities to enable the enterprise to achieve its loAig-term financial viability through the establishment of a cost-related tariff structure; (iii) train'ng capabilities by supporting the - 11 - enterprise's training schemes through appropriate technical assistance and equipment; and (iv) in the medium-term, its planning capabilities through training of medium- and high-level managers and fellowships for young professionals on port planning and administration. 3.03 The proposed project would finance part of the 1985-1988 COLPUERTOS investment plan, which was prepared with Bank assistance. The project is based upon detailed analyses of COLPUERTOS' organizational setup, administrative and operational practices, technical capabilities and financial situation, followed by a detailed analysis of present conditions of the project ports' existing infrastructure and equipment. B. Description 3.04 The proposed project would comprise the following components at the four project ports: (a) civil works for the rehabilitation of existing infrastructure, including quays, storage areas and utilities; Cb) equipment for general cargo and containers, workshops, training and computer equipment and tugboats; and Cc) professional services for technical assistance, engineering, construction supervision, studies and training. A detailed de-cription of the project is given in Annex 4. The location of the project porLs and the scope of the civil works rehabilitation components at each project port are shown on Maps IBRD 18406, 18729, 18730 and 18731. 3.05 Civil works under the proposed project would consist of repairs and reconstruction of about 1,250, 340 and 970 m of quays at the ports of Buenaventura, Cartagena and Santa Marta respectively; paving and repaving of about 63,000 and 39,000 m2, including utilities, at Buenaventura and Cartagena respectively; construction of about 15,000 m2 of roofing at Buenaventura; 7,600 m of sheds to replace old ones to be demolished at Cartagena; and acquisition and installation of emergency power plants at all project ports. Engineering of all the described items has been completed; cost estimates of all civil works are based on final structural designs. 3.06 The proposed project would include the following equipment: (a) forklift trucks and mobile cranes to cover COLPUERTOS' present shortage of equipment to handle heavy loads; (b) trailers for general cargo; (c) container-handling equipment supplementary to the existing equipment owned by COLPUERTOS and private rental companies to handle 40- and 20-foot fully loaded containers; (d) 15,000-lb. forklift trucks or similar to equip the ports with capability to handle empty 40- and 20-foot containers efficiently; (e) yard tractors and trailers for container traffic; (f) workshop machinery and tools, (g) four second-hand tugboats to partially replace the existing fleet; (h) training equipment as required for the implementation of the training program (Annex 5); and (i) computer equipment for the implementation of the management information system (Annex 2). - 12 - 3.07 The procurement of heavy cargo handling equipment includes the replacement of obsolete existing units and the coverage of the existing shortage for current traffic levels and additional equipment to cope with traffic growth. The equipment included in the project is given in Table 3.2. Lists of the existing cargo-handling equipment by port and ownership, together with proposed equipment that would be included in the project, are given in Table 3.1. A list of COLPUERTOS' existing tugboat fleet is given in Table 3.3. 3.08 The professional services to be financed under the proposed loan would couprise: (a) supervision of construction; (b) engineering studies and design for a future port project to equip selected ports with full container and bulk-handling capabilities; (c) feasibility studies for the long-term expansion of Colombia's port capacity on the Pacific coast; Sd) studies to reorganize dredging services required for the operations of COLPUERTOS and to define institutional arrangements to permit the cost recovery of dredging activities (para 3.25); (e) management advisory services to: (i) strengthen and improve managerial, financial, administrative (Annex 2, Appendixes C and D), operational and maintenance capabilities of the enterprise and the project ports (Annex 3, Appendixes A and B); (ii) prepare, coordinate and supervise the implementation of COLPUERTOS' training program (Annex 5'; and (iii) conduct supplementary actuarial financial studies; and (f) trainiug for management, operational and administrative personnel of the port terminals and COLPUERTOS' central office (Annex 5). Agreement vas reached during loan negotiations on the timing and scope of these professional services. 3.09 With regard to the project's training component, COLPUERTOS has selected training advisers satisfactory to the Bank, established and staffed a Training Supervision Unit (TSU) and a Training Steering Committee (TSC), and prepared a preliminary training program to be implemented by SENA as part of the ongoing agreement between the two entities. In addition to the above, COLPUECIOS agreed during negotiations to: - 13 - (a) prepare, with the assistance of the training advisers and submit to the Bank, an integrated four-year training program as a condition for loan effectiveness and implement it with SENA and the advisory services support; and (b) no later than June 1, 1986 select courses abroad and candidates for fellowships and courses/seminars. C. Equipment Situation and Port Productivity Targets 3.10 Privately owned light cargo handling equipment to cover COLPUERTOS' shortage is used efficiently by private operators. However, this arrangement generated a number of anomalies that needed to be corrected to ensure port efficiency. Until very recently, port users paid for less-than-complete services and, in addition, paid the rent of private equipment required to handle porz traffic; this situation encouraged port inefficiency since COLPUERTOS collected revenues for services not fully provided and its equipment operators were paid even when they did not participate in the operations. During negotiations, COLPUERTOS and the Government gave assurances to the Bank that the operational procedures had been changed as follows: (a) COLPUERTOS is paying and would continue to pay for the rent of private light cargo handling equipment to private equipment rental companies and would reimburse the users for the cost of equipment that they may rent by themselves under special circumstances; and (b) COLPUERTOS has eliminated payments to equipment operators who do not participate in the provision of port services. 3.11 Analyses carried out during appraisal show that COLPUERTOS' light cargo handling equipment operating costs are higher than those charged by rental companies. Consequently, COLPUERTOS should abstain from acquiring more light equipment when the existing equipment reaches the end of its economic life and should allow its replacement by private equipment rental companies, unless the enterprise is able to reduce its operating costs to levels comparable with those available in the private sector. This matter was formally agreed with COLPUERTOS and the Government during negotiations. Further details are given in Annex 3. 3.12 Productivity at the project ports was compared with that of other ports of similar size and volume of traffic handled and with the average performance indicators of a sample of 220 ports of the world (Table 1 of Annex 3). This analysis shows that, while gang productivity is generally in line with that of other ports, the idle time of ships alongside berths of the project ports is considerably longer than in other ports. While idle time is, on the average, only about 30% of the total time that ships occupy berths for the sample of 220 ports, in the case of the Colombian ports, idle time is about 60-70% of the total ship stay in port. 3.13 A detailed analysis of the causes for this unsatisfactory situation in each of the project ports is included in Annex 3. Low productivity is the result, among other things, of lack of port operations planning, inadequate - 14 - working time control, poor equipment availability, inadequate internal traffic organization and s'gnalization within the port area and inappropriate preparation of cargo/storage areas. 3.14 The proposed project includes a comprehensive strategy for the improvement of port productivity based upon the rehabilitation of existing facilities, the procurement of heavy cargo handling and container handling equipment, a technical assistance component to improve port operations (Annex 3) and a training program (Annex 5). Based upon a detailed analysis of current port operations, a realistic set of targets for specific productivity i i at s was prepared for each of the project ports. These targets are discussed in Table 2 of Annex 3. At negotiations, COLPUERTOS agreed to take the necessary actions to implement the technical assistance recommendations for the improvement of port efficiency and the achievement of these productivity targets. A sample of the expected increases in productivity is given below: Increases in Productivity I/ with Respect to 1984 Levels in Z 1987 1989 1991 Buenaventura General Cargo 7 14 22 Containers 16 33 33 Cartagena General Cargo 7 13 20 Containers 16 33 33 Barranquilla General Cargo 5 11 17 Containers 25 50 50 Santa Marta General Cargo 6 13 19 Containers 25 50 50 1/ Measured as Ton/Gang/Hour for general cargo and TEU/Gang/Hour for containers. D. Project Cost, Implementation and Financing 3.15 The total cost of the project, including provisions for contingencics and reflecting September 1985 prices, is estimated at US$60.0 million, of which US$42.8 million is foreign exchange to be covered by the Bank loan. The remaining US$17.2 million would be covered through COLPUJERTOS' internally generated funds. Further details of the financing plan of the project are in paragraph 4.07 and Annex 2. Cost estimates exclude a recent value added tax on local acquisitions, considering that practically all equipment included in the project would be imported, and duties on imported items from which COLPUERTOS is exempt; detailed estimates are given in Tables 4.1 to 4.7 and are summarized on page 26. Cost estimates for civil works are based on final engineering. Cost estimates include provisions for - 15 - physical contingencies of 10% for civil works, 6% for equipment, and 10Z for all other project items. Price contingencies were calculated based on projected changes in local and international prices and expected exchange rate adjustment during the project period. Local inflation rates assumed over the project period are: 22% for 1985, 20% for 1986, and 18% thereafter. Price escalation for foreign costs components has been estimated at 5% for 1985, 7.5% for 1986 and 8% thereafter. Estimated manpower required for the professional services included in the proposed project would amount to about 190 anLd 270 man-months of foreign and local experts respectively. 3.16 Most of the civil works and equipment to be financed under the proposed project would be subject to international competitive bidding (ICB) in accordance with the Bank Guidelines; civil works items with an estimated cost of US$0.6 million equivalent or less, and equipment items with an estimated cost of US$0.1 million equivalent or less would be procured under local competitive bidding (LCB) procedures open to foreign bidders and acceptable to the Bank (para 4.05). Workshop machinery and tools, the second-hand tugboats, training-related equipment and computer hardware would be procured under international comparative shopping procedures satisfactory to the Bank. AU professional services to be financed under the proposed project would be retained in accordance with procedures described in Bank Guidelines on the use of consultants. In evaluating bids for equipment procured through ICB, Colombian bidders would be allowed a margin of preference equivalent to 15% of the CIF cost of competitive imports, or the relevant prevailing customs duty, whichever is lower. 3.17 COLPUERTOS would be the Borrower and would be responsible for the execution of the project. COLPUERTOS has already established and staffed a Project Implementation Unit (PIU) to coordinate, monitor and supervise the execution of the project, in a form satisfactory to the Bank. The PIU is now fully operational in accordance with terms of reference also satisfactory to the Bank and available in the Project File. During negotiations, agreement was reached with COLPUERTOS and the Government on the establishment of a technical committee--with representatives of MOPT, the National Planning Department and COLPUERTOS-to coordinate and supervise the execution of studies for which COLPUERTOS will be responsible. E. Financial Aspects 3.18 COLPUERTOS is constituted as a commercial enterprise, under the Ministry of Public Works and Transport, with financial and administrative autonomy. Under its present organization, which is based upon Decree 1174 of May 1980, COLPUERTOS has one central office in Bogota and offices in each port terminal, all of which have their respective functions and income defined by law. However, since the proposed project would ensure COLPUERTOS' overall financial viability, the financial evaluation (Annex 2) deals with the entity as a whole. 3.19 The financial evaluation covers two main aspects, namely: (a) an assessment of COLPUERTOS' financial information systems including budgeting, accounting, cost accounting, tariff structures, and internal and external - 16 - audit, with recommendations for improvement under the proposed project; and (b) an analysis of COLPUERTOS' past and future financial performance, with recommendations for strengthening its future financial position. The details of the financial evaluation are included in Annex 2, and the most relevant conclusions are discussed in the following paragraphs. (i) Financial Information Systems 3.20 COLPUERTOS' financial planning is generally weak. Apart from tne annual cash budgets which are used in monitoring current day-to-day operations, COLP'JERTOS has no long-term financial objectives or plans. Consequently, capital investments and other business decisions are not subject to comprehensive economic and financial analyses to evaluate their impact upon COLPUERTOS' finances. In addition, despite important improvements made over the last two years toward computerization and decentralization, COLPUERTOS' accounting system is still inappropriate for measuring the financial efficiency of each port, and fixed assets are undervalued substantially. COLPUERTOS has no cost accounting to idertify costs by function and by port, arcd the present tariffs, which are applied uniformly to all ports, are not cost-based. COLPUERTOS' external audit is performed by the Controller General of the Republic of Colombia. The external auditors' reports on COLPUERTOS' financial statements, however, lack the analytical scope of a commercial audit. Finally, even though the internal audit system is generally satisfactory, the results are, many times, hampered by the complexity of the existing systems and procedures. 3.21 In order to strengthen COLPUERTOS' financial capabilities, the following agreements were reached at negotiations: (a) the proposed project to contain technical assistance consisting of consultant services for improvements to financial information systems, including budgeting, accounting and cost accounting, with on-the-job training during the implementation phase (draft Outline Terms of Reference in Annex 2); (b) by March 31, 19872 and at least every year thereafter, COLPUERTOS to carry out an inventory and revaluation of its fixed assets; (c) by June 30, 1988, and based upon the results of the cost accounting studies referred to in (a) preceding, COLPUERTOS to restructure tariffs to reflect the cost of services rendered; and (d) COLPUERTOS to have its accounts and financial statements for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent external auditors acceptable to the Bank, in addition to the audit carried out by the Controller General of the Republic. (ii) Past Financial Performance 3.22 COLPUERTOS' actual income statements for the period 1980 to 1984 are summarized on the following page and detailed in Table 1 of Annex 2: - 17 - Actual Income Statements (in Current Col$ millions) 1980 1981 1982 1983 1984 Total Operating Revenues 9,597 11,145 12,936 14,961 16,569 Working E ?enses 9,726 12,529 15,123 12,524 13,697 Working Income (Loss) (129) (1,384) (2,187) 2,437 2,872 Depreciation 171 168 171 197 231 Net Operating Income (Loss) (300) (1,552) (2,358) 2,240 2,641 Financial Expenses (Net) 212 128 259 399 250 Other Expenses (Provision for future Pensions) - - - 1,555 2,391 Net Income (Loss) (512) (1,680) (2,617) 286 0 Traffic ('000) 4,927 4,093 4,628 4,125 3,872 Average Number of Staff Employed 11,923 12,053 12,210 11,266 9,865 Pensioners N.A. N.A. 6,206 6,505 7,005 Ratios Working Ratio 101 112 117 84 83 Operating Ratio 103 114 118 85 84 From 1978 until 1982, COLPUERTOS made losses consistently, and, by year-end December 1982, total accumulated losses amounted to Col$ 6.95 billion (or US$98.9 million). Apart from inadequate tariff increases, coupled, during 1980-1982, with a reduction in traffic, staff costs increased considerably as a result of negotiations with politically powerful labor unions. In late 1982, a new administration carried out a plan of corrective measures to bring down excessive costs. The plan resulted, in 1983, in a reduction in personnel costs of about 31%, in real terms. COLPUERTOS' total staff was also reduced by 16% in the same period. As a consequence, after a period of nearly endemic operating losses, COLPUERTOS generated a significant operational profit for che first time in 1983, which amounted to ColS 2.24 billion (or US$25.2 million). COLPUERTOS' 1984 operating results improved slightly compared to those of 1983, despite a 6% drop in traffic, because of additional staff reductions. 3.23 It should be noted that COLPUERTOS' staff reductions do not result in proportional reductions in the entity's wagebill since COLPUERTOS funds, in its entirety, the existing pension plan on a "pay-as-you-go` basis. The pension commitments of COLPUJERTOS vis-a-vis its employees are contained in the labor agreements with the ports unions, which provide terms, for this benefit, substantially better than those provided under Colombian law to either public or private employees. COLPUERTOS' management agrees that leaving the current pension situation unchanged would eventually lead the entity to a point where it would be unable to afford these payments. In order to prevent a possible financial disaster in the long term, the proposed project would include a redesign of the pension system based upon a funding approach, with contributions required from employees, from COLPUERTOS and, - 18 - during its formation period, from the Government, and with pension terms consistent with those applied in other Government agencies. 3.24 The following steps for relieving COLPUERTOS from the pension burden and attaining a permanent and stable solution to protect the retirement benefits of COLPUERTOS' employees and pensioners, as well as for the adoption of appropriate personnel management policies, were taken prior to negotiations: (a) in February 1985, COLPUERTOS hired actuaries to quantify total future pension obligations as of December 1984; (b) in July 1985, the Government submitted to the Bank a letter of representation informing of the submission to the Congress, on that same date, of a Proposed Law to establish a pension fund, separate from COLPUERTOS' finances, that would be fully responsible for the payment of the retirement benefits of COLPUERTOS' employees and pensioners and would be financed with contributions from COLPUERTOS, its beneficiaries and, in the capitalization period, the Government. Under the proposed pension fund, the terms of the retirement benefits would be in accordance with the existing legislation. The proposed strategy for the establishment of the new pension scheme is further detailed in paragraphs 3.32 (a) and (b). Er) in July 1985, COLPUERTOS submitted to the Bank another letter of representation committing itself to continue to implement management policies aimed at relating workers' compensation to productivity. The proposed strategy is further detailed in paragraphs 3.32 (c) and (d). 3.25 COLPUERTOS has been assigned the responsibility for maintenance dredging in all ports and inland waterways; however, the entity is not reimbursed for the cost of this operation. Since the early 1980s, because of the financial crisis facing COLPUERTOS, most dredging activities have been discontinued and, as an emergency measure, MOPT is financing the 1984 and 1985 maintenance dredging costs. During negotiations, agreement was reached on the following: (a) as part of the project, COLPUERTOS would carry out a study of its future maintenance dredging requirements, together with the definition of institutional arrangements to permit the recovery of related costs; and (b) COLPUERTOS and the Government would implement the recommendations of the study not later than June 30, 1987. 3.26 COLPUERTOS' actual balance sheets for 1980-1984 (Annex 2, Table 2) show the impact of the entity's past losses upon its equity position. As of end-1982, COLPUERTOS' equity had reached a negative Col$ 6.34 billion (or - 19 - US$90.2 million), ten times its paid-in capital. The 1983 profit, however, improved the entity's equity position. 3.27 The actual sources and application of fund statements for 1981-1984 are shown in Annex 2, Table 3. The most outstanding feature is the significant decrease in working capital, during 1981-1982, as a result of insufficient revenues to cover COLPUERTOS' increasing costs, resulting in substantial overdue debts with employees and suppliers. (iii) Future Financial Performance 3.28 One of COLPUERTOS' principal objectives would be to achieve financial viability by improving efficiency in operations, handling more traffic with lower operating costs and implementing cost-based tariffs. COLPUERTOS' financial projections for 1985-1990 are based upon this objective. They reflect reductions in port operating costs which would result from increasing productivity as indicated by the fact that, for an increased traffic, COLPUERTOS' staff would be reduced by attrition. Further cost reductions, not yet quantifiable, would also be expected toward the end of the projection period (1988), as a result of the implementation of the recommendations of a staff rationalization study which would be carried out under the project. The projections assume that, starting in 19861/, pension payments would be the responsibility of a pension fund, either existing or to be established, and, thus, COLPUERTOS' share in these costs would be limited ornly to the employer's regular contribution in the funding of future pensions. COLPUERTOS, however, would start making annual special contributions to the pension fund until the existing pension deficit (accrued pension liabilities) is covered. These special contributions would be in relation to service of the employee in the entity; the balance would be covered by the Government. 3.29 Regarding tariffs, cost-based tariffs would be instituted only when COLPUERTOS' cost accounting system is developed; therefore, the projections have assumed only adjustments to maintain the average revenue per ton constant, in real terms, at the 1984 level. Under the project, COLPUERTOS' financial viability would be supported by staff reduction targets and by a revenue covenant, as spelled out in paragraph 3.32 (c) through (e). 3.30 Projected consolidated income statements, based upon assumptions of paragraph 3.28 and Appendix A of Annex 2, are shown in Table 4 of Annex 2. A simmary follows: 11 Although transfer to an independent pension fund would not be completed until the end of 1985, for purposes of the financial projections, it was assumed that pensions would be recorded as if the fund was in operation from the beginning of 1985. - 20 - Projected Income Statements (Current Col$ million) 1985 1986 1987 1988 1989 1990 Operating Revenues 20,304 26,494 31,288 36,626 44,713 54,703 Working Expensesl/ 11,104 13,534 16,128 19,176 22,751 27,066 Depreciation 271 404 718 1,043 1,150 1,099 Operating Income (Loss) 8,929 12,556 14,442 16,407 20,812 26,538 Financial Expenses 571 723 902 1,294 1,817 2,537 Other Non-Operating Expenses2/ 5,741 7,596 9,057 10,892 13,097 15,830 Net Income (Loss) 2,617 4,237 4,483 4,221 5,898 8,171 Working Ratio 55 51 5? 52 51 49 Operating Ratio 56 53 54 55 53 51 The transferring of pension payments to a separate pension fund would have a significant favorable impact upon COLPUERTOS' operating results; the working ratio would improve from 83 in 1984 to 55 in 1985, and the operating ratio from 84 to 56 in the same years. In addition, as a result of cost reductions which would arise from increasing productivity to be achieved under the project, COLPUERTOS' projected financial performance would improve steadily until 1990. Indeed, a major efficiency gain achieved under the project would be a reduction in the average cost per ton of 24%, in real terms, between 1984 and 1990. 3.31 The sources and application of funds projections for 1985-1990 (Annex 2, Table 6) indicate that COLPUERTOS, after meeting all cash operating expenses, would generate the counterpart funds required for the project and that it could make annual special contributions to the independent pension fund in an amount equivalent to Col$ 6,000 million in constant 1986 prices. COLPUERTOS' balance sheet projections for 1985-1990 (Annex 2, Table 5) show a continuing improvement in COLPUERTOS' equity position, as a result of the projected profits, with equity turning positive by 1986. The revaluation of fixed assets, to be carried out during the project period, would further increase COLPUERTOS' equity. 3.32 During negotiations, the following agreements were reached with regard to COLPUERTOS' financial viability: I/ Include employer's regular contribution to funding of future pension, based upon a percentage of the worker's salary. 2/ Includes a specia'l annual contribution to fund accrued pension obligations. - 21 - (a) in order to determlne the funding requirements of the new pension fund, in addition to the actuarial studies referred to in 3.24 (a), COLPUERTOS would regularly update records and other Information on its pension fund and other related obligations to serve as a basis, given the agreed benefit structure, for defining optimum funding mechanisms from the various sources, as well as pace of the required funding; (b) in case the pension fund, as provided in the Proposed Law referred to in 3.24 (b), is not established in a timely manner, COLPUERTOS and the Government would put into effect, no later than June 30, 1986, arrangements satisfactory to the Bank providing for alternative mechanisms to ensure that the former's contribution toward retirement benefits will not exceed the amount that would have been required, had the proposed law been enacted; (c) not later than December 31, 1987, COLPUERTOS would carry out and complete a study on the rationalization of staff, taking into account COLPUERTOS' stated policy relating to labor assignment, operational requirements and traffic forecasts and, promptly thereafter, would implement the conclusions and recomendations of such study; (d) COLPUERTOS would refrain from hiring new personnel until it achieves, through attrition, a reduction of thEe number of staff to levels compatible with the optimal size of the plant of personnel, this level to be specified by the staff rationalization study referred to in (c) preceding (targets for staff levels, in each port, in the period 1985-1990, are included in Appendix B to Annex 2); and Ce) COLPUERTOS would take all measures necessary, including changes in its rates, to provide, for each fiscal year, funds from internal sources equivalent to at least 35% of the annual average capital expenditures incurred, or expected to be incurred, for that year, the previous fiscal year and the next following fiscal year after meeting cash operating expenses, debt service, increases in working capital and other significant cash outflows excluding capital expenditures and including, startin- in 1986, fixed annual special contributions to the independent pension scheme to be adopted in an amount equivalent to Col$ 6,000 million, to be adjusted annually thereafter by the variation in Colombia's national consumer price index, until COLPUERTOS' share of accrued pension liabilities is covered. F. Economic Justification and Benefits 3.33 The project is designed to reduce transport costs through the rehabilitation of existing facilities and the expansion of capacity to meet the demands of expected levels of traffic. The project is made up of three major components: port infrastructure rehabilitation and improvements, port - 22 - equipment acquisition, and technical assistance and training. In the aissessment of the project's economic viability, each major component was ar,nlyzed separately by port. The technical assistance and training component was not analyzed separately, but its cost was included in the overall project economic analysis. A basic variable in the analysis was the traffic forecast given in Annex 1. Annex 6 gives details of the economic analysis of each component. 1.34 At present, about 3nx of foreign seaborne commerce ls transported by Colombian flag vessels and 70% by foreign vessels. Most of the ship time benefits from the project derived from traffic transported in foreign vessels would be passed on to the Colombian economy. Without the project, foreign liners would impose surcharges in order to recover costs of excessive ship service hours. With the project, these surcharges would be avoided. In the economic analyses, only 50% of the benefits from reduced ship waiting and service time of foreign liner vessels have been included, which is conservative. All other benefits would accrue to the Colombian economy. 3.35 The traffic forecasts are based upon the latest World Bank forecasts of GDP, import and export growth. These projections indicate that GDP is expected to grow by 2.5% in 1985 and 5% thereafter. The value of exports is expected to grow at an average annual rate of 10% and imports 3% p.a. over the 1984-1992 period. Expected movements of exports and imports were applied, by commodity, to determine expected cargo volumes. Allocation of traffic to each of the project ports was based upon past trends, modified as appropriate to take into account expected changes in technology and improvements in port efficiency due to the project (Annex 1 and Table 2.2). tt) Port Infrastructure Rehabilitation and Improvements 3.36 The project provides for the rehabilitation of quays at the ports of Buenaventura, Cartagena and Santa Marta. In addition, port infrastructure improvements would include: (a) extension of the transit shed roof and paving of cargo handling areas and road access at Buenaventura; and (b) improvements to cargo handling yards at Cartagena. Together, these components represent 54% of total project costs. 3.37 Quay Repairs (31% of Project Costs). Quay deterioration has progressed to a point where, if the quays at Buenaventura, Cartagena and Santa Marta are not rehabilitated, berth capacity will decrease dramatically and seaborne traffic will, by necessity, be handled by a less efficient lighterage system. Quantified benefits from this component comprise avoidance of lighterage-related costs, including the cargo double handling costs and the cost of cargo losses. The estimated economic rates of return for these works are 86% in Buenaventura, 63% in Cartagena and 38% in Santa Marta. 3.38 Buenaventura Paving and Roof Extension (10% of Project Costs). Cargo storage and circulation problems in Buenaventura result from excessive precipitation, unpaved open storage areas and narrow, poorly maintained port roads. The main pert road providing access to all facilities is overcrowded and is used for loading, unloading and temporary storage; its riding surface is too rough for normal speed operations and safe movement of port cargo. Quantified benefits from the paving works are reductions in damages to cargo - 23 - handling equipment and cargo. Benefits from extensioDs to transit shed roofs are reduced ship service and truck waiting times through avoidance of work stoppage during inclement weather. The estimated economic rate of return for this component is 36%. 3.39 Cartagena Cargo Handling Yard Improvements (9Z of Project Costs). At Cartagena, the project provides for tearing down of three old sheds and repaving the entire area, as well as for the construction of a new shed to replace those demolished, and the paving or repaving of areas to meet the storage needs of breakbulk cargo. These works will shorten distances between the ship and the storage areas, improve access to the loading and unloading areas, increase safe speed limits and generally facilitate ship service operations. The project results in an estimated economic rate of return of 27%. (ii) Cargo Handlig Equipment 3.40 The project provides for acquisition of container handling equipment and heavy load equipment for general cargo (22% of project costs). The types and amounts of equipment required were determined on the basis of an analysis of current port equipment available at each port from both COLPUERTOS and the private sector, equipment requirements assuming the untroduction of more efficient handling methods, and forecast traffic flows. An analysis was also made of the merits of COLPUERTOS owning and operating the equipment versus renting equipment from the private sector. This analysis concluded that COLPUERTOS sbould take advantage of capacity in the private sector to provide light cargo handling equipment. COLPUERTOS could efficiently provide the container and heavy load general cargo equipment, assuming that the productivity improvements contemplated under the project are achieved. Because this component's viability is dependent upon improvements in productivity, the acquisitions would be divided into two tranches. Bank financing of the second tranche would depend upon achievement of productivity and traffic targets (para 3.07). Quantified benefits from the cargo handling component are reductions in ship service time and in cargo handling costs. The estimated economic rates of return for container handling equipment are for Buenaventura 32%, Cartagena 22%, Barranquilla 32Z, and Santa Marta 29%. The estimated economic rates of return for the heavy general cargo handling equipment are 16% at Buenaventura, 29% at Cartagena, 38Z at Barranquilla and 25% at Santa Marta. (iii) Tugboats 3.41 COLPUERTOS tugs are old, with engines which require frequent and costly repairs. Four used tugs will be purchased under the project (11% of project costs). Because the tug is an integral part of the efficient and safe operation of a port, its costs and benefits cannot readily be isolated. As such, a separate economic rate of return was not calculated, and, instead, the cost of tug acquisition was included in the overall economic analysis of the project. The tug analysis focused upon the determination of the most economic alternative: acquisition of used or new tugs. This analysis indicates that the acquisition of used tugs is the least cost alternative. - 24 - (iv) Overall Project Economic Justification 3.42 The overall economic evaluation of the project, including the costs associated with the expected institutional improvements (technical assistance and training) and the tugs is estimated at 38%. The economic rates of return at the individual ports are estimated at 56% at Buenaventura, 39% at Cartagena, 15X at Barranquilla, and 33% at Santa Marta (Table 3.4). Ship service time savings are a principal benefit for several of the project components. In order to avoid double counting, only ship service time savings associated with the equipment procurement program were considered in the calculation of the overall economic rates of return. In addition, only ship waiting time benefits associated with the quay improvements were considered for the overall analysis. G. Project Risks and Sensitivity Analysis 3.43 The main risks associated with the project are those of shortfalls in forecast traffic levels and COLPUERTOS' failure to achieve productivity targets. While the civil works are not sensitive to these risks, these associated with the port equipment component are minimized by concentrating on replacement of obsolete items. In addition, a mid-term review would be made to determine if traffic and productivity improvements warrant continuation of the program at the same pace as that currently planned. Even if no productivity increases are realized under the project, and the benefit is limited to avoidance of declines in productivity without the project, the container handling equipment program would be viable, with estimated economic rates of return varying from 12% at Cartagena to 18% at Buenaventura. 3.44 Of the heavy load general cargo equipment, the Buenaventura acquisition program is the most sensitive to shortfalls in benefits, partly because of the high cost of the 40-ton crane, in comparison with the relatively modest heavy load traffic growth forecast for that port. Nevertheless, availability of at least one such crane on the Pacific Coast is considered essential. Benefits would have to decrease by 11% at Buenaventura, as compared to 43% at Cartagena, 50% at Barranquilla and 38% at Santa Marta, for the estimated economic rate of return on the general cargo equipment to drop to 12%. The risk of shortfalls in benefits due to lower-than-expected traffic at Buenaventura is not considered great since the traffic for general cargo which would use the equipment was assumed to grow at a modest 2% p.a. over the project life. 3.45 Another risk relates to the timely establishment of a new pension system, either through the enactment of the Proposed Law submitted to the Congress or through alternative mechanisms, which would liberate COLPUERTOS from the heavy financial burden imposed by the current system. The Government and COLPUERTOS have already shown their commitment to this objective by pursuing actively, through negotiations with the port labor unions, the necessary changes to legally binding labor agreements, and by initiating the legal process to establish a pension system self-sufficient in the medium term and financially separated from COLPUERTOS. - 25 - IV. PROJECT IMPLEMENTATION DETAILS A. Cost Estimates, Finance and Disbursements 4.01 A summary of the estimated costs for the proposed project components is given on the following page, and detailed cost estimates are given in Tables 4.1 to 4.7. Cost estimates of the civil works components are based upon final engineering. Equipment costs estimates are based upon average current market prices, including attachments and spare parts. A list of existing and proposed equipment is given in Table 3.1. Technical assistance cost estimates reflect manpower requirements obtained from terms of reference; cost estimates for engineering services and studies are based upon the cost of similar studies in other Bank projects, and training cost estimates are based upon a tentative training program developed by the mission (Annex 5). The financial plan for the project is given in paragraph 4.07. All cost estimates are based upon September 1985 prices. 4.02 Disbursements of the loan would be made against: (a) 482 of total expenditures of civil works; (b) 100% of CIF costs for equipment procured from foreign sources; in the case of equipment procured from domestic sources, 100% of ex-factory prices if the valued added in Colombia represents at least 20% of the ex-factory price, and 80% of the cost for imported equipment procured domestically; Cc) 79% of costs for professional services, including supervision of construction, technical assistance and training; and td) 100% of foreign exchange costs for fellowships and work visits abroad. 4.03 Bank funds are expected to be disbursed over a six-year period (Table 4.8), broadly in line with the standard profile for port projects in the region, which indicate that a six-and-a-half-year period is required to obtain full disbursement. Advance procurement of some of the project items, namely civil works and equipment, is in progress, and retroactive financing limited to US$4.0 million would be allowed for expenditures incurred in relation to these project items after January 1, 1985 and before loan signature. B. Execution and Procurement 4.04 The proposed project would be implemented by COLPUERTOS with the support of PIU (Annex 4) and consultants. Procurement procedures (para 4.05) were defined by grouping components of the rehabilitation program by port and type of construction works included, such as quay repairs, paving and repaving including related utilities, and shed construction. The project implementation schedule is given on Chart 27106. 4.05 Local competitive bidding (LCB) procedures to be used by COLPUERTOS (para 3.16) are similar to those used by other Government agencies for which - 26 - COLOe'IA PORT REHABILITATION PUJECT sunii .ccauatrs COST sunnam (Cal. Peso Million) (USI ^'0 Z Total Total Z ForeiLsn Pase : esrei e Bae Local Foreign Total E.charde Costs Local Fareign Total Es!2n1e Costs a. Civil Works 14039.9 1,695.4 3'535.3 49 48 1tM.9 11,149.4 23,249.3 49 49 P. Eauipsert - 2,o14.5 2i614.5 1-,0 3n - 17,194.1 17-194.1 lOG 35 C. Institutional Devlament 1. Technical Assistance 65.4 250.9 316.2 79 4 430.1 P649.l 2,079.2 7? 4 2. Fellauships and Sork Visits Abroad - 105.3 105.3 100 1 - 692.3 692.3 1oo 1 3. CoJrSeS and 5mgnars (Consultants) 24.9 95.5 170.4 9 2 163.9 629.2 1 n 2 Stjb-Total Institutional Dewlopunt 90.3 451.6 541.9 03 7 593.9 2v969.7 3p563.6 83 7 D. Projlect Stervision and Studies 1- Suwervision of Canstr.ction 30.8 119.2 149.0 79 2 202.7 m.5 990.2 79 2 . Engineering Studies 29.6 113.4 143.0 79 2 194.6 746.0 940.6 70 2 3. Port Studies 92.5 316.4 m.o 79 5 542.7 2M011.1 2i62.9 79 5 Sub-total Project Supervision and Studies 142.9 S4.1 691.0 79 9 '40.0 3,604.6 4-54U 79 9 Total BASELINE CLSTS 2P073.2 5309..6 7i392.8 72 100 l3963.9 34m17.8 49,551.6 72 100 Pmcsical Continteneen 207.3 426.4 633.7 67 9 1,363.4 2'904.0 4-167.4 67 9 Price tantiuemies l.1.,.2 2,689.7 3i65.9 70 52 29216.7 5t024.3 7.241.1 6! 15 Tetal PROJECT COSTS 39457.7 M424.6 11i92.3 71 161 17P213.9 42i746.1 599?60.1 I1 123 - - -= ==_ =__==- -= == _ October 21t 195 14:40 Source: MiSsion estimates - 27 - Bank financing is involved. Specifically, during appraisal, COLPPUERTOS agreed, in principle, with the Bank's recommendations resulting from the review of LCB in Colombia, as follows: (a) foreign contractors should be allowed to participate in LCB; the association with local firms should be on a voluntary basis; (b) awards would be to lowest evaluated bidders; and (c) bids of imported equipment would be evaluated on a CIF basis, taking into account the freight costs quoted freely by each bidder. LCB procedures would be followed for civil works items with an estimated cost of US$0.6 million equivalent or less, in a manner consistent with normal Bank practice. All contracts for civil works and procurement of goods with a value of more than US$200,000 would be subject to prior review and approval by the Bank. Contracts for less than US$200,000 would be reviewed after the award. Procurement of second-hand tugboats, Included In the proposed project, would be carried out through International comparative shopping procedures satisfactory to the Bank, and contract award would require an independent technical assessment of the physical conditions and adequacy of the selected boats. These agreements were confirmed at negotiations. Procurement arrangements for items to be financed under the proposed loan, excluding physical and price contingencies, are summarized as follows: US$ Million 1/ Procurement Procedures Project Element ICB LCB Other Total Cost Civil Works 27.3 2.2 - 29.5 (13.1) (1.0) - (14.1) Equipment 14.1 0.8 5.6 20.5 (14.1) (0.8) (5.6) (20.5) Technical Assistance and Studies - - 9.1 9.1 - - (7.2) (7.2) TOTAL 41.4 3.0 14.7 59.1 (27.2) (1.8) (12.8) (41.8) 1/ Excluding fellowships and work visits abroad. Note: Figures in ( ) correspond to the foreign exchange cost component that would be financed by the Bank. 4.06 Supervision of civil works would be carried out by COLPUERTOS assisted by consultants acceptable to the Bank. Inspection of equipment during fabrication would not be required since all equipment should be suppliers' standard manufacture and widely used and tested around the world. Final acceptance tests would be carried out directly by COLPUERTOS. 4.07 Details of the proposed financing plan for the project (1985-1989) are given in the sources and application of funds statement in Annex 2. A summary follows: - 28 - US$ million Local Foreign Total Z Funds Required: Proposed project 17.2 42.8 60.0 78 Debt service during period - 17.3 17.3 22 Total Required 17.2 60.1 77.3 100 Funds Available: Funds generated internally by COLPUERTOS 34.5 - 34.5 45 IBRD loan - 42.8 42.8 55 Government (17.3) 17.3 - - Total Available 17.2 60.1 77.3 100 The amounts include physical and price contingencies. The terms and conditions regarding interest rate, amortization period, grace period and service charges are presented in Annex 2, Appendix A. The Bank would finance 71Z of the project cost equivalent to 100X of the estimated foreign cost. COLPUERTOS would contribute, from its internally generated funds, for the local cost. COLPUERTOS would also contribute, from its internal cash generation, for debt service requirements; the foreign exchange required for this purpose would be obtained from the Government. C. Special Account 4.08 In order to reduce the interval during which COLPUERTOS would finance the Bank's share of project costs with its own resources, the Bank would make advance psyments from the loan account into a Special Account for an amount, in US$, of 4.0 million, which would be opened in the Banco de la Republica and would be available for reimbursing COLPUERTOS for the Bank's share of the project cost. COLPUERTOS would be entitled to make withdrawals from the Special Account for payments incurred on Bank-approved contracts. The Bank would replenish the Special Account upon request of the borrower on the basis of statements of expenditures of the withdrawals made. Supporting documentation of withdrawals from the Special Account would be examined on a routine baais by regular project supervision missions. Disbursements from the loan would be made on the basis of certified statements of expenditures for local expenditures where the contractual values are less than the equivalent of US$200,000, and for foreign expenditures where the contractual values are less than the equivalent of USS20,000. The corresponding supporting documentation would be verified on a routine basis during the supervision process. At negotiations, agreement was reached on the terms and conditions of the Special Account. 4.09 Under the project, the Bank would require the Borrower to have the Special Account for each fiscal year audited, in accordance with appropriate auditing principles, consistently applied by independent auditors acceptable to the Bank. COLPUERTOS would forward copies of the accounts and of the audit report to the Bank, no later than four months after the close of the fiscal year. At negotiations, the auditing procedures were confirmed and agreed upon. - 29 - D. Project Monitoring, Semi-Annual Consultations and Mid-Term Review 4.10 With regard to project monitoring, COLPUERTOS would prepare quarterly reports providing information on the progress of procurement; the execution of the project; the status of each contract related to Bank-financed components; the status of disbursement requests and the schedule of estimated withdrawals of the loan proceeds. The quarterly reports would include operational data to assess the progress in the achievement of established productivity targets. COLPUERTOS would prepare reports on items detailed in Annex 7. The achievement of Productivity Targets would be specifically examined by the Bank and COLPUERTOS in early 1988 (Annex 3, Table 2). This would be assessed by COLPUERTOS and the Bank during a mid-term review that would take place in early 1988. These matters were agreed by COLPUERTOS at negotia.0ons. 4.11 Considering the complexity of all matters that would be dealt with during the implementation of the project, frequent and intensive monitnring through Bank supervision is crucial. At least three supervision missions per year are considered necessary. The financial rargets and the targets agreed at negotiations and the establishment of a new pension system would be reviewed every six months so that compliance with COLPUERTOS' and the Government's commitments is closely followed. 4.12 Another important aspect upon which achievement of the project objectives would depend is the effectiveness of the technical assistance and training elements that would be included in the project; the PIU that has been established by COLPUERTOS would have to prepare, in addition to the tables inclLded in the quarterly report, a separate detailed report on the progreJs of Lonsultant services in each of the areas described in paragraph 3.08 (e) and (f). 4.13 Upon completion of the proposed project, COLPUERTOS would prepare a Project Completion Report to assess the success in the implementation of the project and would carry out a general evaluation. During negotiations, assurances were obtained that, not later than six months after project completion, COLPUERTOS would prepare a Project Completion Report, satisfactory to the Banak, describing the implementation of the project, the achievement of financial and operational goals and the lessons learned from past experience. V. AGREEMENTS REACHED AND RECOMMENDATION 5.01 During negotiations, agreement was reached with COLPUERTOS on the following: (a) to review with the Bank any investment item, not included in the project, resulting in a capital expenditure in excess of US$2 million. Notwithstanding, COLPUERTOS would not commit itself to any such capital expenditure unless it were economically, technically and financially justified (para 2.25); (b) the scope and timing of professional services (para 3.08); - 30 - (c) to prepare with the assistance of the training advisers and submit to the Bank an integrated four-year training program as a condition for loan effectiveness (and implement it with SENA and the advisory services' support) [para 3.09 (a)]; (d) to select courses abroad, candidates for fellowships and instructors/experts, for courses/seminars in Colombia, not later than June 1, 1986 [para 3.09 (b)]; (e) additional required light cargo handling equipment to be rented by COLPUERTOS from private equipment rental companies, unless the enterprise is able to reduce the operating cost of such equipment to levels comparable with thoae available in the private sector (para. 3.11); (f) to take the necessary actions to implemeot the technical assistance recommendations for the improvement of port efficiency and achievement of the productivity targets (para 3.14); (g) to carry out an inventory and revaluation of its fixed assets by March 31, 1987 and at least every year thereafter [para 3.21(b)]; (h) to have its accounts and financial statements for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent external auditors acceptable to the Bank, in addition to the audit carried out by the Controller General of the Republic [para 3.21(d)]; (i) to regularly update records and information on its pension fund and other related obligations necessary for defining optimum funding mechanisms [para 3.32 (a)]; (j) to take all actions necessary to enable the Government to attain the arrangements for the handling of pension liabilities, should the Proposed Law for the establishment of the pension fund not be enacted in a timely manner [para 3.32 (b)]; (k) to carry out and complete, by December 31, 1987, a study for the rationalization of staff i" a or an-e with operational requirements and traffic forecasts [para 3.32 (c)l; (1) to continue reducing its staff by attrition until it achieves levels compatible with the optimal size of the plant of personnel [para 3.32 (d)]; (m) to take all measures necessary, including changes in its rates, to provide, for each fiscal year, funds from internal sources equivalent to at least 35% of its annual average capital expenditures incurred for that year, the previous fiscal year and the next following fiscal year, after meeting cash operating expenses, debt service, increases in working capital and other significant cash outflows excluding capital expenditures and including, starting in 1986, fixed special annual contributions to the independent pension scheme to be adopted [para 3.32 (e)]; - 31 - (n) to carry out procurement of goods and services in accordance with the corresponding Bank guidelines and LCB procedures, satisfactory to the Bank (para 4.05); (o) to examine together with the Bank, the achievement of Productivity Targets during a mid-term review that would take place in early 1988 (para 4.10); and (p) to prepare a Project Completion Report not later than six months after project completion (para 4.13). 5.02 During negotiations, agreement was reached with COLPUERTOS and the Government on the following: (a) to establish a technical committee with representatives of MOPT, DNP and COLPUERTOS for the supervision and coordination of the feasibility study for the Pacific Coast port expansion and the other studies for which COLPUERTOS would be respon&0ble (Para 3.17); (b) by June 30, 1988, and based upon the results of the cost accounting studies, COLPUERTOS to restructure tariffs to reflect the cost of services rendered [para 3.21 (c)]; (c) not later than June 30, 1987, to implement the recommendations of the study on the dredging services required, including institutional arrangements to permit cost recovery for such operations (para 3.25); (d) terms and conditions of the Special Account (para 4.08); and (e) auditing procedures for the Special Account (para 4.09). 5.03 A condition for loan effectiveness would be the preparation of an integrated four-year training program [para 3.09 (a)]. 5.04 Subject to the above, the project provides a suitable basis for a Bank loan of US$42.8 million. The terms would be 17 years with a four-year grace period. October 1985 - 32 - TABLE 2.1 COLOMBIA PORTS REHABILITATION PROJECT Sumary Port Traffic in 1983 and 1984 a/ (000 tons) - 1983 SANTA TOTAL TRAFFIC/PORT IBUEAVENTURA CAATAREAA JRANOUILLA XAlTA TUKACO TOTAL 1984 Foreign Public 2,453.9 708.0 576.9 386.5 - 4,125.3 3,872. Private - 5,212.5 716.7 - - 5.929.2 5,793.0 TOTAL 2,43. -- 1,293.6 3_5. Coastal Publlc 313.1 0.3 14.2 - - 327.6 n/a Private - 2,162.3 239.3 - 682.4 3,084.0 n/a TOTAL 313.1 2,162.6 253.5 - 682.4 3,411.6 n/a River Public 114.8 7.5 - - 122.3 n/a Private - 1 255 7 242.7 - 1 498.4 u/a TOTAL 250. - - 1 7 - - - - -_ GRAND TOTAL Public 2,767.0 823.1 598.6 386.5 - 4,575.2 n/a Private - 8,630.5 1,198.7 - 682.4 10,511.6 n/a TOTAL 2,767.0 9,454.6 1,797.3 386.5 682.4 15,086.8 n/a 0~~~~~~ mmui --in- *- m~ ~ a/ Does not include private ports outside COLPUERTOS' jurisdiction. Source: COLPUERTOS December 1984 - 33- ?A5LIZ. "aroet lorts: ALec2 Laorec Terinal Treffet. 197-o2000 ""bawe" tome] PSI 313 19W INS 1911 3W 153 1941 331 1B39 I lI IM ja 13,1 196 Nfl 1~i a 1am IiIE leg 1935 IUI 314 aIm 337 Un 171 1.1 333 1 3 1 W1 kts In m m en "l - en in as am ef m in w "I - -~~~~~~ TqwI trdf34 UM I 69 512 11 mgU 6 Ub Sm El 331 Il 7l2 kiwis 142 iii a 4a so 3 2 7 21 23 w 31 U n7 Iid I3d 11 746 e M 7 la m ii 9sJ5 %n JNg lo on --t's 43U II £3Al 53 am w 4 4U1 U 4114n 9 4 2 7g. k 8 A II 41 37 a1 41 46 a 62 71 a 13 19" d Irdlff 4n 17 a s 5 64 344 au 42 *n II 9m so Su 71 in bw 7 N 3 3 2 M 3 4 s2 i W 2 7, 2274 4 N ulrdlags U US U *u NI Ni 36 UP Il II 71 9 797 96 3667 nnM JU WAMC 37M9 41 42 WI Aid 4s 3u y 3a 4e 41" w 44 m4 So e 0- - m now - - n o w - .minin t111o1111111111 3 no7 S m- 27 22 27 2Mz D. 1911 lm 3 912 135 11t 149n IW1 114 Ia Uai 149 I 1197 IM 124 1202 14 d1u 126 2IS SoureL MLPOgh and udt . ut Auust 12I5 oNul MdattSz Iw!M E*dm!t ancriptiWII CRE=i In CRtM lu_ml =M h;a UI in1mvam 5tunml!stn 6G; U ft tnu*A 54 39 33 55 - 63 2 - 63 - - 1S,0O lbs. faolft tna 4 6 10 4 -I 10 6. 5 6 7 - 4 Tractn 1i IS - 13 29 - 19 23 - Jo - - 5,aoo lbs. pl3acom 24 6 22 28 13 23 10 17 29 23 it 12-tm .dbile cram - - - - - - - 2 - - 16-CM Wilcr 2 - 2 0 1 3 3 - 3 2 - 40-to w 1 mbla I - I -I 4 3. Ouiwttxi.a 65,O0 lb. foift twdu& or piw1ait 1 2 2 - - 4 1 - I I - I 4,00 lbe. fogullft tng d U 3 q -- / - 3 - 2 3 - 2 3 - I - - ISSCOO lbt. fosaift tnK*A or eqiw1.ulol - - 2 - - 4 - - I - _ I 4,OOD lbs. foddift tnwks 5/ - - 5 - - 5 - - - - - - 5th 1. yadtrata - - 14 - - 10 - - 2 - _ 2 6' traAZe. 6 - - 12 - - 12 - - 4 - - 4 40'e trailu - - 12 - 12 - - 4 - - I 15hdom ejlpmt that tim Its. oc lUfa. Ftr Ml c ita1mr up to 40' 1q. For full walem 4p to 20D lag. hr ay mitanaw lip to 40' la. For emiffw ax tafm carp. Ti?. insd Xrhl yard tractm. AU eaxftt 30Dtgi whil cn ane la svra 2S-eu old. Source: CO WUERTO8 November 1984 COLOMBIA TABLE 3.2 PORTS REHABILITATION PROJECT Proposed List of Equipment and Procurement Schedule Unit Estimated N U M B E k O F U N I T E Price Costs By Port US$ - Year to Santa Equipment Description Be Procured 3uenaventura Cartagena Barranquilla Harta Total General Cargo 15,000 lbs forklift trucks 1985-1986 2 3 1 1 7 2eo 1988 8 7 5 3 23 40 920 16 ton mobile cranes 1985-1986 2 3 3 1 9 1988 - - - - - 180 1620 40 ton mobile cranes 1985-1986 I I 1 1 _ 1988 - - - - 270 1080 3 ton trailers 1985-1986 7 5 4 - 16 80 1988 15 18 25 11 69 5 345 Container Handling 65,000 lbs. forklift trucks 1985-1986 2 3 1 1 7 2450 1988 - I - - 1 350 350 15,000 lbs. forklift trucks 1985-1986 2 2 1 1 6 270 1988 - 2 - - 2 45 90 4,000 Ibs. forklift trucks 1985-1986 3 3 - - 6 126 1988 2 2 - - 4 21 84 Yard Tractors (5th vheel) 1985-1986- 7 5 2 2 16 1120 1988 7 5 - - 12 70 840 20' trailers 1985-1986 6 2 2 - 10 80 1988 6 10 2 4 22 8 176 40' trailers 1985-1986 6 7 2 - 15 180 1988 6 5 2 4 17 12 204 t-. w r -36- TATJ& 3.3 COLOMIDA POLTS RXBILZTATIOW PROJECT £zlutlna COLPURTOS' Tugboat fleet Tear of Port Boat Power Coustructiou Iwmaveutura lodrigo tida. (M) 1,200 BP 1953 Rio Caues (*) 1,200 B 193 Rio Dagus (limited use) 240 BP EP Cartageu Pedro lbomro (0) 1,200 E! 1953 io anzanares 70 BP a Barranquilla Sloce de Abril (M) 1,200 HP 1953 Q.H.-39.3 (river earvices) 374 B no& Santa Marta SantaL Marta 600 BP ua (T) Tugboats that mould be replaced under the proposed project. Source: COLPUERTOS Nlovaber 1984 - 37 - Table 3.4 COLOMBIA PORTS REHABILITATION PROJECT Economic Evaluation and Sensitivity Analysis Base Case Benefits Costs Economic Rate Switching Values Decreased Increased of return BenefitEs Costs by 20% by 20Z 7. - Z Z X Quay Rehabilitation Buenaventura 86 -97 1,670 76 78 Cartagena 63 -93 993 56 56 Santa Marta 38 -72 249 24 24 Infrastructure Improvements Buenaventura 36 -61 141 28 31 Cartagena 27 -56 121 22 23 C(ontainer Handling Equipment Buenaventura 32 -55 122 26 27 Cartagena 22 -34 52 16 17 Barranquilla 32 -46 86 23 25 Santa Marta 29 -51 106 23 24 General Cargo Handling Equipment Buenaventura 16 -11 12 9 10 Cartagena 29 -43 75 29 22 Barranquilla 38 -50 98 28 30 Santa Marta 25 -38 61 18 20 TOTAL PROJECT 38 -73 284 32 33 Buenaventura 56 -87 546 49 50 Cartagena 39 -71 241 32. 33 Barranquilla 15 -12 13 11 10 Santa Marta 33 -67 189 77 98 Source: mission estimates October 1985 COLOMBIA PORT REHABILITATION FPOJECT Table 1. Penavantura Detailed Cost Titile Preakdawn of Totals lrSl. Cent (US '000) Base Costs Totals Including Continseneies Totals Includind Continflncles ------------------------------------ (Col. Peso Million) (Col. Peso Millioni US9 '000) Local ------------------------------------ ------------------------------------- ...........................................- lExcl. psties a '5 I6 1997 199M 1999 Total 1995 2996 1907 1999 1909 Total 195 1996 1987 1998 1999 Total For. Exch. Taxes) Taxes Total I. INVESTHENT COSTS ............... As CIVIL MSI . ........ aVNo Repairs 41.4 156.9 156,9 156,9 - 512.0 SO.S 231.6 275.4 324.9 - 892.4 306.7 1.236.3 l.332.2 1,43898 - 41314.0 2:233,8 2090,2 - 4,314.0 co Pavins and Services 34.9 167.5 224.9 62.3 - 490.0 42.6 247.3 39445 130.1 - 914.6 258.9 13202 1990907 576.2 - 41063.9 19646.6 29417.3 - 4:063.9 Sheds 24,3 87.2 87.2 24,3 - 222.9 29.7 128.7 153,0 50.3 - 361.7 180.1 686.9 740.2 222.8 - 1,830.0 965,9 864.1 - 11830.0 Bub-Total CIVIL MOAtS 100.6 411.6 469e9 244.0 - 1.224,9 122,9 607.6 822.9 505.4 - 2:059.7 745,6 3.243,4 3.981.1 2P237.9 - 10.20799 4.946.2 5.161,6 -10,207.9 I. EWIPIEHT Semral Cargo 103.7 51.9 - 62.9 - 218.4 122.0 73.8 - 125.4 - 321.2 741.0 393,8 - 555.5 - 1:690.2 19690.2 - - 1,690.2 Container 169.1 23.6 - 89.6 - 291.3 197,9 33,5 - 179,9 - 410.1 1W2013 179.0 - 791.5 - 2,171.8 2:171.8 - - 21.7108 Tugboats - 1037 103.7 - - 207.4 - 147.5 175.4 - - 322,9 - 797,5 848.6 - - 136.1 1:636.1 - - 1.636.1 Vorkshor nd Training 18.9 - 17.3 - - 36.1 22.2 - 29s2 - - 51.4 13407 - 141.4 - - 276.2 276,2 - 276.2 Sub-Totel EOUIPHENT 290.7 179.1 121.0 152.4 - 743.2 342.0 254.9 204.6 304.2 - 1#105.7 2,077.0 14360.2 990.0 1,347.0 - 51774.2 5,774.2 - - 5,774.2 .. ... .... .... ... ... .... ... ..,. .... ..... .... .... ....... .... .... ..... .... ---- ---- --- -------- Total IIIESTMENT COSTS 391.2 S90.7 569.9 396.4 - 968.1 464.9 962.4 1t027.6 809.6 - 39164.3 2.92265 4.603,6 4,971.2 395947 - 15.992,1 10:620.5 5:361.6 - 15,PZ.1 axr xaas ssa &USS a Masaao namax au 3333 ut=-X 333S*33 ::::: :::: :::a::: axans Xtax-- J3333333 :3:33 == == :::2:z :3afl33*33 3*:I:S= ;".nzz :Xa:;nw- Total 391.2 590.7 589,9 396,4 - 1:969.1 464,9 962.4 1,027.6 609.6 - 39164.3 2,922,5 4,603.6 49971.2 3:594.7 - 15,992.1 10:620.5 5:361.6 - 159d .1 October 212 1995 14239 Source: Mission estimates H COLONPIA PORT REIASILIIATIOH ROJECT Table 2. Cartagena Detailed Cost Table Preakdoun of Totals lItr. Cant WUSI '000) Pose Costs Totals Including Contintencies Totals Including Continsenclis ------------------------------------ (Col. Peso million) (Coal Peso Million) (U391 000) Local -----~------------------------------ -------------------------------------- -------- ------------------------------------ (E.cl. Duties I 1985 1986 1987 IM8 I99 Total 1985 1986 1987 1988 1999 Total 1985 1906 1987 1988 1989 Total For. Exch. Taxes) Ta;es Totel _Azxz *-jtiran awai s... s saia 3::::= *atgi 20t.: 2:az t:: a: ==stains- .giust ii::: ::-::::S m:::S: ::::5s tat::::: ..a i t t ::=S=:: -t . ===tZ= o. IWES9TrENT COSTS A. Civil Works ........... QuaY Repairs 37.6 835.4 78.2 - - 201.3 46.0 126.1 137,3 - - 309.4 279.2 673,3 664.0 - - 1.616.5 964.7 651.9 - 1,616.5 % Redelllns Sectors 3 and 4 - 279.S 47.6 - - 327.3 - 413.0 93,5 - - 496.5 - 2P204,7 403.9 - - 2t608.5 1,064,1 1524A4 - 2 609.5 Rewodellind Sector 502 103,1 30.7 - - 193.9 61.2 152.2 53.8 - - 267.3 371,9 912,5 260.3 - - 1.444.8 570.2 874.5 - 1:44e Services - - - 17.1 25.7 42,9 - - - 35.5 62.9 98.4 - - - 157.3 254.8 412.0 217.5 194.6 - 412.0 Sub-Total Clvl Works 87.9 468,3 156.4 17.1 25.7 755.4 107.2 691.3 274.6 35.5 629 1171,5 651.1 3,690.5 1,328.2 157.3 254.8 6.091.9 2.836.53,245.3 - 6091.9 3, iFeupent General Cardo 47.1 110.0 - 73,8 - 231.0 55.5 156.5 - 147i4 - 359,3 336.68 35.2 - 652.7 - I,924.7 1.824.7 - - 1924.? Container 59.7 224.7 - 154.0 - 438.4 70.3 319.6 - 307.3 - 6972 42646 1706.3 -1,360.9 - 3,49307 3:493.7 - 3,493.7 Tusboat - 103.7 103.7 - - 207.4 - 147.5 175.4 - - 322.9 - 797.5 948.6 - - 1:636.1 1,636.1 - - 1,636.1 Worksho and Training 20.4 - 18.9 - - 39,3 24.0 - 31.9 - - 559 145.9 - 154.3 - - 300.2 300.2 - - 300.2 Su-Total Emuirent 127.3 438.4 122.6 227.9 - 916.0 149.7 623.6 207.3 454.7 - 1:435.4 S09.4 3329.0 19002,9 2.013.5 - 7,254.9 7:254.9 - - 7,254.9 !otal IMYSTIENT COSTS 215.1 906.7 279.0 245.0 25.7 1,671.4 257,0 14314s 481.9 490.3 62.9 2,606. 1S 560.5 7.019.5 2.331A1 2.170,9 254.9 13.336.6 10:091.3 3:245.3 13:336,6 2zV--X zzzzz cm=== ==== ==.-zzz = = --== z== :_:::- . wa isa : .... ui.a.... is.tsx mmii t :::: t :-:: :==,=: = :=.: ::: zxa: J.t:su=: 0t3l 215.1 906,7 279,0 245.0 257 1:671.4 257.0 1:314.9 491.9 490.3 62.9 2.60649 1,560.5 7:019,5 2:331.1 2t170s8 254.8 13.336.6 IO091.3 3,245.3 - 139336.6 aSajn ttti taut. st:as Rirs =ittt:i-rz_ilt tStin tg ::: 2 : :an t 7 ::asuA S-asns aste:r:: ::: a:::: s *S::: :::=::su :=:==: fins ss: a=s … ::_:-:: October 21, 1985 14139 Source: Mission estimates 19 COUOIA FORT REIAPILITATIOM PROJECT labie 3. )arrane'llI Detailed Cost Ttble Breakdown of Totals Inel, Cant CUSS '000) Perimeters pase Costs Totals Includinr Continrencies Totals Includind tontinreicies -----------------------…-------- ------------------------ (Col. Paso Million) (Col, Peso Killion) (1us 000) Local Pht. -... ------------ . ------ --------------^--------------------- - …(Excl. Duties I Cant. For. Grass Sue I995 1986 187 1S88 I198 Total 1985 16198 7 1S88 1S8? Total 1985 I96 1987 1919 1989 Total For. Exch, Taxes) Taxes Total Rate Exch. Tax Rate ACC *33:3==33 33333 3*-- 533333 3 8383* 38*3 *333 3333 83333 33383 flxs:g 33333 33333Z 33an . ::: ::: … 3 … 3:::: 33$- :::::::=::-= =:::: 333:=e3 =s=5Lsss=. Is IWYESTRENT COSTS A. Civil Vofris Eoer toer Plants - 2.?9 - - - 29.9 - 44.1 - - - 44.1 - 235.3 - - - 2J3.3 235.3 - - 235.3 0.1 I 0 0 ------------------------------ ----------------------- ----…-…--- ---… --- - --- -- 9t-Total Civil krse - 29.9 - - - 29.9 - 44.1 - - 44.1 - 235.2 - - - 235.3 231.3 - - 235.3 3. Esinmnt General Caro 550 5. - 50,3 - 163,4 64.7 82.7 - 100,4 - 247,8 3929 441,5 - 444,4 - 1.2788 1i279,9 - -1,279.! 0.06 1 0 Containers - 94,9 - 1.9 - 92.7 - 1207 - 15,7 - 136.4 - 644.3 - 69.4 - 713,8 713,8 - - 713.9 0.06 1 0 lu*bat -103.7 103,7 - - 207.4 - 147.5 175,4 - 322.9 - 797,5 848,6 - 19636.1 1,636.1 - - 1,636.1 0.06 1 0 Vorksham and Tralnins 18.9 - 17.3 - - 36.t 22,2 - 29.2 - - 51,4 134.7 -141.4 - - 276.2 276.2 - - 276,2 0,06 1 0 ._ . ... ....... .... ..... .... ... _.___,, . .... ,,,., ..... ..... ...... ..... .... ... ....... ........._._ ...... ....... .... .. 8th-Total Eulpeent 73,8 246.7 121,0 56.1 - 499,7 86,9 350,9 204,6 116.0 - 758,5 527,7 15873.3 990.0 513.8 - 3,904.9 3,904.9 - - 3M04.N Total IIYESTMENT COSTS 73J8 2765 121.0 58.1 - 529.5 16,9 395.0 204,6 116,0 - 802.6 527.7 2M1M8.6 ff0,O 513.8 - 4,140,1 49140,1 - - 4,140.1 Total 73.8 276., 121.0 58.1 - 52985 86.9 395,0 20046 116,0 - 802.6 527,7 2.109'6 990.0 513.9 - 4,514.1 4.140,1 - - 4.140.1 Octoer 211 195 14139 Source: Mission estimates COLOIDIA PORT REHAPILITATION FROJECI Table 4. Snt, Marta Detailed Cost Table Breakdown of Totels Irdl. Cont (USI '000) Pase Costs Totals Including Contingencies Totals Incl'jding Contingencies - (Col. Peso Nillion) ICol. Peso Million) (US$ '000) Local ------------------------------------- ...................................... ....................-------------------------- (E.xcl, Dule I 1995 1964 1997 19M 1989 Total 1"5 1986 187 1988 1989 Total 1985 1986 1987 198 1989 total For, Etch. Taxes) Ti:es To'.al 5Z:3: ::::: Ja::= sam : zA asa *U . sass::: &Za:: sugz33 53333 Sar 3 35ss a55A3 s: S:- 3a55S: c---- r335 3:5 333533s3 ==zzmau33 :_=:3::3 333:::3: 335wT. 1t IIWESTMENT COSTS A. Civil Vorks Gusa Repairs I1 2 and 3 '9.3 424.6 353.9 223.6 114.6 19195.9 96.8 626.9 621.1 463.2 280.2 2M0O7,M 587.6 34345.8 3,004.5 2,050.9 1.135.5 10,124.2 4,933.3 5,290,9 - 10.124*2 uay Repairs 4 an 5 24.1 83 83.5 83.5 39.6 314,2 29.4 123.3 146.6 173.0 96,9 569.0 178.4 658.0 709.1 765,9 392.5 2,703,5 1,290.9 1,413.0 - 2,703.8 Services - 9,0 6.0 - - 1511 - 13.3 10.6 - - 23,9 - 71.2 51.1 - - 122,3 97.0 25.3 - 122.3 --- --- ----- ----- --- - ...... ..... ....... ...... -------- . ---- --- ------ ------ --- - --- - ---- - -- ---- ---- -----. --- - Sub-Total Civil VorPs 103.3 517,1 443,3 307.1 154,3 1,525,1 128.1 763M4 778,2 636.1 377,0 2,660.8 766.0 4,075.0 3,764.7 2,916.6 1,528.0 12,Y50,3 6,221,1 6,729.2 B. Esuieeint Eeeral Cargo - 64.4 - 69,1 - 133.6 - 91.6 - 130.0 - 229.6 - 489.2 - 611.0 - 1,100.2 1,t00.2 - - 1t100.;2 Contaivers - 79.6 - - - 78.6 - 111it - - - 111.9 - 596.6 - - WM6.6 596,6 - - 5?6.6 tudovat - 103.7 103I7 - - 207.4 - 147.5 175,4 - - 322.9 - 787.5 649.6 - - 1,636.1 1,636,1 - - 1,636,1 Voist.op and lrainihn 18.9 - 173 - - 36.1 22.2 - 2NJ2 - - 51,4 134.7 - 141.4 - - 276.2 276.2 - - 276.2 Sub-Total Eeuirsent 18,9 244t7 121.0 69.1 - 455.7 22.2 350,9 204.6 1390 - 715,7 1347 1,873.3 9.0 611.0 - 3.609.1 39.09. - - 3,609.1 Total IIMESTIENT COSTS 122.2 763.8 564*3 376,2 154.3 1 4990.9 1493 1,114.3 982.8 774,1 377.0 3.396,6 900.8 MU948.3 4,754.8 3,427.6 1,528.0 16,559.4 9.a30,2 6,729.2 - 16.559.' "--,; :5333 ::3 33::3 :33:3 3335*53 *-5::: *: ':::3 :35="33 3:333:3 :5:: ::s::3 s:ss:wa 333a333 3:53333 33:33333 33:3::::: ::3353: 33: :03. Z:3-.-33 Total 122.2 763,8 564,3 376,2 154.3 1e 980,9 148,3 1,114.3 992.3 774.1 377.0 3,396,6 900,8 5,948,3 4,754,9 3.427.6 1,529.0 169559.4 99830,2 6,729.2 16i359.4 …:_: ::: :: :: ::::a 33333:3:33 5=- ::sos 3S aJ SSSU:::, 3: 33 33 3:: :5 333 3::55333333 3333333 33333w g:X : ::::ss :35::5:::= S:::::: :a: ::.J .5-- --- - -----------_ ..................__________.__................................................................. ---------------------------------------- -___________.________________________---------------.....-.-----------------..... _____-_._ _ October 21. 1995 14139 Source: Mission estimates COLOflhA PORT REIIAPILITATION PROJECT Table S. Institutional Developsent Detailed Cost table Irea&do.m of Totals mnel. Cant (US51 000) Pase Casts Totals Includind Contingencies TatU1s Includins Continsencies ……------ -…--------- (Cob. Peso Nillion) (Col. Peso million) (U51 '@00) Local ----- ----- ---- ----- ---- ---- ---- ----- ---- ----- ---- ----- ----- ---- ----- ---- ----- ---- ----- -,(E utiesits I 199 M96 191 IM1 1999 Total 1915 l3 199 ? 19 19 1998I?9 total 1?65 191 1997 IM1 199 total For. Cxchi. Tares) TaXes Total - --------------~~~~~~~- - A. Institutional Nvelant 1. Technical Assistance Financial Controls 36.1 25.6 7.M 69.3 *4,1 37,8 133.2 - - 95.1 267.9 201,7 63.9 - - 533.5 421.2 110.4 . 533.5 TMransent Infomation Systems 33.1 10.5 9,0 - -52.7 404 15.6 15.9 - - 71.9 245.5 93.1 76.7 - - 405.4 321.5 93.9 - 405.4 Part &,tratzons 40,7 31.6 10.5 - -91.1 60.7 46.7 19.5 - - 125.9 349, 249.2 99. - - 707.0 560il9 146.2 707.0 5 Naintenane 57.2 34s6 10,5 - 102.4 69.9 5!!l 29.5 - - 139.5 424.2 272;9 89.5 - - 786.6 £23. 162.7 - 796.6 4.. Sub-Total Technical AsIistance 176.1 202. 37.6 - - 316.2 255.1 251.1 66.2 - - 432.3 19306,1 906.9 319.6 - - 29432.5 1,929.4 503.1 - 2,432.5 2. Courses and SemInars (Consultants) Advisors Services 6.0 7,5 6.0 6.0 - 25.6 7.4 11.1 10.6 12.5 - '2.5 44.7 59.3 52.1 55.2 - 210.3 166.19 43.5 - 210.3 Tralnini Seminars 19.6 63.2 7.5 4. - 94.9 23.9 93. 23.2 9. - 139.9 145.1 491.3 63.9 41.4 - 749.9 593,9 154.9 - 748.9 1gb-Total Courses eNd Seminars (Consltants) 25.6 70.9 13. 10.5 - 120.4 32.3 104.1 23.9 21.9 - 192. 239.9 55'S1 U1151 96.7 - 959.1 760M 1914 - 95911 3o FellwsshIrs and Mart Yisit. Abroad Nanuesent Training - 14.1 ĥ1.0 - - 25.1 - 20.9 19.3 - - 40.2 - 213.4 93.4 - - 20A.8 2104.3 - - 204.5 Conferences - 4.7 4.7 4.7 - 14.1 - 7.0 3.3 9.3 - 25.0 - 1-.l 40.0 43.2 - 120.4 120.4 - - 120.4 Fellowships 26.9 27.3M 17322. - 66.0 23.0 25.5 30.3 26.0 - 204.9 139.81 236.2 146.9 115.3 - 539.1 536.1 - - 5394: Su-Toasl Fellowships and Matk Yisits Abroad 19.9 36.1 33. 17,1 -105.3 23.0 53. 57.9 35,5 170.l1239.5 264,3 23M, 158.5 8 63. 963. - 63.3 subTotal Institutionial Devlosset NM. 209,3 34,2 27.9 - 542.9 269.4 300.9 147.9 57.6 - M137 2,635.7 1,649.2 718.9 255.2 -4,255.0 3,553. 701.5 -4rM550 Total 2INSTIEN' VI'STS 220.6 209.3384,2 27.9 - 542.9 269.4 306.9 147.9 57,6 - 793.7 1.63597 29649.2 714.9 255.2 -4.255, 3,553.4 701.5 - i,rs.0 suaaa sian iucs SMSa sass gasmig art: nvas maz &Asio" a sa sases. AS nan- zWWSia arias sangags mC m as ua.TsEXASzMaRS"ian asita. Total M,~~~~~~~~~206 209.3 14,2' 27.31 - 542,9 269.4 300.9 147.6 57.6 - 783.7 1.635.7 19649.2 714.9 255.2 - 4,255,0 3,553.4 701.5 -4,255.0 :O. Total 53553~~~~~~~~~~~~~aza 53515 3533 SEEM Bass axaca *=*ftzaz iiiii WSiii iifl813 SCala ala1asaa iitfl* 2 J an: tinz ira:aaas a ………WV-2 zt Uctot.e' 219 1955 14139 Source: Mission estimates COLOIA PORT RHABILITATION FIECT Table 6. PFonct Swtvision of Construction srd Stuoies Detailed Cost Table Fase Costs Totals Includige 2rtimtencies Totals Includini tontintmncies (Col. Peso Million) 'Col. Peso Million) (USO 1000 195 1996 199' jQeP 1999 Total 1995 1I86 197 1998 1989 Total 1905 1996 1997 19I9 1999 .:tel :c:: ::xat : .:n :33 ::s : 3C 3:_ :a:3= = a:=:: . 3_: =:z::: --222 :===: S :::=: ===_::: 1 INJESTMENT COSTS A. Project Suervision of Construction and Studies 1. Suervision of Construction U£NAVENTURA 4.5 16.6 l.1 120 - 51.2 5.5 24.4 31.7 24,9 - 56.6 33.5 130.5 153.4 110.5 - 427.9 CARTAGENA 1,5 10.5 15,1 1.5 1,5 30.1 1.8 15.6 26.4 3.1 3.7 50.6 11.2 53.1 127.9 13.8 14. 250.I PARRMASUILLA - 1.5 - - - 1.5 - 2.2 - - - 2.2 - 11. - - - 11.3 SANTA MiTA 4.5 16.6 16.6 16,6 12.0 66.2 5.5 24.4 29.1 34.3 29,4 122,9 33.5 130.5 140.6 1-!.0 11'.] 575.9 Sub-Total Supervision of Construction 10.5 45*2 49,7 30.1 13,5 147,0 12.9 66.7 97.2 62.4 33.1 262.2 79.1 355.9 421.9 276.2 134.2 19266.4 2. Enirneerlns Studies FiNAL PESIGN SECOND PORT MROACT - 72.3 70.8 - - 143.0 - 106.7 124.2 - - 230.9 - 569.5 600.9 - - 1.170.4 Sub-Total Endineerir.d Studies - 72.3 70. - -143.0 - 106.7 124.2 - - 230.9 - 569.5 600.9 - - 19170.4 3. Port Studies FEASIPILITY STUDY 57.2 231.0 132.5 30.1 - 350,8 69.9 193.4 232.6 62,4 - 559.1 424.2 1:03:.2 1-125.1 276.2 - 2fr57.7 PEMDOINO SIUDY - 27.1 21.1 - - 48.2 - 40.0 37,0 - - 7.0 - 213.6 179.0 - - 392.t Sub-Total Port Studies 57.2 158.1 153.6 30.1 - 399.0 67.9 233.4 269.6 62.4 - 635.1 424.2 1*245.9 1,304.1 276.2 - 3250.2 Sub-Total ProJect Supervision of Construction and Studies 67.7 275.5 274.0 60.2 13.5 691.0 92.7 406,.7431.0 124.7 33.1 1s121.3 502.4 2Y171.2 2,326.9 552.3 !!'.2 ,6937.0 Total IUESTWNT COSTS 67.7 275.5 274.0 60.2 135 691.0 92.7 406.7 481,0 124.7 33.1 1*12.3 502.4 2:11.2 2.326.9 552.3 134.2 5*697,0 ::a:::: :::na a t sam:sa a nSX =::S ax :: :3::. ea::: 3:3s =3 Z.9:: .*n= z:-- : z a=: s - : = ::-- Total 67.7 275.5 274.0 60.2 13.5 691.0 82.7 406.7 481.0 124.7 33.1 1*128.3 502.4 2*171.2 2.326.9 552.3 134.2 5657.0 :::: ~ ~ ~ 3 ::_:::an :=8. a ::=: a:::: =:;:: 3:t ==…: : ::::a =-ao-n : =a --:… -- - --- -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~zc taZ2-"z--- -a in az=2-s October 21* 1185 14:4O0 Source: Mission estimates MUT KIMIILIATAION MAECT osWCT cOST suwa (Col. PM Million) cuSs '000) Z Total X Total I Foruisn lise 2 Foreif,n Pase Local Forersi Total Exchuu'e Costs Local Fereisn Total E:;chmte Costs :Satin anai aSaXSaa nannmm= :Sant: a::-- … .*5 ::::: - tL = - A. Port Rdeabilitation ... ...._.._. .._ 1. lmnawntura 643.6 1.32405 1,968.1 67 27 4?232,7 8,710.4 12,943.1 67 27 2. Carta.l 404.0 1267.4 1,671,4 76 23 2Y657.0 8334.9 10,991.9 76 23 3. hrtrnuilla - 529.5 529.5 100 7 - M1482.2 3.482,2 1OO 7 4, Santa Tfte 7M.3 1188.35 19980.8 60 27 5,210.2 7,916,0 13.026,2 60 27 Sub-Total Port Rteabilitation I1S39.9 49309,9 6,14948 70 83 12,099.9 29,343.5 40.443.4 70 93 3. Institutional vulogmnt 90.3 451.6 541.9 83 7 593.9 2,969.7 3,563.6 83 7 C. ProJect Supervision, Ensinegrini and Sector Studies 142,9 543,1 691.0 ?9 9 940.0 3,604.6 4.544.6 79 9 C Total IASELIME COSTS 2.073,2 5.309,6 7M392.9 72 100 139633.9 34,117.9 49,551.6 72 100 Ptuical Contingenies 207,3 426.4 633.7 67 9 1.363.4 2M304.0 467,4 67 9 price ContinSocies 1.177,2 2,698.7 3,865.9 70 52 2,216.7 5,024.3 ?7241.1 69 15 Total PMAECT COSTS 3 45707 9,424,6 11,982,3 71 161 17,213,9 42,746.1 59,960.1 71 123 =ass=- azi--s =aflaniw amsm:Xas m:2anna ..m-=-.: nss:--:: 5: …a … ::: *==:: October 21. IM5 14140 Source: Mission Estimates Ir tEl 45 - Table 4.8 COLOMBIA PORTS REHABILITATION PROJECT STAFF APPRAISAL REPORT Estimated Schedule of Disbursements US$ millions) Disbursements FY/Quarter Annual Cumulative FY1986 December 31, 1985 _ _ March 31, 1986 0.7 0.7 June 30, 1986 4.3 5.0 FY1987 September 30, 1986 3.0 8.0 December 31, 1986 3.0 11.0 March 31, 1987 2.5 13.5 June 30, 1987 2.5 16.0 FY1988 September 30, 1987 2.0 18.0 December 31, 1987 3.0 21.0 March 31, 1988 4.0 25.0 June 30, 1988 4.0 29.0 FY1989 September 30, 1988 2.0 31.0 December 31, 1988 2.0 33.0 March 31, 1989 1.5 34.5 June 30, 1989 1.5 36.0 FTY1990 September 30, 1989 1.0 37.0 December 31, 1989 1.0 38.0 March 31, 1990 1.0 39.0 June 30, 1990 1.0 40.0 FY1991 September 30, 1990 0.8 40.8 December 31, 1990 0.8 41.6 March 31, 1991 0.8 42.4 June 30, 1991 0.4 42.8 Source: Mission estimates September 1985 - 46 - ANNEX I COLOMBIA PORTS REHABILITATION PROJECT Port Traffic Analysis I. Methodology 1. Virtually all of Colombia's foreign trade volume is seaborne and moves through its public ports and private berths, and port traffic closely reflects the international economic and financial situation of the country. At present, imports are determined not by demand but by Colombia's depleted foreign reserves, low levels of foreign inveatment and credit. Export levels are largely dependent upon coffee and sugar; these commodities are controlled by international agreements and movements of international commodity markets, over which Colombia has little or no control. 2. Between 1980 and 1983, GDP grew at a rate of only 1% p.a., with the value of exports declining by 5% p.a. Imports declined in 1980 and 1981 and, after a recovery in 1982-1983, again in 1984. The most recent Bank economic projections indicate that GDP is expected to grow by 2.5% in 1985, and by 5Z p.a. between 1986 and 1992. Exports of goods are expected to grow in terms of value by an average annual rate of 10Z per annum over the 1984-1992 period, while imports will grow at a more modest 3% p.a. These projections are predicated upon the assumption that the proposed Bank Export Development Project will be implemented and that world economy conditions will be favorable. The import projections take into account projected increases in income, the income elasticity of demand for imports, and changes in the trade regime for the major import categories. For the major export commodity, coffee, the World Bank projections of price increases and increases in world demand were utilized. For the remaining export commodities, product-by- product projections of price and quantity changes were made, taking into account expected exchange rate movements. 3. The traffic forecasts used in the appraisal of the Colombia Port Rehabilitation Project were prepared by the mission in cooperation with COLPUERTOS. Forecasts were made for each of the public terminals to be rehabilitated under the project: Buenaventura, Cartagena, Barranquilla and Santa Marta. In making the forecasts, the World Bank estimates of export and import movements were applied, by commodity, to determine expected cargo volumes between 1985 and 2000. Allocation of commodity import and export traffic to each of the ports was based upon past trends, modified as appropriate to take into account expected changes in technology (particularly containerization) and improvements in port efficiency due to the project. II. Characteristics of Port Traffic Flows 4. Colombia, through its ports, imports food, raw materials and intermediate inputs for its agriculture and industries, and exports such traditional agricultural products as coffee, bananas, sugar and molasses. Total waterborne commerce exceeded 15 million tons in 1983. This total - 47 - ANNEX 1 includes 10.5 million tons of hydrocarbons, fertilizers, cement and minerals handled by private berths and 4.6 million tons handled by the public ports. Of the traffic handled in the public ports, some 4.1 million tons were handled by the four project ports. The public port at Buenaventura on the Pacific coast handled 2.5 million tons in 1983 while, at the Atlantic ports, Cartagena handled 707,000 tons, Barranquilla 550,000 tons and Santa Marta 390,000 tons. 5. After a period of rapld growth in the late 1970s, foreign trade through the major public ports declined sharply from 4.9 million tons in 1980 to 3.8 million tons in 1984. Imports feLl largely as a result of Colombia's worsening payments situation, while the decline 1ix exports resulted mainly from the weakness in world demand for its sugar and molasses and the diversion of coal exports to private ports. The stagnation of port traffic affected some ports more than the others. Worst hit was the port of Santa Marta, whose traffic declined by over 40% as a result of diversion of traffic to other ports. On the other hand, the port of Cartagena actually registered a small increase in its traffic volume on the strength of its expanding container traffic. 6. All four project ports are fundamentally general cargo ports. Only Buenaventura and Santa Marta have mechanized facilities for bulk cargo handling and storage. Specialization, in terms of traffic flows that have developed (banana exports via Santa Marta, or barley imports via Cartagena), has been determined largely by the ports' proximity, or by inland transport links, to the plantation or processing locations. 7. Most of Colombia'-s seaborne coimyrce is, and will likely remain, with the industrialized countries of Eur4pe, with Japan and with the United States. The country's own maritime fleet, which carried 30% of the public port cargo in 1983, has recently been modernized as a result of a major ship construction program. While the aggregate number of ships visiting Colombian ports has declined in recent years, their average size has increased. 8. Until recently, Colombian ports have been slow to containerize. Tn 1978, only 103,000 tons, or 4% of the general cargo traffic, were handled in containers, as compared to 468,000 tons, or 19% of the general cargo traffic, in 1984. The first full container ship service, CAROL, was established in Cartagena in 1981, followed by EUROSAL in Buenaventura in 1984. Both consortia are foreign-based and operate titth self-sufficient ships, but they depend upon the ports to provide container storage and handling facilities and equipment. III. Commodity Forecast A. Exports Ci) Coffee 9. Coffee traffic represents about 55% of total exports through the project portg. CoEFee exports through the project ports increased at an average rate of 1.9% p.a. between 1978 and 1984. During that period, coffee - 48 - ANNEX 1 traffic dropped in 1980 through 1982, then recovered by 1984. Based upon projections of world demand and prlces, it is expected that coffee exports vill increase at a rate of 0.6Z p.a. between 1984 and 1992. (ii) Sugar and Molasses 10. Sugar and molasses exports represent 15% and 5% of total project port exports, respectively. These commodities are handled as bulk traffic by the port of Bueiaventutra. Sutgar exports fluctuated from a low of 124,000 tons in 1978 to a high of 293,000 tons in 1983. In 1984, these exports dropped to 167,000 tons. A modest increase of 1.3% p.A. between 1984 and 1992 is expected for this commodity. Even with this growth rate, sugar traffic will not reach the high of 1983 over the forecast period. Molasses traffic demonstrated a similar trend, dropping from 126,000 tons in 1983 to 52,000 tons in 1984. Molasses traffic is expected to remain at this lower level over the forecast period, growing to only 58,000 tons by 1990. (iii) Banana 11. Banana traffic accounts for 6% of total export traffic handled by COLPUERTOS. Bananas are also exported through specialized facilities not administered by COLPUERTOS. All of COLPUERTOS' banana traffic is expo-ted through the port of Santa Marta. Total Colombian banana exports betwetoi 1980 and 1984 grew at a rate of 4.7% p.a. The banana traffic through Santa Marta grew at the same pace over the period. In the traffic forecasts, it is assumed that exports through Santa Marta will continue to grow at the same rate as overall Colombian exports, or 2.8Z p.a., uritil 1990. (iv) General Cargo 12. Other general cargo traffic, which is made up mainly of heterogeneous goods, represents 19% of export traffic through the project ports. This traffic fluctuated between 124,000 tons and 225,000 tons from 1978 to 1984. Rapid growth in this traffic is expected as the proposed Export Development Project is implemented. Exports of other general cargo traffic are expected to grow at a rate of 10.9Z p.a. between 1984 and 1990. Tle growth ts expected to be distributed evenly among the four project ports. B. Iports (i) Grain 13. Wheat and other cereal imports account for about one-third of import traffic through the project ports. Wheat iaports grew at an average rate of 5.8% between 1978 and 1984. Over the same period, imports of other cereals declined by 19% p.a. During this psriod, there was a shift in bulk grain traffic from S.nta Marta and Barranquilla to Buenaventura. This trend is expec.ed to be reversed as the large and relatively modern grain silo at Santa Marta, which 10 years ago handled nearly 300,000 tons of grain imports but which now handles less than 50,000 tons, will be reactivated outside the proposed project by the owner, the Agriculture and Cattle Marketing Institute (IDEMA). This facility has the potential for providing the most efficient - 49 - ANNEX I and least costly trensshipment of graln to the Bogota metropolitan area. Overall, wheat lmports are expected to increase at a reduced rate of growth of 2.2Z p.a. until 1990, and other cereals are expected to remain at current levels. The growth in traffic Is expected to be concentrated at Santa Marta, however, where grain imports are expected to increase from 53,000 tons In 1984 to 280,000 tons by 1990. (il) Petroleum Produ:ts 14. About 5Z of Import traffic is made up of petroleum produrts, which are mainly handled at Buenaventura. The petroleum berth is operated by ECOPETROL. The decline in petroleum product traffic, from 389,000 tons in 1982 to 120,000 tons In 1984, experienced by Buenaventura is expected to continue. It ls expected that, after 1987, Colombia will no longer import petroleum products. (iII) General Cargo 15. General cargo forecasts vere developed by grouping COLPUERTOS' trafflc into several categories (food, consumer durables, raw and inter- mediate products) and applying the corresponding World Bank projections to these for each port. General cargo import traffic grew at a rate of 5.5% p.a. between 1978 and 1980, then declined by 4% p.a. until 1984. With the revitalization of the economy, the trend is expected to be reversed, and this category of traffic is expected to grow at a rate of 2.5% p.a. at the four project ports. Despite this growth, the high of 1980 will be reached only by 1990. The smaller ports of Barranquilla and Santa Mdrta will experience the highest growth rates, 2.8% p.a. and 3.3% p.a. respectively. Buenaventura and Cartagena's growth rates are expected to be 2.5% and 2.0X p.a. respectively. IV. Containerization 16. An estimate of the rate of containerization was made after the comodity projections were completed. It is estlmated that 90% of coffee exports and 70% of general cargo exports will be conzainerized by the year 2000. Buenaventura, on the Pacific coast, is expected to follow, after a lag of about two years, a pattern similar to that which occurred in Cartagena. For Atlantic coast port import traffic, it is estimated that, by the year 2000, 752 of potential cargo will be containerized at Barranquilla and Santa Harta, and 54% at Cartagena. At Buenaventura, 54% of potential cargo will be containerized by the year 2000. Percent of Potential Cargo Containerized (percent) Barranquilla Cartagena Santa Marts Buenaventura Exports 1984 (actual) 22 29 27 24 1990 40 55 51 47 1995 55 70 68 77 2000 70 85 85 82 Imports 1984 (actual) 10 18 7 18 1990 17 29 15 29 1995 21 39 19 40 2000 27 54 25 54 - 50 - ANNEX 1 V. Traffic Forecast by Port 17. Tables 1 to 4 of this annex present past trends In traffic at each of the four project ports and expected levels until the year 2000. Buenaventura's import traffic is expected to decline by 1.6% p.a. between 1984 and 1990 while exports are projected to increase by 2.0X p.a. The decline in overall import traffic reflects the diversion of grain to Santa Marta and the declines in petroleum product traffic. General cargo is expected to grow at a higher rate than average (2.4%). 18. At Cartagena, total traffic is forecast to increase at 3% p.a. between 1984 and 1990. Exports show the highest rate of growth, 5.8% p.a., as compared with imports, 1.5Z p.a. Barranquilla's traffic is expected to increase by an average of 2.3% p.a. Exports are projected to grow by 10.9% while imports will realize a modest increase of 1.4% p.a. Santa Marta is expected to register the highest growth of the four ports, or 7.6% p.s. Most of this growth is attributed to redirection of grain imports through the Santa Marta bulk facility. Besides the rapid growth of grain, traffic increases are expected to be relatively modest at Santa Marta. Traffic other than grain is expected to increase at a rate of 1.9% p.e. between 1984 and 1990. October 1985 - 51 - COLOMBIA ANNEX I Table 1 PORTS REHABILITATION PROJECT Port Traffic Projections - Buenaventura UCT114 F1ri 7 IIUTY 197 157 ;D3 193 1932 193 194 91< 1UU 1917 193 1939 199 19 2000 on', htk 21 37 43 371 " 4 52 0 43 47 4f 44 u 715 mat a 31 204 275 51m 4013 11 442 444 433 40U4 3 3 44U 571 Other MA 232 9 30 77 43 40 43 a 5 1 1 47 91 144 Upli Ml 333 113 *13 103 544 3 1 2D5 22 234 2 22S 22 229 179 20 " ltow retct 2S4 440 *n5 320 39 212 120 141 94 2 73 75 74 0 0 Edible Bil 53 so 29 21 94 13 44 44 44 47 47 4 43 13 U Ulu 41 93 U 19 11h 33 Di 3 92 94 97 too 103 107 122 151 Iowal c- 40 119 11 723 4 425 b19 59 4 04 474 49 711 n 17 93 k kt Si7 5s3 611 1 4 57 7 41 4s 49 502 503 50 43 430 Ctaler 33 31 70 47 42 S0 112 130 143 MI 174 193 211 32 10 TuTf t139035 12:t 11i 06l 172 1405 1915 171 1441 1401 237 1337 1372 1ul 1391 2 14 --,- Dr lIlk 124 213 24 171 293 293 iI 1I9 172 174 177 119 082 194 2 PAW 124 233 241 17I 23 m 2 t7 19 12 174 177 179 132 194 203 U1 i- bit 120 1N 269 102 21 12 52 53 54 55 1 57 S 40 a 120 133 2 102 121 U1 12 53 14 55 5S 7 5 s 0 a wal Caro 407 411 47t 39 35 314 393 403 414 429 44U 441 431 541 12 Cbffr 32 393 391 313 31t 327 33 340 343 347 351 5 39 314 334 Ote 73 72 U IL 41 37 17 43 71 32 9n 110 I 177 29 O %ick Iralulk 372 424 424 30 290 314 293 31 2 231 27 2 257 11U 10 Of ick umtainar 35 41 47 39 49 50 5s 123 143 149 197 229 122 512 TOU.EIVU 451 3 9 77 77n 7C3 12 * 0 ae 479 701 724 7n 911 711 PUT T IC Uv T0 1909 249 2 2 2 2 200 22 2019 2036 M0 202 2117 254 2ni i" blk 39 k5 704 S50 954 m 74t 491 U79 7n 44 130 in 757 91n liuid blk 50 751 32 45 6n92 47 37 34 23 231 211 2 27 29 272 bnukl k 939 1 L0031 1041 93 39 E3 73 731 m 779 m 762 107 550 cint 43 77 117 3 111 1o0 207 213 27 3u 3Dt 3 440 *41 2012L Source: COLPUERTOS' and mission estimates April 1985 - 52 - COLOMBIA ANNE I Table 2 PORTS REMABILITATION PROJECT Port Traffic Projections - Cartagena 0mmi 1m7 197 190 196 1932 1933 14 13 193 137 ItU 19K 199 1991 260 Dratylt 133 123 22 1001 233 1 1271 13 126 129 16 132 M34 WS 247 IF It 133 12 175 in I2 144 127 126 1 129 130 2 134 I3 l7 Cwuls 1SB 12 175 too IC 12J 121 IJ 129 IJII 1S2 Ut D 1to Ui hklk 7 7 22 Ik 4 & 19 1i 24 17 11 19 20 28 3a uuwgarp 302 34 m 33 34 332 3 37 397 46 41 a 4 42 rdhlbk 2% 341 322 297 321 27 317 292 311 310 311 311 310 m 21 Cutaur 13 it 39 33 It 71 78 a is 165 115 12 1" 29 TMuf 1wU 447 30 S55 452 33 5so 534 s0 341 S1 364 377 59 117 132 E- kwal CrP 142 176 191 IS7 123 266 213 27 2" 322 311 as 424 ml 19 Cff. is 1S 120 a 115 145 147 14 10 12 134 234 237 1i Otsw 74 7 7t1 9 33 Is 120 232 150 I72 I 231 2U 374 27 0 fIciiruakbdk 13 17 179 1ts I 12 no 147 17 170 176 119 In lit 143 U fich catimr 4 9 12 33 23 Is 77 112 12 14 172 2no so 2 U MOA3.L £P173 142 17 191 LO 2 205 24S 279 29 22 31 3S5 424 331 793 TUTU PiT TWFFIC 309 iNo 741 k10 " 707 7" 3 837 I3I 910 93 I0 1100 I525 dryhukk IN 123 173 10t In 144 127 126 123 129 10 12 13 150 117 Iqilid ul tk 7 7 22 14 1 & 19 15 14 17 13 20 25 30 trNukilk 432 D2 S0l 402 421 393 505 4SO 43 40 435 *490 49 441 39 coutar 12 22 43 92 5* 144 143 190 213 243 27 315 340 2 93 Source: COLPUEROS' and mission estimates April 1985 - 53 - AUnX 1 COLOMBIA Table 3 PORTS REHABILITATION PROJECT Port Traffic Frojections - Barranquilla _IILLA C11 193 97 1913 1931 193 IM 1914 1m 1 197 19 4 t 1 199 2345 3ryhJk 33 122 t1 12Z 191 201 149 142 144 142 14 140 142 t 2 mat u4 147 119 35 1347 10 in2 In t12 96 91 13 t e9ho 2 5 12 3 24 54 42 40 42 43 44 44 a WWI Cp 310 443 459 44 417 30 301 2M 36 317 a w 407 435 Ir"WI 344 42* *11 19 30 27 2i7 27 m 27 D7 35 9 217 MR CatSmer 14 23 4U a 33 U 34 32 36 41 47 is a 1 l2a TOTAL INP 413 545 h13 5O 60 u 07 430 GI es 459 471 417 492 32 76 &Mal ca' 60 52 44 54 40 37 37 41 44 A0 a4 a2 4 11 I" bult 9 *2 40 25 23 7 2 31 33 37 41 45 50 a 72 Cauls 4 3 4 lb 15 9 A t0 13 1 it 24 33 s 2 1in 11I11 E S i i S2 Si a 37 37 Z 1 44 s0 50 42 U 9 114 1" TOTL PT TP*IC 473 417 34 Su 44 544 47 42 S017 drylBlk 3U i2 159 122 191 201 149 142 44 142 14 140 142 33 243 hakhul 422 449 473 399 409 30 29 2 3935 313 3t 32 37 411 Cmtaiw .1 26 S2 45 43 37 42 42 57 a U 9 12 241 Source: COLPUERTOS' and mission estimates April. 1985 - 54 - AMiNEX 1 Table 4 COLOMBIA PORTS REHABILITATION PROJECT Port Traffic Projections - Santa Marta ISTI HUTS~~~~~~~~~~~~~~~~~~~~~~~~FOGS INPORTI ~ ~ ~ ~ ~ ATItFWS Dryhitk 1II I99 24 132 32 43 53 11! 241 173 217 252 210 344 423 eARt III IF 173 110 29 23 I3 115 141 173 227 252 230 344 423 Other 0 10 76 22 53 20 5 0 0 0 0 0 0 0 a Uqfidhlt 3 a 11 7 12 5 7 t0 10 10 10 10 10 0 0 PetralieueFradectg I a 11 7 12 5 7 10 it t0 10 to 10 0 0 Imeal Carp 29 304 259 221 230 II 13i 14 170 191 297 203 214 226 250 NI kibeehrl 292 300 249 211 221 145 172 151 179 277 179 1to 10 201 215 Cutalem 3 4 10 1o 9 II 12 14 17 20 24 29 34 49 71 TOTL iEUT 49 11 52t 4 360 124 209 244 29 352 335 430 476 514 394 709 Dry bit 102 241 33 70 10 2 14 2 10 10 L 10 10 10 20 10 Eowal Carl 227 742 219 133 201 171 237 242 247 253 260 266 273 297 32 Cuff.l 110 164 11 III 132 I9 143 145 146 143 149 11 153 1 5 213 goods 54 10 52 52 14 74 a 37 9 92 91 II to0 115 123 Other 13 1a 11 20 5 I 9 20 11 13 15 17 20 27 3 0f thick brtelblk 225 233 216 175 157 133 172 15 167 161 154 143 141 134 25 Offh cI tsjg 2 I 3 la 44 43 is 92 9 we 100 163 2o TOTNLEMIP 329 333 302 253 231 173 251 252 257 263 270 276 233 30 33 7TOAL PUT 1NFFZC 320 3I4 524 623 625 3 495 547 609 643 700 752 79 952 194 idrydk 290 340 337 202 162 5 a7 125 10% 1og 227 262 29 54 433 11q1dh b alk S a 11 7 22 5 7 10 10 10 10 10 10 0 S IVHIkhUIk 517 533 445 334 37 2 344 321 341 33 333 333 331 3 25 cfahr 5 13 13 20 53 54 77 101 107 112 120 2 134 212 341 Sourceg COLPUERTOS' and mission estimates April 1985 - 55 - ANNEX 2 COLOMBIA PORTS REHABILITATION PROJECT Financial Evaluation A. Introduction 1. COLPUERTOS, since 1975, has operated as a state-owned commercial enterprise with financial and administrative autonomy. Under its present organization, defined through Decree 1174 of May 14, 1980, COLPUERTOS has one Central Office in the city of Bogota and special offices in those cities which have ports. The Central Office has been assigned the following func- tions: (a) planning, programing and control of national port development; (b) planning and execution of investment programs; and (c) determination of the entity's administrative structure and salary scale. The responsibili- ties of the port terminals are defined as follows: (a) planning and execu- tion of port operations; (b) preparation, execution and control of the port's annual budget and preparation of financial statements; (c) mainten- ance of installations and equipment for the normal operation of the port; and (d) personnel management based upon guidelines of the Central Office. 2. All COLPUERTOS revenues come from services provided by the ports under its jurisdiction and from charges to private wharves. The Central office has been assigned 20X of each port's revenues plus all collections from private wharves, and each of the ports retains 80% of its own revenues. The resources of the Central Office are used to cover the costs of administering the office, the investment programs, the repair of civil works and equipment and the servicing of the external debt and of the internal debt when destined for investment. The resources of each port are used to cover the total cost of their functioning. The ports are allowed to use cash surpluses, produced after covering port operating expenses, in civil works and in equipment acquisition, provided that this is in accordance with the national port development plan and has the prior approval of the Central Office. The ports can also incur debt with local banks to cover cash operating deficits. However, all loans from foreign banks or loans from any origin to be used in investments can be obtained only by the Central Office. Although some flexibility was allowed in the distribution of revenues between the Central Office and the ports (20%-80Z) until 1983, the percentages were to be enforced starting in 1984. B. Accounting, Budgeting and Audit 3. COLPUERTOS' accounting system is computerized. Each port does its own accounting and forwards, to the Central Office in Bogota, summary copies of its monthly income accounts and balance sheet data. The information is used in Bogota to prepare consolidated statements for COLPUERTOS as a whole, which are issued every six months. The accounting system, however, needs to be further strengthened; some recording procedures such as billing, accounts receivable and payroll are not uniform for all ports, preventing a proper comparison of the ports' performance and delaying the preparation of COLPUERTOS' consolidated financial statements. Also, important accounting - 56 - ANNEX 2 functions, such as fixed assets and inventories, are still carried out manually because of the lack of adequate computer programs. Finally, the presentation of financial data needs to be improved to provide each management level with information to control its respective responsibilities effectively. It was agreed with COLPUERTOS during appraisal that the financial technical assistance under the proposed project, to be provided by consultants, would include a complete revision of the general accounting system. The scope of the consultants' work in this area, as described in terms of reference prepared by COLPUERTOS and the appraisal mission (Appendix C of this annex), would cover a revision of procedures and of the administrative organization of the accounting department as well as the preparation of manuals. The consultants would also be responsible for implementing their recommendations and training involved staff. Outline terms of ieference for upgrading management information systems have also been attached to this annex (Appendix D) since they provide key data for interpretation of financial results and planning of future operations. It was agreed with COLPUERTOS that the contracting of technical assistance for the upgrading of the financial and management information systems could be made either separately or under a single contract, and, therefore, the terms of reference included as Appendixes C and D of this Annex are merely an indication of the scope of the work required. 4. Fixed assets are substantially undervalued; the last revaluation (1973) was canceled in 1974. Although the generally accepted basis of valuation of plant assets is that of costs less accumulated depreciation, the effects of inflation and rapidly changing price levels, such as in Colombia, make it necessary to review the methods of valuation. Assets should be revalued from time to time in order to avoid matching, in financial statements, monetary units of substantially different values. Revaluation should also apply to those assets which are fully depreciated but still in use. It is recommended that appreciation be recorded in accounts and that depreciation also be based on the higher written-up costs. To meet these requirements, COLPUERTOS' management has agreed to carry out an inventory and revaluation of the entity's fixed assets by March 31, 19S7. and at least every year thereafter. The identification of appropiate systems for revaluing assets would be the responsibility of the financial technical assistance consultants to be contracted under the proposed project (Appendix C). COLPUERTOS would carry out the revaluation and would contract outside assistance, as necessary. 5. At present, COLPUERTOS' income accounts are classified into cost centers, or centers of responsibility. This grouping of accounts, however, does not allow for identifying costs and revenues by individual port functions or services. Since the ultimate aim of a tariff policy should be to enable the entity to generate sufficient revenues to cover its operating expenses and provide a reasonable return on the net fixed assets at the same time that it maintains a reasonable relationship between tariffs and costs of each function or service, it is imperative that COLPUERTOS institute a cost accounting system suitable for this purpose. This requirement would be fulfilled through the financial technical assistance of the proposed loan, which would cover the design and implementation of a system to identify costs of the various services provided by the ports, with the corresponding manuals and training of staff involved in this function. - 57 - ANNEX 2 6. COLPUERTOS prepares annual operating and investment budgets, on a cash basis. Each port does its own detailed revenue and expense cash budget and submits it to the Central Office, where the budgets are consolidated and approved by COLPUERTOS' Board. The investment budget is prepared by the Central Office, taking into account cash operating surpluses and each port's investment requirements. Budgeting control is strict; each port prepares monthly cash flow reports which are sent to the Central Office for review. Although the existing budgeting process is satisfactory for programing and controlling current day-to-day operations, budget preparation is long and tedious, and budgets are not issued until late (November-December) in the year prior to the budget year. It was agreed that the computerization of the budgeting process would be included in the financial technical assistance component of the proposed project. The financial consultants would also expand the scope of budgeting with a view toward covering, in addition to the entity's cash-flow position, an income and expense budget to monitor the financial performance during the year. 7. COLPUERTOS has no long-term financial planning. As a consequence, capital investments and other business decisions are not subject to comprehensive economic and financial analysis to evaluate their impact upon COLPUERTOS' finances over the long term. COLPUERTOS has agreed to strengthen its financial planning functions with the aim of formulating, periodically, comprehensive long-term financial plans simulating COLPUERTOS' economic and financial situation resulting from the combined impact of budgeted operations, proposed capital investments, settlement of existing obligations, and financing sources. In this respect, the financial technical assistance consultants to be contracted under the proposed project would be responsible for defining the functions and methods for the analysis, which would be conducted regularly by COLPUERTOS' financial staff. 8. COLPUERTOS has an internal audit unit which reports to the General Manager. The current structure and operation of this unit are based upon recommendations of a study of internal auditing carried out by Price Waterhouse in 1981. The internal audit unit, which is concerned with many aspects of accounting and finances as well as with operations and administration, pays regular visits to the ports to review the application and adequacy of internal controls and procedures in the above-mentioned areas. Although the internal audit system is generally satisfactory, the results are, many times, hampered by the complexity of the existing information systems and procedures. It is therefore expected that the proposed financial technical assistance would substantially facilitate the internal audit functions. 9. COLPUERTOS' external audit is performed by the office of the Controller General of the Republic of Colombia; the external auditors produce annual audit reports on COLPUERTOS' financial statements. Although these reports include some recommendations for improvement in accounting practices and internal control, they lack the analytical scope of a commercial audit. It was discussed and agreed with COLPUERTOS that, in addition -* the audit of the Controller General, COLPUERTOS would hire independent external auditors acceptable to the Bank. - 58 - ANNEX 2 C. Tariffs and Costs 10. COLPUERTOS' existing tariffs, which are applied uniformly to all ports, bear no relationship to the cost of providing each port service. First, in the case of charges to vessels and charges for cargo handling, lump sum charges are applied instead of separate charges for each individual service provided. Second, tariffs are set arbitrarily to cover the overall costs of the entity without taking into account the specific cost of each service in each port. Third, some tariffs are denominated in local currency - tariffs on exports - and others in US dollars - tariffs on imports and tariffs to international vessels; therefore, exchange rate movements affect these tariffs differently. COLPUERTOS has not raised tariffs since mid-1980; consequently, only those tariffs denominated in US dollars have kept pace with the depreciation of the domestic currency. As a result of these three factors, the price of each service is not related to its cost. Thus, some services are taxed implicitly to subsidize others, with no clear rationale. The need to revise the present tariff structure to eliminate these distortions was discussed extensively with COLPUERTOS and the Ministry of Public Works and Transport. Agreement was reached that tariffs would be revised when cost accounting 's implemented. In this respect, the financial technical assistance consultants would be responsible for formulating and applying an appropriate methodology for setting tariffs. D. Past Financial Performance 11. COLPUERTOS' actual income statements for the period 1980 to 1984 are summarized below and detailed in Table 1 of this annex. The balance sheets and sources and application of funds statements for the corresponding period are shown in Tables 2 and 3 of this annex respectively. Actual Income Statements (in Current ColS/. millions) 1980 198i 1982 1983 1984 Total Operating Revenues 9,597 11,145 12,936 14,961 16,569 Working Expenses 9,726 12,529 15,123 12,524 13,697 Working Income (Loss) (129) (1,384) (2,187) 2,437 2,872 Depreciation 171 168 171 197 231 Net Operating Income (Loss) (300) (1,552) (2,358) 2,240 2,641 Financial Expenses (Net) 212 128 259 399 250 Other Expenses (Provision for future Pensions) - - - 1,555 2,391 Net Income (Loss) (512) (1,680) (2,617) 286 0 Traffic ('000) 4,927 4,093 4,628 4,125 3,872 Average No. of Staff Employed 11,923 12,053 12,210 11,266 9,865 Pensioners N.A. N.A. 6,206 6,505 7,005 Ratios Working Ratio 101 112 117 84 83 Operating Ratio 103 114 118 85 84 - 59 - ANNEX 2 While revenues increased by 35% from 1980 to 1982, working expenses increased by 55% over the same period. Apart from inadequate tariff increases coupled with a reduction in traffic, staff costs, which form about 90% of working expenses, increased considerably as a result of higher social benefits and the hiring of additional staff, reaching levels which represented about 92%, 100% and 103% of total operating revenues in 1980, 1981 and 1982 respectively. By year-end 1982, total accumulated losses amounted to CoIS/. 6.95 billion (or US$98.9 million), and COLPUERTOS equity had reached a negative ColS/. 6.34 billion (or US$90.2 million). 12. It should be noted that COLPUERTOS' staff costs include, in addition to salaries and related benefits, provisions for future payment of unemployment allowances (severance payments) and actual pension payments to COLPUERTOS retirees. Since each employee receives, when leaving the entity, a one-time unemployment payment equivalent to one month's salary for each year of service, Colombian law makes it compulsory for employers to establish a provision which should reflect, at the end of each fiscal year, the total accrued liabilities pertaining to this benefit. The annual adjustment to this provision, resulting from salary increases and from the additional year of service with the entity, is reflected as an operating expense, although it does not entail an immediate cash outflow. On the other hand, COLPUERTOS has to bear the financial burden of pension payments to its retirees, which the entity funds in its entirety and with benefit terms substantially better than those provided under Colombian Law to either public or private employees. Together, unemployment and pension costs accounted, during 1980-1982, for about 28% of total personnel costs. 13. COLPUERTOS' financial results, however, improved substantially during 1983, and COLPUERTOS generated a net operating profit of about ColS/. 2,240 million (or US$25.2 million). These improvements were possible, despite an 8% reduction in total traffic, because of important corrective measures, undertaken by a new administration appointed in late 1982, which consisted of ending all fixed-term contracts, reducing overtime payments and mcdical expenses and reducing COLPUERTOS' staff through attrition.. These corrective measures also contributed toward increasing the number of employees who retired and/or resigned voluntarily because of the continuing reduction in the average salary which serves as a basis for unemployment and future pension payments. Consequently, these measures resulted in a reduction of 1,943 employees in 1983 (16%) and a reduction in personnel costs (excluding unemployment and pension costs) of about 32% in real terms in 1983 as compared to 1982. Although pension costs increased by about 12% in real terms in 1983 because of the increase in retirements, the annual adjustmenc to the provision for unemployment was substantially lower than in previous years since it is calculated for the employees who still remain with the entity at the end of each year. As a result, total personnel costs were reduce.d by 31%, in real terms, in 1983 as compared to 1982. The actual 1984 results show a slight improvement in COLPUERTOS' financial performance, as compared to 1983, despite a 6% drop in traffic, because of additional staff reductions. 14. COLPUERTOS has been assigned the responsibility of dredging in all ports and inland waterways. The service is provided by its dredging office, Bocas de Ceniza, located adjacent to the port of Barranquilla. However, the entity is not reimbursed for the cost of this operation. In the early - 60 - ANNEX 2 1980s, because of the deep financial crisis facing COLPUERTOS, most dredging activities were discontinued. In 1984, as an emergency measure, MOPT financed maltenance dredging costs and It will bear this cost again In 1985. However, an Institutional definition for future maintenance dredglng In Colombia would be required. A study on the dredging services required for COLPUERTOS operations, including a definition of institutional arrangements to permit recovery of costs related to dredging activities, is being included under the project. Implementation of reconmendations of the study would imdiately follow. 15. Because of the poor financial results of 1981 and 1982, COLPUERTOS' cash posltion deteriorated sharply in those years, as shown in a substantial decrease In working capital (Table 3 of this annex), reflected mainly in higher overdue debts with former and current employees (pensions, unemployment and leave payments). Despite an Important luprovement In its cash position in 1983 and 1984, COLPUERTOS will still require at least until end-1986 to catch up with delayed payments (Table 6, Note No. 3, of this annex). 3. Financial Objectives 16. One of COLPUERTOS' principal objectives would be to achieve financial viability by improving efficiency in operations, handling more traffic with lower operating costs and implementing realistic cost-based tarlffs. COLPUERTOS' revenues should be able to cover total operating expenses, debt service charges and a fair contribution to the capltal needs of the port system. However, since it is generally recognized that COLPUERTOS' operating expenses are still excessively high, the following complementary targets have been defined: (a) COLPUERTOS would continue reducing its staff by attrition during 1985-1990, which would result in a reduction of at least 205 employees p.a. In this respect, COLPUERTOS has committed itself to seek, during future labor negotiations, a rationalization of staff in line with operational requirements and traffic forecasts; and (b) COLPUERTOS would take all measures necessary, including changes in its rates, to provide, for each fiscal year, funds from internal sources equivalent to at least 35% of the annual average capital expenditures incurred or expected to be incurred for that year, the previous year and the next following year, after meeting cash operating expenses, debt service, increases in working capital and other significant cash outflows excluding capital expenditures. Consequently, in addition to the revision to tariff structures, tariff levels would be adjusted whenever necessary to ensure that this target is met. It has been felt that the cash generation covenant, referred to in (b) pre- ceding, addresses COLPUERTOS' cash requirement more directly given the magnitude of COLPUERTOS' non-cash expense items (provisions for unemployment, depreciation) and the low value of fixed assets, which make difficult the use of other measurements of financial viability (e.g., working ratio or rate of return). - 61 - ANNEX 2 F. Future Financial Performance 17. Financial projections for the period 1985-1990 have been made in current ColS/. pesos. The financial assumptions upon which they are based are listed in Appendix A of this annex. Five important assumptions are the following: (a) the financial projections assume reductions in port operating costs to be achieved under the proposed project from increasing productivity, as reflected in the fact that, for an increased traffic, COLPUERTOS' staff would be reduced through attrition. Also under the project, COLPUERTOS would carry out a staff rationalization study which would result in additional cost reductions starting in 1988. However, since its impact is not readily quantifiable, it has not been included in the projections; (b) since COLPUERTOS' tariff structure would be revised only by June 30, 1988, once cost accounting is developed, tariffs have been adjusted to maintain the average revenue per ton constant, in real terms; (c) starting in 1986, pension payments would be the responsibility of an independent pension entity or fund, either existing or to be established, and, thus, COLPUERTOS' share in these costs would be limited only to the employer's regular contribution in the funding of future pensions. Consequently, only these contributions have been recorded as an operating expense. However, COLPUERTOS would start making annual special contributions (non-operating expense)- to the pension fund until the existing pension deficit (pension liabilities accrued up-to-date) is covered. The special contributions would be in relation to the service of the employee in the entity; the balance would be made up by the Government; (d) COLPUERTOS would continue charging to operating expenses the adjustments to the unemployment provision resulting from the additional year of service with the entity; adjustments to the accumulated provision to include latest salary increases would be considered non-operational; and (e) COLPUERTOS would continue bearing only the costs of maintenance dredging of port basins and alongside quays under its direct administration. A summary of the consolidated income projections is shown as the following page. - - ANNEX 2 Projected Income Statements (Current ColS7. millions) 1985 1986 1987 1988 1989 1990 Operating Revenues 20,304 26,494 31,288 36,626 44,713 54,703 Working Expenses 11,104 13,534 16,128 19,176 22,751 27,066 Depreciation 271 404 718 1,043 1,150 1,099 Operating Income (Loss) 8,929 12,556 14,442 16,407 20,812 26,538 Financial Expenses 571 723 902 1,294 1,817 2,537 Other Non-Operating Expenses 5,741 7,596 9,057 10,892 13,097 15,830 Net Income (Loss) 2,617 4,237 4,483 4,221 5,898 8,171 Working Ratio 55 51 52 52 51 49 Operating Ratio 56 53 54 55 53 51 I8. COLPUERTOS' operating results would Improve suebstantially between 1984 and 1985, an a result of excluding from the operating costs the portion of pension and unemployment costs which do not pertain to the current port operation [para 17 (c) and (d)]. Between 1984 and 1985, the working ratio would improve from 83 to 55 and the operating ratio from 84 to 56. Moreover, the working ratio would improve rapidly from 1984 until 1990, as a result efficiency gains to be achieved under the project, which would bring about a reduction in the average cost per ton of about 24% in real terms. 19. Since the proposed project has been designed to assist resolution of the prlncipal problem affecting the ports' finances, it has been conditioned to COLPUERTOS and the Government taking action to give an adequate solution to the pension issue, by seeking the establishment of a contributory pension scheme for COLPUERTOS' workers, with benefits consistent with those prevailing in other Government agencies. 20. In line with the preceding condition, the Government oubmitted to Congress (July 1985) a Proposed Law establishing a pension fund separate from COLPUERTOS' finances that will be fully responsible for the payment of the retirement benefits of COLPUERTOS' employees and pensioners, such pension fund to be financed with contributions from COLPUERTOS, its beneficiaries and, In the capitalization period, the Government. Should the Proposed Law not be enacted within an agreed timeframe (June 30, 1986), COT.PUERTOS and the Government have agreed to put into place an alternative mechanism to ensure that COLPUERTOS' contribution toward the retirement benefits of its employees and pensioners will not exceed the amount of the contributions that would have been required from COLPUERTOS had the Proposed Law been enacted. 21. In early 1985, COLPUERTOS carried out actuarial studies to determine future pension payments based upon assumptions established in the existing Colombian legislation. The results indicate that the present value of future pension payments of COLPUERTOS' existing pensioners and workers amounts, as of December 1984, to about ColS/. 50 billion in 1984 prices. Although the validity of the assumptions used in the calculations is still under review, the figure gives a reasonable indication of the order of magnitude of pension obligations. However, further studies need to be carried out to produce, based upon COLPUERTOS' present benefit structure, as - 63 - ANNEX 2 well as alternative ones, cash outflow projectlonse which would serve ad a bases for determining alternative funding m_chanisue, including sources and pace of the required contributions. COLPUERTOS would regularly update related records and information. 22. COLPUERTOS' forecast sources and applicatlon of funds for 1985-1990 are shown to Table 6 of this annex. A summary follows: Summary Sources and Application of Funds 1985 1986 1987 1988 1989 1990 Sources Internal Sources 9,571 13,397 15,669 18,037 22,639 28,432 Borrowings 103 1.758 1,98d 2.640 2.357 5,677 9,674 15,155 17,657 20,677 24,996 34,109 Applications Capital Expenditure. 1,759 4,402 3,326 2,372 3,956 8,240 Loan Mspaymenst 448 411 217 207 641 1,136 Interest Payients 215 287 413 661 921 1,365 Working Capital-Increase 2,720 2,371 675 762 1,062 1,297 Pension Fund 5,000 6,000 7,100 8,400 9,900 11,700 Total Applications 10,142 13,471 11,731 12,402 16,065 23,738 Increase (Decrease)in Cash (468) 1,684 5,926 8,275 8,931 10,371 Cash at Beginning of Year 2,325 1,857 3,541 9,467 17,742 26,673 Cash at End of Year 1,857 3,541 9,467 17,742 26,673 37,044 Under the assumptions used (pare 17 and Appendix A), COLPUERTOS' total sources of funds over the 1985-1990 period would be sufficlent to meet capItal expenditures, debt service and working capital requirements and to contribute toward the funding of the separate pension scheme, to cover the current pension deficit, in the amount of ColS/. 6,000 million p.a., in constant 1986 prices. 23. COLPUERTOS' Balance Sheet projectlons for 1985-1990 are shown In Table 5 of this annex. By end-1986, COLPUERTOS would have covered all overdue short-term debts, and, in addition, its equity would again turn positive. The revaluation of fixed assets, not yet reflected in the accounts, would further improve, starting in 1987, the entity's equity position. G. Sensitlvity of Financial Forecasts 24. The main risk assoclated with the project would be the uncertainty regarding traffic levels. However, since traffic has been projected to grow at a modest average rate of 1.8% from 1985 until 1990, a decline in traffic growth, of say 50Z, would have a negligible impact upon COLPUERTOS' projected financial position. October 1985 - 6 la_ aJn.6A A1W 2 il BUFsYn w (in Qgwt 001$ MWAMu) 19M 1961 l92 11 U 1. OSaT RUVDf 1. ShlpZi W'SUrA N 9615 729 925 1,02 1,122 2. Sd.p lnszvg Md lihg 2,96 3,3%? 4,035 4,700 5,7 3. Var1 Bwv1u.D Skdp1 46 55 28 29 4. Privmte WhRrs. 195 l17 193 275 365 5. Cap P dlHi 5,412 6,.>9 7,1147 7,603 8,579 6. fd1 t Pant 64 52 as 62 418 7. S al TrLff.44d Surims 256 287 m2 4.2 42 8.& 0 46 89 106 a34 577 Taoel (3epratl _r m ,Sw 11,145 -l;i i1 16W II. Crw OQ5SE 1. Diect Fig Outs 1.1 Variable Lbr 1,777 2,1U9 2,576 1,821 1,966 1.2 Femnt Staff 1.2.1 Opuratios 1,171 1,1479 1,814 1,46D 1,438 1.2.2 Adnistration 422 577 678 5.9 707 Tocal Sff 1V I6 2,145 DItal Perrl Oto VMT;7w1 ,1 2. Iuidrect erumml Qtos 2.1 Social Osto 2.1.1 Variable labr 1,405 1,759 1,993 1,636 1,434 2.1.2 truIt Staff 2.1.2.1 Operatio 917 1,222 1,44A 1,391 1,m9 2.1.2.2 Anustratiħm 539 873 1 MS 1 007 1 151 Sib-Total P1rm . Staff 1,476 2=.05 2 2 Sub-Ttal Socil Costs 2,881 3,854 4,485 4,0 3,621 2.2 IUmpoyhqt (taWE,r) 1/ 1,429 1,.V4 1,619 360 985 2.3 umiPymt.2/ 1 1> 1,745 2 M3. 2,7 31466 :D4otl Inim Persmel c 6, 5% 360ff f&d i1w W. Sub4otal Persmat Cotts 11,098 1,275 10,9S2 l,186 3. Odor W drkg ai E_ 942 14818 1,572 1 511 btual Wozkl* P 1q 9,726 1WZ 15,123 12,524 T3?7 4. DmruciatLor. 171 168 171 197 231 Ibtal OFptra Exqpm n 9,897 12,697 15. 12,721 13,92B IIMIr ATh DiE (Loss) (300) (1,552) (2,358) 2,24n 2,641 Mv. FDWIA E S (N?t) 212 125 259 399 25 V. OM EXPEES 3/ 1.555 2,391 VI. Nlr D tn (Los) (512) (1,680) (2,617) 286 0 Awerp 1nbir of Staff qalays 11,923 12,053 12,210 11,266 9,865 E eD 4/ NA. NA. 6,D% 6,505 7,05 Ration IIednlgbtio 101 112 117 84 83 Ratio 103 114 118 85 8, -1 Prods1io for futue 'zu1oyint (mmire) pay'ts; fln cub ite. Actual p~ayta to retirue, fumded ntħuy by tbe entity. .Y Li view of tie Imp 198.3 opartir profit, CLPJZ2 mtared In its acuita a piWoidea for fubxm Pmimt payimmt: of 0mS/ 1,555 udflIicn. Tte 1984 ffue incla s a pmħis' for futue psami pyinta amBmEing to OS$/1,514 flicm md other nw-operating apmm (previa Yor). ħ1 Md Yaw figus; exdWar figur are availmbl In hI'sc 3. Awwt 1985 - 65 - 1I3IIA AN= 2 P RHIr.tAN 1FEllff T>1e 2 (in Orwuit 0,. HLUkM.'- 1980 1981 1982 1983 1984_ ASSErS COM ASST Cohb and Bo 250 216 201 508 554 -t-r- Irstmw 6 293 39 19 1,771 ReJ.vLes (topertions) 1,038 1.122 889 1,079 1,308 Otin bonivible 150 118 170 .319 3i Iwatod 769 794 903 982 1,112 Ddfeaed AgMe 10 7 24 139 231 TM aIDREN ASSES 2,223 2,550 2,226 3,046 5,365 FIM ASEI Fort betaLlatLos & Equiumit 2,700 3,066 3,730 4,227 4,521 Traaspot Equpl t 296 335 369 379 217 less (cmae wmaLn _782) (95) (1,121) (1,31B) (I 569) 9htota11 2,214 2,451 2,978 3,288. 3,189 -L & Ibrks in *op 923 1,1 770 567 780 TOTAL FDE AS1SE 3,137 3,572 3,748 3,855 3,969 am D.SEt 151 187 .170 219 52D Wm.ASS 5,511 6,309 6,144 7,120 9,854 agummu Sor-tsm Book lows 165 239 351 571 489 0vnt Portio Low-term Los 130 181 249 223 281 Pwables 353 585 650 732 865 Sort-tem Provslsi Taip3oymot 646 1,009 1,241 1,268 1,0(4 Sh-tem Social Payunts 369 981 1,485 1,337 2,031 onpr 281 525 750 798 1,067 WM CJRBI LTAB I=ES 1,944 3 ,520 4,726 4,929 577 lAng-term 1o 822 852 861 890 1,164 Lxg-ta Povision t5 cployunt 2,848 3,327 3,903 2,740 2,743 tog-tr Social Paym 1s61 1 1.931 2,262 3,831 4,7 IYAL 1D-q( LICAiLlS 5,281 6,110 7,(26 7,461 8,784 OMM LIABTMDXM 234 268 180 168 673 E1 lJ FM R Eir S 98 137 555 619 678 Paid-dn Capital 606 606 606 606 606 Profit (Eons) zviom yeas (2,140) (2,652) (4,332) (6,949) (6,663) Pmot (Low) of tiw wr (512) (1,680) (2,617) 286 0 MwraL E= (2,tA6) (3,726) (6,343) (6,057) (6,057) TrAL LTABU: AID AM = 5,511 6,309 6,146 7,120 9,854 Sourc 15B5RDS XiwF 1985 COLOUIA ANNEX 2 PORT REABILITATION PROJECT Table 3 COLpUERTOS' Actual Sources and AplI[cation of Funds (in Current ColS mIIIIon) 191 1982 1993 1994 SOURCES internal Source Not Operating Inc.me (1t1,2) (2,386) 2,240 2,6A1 Add: OforOcIatlon 168 171 197 231 ProvIslon for UneaVloymsnt 1,304 1,649 360 99 Other ProVIsions 319 749 78 59 Less: Unef mlOYent Paymnets 462 841 1,496 1,207 Total Internal Sources t 183) ( 630) 1,379 2,709 Lang-Ter rr orowings Foreign Loans 135 254 38 87 Lceal Loans _ _ _ Total Borrcwings 135 254 318 597 Other other Assets (36) 17 C 49) (301) Other Liabilities 34 (88) C 12) 1,551 Tosal Others _2) 71 (61) 1,251 ToTAL SOURCES AND FUNDS (50) t 47) 1,636 4,547 _umu amw._u u ..u _ u. _ APPLICATIONS OF FUNDS Caoital Expendrhures 603 347 304 345 Long-Term Loan Repament Foreign Loan Repayment 54 177 315 213 Local Loan RePaYment - - - 42 Total PrfncIpal Repayment 54 177 315 255 interest Payments CNot) 129 259 399 250 Change 'n Working Capital Other Than CaSh-Inerease (Decreae) (801) (1,2151 311 (493) Other _ _ 2,391 TOTAL APPLICATIONS OF FUNDS 1 t6) t 4323 1,329 2,748 INCREASE (DECREASE) IN CASH t 34) C 15) 307 1,799 CASH AT BEGINNING OF YEAR 1/ 250 216 201 527 CASH AT END OF YEAR 216 201 508 2.326 1/ The 1984 figure Includes short-ter Invsstments. Source: COLPUERTOS August 1985 - 67 - EIALI IA ANNEX 2 WIr4NoZtl:.lTgTIII p1:w Tab le 4 Ism w1 31j - Coa:s c a#ags'am a' uruaa tal 2tI&rat' 3": MI , U i1 1 11 1l ~~~~~~~~~................... .... ..... ...._. I.Pawm 14itlae 8r1mr 12;b 1822 3916 2113 1911 2.11ng L"Ina AN aLml'lks ce:e 33874 1289 144 10 la" 31336 Lileas swialt to Isaga 12 36 31 41 41 43 *.rn,na mum 632r IUI 74 1112 Sl 913 S.Cp rlsNaitia It "DO 12827, 13428 3*413 13742 2193 *.lammot oft lo 2 1 39 39 3t i.fIuculd Ti,rl4lala lungSS 1IIC iTI 3101 1373 lay 3431 8.31kw e 8 e S S 4 9.1r-n fro twrlif II satit I S 2 e3 tau fetid taer:q loam 2824t 20m96 33111112 38 46713 Sim 1.1irKt FuGueS Cuts I.. arlaUj LI 2r7 as I 3MU * i 7tH .LSuua 8td 3.3.3.§Wutla a337 136" ls35 22a5 29 253 3.L2.21.SaaIetretlm in3 La"7 13 lIsm teal vunt lilE 2348 21s 2no 2 3901 439 I*tilw taigt Primed rats 4265St 1341432 ISM3 UR1 184 2.10dern _m l Uds Il.l.clrl Csa L3.3.VaraIIle LIE 1167 31 273 3113 nil 4mt 2.3.2.PmueUa 31.f LI.2.I.ataa 33t184 IOSI 15133 37 7.9 2331 LI.I.Lhiaasartatar 93f low 3t4 42 1443 31 s!tute P dlmat staff ml 2 2713 3n7 as1 *;U .ek ksluttmt a :sta Mn tagU s:t: 74n mp .. :.v'.q:.,w- . 114 ..LO12 "a8 112 ; 1329 35" *.Llemaara :I LP ICU 1:2 3473. 176 2357 Sottmtl Iast'st I'wacn3l tcu 1t 23 lSUPtl 21 Istow Pwrmmi Emote 9443 33444~~~~~~~~~~~~~~~~~~~10-39 334?tR 9 2611N Liarw donai luwag 3.1.Ssateuwc AM lewd 41 13A 3918 27 335 SW 354 3.LfatrIletim 1 tea" s U 4 in3 at 373 269 Sitat! #lua rbratas Tlf ml 3m ICft26 3US 413 IStd atrtial EWmia 318133134 13a2 III7, 2271 Vms t. Somracaataa 273 456 713 too3 1)18 am_ IstU u rl lnema 337 13m .SW 21 19 3134 11S ElITE -X LU IqSe 44 4872223 III b_ IV Prsl *1 - P 3 on MP 7Dz J59C I wX r n owm eau in 962 q 134 3887 333 3. Catrajam is mats, FoI 110 Am1 IE - "of 3173111 L M tatM t Ps tbeslce 143 SPa 3917 2892 331 4 mIraut 1241 71T * 7 3482 I 3J 38 I C10 [mm -L 2*17 47 160 12 SW mill w14m tear atW I f4 17 all ua,mminra' 723617r 7127 338is en TalC Prear. Trade 382 .911 a0a9 439" 43t4 6366 Is3:1 32 it46 ~~~~~~~~~~~~~~~~~~~~~S u1 Wt"~~~~~~~~~~~~~~~~~~~5 25 1 171Z" _n_ ue revenue from epty contaIner handling. 2/ Provision for future unseplovamat (uewranc.) payments; reflects annual Increa se a IlablIlty for the add.tlonal year of service, With the entity. 31 aincludee only the employere regular contribution to an independent Pension iRate. to fund future Pension payMemte; COnrLfMut lone aikre a percentage of total coepefiaatioat payments received (direct p1us imndIreCL pVeronel coste excluding medical expenases). 4I Includes sqatiment inamaance. dredging (COLPIERTOS' *ea.re) end generAl adminlecracive. SI Special coaatrlhution to independent penelon system to fund pension labUlitiea accrued up-to-date. Al Adjuetnent to acmuelecped C past) unemployment liab ilities to be made when -salariee are increased. Source: COLPEITOS end mission gstim tee ItLoner 1941 - 68 - ANNEX 2 Table 5 COtOMBIA PORT REHABILITATION PROJECT COLPUERTOS, Balance Sheet Prolecctlon 1904-1990 (in Current CelS million) ASSSTS 1985 1986 1987 1988 1989 1990 Current Asost. Comb and Bankn 1/ 1,857 3,541 9,467 17,742 26,673 37,04 Recelvableu fruo Operations 2,030 2,649 3,129 3,663 4,471 5,470 Other RaceLvebles 236 '98 354 421 493 578 Inventorlec 785 193 1,179 1.403 1.644 1,927 Other Current AJnetn 277 335 399 471 556 656 Total Current Assets 5,185 14,5Z8 Z3,75 Plxed Asets Port In-tllatieons and Equipment 4,914 6,666 10,352 13,049 15,239 19,162 Lees: Accumulated Depreciation ( 1,78Q) ti,Jj} 4,699) ( 3,468 t4,399) Subtotal 3,13 4,545 63 3,0 Lend and Work la Progreso 2,011 3,945 2,956 2 449 4 182 8 499 Total Fixed Ak_ate 5,145 8,490 10,609 IZ. 1$T 0t22 Other Assets Deferred Aeetn 2/ 872 1,588 2,217 2,399 2,432 2.432 Less: Aortation j 0 ) ( 243) 517) jfl3) L 875) Subtotal 8 - U 1,8B2 1,696 1.55 TOTAL ASSTS 11,162 17,791 27,111 37,612 50,555 69.534 LUBILrS AND ROM Mr- ~E- - --G Cursn t Pration long-T ru Loans (Exieting) 411 217 207 226 248 224 Curreot PortLon lAng-Term Loans (IBRD) - - - 415 888 973 ftyable. 471 596 707 842 986 1,156 Short-Term ProvInaon Ibemploym.nt 3/ 355 435 535 657 795 1,020 Short-Term Social Payomntu 4/ 1,016 - - - - Other Current Liabilities 47 533 - - - - Total Current -Liabilitles n Z78 1,248 1,449 142 2,917 3373 LongTo Liablles- -ft Lw lo 3datiog) 937 959 880 748 581 426 long-Term Leos URD) I/ 108 2,063 4,412 7,176 8,671 9,537 Other TAng-r Loans - - - - 1,204 6,145 Lon-rm Provision Unemploymnt 4,543 6.*96 8,862 11.819 15,555 20,255 Long-er Social Payments 6/ 4 877 4 877 4 877 4 877 4 877 4 877 Total Long-erm Labilities t i19031z6 30 88 20i Other Liabilities 673 673 673 673 673 673 Provllon for Cantingencie. 678 678 678 678 678 678 ~tl Paid-in-Capltal 606 606 606 606 606 606 Protlt (Leoa) Previous Years (6.663) (4,046) 191 4,672 8,895 14,793 Proflt (lonn) of the Y 2 617 46237 4483 4 221 5898 a171 Total Bui!z Aje x-) 797 INw S 280-i- -;. w TaTmL LIiLlTTS AIMD EQUITY 11,162 17.791 27,111 37,512 50,555 69,534 17 Includes obort-tern invoteents. ti Invest_nt ln taudlee (tebhnical eolietance). eflects paymate to be made in the next fiscal year. T/ Overdue personnel paymnts. 5T/ ay not agree wich accumulated disbursemnt. since figure L. balance eheet reflects the affect of devaluatin on balanc of loan I/ Includes mainly a proviaLon for future pensoo paymnts and other benefit.. Source: COLPUZRTOS and mlmson estletee. October 1985 - 69 - MINEX 2 Table 6 COLOIBIA PORTS REHABILITATION PROJECT COLPUERTOS' Sources and A icatioe of Funds Sln Current CoiBpmillion) TOTAL SOURCES 1985 1986 1987 1998 1989 1990 19851199 Intornal Sources Mgt Operd1.ng Income 8,929 12,556 14,442 16,407 20,812 26,538 99,64 Adds Dnpreclation and Amortizetion 271 404 719 1,043 1.150 1,099 4,663 Provi.oo for Unemployment 654 792 944 1,122 1,334 1,590 6,436 lRA.: Unemployment Paymeet. 283) ( 355) 4.5 43 5) 3S6SJ} 795 I J060 Total Internal Sources n 9 Lonu-'Iru 3TorreiueU Proto.ed [BD Loan 1/ 103 1,758 1,988 2,640 1,205 950 8,64 Other Foreign Loa 2/ - - - 1,152 4,727 5,879 Local loam -- - --- Total Uorroings 103 - rAM TOTAL SOURCSS OF muNDS 9.674 15.155 17.657 20,677 24,996 34,109 122,266 APPLICAIONs O7 FUNDS Cap ital Cxo-MdLturs rh Project 1,309 4.402 3,326 2,372 473 - 11,82 Ofhtr - COLPUERIOS' 2/ 450 - - - 3.48 8.240 12 173 Total Capital IxZneditura J .0 * ia loAg 4r-Loen Repayment. orig oan RepaymentC IBrD - - - - - u Othbr 281 281 217 207 226 248 1,460 Local Loan oEpsymnt 167 130 - - - - 297 Total Princivel Rezyments-44 411 --ITY --ITv 22__ Xntereut PJsntr Foregn Ilterert Paymant IR1D 10 138 332 5J6 797 952 2,815 Other 99 93 81 75 124 413 335 Local lterest Payment 106 56 - - - - 62 Total Interest Parmenta --TIT ---h --- -R3 --b E in gorklns Cooltl o ther Than :ssh - Incr ^ fDecrease) 2,720 2,371 675 762 1,062 1,297 J.J6? Co> irbutio to Y od0on u r,00, 6.000 7,100 8.4oo 9.9M 11.700 *8.100 TOTAL APPLICATIONS o0 FUNDS 10.142 13,471 11,731 12.402 16.065 23.738 37.549 LRLS*U (DECREASE) IN CASH (468) 1.684 5,926 8,275 8,931 10,371 36,719 CASE AT BGZCIN= OF YZAR 4/ 2.325 1,852 3,541 9,467 17.742 26.673 2.323 CAS AT END OF nuA 1.857 3.541 9,467 17.742 26,673 37,04 37,044 L7 Intl Iamount of diubureaenta varies from Table 4.7tu- to the effect of devaluation or dLsbursements uMcb comes after cospleti.. of works 2 Fgue tn 1989 sod 1990 rofor to futwr lnvetmonte in the port. (container terminal. and bulk haniag fteltites) tO be patlMy finenced (foreign cost) wich exteral borrowingu. Projection aesm a six-moutb delay in diebure mets. 3I Include., In 1985 end 1986, paymnt of overdue persoonnl expeness. 4/ Inchlue short-term investment. Source: COLPUERTOS and mission estimates October 1985 - 70 - ANNEX 2 Appendix A COLOMBIA PORTS REHABILITATION PROJECT Assumptions for Financial Projections A. General 1. All financial figures in this report have been presented in current prices and are based upon the following rates of inflation and devaluation: Rate of Price Rate of Year Increase (Percent) Devaluation 1984 18.3 28 1985 22 35 1986 20 22 1987 18 12 1988 18 9.5 1989 18 9.5 1990 18 9.5 B, Traffic 2. Cargo traffic inputs were based on figures provided in Tables 1 through 4 of Annex 1. Ship forecasts have been made based on the average tonnage per ship of the first semester of 1984. C. Tariffs 3. The 1984 tariffs were used in projecting revenues by the main revenue headings. Since some tariffs are denominated in local currency - tariffs on exports -and others in-US dollars - tariffs on imports and tariffs on international vessels- the latter were adjusted to reflect exchange rate movements. During 1988, COLPUERTOS should revise the existing tariff structure to have tariffs reflect the cost of services rendered. Since the impact of this revision, both upon composition and upon level of revenues, cannot be predicted at this time, tariffs have been adjusted only as necessary to mainttin the average revenue per ton constant, in real terms, at the 1984 level. These adjustments have been indicated as a global amount in the revenue projections. 4. The following exchange rates (mid-year) were used to express tariffs denominated in US dollars, and in Col$ pesos, over the forecast period: 1984 - Col$ 101.3 - US$1; 1985 - Col$ 133.82 - US$1; 1986 - Col$ 170.67 - US$ 1; 1987 - Col$ 198.83 - USM1; 1988 - Col$ 200.09 - US$ 1; 1989 - Col$ 240.97 - US$1; and 1990 - Col$ 263.87 - US$ 1. - 71 - ANNEX 2 Appendix A Page 2 D. Revenues 5. The following assumptions were used for calculating revenues under the main revenue headings: (a) Ships Maritime Services: based upon forecast number of ships (available in project file) and present wharfage and harbor tariffs; (b) Ship Loading and Unloading: based upon projected import and export traffic (weight-tons or volume-tons, as applicable) and the average tariff (including overtime surcharges), for the first semester of 1984, for each commodity or group of commodities; and (c) Cargo Handling: based upon projected import and export traffic (weight-tons or volume tons, as applicable) and the average tariffs (for each commodity or group of comodities) for the first semester of 1984. This revenue heading groups charges for cargo-handling, use of port facilities, storage, truck loading and unloading, port police and empty container-handling. E. Costs 6. The total labor force was assumed to decrease by attrition (forecast number of staff in Appendix B of this annex). Basic wage rates (direct personnel costs) for variable staff (rates per ton) and for permanent staff (fixed salary) were forecast to increase by 10% in 1985, as approved by the Government, for all public entities, and by inflation thereafter. The relationship between direct personnel costs and social costs was forecast to remain constant at the 1984 level (first semester). 7. Unemployment costs reflect the annual increase in the provision for future severance payments. Colombian law makes it compulsory for employers to establish a provision for payment of unemployment money to staff retired or dismissed. This allowance, which is proportionate to the level of remuneration and length of service, should reflect, at the end of each fiscal year, the total accrued liabilities pertaining to this benefit. The annual increase in this provisionis recorded in the accounts as follows: (a) the adjustment for the additional year of service is charged to operational expenses; and (b) the adjustment to the accumulated provision, to reflect salary increases, is considered as non-operational expense. 8. Pension costs have been divided into two portions: the first represents the employers' contribution toward pensions with respect to the service of the employee in a current year (charged to operating expenses), and the second, a special contribution toward the accrued liability for previous years - a charge to non-operating expenses. The first portion-regular contributions-has been assumed to be 12% of total compensation payments (direct personnel expenses plus social costs, excluding - 72 - ANNEX 2 Appendix A Page 3 medical expenses). The second portion - special "make-up" contribution - is a fixed amount determined from the 1985 forecast cash flow. 9. Maintenance and general expenses include: (a) general administrative expenses which are based upon the actual 1984 costs (first semester) and have been assumed to increase by inflation; (b) equipment maintenance costs based upon regular maintenance of existing and new equipment; and (c) maintenance dredging costs, based upon cost of dredging contracted by HOPT in 1984. The forecast includes only COLPUERTOS' proposed share of these costs (port basins and alongside quays under its jurisdiction). In the case of Buenaventura, COLPUERTOS' share was assumed to be 30X of total maintenace dredging costs in the area; in the case of Barranquilla, COLPUERTOS' share was assumed to be 20%. 10. Interest on loans corresponds to actual interest payable by COLPUERTOS on obtained, and still outstanding, loans and a forecast of interest payable on the loan to be obtained from the Bank. The terms of borrowing from the World Bank were assumed to be 17 years, with four years of grace. Although the loan wduld be at the standard variable rate, the current rate (8.82% p.a.) was used for purposes of financial forecasting. II. Depreciation of existing fixed assets (as of 1984) was calculated based upon the historical value of these assets. By the end of 1986, according to the action plan, COLPUERTOS will have revalued its fixed assets in use and will institute a more realistic depreciation. This effect has not been included in the forecast. Depreciation on new investment is based upon straight line amortization and useful lives of 20 years for port installations and 10 years for equipment. F. Main Balance Sheet Items 12. Accounts receivable were forecast to be 10% of operating revenues. 13. Inventories were forecast to be 50% of general and maintenance expenses. 14. Accounts payable were forecast to be 30% of general and maintenance expenses. 15. Provision for unemployment (severance) reflects the total accrued liability as of the end of each fiscal year (unfunded provision) and is based upon the total number of staff employed, the last year's salary and the length of service with the entity. The amount shown tinder short-term liabilities reflects payments to be made in the next fiscal year based upon projected retirements. 16. Short-term social payments reflect overdue personnel costs and were forecast to be paid during 1985 and 1986. - 73 - ANNEX 2 Appendix B COLOMBIA PORTS REHABILITATION PROJECT COLPUERTOS' Staff and Pensioners 1. COLPUERTOS' actual number of staff for the period 1981-1984 and targets to be met during 1985-1990 are shown in Table 1 of this appendix. Although total staff decreased from 12,237 at end-1982 to 9,436 at end-1984 - 23% - COLPUERTOS is still overstaffed in almost all areas. By the end of 1987, according to the action plan, COLPUERTOS will have carried out a study for the rationalization of staff which should determine the optimal size of the plant of personnel, taking into account operational requirements and traffic forecasts. In the meanwhile, until the recommendations of the study are available and implemented, COLPUERTOS would continue making staff reductions In the course of the retirement program. These reductions would be possible because of efficiency gains to be achieved under the project. The targets developed for the period 1985-1990, based upon reductions by attrition, would need to be revised in light of the results of the staffing study. It should also be noted that the forecast number of retirements is based upon the years of service of the employees with COLPUERTOS only since information on years worked in other entities before joining COLPUERTOS was not available. The number of retirements in each year would therefore most likely be higher than that assumed in the forecast. 2. Table 2 of this appendix shows COLPUERTOS' actual and forecast number of pensioners. Based on the existing retirement program, by end-1990, COLPUERTOS' number of pensioners will exceed the total number of staff employed. 3. The figures shown in Tables 1 and 2 of this appendix were used for the purposes of financial forecasting and discussions with COLPUERTOS. - 74 - ANNEX 2 APPENDIX B Table 1 COLOMBIA PORTS REHABILITATION PROJECT COLPUERTOS' Number of Staff (1981-1984, actual; 1985-1990, forecast) Barranquilla Buenaventura Cartagena Sta. Marta Central Office 1/ Total end-year figures 1981 2,458 3,954 2,798 2,167 806 12,183 1982 2,452 4,052 2,756 2,113 860 12,237 1983 2,141 3,254 2,313 1,910 676 10,294 1984 1,971 2,964 2,183 1,713 605 9,436 1985 1,942 2,823 2,174 1,677 593 9,209 1986 1,898 2,766 2,165 1,599 579 9,007 1987 1,854 2,709 2,156 1,521 565 8,805 1988 1,810 2,652 2,147 1,443 551 8,603 1989 1,766 2,595 2,138 1,365 537 8,401 1990 1,724 2,540 2,127 1,289 522 8,202 Staff Reductions 2/ (1985-1990) Total 247 424 56 424 83 1,234 Average p.a. 41 71 9 71 13 205 Staff Composition(Z)31 (1985-1990) Variable 54% 50% 48% 58% - 49Z Permanent Oper. 33% 35% 31% 24% 43% 32Z Permanent Ad. 13% 15% 21% 18% 57% 19% 1/ Includes the small port of Tumaco and the dredging office Bocas de Ceniza. 2/ Assumes reduction by attrition only. 3/ Staff composition used in financial forecasts; changes may occur due to reassignment. Source: COLPUERTOS and Mission Estimate August 1985 - 75 - ANNEX 2 APPENDIX B Table 2 COLOMBIA PORTS REHABILITATION PROJECT COLPUERTOS' Number of Pensioners (1981-1984, actual; 1985-1990, forecast) Barranquilla Buenaventura Cartagena Sta. Marta Central Office Total - - - -end-year figures - 1981 N.A. N.A. N.A. N.A. N.A. 6,166 1982 2,310 1,745 1,470 546 175 6,246 1983 2,380 1,995 1,568 617 204 6,764 1984 2,224 2,239 1,634 737 412 7,246 1985 2,253 2,380 1,643 773 424 7,473 1986 2,297 2,437 1,652 851 438 7,675 1987 2,341 2,494 1,661 929 452 7,877 1988 2,385 2,551 1,670 1,007 466 8,079 1989 2,429 2,608 1,679 1,085 480 8,281 1990 2,471 2,663 1,690 1,161 495 8,480 Source: COLPUERTOS and Mission Estimates August 1985 - 76 - ANNEX 2 Appendix C COLOMBIA PORTS REHABILITATION PROJECT Outline Terms of Reference for the Financial Technlcal Assistance I. OBJECTIVES 1. The technical assistance In this area will focus upon a review of the accounting systems, setting up cost accounting and establishing the tariff structure, with a view toward making the necessary procedural changes in order to obtain prompt and reliable Information for decision-making. The consultants will introduce appropriate Innovations, including latest technlques In finance and systems, and will implement the recomendations agreed upon by the consultants and COLPUERTOS for promptly obtaining the information needed for efficient management. The studies referred to herewith would be carried out within the context of an integrated information system already defined by COLPUERTOS and would thus take into account their interrelation with systems presently in operation (i.e., personnel, billing). In this respect, the consultants would also propose, as appropriate, modlfications to existlng systems for purposes of coapatibility. II. SCOPE OF THE CONSULTING SERVICES A. General Accounting 2. Work in this field will comprise review of-the accounting system, both In terms of procedures and of the administrative organization of the department, preparation of manuals, identification of methods for revalujation of fled assets, training of staff and implementation of recouendatlons. B. Cost Accounting 3. Consulting services in this field will consist of designing a cost accounting system that will make possible the identification of the costs of the various services. The system should allow management to evaluate performance of the various operations and should also provide a base for periodic tariff reviews. Preparation of manuals, staff training and implementation of recommendations will also be included in the consultants' assignment. C. Tariff Structures 4. Work in this field will consist of formulating a methodology for setting tariffs, taking into account the- cost of the services. The consultants will also prepare manuals, train the staff and implement their reco nendations. - 77 - ANNEX 2 Appendix C D. Financial Planning 5. In this area, the consulting services will consist of defining functions and methodological design of analyses to be performed by COLPUERTOS' Financial Planning Unit, with a view toward formulatlng, regularly, a comprehensive financial plan, resulting from the combined Impact of budgeted operations, proposed capital investments, debt service, financing sources, etc. E. Fixed Assets and Inventory Control 6. Work in this field will Include review of classificatlon methods, basis of valuation and depreciation, accounting records and procurement and bidding systems for COLPUERTOS' fixed asoets and Inventories. The consultant will prepare the necessary manuals, train the staff and implement recomuendations. F. Budgeting 7. The consultants will review the methodology used for preparing the budget and the pertinent manuals in order to have this function Include budgeting by item or account and by responsibllity center, cash flow budget, investment and procurement budget and the mechanisms to control the execution of the various budgets. Preparation of manuals, staff training and implementation of recommendations will also be part of the consultants' work in this field. - 76 - ANNEX 2 Appendix D COLOMBIA PORTS REHABILITATION PROJECT Outline Terms of Reference for the Upgrading of Managoment Information Systems I. OBJECTIVES 1. The purpose of this technical assistance will be to help COLPUERTOS upgrade its management information systems so that they will provide accurate key performance data, such as cargo handling rates, equipment utilizatlon, ship waiting and turnaround time, berth occupancy and import/export, coastal and river traffic statistics by port and product, covering the entire range of COLPUERTOS' operatlons. II. SCOPE OF THE CONSULTING SERVICES 2. The consultants' assignment will consist of reviewing existing management information systems, suggesting needed changes, making adjustments as and when required, and obtaining the decision-making data needed to chart the future development of COLPUERTOS' operations. The consultants shall pay special attention to the present level of mechanization and make full ise of the available computer equipment. The consulting services shall, therefore, include the modification of existing, and the design and installaton of new, computer applications in the fields or areas covered by the terms of reference. The consultants shall, if necessary, also make specific recommendations concerning additional computer equipment compa,._ble with the existing facilities. 3. In performing their assignment, the consultants shall consider the statistical and operating data needs of: (a) each of the ports and the Head Office in Bogota, bearing in mind the long-term decentralization plans to delegate responsibilities to the ports; and (b) the planning, financial, technical and operational areas, among others, in order to facilitate: (1) appropriate planning of the future development of the ports system; (II) appropriate interpretation of current financial results and future financial planning; (iii) efficient programing of equipment and spare parts maintenance and contracting of civil works; and (iv) continuous upgrading of the land and maritime services provided by COLPUERTOS. 4. The consulting services shall include: (a) implementation of the recommendations, subject to prior approval by COLPUERTOS; (b) training of staff In the new procedures for operating the upgraded management information systems; and (c) preparation of instruction manuals describing the operation of the systems and detailed procedures. - 79 - ANNEX 3 COLOMBIA PORTS REHABILITATION PROJECT Labor and Equipment Situation and Productivity Targets A. Past and Present Labor Situation 1. COLPUERTOS was established in 1975 as a state-owned commercial and industrial enterprise, with financial and administrative autonomy, under the tutelage of MOPT. The Bogota office is responsible for the planning and control of national port development, including the implementation of investment programs. The terminals are responsible for the day-to-day planning and control of port operations. Allocation of responsibilities is based upon Law 1174 of 1980, but, in the past, COLPUERTOS headquarters has actively interfered in the operations of the terminals and has failed to fulfill its planning functions. Lack of qualified professional staff, coupled with highly politicized management, led the enterprise to inefficiency, overstaffing znd corruption, resulting in continued operational losses, neglected maintenance and inability to provide all ports with full port services. 2. Labor union conquests over the years have gone so far that they have badly damaged COLPUERTOS. There are six labor unions, three at Barranquilla and one at each of the other ports. Until very recently, the unions had taken over control of equipment and labor assignment, as well as the interpretation of labor agreements with regard to payments. A clear example of the seriousness of this situation was the system used by COLPUERTOS to pay its workers, applying the same rate per ton for every ton of cargo handled irrespective of the type of cargo and handling method or s,stem used. Container and direct deliv-ry bulk-handling operations at Buenaventura, for example, were responsi;le for about 401 of the losses incurred at that port during 1981. In fact, while revenues increased by 35% from 1980 to 1982, working expenses increased by 55% over the same period, representing 92%, 100% and 103% of total revenues. 3. Due, in part, to the Bank's involvement in the port subsector in the role of Executing Agency for a UNDP-financed Ports Modernization Study aimed at the containerization of Colombian ports, some progress was made by the previous administration during the !982 labor negotiations when: (a) payments to workers for container and bulk handling were frozen for four years (1982-1985) at the 1982 rate; and (b) payments for bulk direct delivery operations were reduced by 40% and frozen for the same four-year period. These changes were, however, insufficient to justify major investments for port development, and the new administration that entered the Government in August 1982 decided to seriously tackle the problems affecting CCI,PUERTOS and to limit the 1984-1988 investment plan to rehabilitating existing port facilities and equipment. - 80 - ANNEX 3 4. In October 1982, at the new Government's request, the Bank and UNDP organized a technical assistance mission, consisting of four independent experts, to identify institutional and labor constraints affecting the port system and to prepare a short- and medium-term plan of action that included, among others, the following aspects: disposal of abandoned cargo and scrap material; equipment repair and spare parts; implementation of a freeze on hiring personnel (which had been adopted, but not implemented, by the previous administration); operational planning and coordination; and rationalization of labor assignment to return this responsibility to the operations departments at the ports. 5. COLPUERTOS' management responded to these recommendations by adopting a number of corrective measures, most of which have been implemented, and, at the same time, with the full support of the Government, adopted a strong position during the labor agreement negotiations in 1983. Following a strike (July-August 1983) that was declared illegal by the Ministry of Labor, COLPUERTOS was able to change the pattern of previous negotiations and obtained some important changes to labor agreements as follows: Buenaventura: (a) changes and reduction of payments for sick leave, seventh day and holiday; (b) establishment of special low rates for direct delivery bulk handling; (c) reduction of payments for container handling operations (although still on a by-the-ton basis); (d) freeze in rates for bulk cargo through silos; and (e) elimination of standby (supernumerarios) workers' category used during peak hours. Atlantic Ports: (a) elimination of payments for direct delivery of bulk if port labor is not used and establishment of a compensatory payment to displaced workers; (b) reduction to selected container handling payments; (c) reduction to payments for sick leave; and (d) establishment of maximum number of stevedores and windmen. 6. The corrective measures undertaken by COLPUERTOS' uanagement, together with the impact of changes to labor agreements and the reduction of personnel by attrition and voluntary reLirements and resignations, have had a serious and important impact upon the financial situation nf the enterprise, changing the nearly endemic operating losses of the 1979-1982 period into operational surplus for the first time in 1983. 7. COLPUERTOS' management is seeking additional changes under the ongoing negotiations, adopting a strong but conciliatory attitude toward the labor unions. A strategy that may render extremely important gains, consisting of ensuring employment to its workers, thus limiting reduction of personnel to attrition and voluntary premature retirement or resignation, has been adopted by the management. However, workers would have to agree, in principle, to: (a) change the pension benefits of personnel who joined COLPUERTOS within the last two to three years, to be in line with those established by the Social Securit- Law; and (b) contribute to their pensions on a percentage basis, when and if a new pension system is developed. 8. COLPUERTOS and the Government, during appraisal, expressed their commitment to establish a new pension system; although an early workers' agreement would, undoubtedly, prevent de.ays, such commitment would have to be formalized. Based upon the preceding, the proposed project includes - 81 - ANNEX 3 provisions to ensure COLPUERTOS and the Government's commitment to the establishment of a new pension system; COLPUERTOS has already retained actuaries to determine its pension requirements (Annex 2). 9. In addition, COLPUERTOS and the Government expressed their agreement to commit themselves to continuing their efforts to rationalize payments to workers, relating payments to productivity during future labor agreements. This commitment would be reflected in a letter of representation which stipulate the targets to be sought by COLPUERTOS during future labor negotiations as follows: (a) rationalization of gang sizes in accordance with operational requirements and cargo handling systems used; and (b) modification to payment systems for container operations from by-the-ton to by-the-container basis. Since containerization is now being introduced, the principle of 24-hour working should also be addressed. B. Equipment Requirements 10. Equipment requirements for the project ports were determined jointly by COLPUERTOS and the Bank. The methodology developed by COLPUERTOS was reviewed and found satisfactory by the appraisal mission: it is based upon operational analyses and actual and expected productivity. Total equipment requirements were determined based upon traffic forecasts, physical condition and expected useful life of COLPUERrOS' existing plant of equipment and the availability of privately owned equipment. Existing COLPUERTOS' and privately owned light cargo-handling equipment (namely forklifts and tractors for general cargo) is sufficient to cope with traffic growth up to 1988; private equipment is used because of the shortage of COLPUERTOS' light cargo- handling equipment due to poor maintenance. However, until recently, port users incurred a double payment because they had to pay full tariffs to COLPUERTOS for less-than-full services and, in addition, had to cover the costs of private equipment. This situation encouraged COLPUERTOS' inefficiency because the enterprise collected revenues for services not provided, and equipment operators were paid even when they did not participate in the provieion of services. Present management has undertaken a plan to rehabilitate light equipment which is only five years old and is out of service for lack of spare parts. During 1984, the enterprise procured about US$0.8 million of spare parts, and the rehabilitation plan is already under way; it is expected to reduce, but not eliminate, the participation of private equipment. 11. To eliminate the double payment incurred by the users, COLPUERTOS COLPUERTOS has changed its operational procedures and it is currently paying for the rent of private light cargo handling equipment to private equipment rental companies and will reimbu-se under special circumstances the users for the corresponding costs if they rent it directly. To discourage inefficiency, COLPUERTOS has also changed its operating regulations eliminating payments to operators who do not participate in the provision of services when private equipment is used. When some of the existing equipment - 82 - ANNEX 3 either COLPUERTOS' or privately owned, reaches the end of its economic life, it would be necessary to replace it. 12. An analysis prepared during appraisal shows that new operating costs of light equipment provided by 0OLPUERTOS would bring about considerably nigher results than if some equipment were provided by private rental companies. Under these circumstances, COLPUERTOS should abstain from acquiring additional light equipment and allow rental companies to provide it, unless the enterprise is able to reduce its operating costs to levels comparable with those obtained in the private sector. This matter was discussed and agreed by COLPUERTOS and the Government during negotiations. 13. The project will finance heavy cargo handling equipment and container handling equipment. The former would replace COLPUERTOS' equipment that is 15 to 25 years old, that cannot be economically repaired and that would be scrapped durin the period of project implementation; besides, additional units would be provided to cope with traffic growth. The table below shows the year of acquisition of existing equipment and identifies the units to be replaced. Yr. of Acquisition Proposed Equipment 1962 1970 1979 Replacement Additional 15,000-lb forklift trucks - 15 24 15 9 16-ton mobile cranes - 9 10 9 - 30-ton mobile cranes 1/ 1 2 - 3 1 I/ These cranes will be replaced with 40-ton capacity ones. The replacement and provision of heavy cargo handling equipment will avoid cargo damage and truck/wagon and ship delays by handling cargoes weighing between 5 and 40 tons more efficiently. The container handling equipment will supplement existing COLPUERTOS' and privately owned equipment and will provide the necessary capacity as traffic increases. Some of COLPUERTOS' existing equipment is 25 years old (45,000-lb. forklift trucks) and has already been replaced by privately owned equipment. The project will include yard tractors and trailers and will establish their use as a regular feature of container operations at all the project ports to achieve improved productivity. 14. Cargo handling equipment requirements were determined using all information, data and results of methodology described above. The process can be shown schematically as follows: - 83 - ANNEX 3 Traffic projections Type of cargo LjjIjj_c_in_ _ - |(packing-commodity) | Gneral car go traffic to be handled | Operational data |-- Cargo weight Distance of movement Availability of - - ulation model1 equipment Total Equipment Requirements Equipment available | Privately owned Iequipment available Equipment to be rehabilitated Proposed List of Equipmentj The equipment to be procured would cover the current shortages of equipment and additional equipment to cope with traffic increases up to 1991. The proposed list of equipment that would be included in the project is given in Table 3.2. C. Port Productivity and Productivity Targets 15. To measure the productivity of the project ports, port statistics were analyzed and compared with those of other ports. The following performance indicators were used: (a) Berth Performance Index (BPI), average rate based upon total time ships occupy berths; (b) Cargo Performance Index (CPI), average rate based upon net time ships are engaged in loading and discharging cargo; and (c) Gang Performance Index (GPI), average rate based - 84 - ANNEX 3 upon CPI and the average number of ships hatches worked simultaneously per ship; this index is expressed in terms of con/gang/hour. It was obtained directly for Colombian ports based upon actual average hatches worked at the project ports. 16. The comparison of performance indicators precludes adjustments for bringing all ports into an absolute common basis since there may be disparity in port working hours, size of shipments, weather conditions, etc. To isolate the effect of these factors, a Cargo/Berth (C/B) ratio was determined which measures time actually spent in loading and discharging ships as a proportion to total time that ships occupy berths. 17. Table 1 of this annex shows the comparison of performance indicators and ratios of the project ports with other ports of similar size and volume of traffic handled and with the average for a sample of 220 ports of the world. The analysis of this table leads to the following conclusions: (a) Cargo performance (CPI) at the project ports is generally in line with that of other ports; this indicates that, despite the bad condition of existing facilities, port workers are able to handle cargo at reasonable rates; the gang productivity also reflects the effect of covering the ports' equipment shortage with equipment provided by the users. The effect of improved port facilities and availability of equipment to be provided under the proposed project leaves a margin of improvement to gang productivity; and (b) the comparison of C/B ratios indicates that idle time of ships alongside berths in the project ports is considerably larger than it is in other ports. While, in the case of the Colombian ports, ships are idle for about 60-70Z of the total time that they occupy berths, the average for 220 ports is only 30%. This indication reflects, among other things, a lack of oort operations planning, unsatisfactory labor working time controls, poor equipment maintenance services, inadequate port traffic organization and signalization, and inappropriate preparation of cargo/storage areas. The proposed technical assistance component to improve port operations, followed by the implementation of adequate administrative corrective measures to be identified through this assistance, would assist the ports in alleviating these problems and, consequently, would improve productivity and performance. An outline of this technical assistance is given in Appendix A to this annex, and draft terms of reference are in the Project File. 18. The main causes for the low productivity at the project ports may be sumnarized as follows: (a) restrictions imposed upon the use of heavy cargo handling equipment alongside quays due to the degree of deterioration. This applies to Buenaventura and Santa Marta; - 85 - ANNEX 3 (b) narrowness of quay aprons. At Buenaventura, this problem in affecting quays 2 to 6 since a semi-fixed pipeline alongside these quays are narrowing the apron and obstructing loading/ discharging operations. At Cartagena, finger piers 1 and 2 have narrow aprons 8 to 10 a wide; (c) restricted access to quays and storage areas. Thls applies to quays 2, 9 and 10 at Buenaventura and quay numbor 1 at Santa Marta, where access is restricted because of nettlp-nnts of backfill. At Buenaventura, the access road to, epen storage areas behind quays 2 to 8 is neither paved a_c L,aed; (d) poor maintenance services. This problem causes interruptions to port operations as a result of continuous failures of equipment assigned to work; (e) shortage of container-handling equipment. Although some of this shortage is alleviated by equipment provided by port users, they give preference to their own vessels, and the others have to wait; (f) shortage of equipment to handle heavy cargo (over 15 tons). At all the project ports, this problem causes damage to cargo by necessitating the use of several forklift trucks to mobilize it; also,delays occur in receiving/dispatching heavy cargo becuuse the user has to hire 16-to-40-ton capacity cranes wherever these can be found (Medellin, Cali and sometimes Bogota); (g) poor method of handling overall port operations. Operations at all project ports are carried out following the traditional daily meetings to define berth, labur and equipment to be assigned to each vessel. These meetings are attended by the agents, each one looking after his own ship, and the head of port operations. All ships are served on the basis of first-come/first-served. No overall planning exists nor do regulations concerning the admittance of trucks to deliver/receive shipments, coordination with railway services, delivery and reception of cargo, container storage and inspection and internal port traffic and signalization. This lack of planning applies to the absence of specific provisions to better serve full-container vessels, such as the introduction of the principle of 24-hour working. The ports lack an operational analysis unit to monitor and analyze port operations and resources used for mobilizing the various types of cargoes; statistical Information is voluminous and complicated, and most of it is rarely used at port level or at headquarters level for improving productivity or/for medium- and long-term planning. Port documentation is complicated and obsolete; and (h) Inefficiency of all the project ports' maritime services. This inefficiency results from, among other things, the lack of maintenance of the existing tugboat fleet. - 86 - ANNEX 3 19. Specific investments/actions that would be included in the proposed project to improve productivity and efficiency are as follows: (a) rehabilitation of existing facilities would reduce and eliminate restrictions described in paragraph 18(a) to (c); (b) the equipment component of the proposed project would eliminate shortage of port equipment, including general cargo and container-handling equipment and tugboats as described in paragraphs 18(e), (f) and (h); (c) the technical assistance, training and workshop equipment included in the proposed project would eliminate deficiencies of port maintenance services at all project ports, as described in paragraph 18(d), and (d) improvements for servicing full-container vessels by the introduction of the principle of 24-hour working would be addressed by COLPUERTOS during future labor negotiations (para 9 of this annex) and have therefore been partially considered in the determination of productivity targets. 20. Based upon a detailed analysis of current port operations, specific efficiency indicators have been prepared for general cargo and containers, in terms of ton/gang/hour (GPI), and ton/ship/day (BPI); the latter also includes dry bulk. The proposed project would not include investments to improve bulk-handling systems, but productivity rates for this type of cargo, through the actions/investments mentioned in paragraph 19, would improve the C/B ratio. Port efficiency indicators' data and analyses are in the Project File. 21. Table 2 of this annex swmmarizes the results of productivity andlyses translated into productivity targets by main commodity groups and by port. 22. These productivity targets would have to be reviewed early in 1988, and refined by COLPUERTOS with the assistance of the consultants to be retained to improve port operations. The increase in terms of ton/gang/hour is reasonably modest because port workers are able to handle cargo at acceptably good rates; the average increase of about 19% is considered acceptable. The area in which there is more room for improvement is the increase of effective working hours, and it should have a favorable impact upon operating costs. April 1985 - 87 - ANNEX 3 ANNEX 3 COLOMBIA Table I PORTS REHABILITATION PROJECT Comparison of Operational Efficiency of Colombian Porte with Other Ports Port Annual Throughput Cargo-Handling Rate (000 tons) (ton/ship/hour) BP I 1/ CPI 2(1/2)3/ (1) (2) (3) General Cargo Buenaventura 990 22.5 61.3 .36 Cartagena 830 27.8 71.1 .39 Recife (Brazil) 780 27.5 55.2 .50 Veracruz (Mexi'o) 1,040 20.1 43.5 .46 Valencia (Spain) 1,010 12.3 27.7 .44 La Guajira (Vener,uela) 642 330.9 419.1 .79 Barranquilla 380 14.7 49.8 .29 Santa Marta 330 17.4 49.5 .35 San Diego (USA) 319 433.7 453.4 .95 Mazatlan (Mexico) 140 15.5 44.9 .34 Townsville (Auatralia) 197 38.0 82.4 .46 Kiel (Germany) 101 61.2 67.4 .91 Average 220 Ports N.A. 25.9 37.7 .69 Dry Bulk Buenaventura 978 46.2 124.8 .37 Barranquilla 201 26.4 93.5 .28 Cartagena 164 39.8 71.8 .55 Santa Marta 50 34.2 80.3 .42 Progreso (Mexico) 262 32.8 70.1 .47 La Guaira (Venezuela) 469 37.9 38.6 .98 Maracaibo (Venezuela) 551 99.4 128.4 .78 San Diego (USA) 908 235.8 242.7 .97 Palm Beach (USA) 797 124.4 186.5 .66 Average 220 Ports N.A. 100.6 122.8 .82 1/ Average rate cargo moves between ship and shore based upon the total time ships occupy berths, measured in tons/hour. 2/ Similar to BPI, but based upon the net time ships are engaged in loading and unloading, measured in tons/hour. 3/ C/B ratio time actually spent in loading and discharching ships as a proportion of total time that ships occupied berths; Source: Port Performance Index - 1984 April 1985 - 86 - ANNEX 3 Mt 3 Productivity Ta!rptu 2- Pirt C-IlTon/GanAbn 2/ Tor/Shlp/Dm 3/ I P IOActual 1987 1989 19 91 Acttal 1987 1989 1991 -,siiaventtj I (1984) 1 1 8~~ 1 ra I I I Ta=gHm Ipnm 18 19 21 22 1 590 640 890 1,040 I (b) Misell]ams I 11 12 12 13 1 350 440 530 620 I I I I 'bntafner 4/ 1 6 7 8 8 1 106 130 162 192 Dry B,X I 42 45 47 50 1 1,470 1,780 2,090 2,400 ~~1- II I Tai-mwemn 1 14 15 16 17 510 600 690 780 I (b)Miacelarm I 11 11 12 13 1 410 480 550 620 I 1 I I (xtainez 4/ 1 6 7 8 8 1 106 130 162 192 Dry &ilk 1 36 38 40 43 1 950 1,010 1,080 1,140 Barranq~uillaII _ I e I (a) a o 1 12 13 14 15 1 350 430 510 590 I (b) 1SellAMo1 1 11 12 12 13 1 300 370 440 510 I I 1 I imbntas 4/ 1 4 5 6 6 1 58 63 68 72 j Dry Bak 1 31 33 35 36 1 630 740 860 980 I ~~~~~~~~~~~~~~~~~~~~~II Samta Hmta I i) I 19 21 22 23 1 590 700 810 920 I (b) Mlsclaxws 1 13 14 15 15 1 390 460 540 610 I Ontane 4/ 1 4 5 6 6 1 58 63 68 72 Y &dkl 27 28 30 32 830 930 1,040 1,150 1/ Weited awerqe - Iqmort/exports / Bel san net tiur ships are ergage in loading ar unloading operatloiu. 3/ Basl on to timne ships oop b1rths. 4/ Pooductivity epmeow In TEJ S: : 1983 Eqipxnt Rqursirnts - WI.9ERLS Apr1 1985 - 89 - ANNEX 3 Appendix A COLOMIA FORTS RAEBILLTATION PROECT :~zline Of TechnicalAssligtance for Improvement of Port Operations The cost of these consulting Services to Improve port operations will be financed by COLpuFRTOs, supplemented by funds from the loan under negotiation with the World Bank. It is CoLpUERTos' intention that the technical assistance to which these te%u8 of reference relate shall be eminently practical. This will require the consultant8 to WOrk, In all cases, in close collaboration with the chiefS of oPeratiOns of the ports and the pertinent supervisory personnel- Terminal managers will be directly responsible for taking the neceseary measures to ensure that the recomendations, regulatlons, etc. prePared by the consultants are implemented In a manner to accomplish the Purpoaes described in the following paragraphs. Managers will have to secure the PartiCipation of users and other entities (railways, truckers, etc.) whenever necessary. The port Implementation Unit (PIU) will be responsible for coordInating the vork of the Port operations consultants with that of the cofusLihants developing the management information and cost accounting systems and helping the POtts to reorganize their maintenance services. ObEi e iveBl The objectives of the technical assistance for improvement of port operations are to: (a) increase the operational productlvity of the ports; (b) rationalize the utilization of the available physical and human resources; (c) coordinate the port services with users' needs and land transportation services; (d) define, simplify and implement general axd container cargo control systems; te) define and implement cost centers for each service; (f) sigplify cargo reception and delivery procedures; and (g) Coordinate port activities with Customs procedures. Scope of the work To accomplish the foregoing objectives, the consultants' services have been divided into the following phases: Phase 1: (a) analysis of present and future traffic composition, cargohandling sYstems and controls; (b) analysis of the operations' organuzatiOn of the port, includiOg physical and human resources; (c) identification of imUediats measures to improve present operations; and (d) Prepa8rtion of an iftediate plan of action to implement those measures. This Phase is expected to last gigC weeks. - 90 - ANNEX 3 Appendix A Phase 2: (a) Implementation of the Phase 1 plan of action; (b) preparation of a plan for the rationalizing of operationa' personnel; (c) preparation of port operations regulations; (d) analysis of the viability of concessioning selected port servlces; (t) development and lmplementatlon of simplified port statistics; (f) simplification of port documentatlon; (g) development of port operations planning; and (h) review of productivity targets and monitoring systems. The duration of this phase is estimated at four months. Upon Its completion, the consultants shall present a report covering, among other points: (a) the results of the action plan; and (b) operations manpower rationalization plan. Phase 3: Implementation of Phase 2. The duration is estimated at 10 months, at the end of which the consu'tant shall present a Draft Final Report for COLPUERTOS and Bank review, followed by a Final Report incorporating the corresponding comments. Phase 4: Six months after completing Phase 2, assessment of the additional recommendations for further improvement. This phase is estimated at one month, and, upon its completion, the consultants shall present an evaluation report. _ 91 - ANNEX 3 Appendix B, COLOMBIA PORTS REHABILITATION PROJECT Outline of Technical Assistance for Reorganization of Repair and Maintenance Serv_ces Oblectives 1. The objectlves of the technical assistance to Improve repair and maintenance services are to: (a) organize an equipment management system; (b) ensure the availability and efficiency of port equipment, existing and new, to be procured under the Ports Rehabilitation Project; and (c) establish policies for replacement of equipment. Scope of the Work 2. The consultants' services to assist COLPUERTOS in the reorganization of the maintenance services at the project porte will be d:'.vided Into four phases, to enable the ports to undertake immedlate corrective measures, develop an organization and operating methods and controls, and, in the short-term, assess the results. These phases will include, but not exclusively: Phase 1: (a) a diagnosis of the existlng organization; (b) an assessment of maintenance staff qualifications; (c) an assessment of physical facilities and resources; (d) a cri' cal analysis of current maintenance preparation of an action plan for .eir implementation; and (f) an analysis of maintenance and repair requireG.ents In the light of physical conditions of existing plant of equipment and programed acquisition of additional units. This phase is estimated to lasL about six weeks. Phase 2: (a) implemeri -ition of the Phase I plan of action; (b) the design of a suitable orgar zation of the services, including specific functions and responalbil les of all staff concerned; (c) preparation of manuals for prevencive a. tenance and mobile maintenance units; (d) design of control systemw :or mr ,tories, fuel and lubricants consumption, and maintenance and - - s; and (e) design of an adequate diagnostic method and quality conL;. Phase 3: (a) r= niementation of reorganization of the services, including reassignmeat. of personnel and machinery and tools; (b) preparation of bidding documentr ',r the acquisition of machinery and tools and diagnostic iv*trumeacation to adequately equip the port workshops and maintenance facilities; and (c) implementation of the use of manuals and control systems. This phase is expected to last about 36 weeks. _ 92 - ANNEX 3 Appendix B Phase 4: Six months after completion of Phase 3, the consultants would go back to the ports to: (a) assess the performance of the reorganized maintenance services and the personnel assigned thereto at each port; and (b) reco mend corrections to the established systems and controls. This phase will last about one month. Reporting 3. The consultants will prepare: an Inception report, after completion of Phase 1; an interim report, Number 1, including manuals and control systems, and an organination manual, including detailed functions and rssponsibillties; monthly progress reports, during Phase 3. A Draft Final Raport followed by a Final Report Incorporating COLPUERTOS and Bank comments, Ofter completion of Phase 3, and an evaluation report, after completlon of Phase 4. - 93 - ANNEX 4 COLOMBIA PORTS REHABILITATION PROJECT Detailed Project Description A. General 1. The proposed project would consist of: (a) the rehabilitation of port facilities at three of the four deepwater commercial public ports of the country, namely, Buenaventura on the Pacific Coast, and Cartagena and Santa Marta on the Atlantic Coast; (b) cargo handling equipment to supplement COLPUERTOS' and privately owned, second-hand tugboats to partially replace the existing fleet; workshop machinery and tools; training equipment and training-related material; and computer equipment complementary to that existing; and (c) professional services for: (i) technical assistance to help COLPUERTOS to strengthen its managerial, administrative and operational capabilities; (ii) training of COLPUERTOS personnel; and (iii) engineering and studies. B. Civil Works (i) At Buenaventura 2. Repairs to Quays 2 tc 9: These quays need to be repaired since they are seriously deteriorated as a result of: poorly maintained fender systems (the berthing beam and a large number of concrete piles are seriously damaged); defective design (some quays' sections were built with no retention structures to contain backfilling); and poor coastruction antd age (a large part of the structure's steel reinforcement is exposed and corroded). Paving and Repaving: Storage areas behind berths 2 to 5 are damaged and would be repaved under the project (concrete slabs are fractured, and settlements cause flooding during raining spells that occur most every day). Storage areas behind berths 6 to 9 and the corresponding access road have never been paved and lack drainage and lighting. Covered storage: Most of the areas adjacent to, and between, transit sheds have been covered in recent years to allow cargo operations during rainy periods (there is an average precipitation of P.bout 770 mm per year). The project includes construction of roofs for similar areas not yet covered. Emergency Power Plant: There are continuous power interruptions in the port due to unreliable municipal services to which the port is connected. The proposed project includes an emergency power plant. (ii) At Cartagena 3. Repairs to Finger Piers 1 and 2: These piers would be repaired since they are also deteriorated as a result of lack of fenders (this has caused damages similar to those in Buenaventura) and poor construction (corrosion of exposed steel reinforcement); the repairs would also include demolition of an existing old transit shed in finger pier I to enable this berth to handle container traffic. Remodeling of Sectors 3 and 4: These sectors would be remodeled under the project, being paved and having a new transit shed constructed to replace the ones to be demolished at pier 1 and sectors 3 and 4. Emergency Power Plant: For same reasons as in Buenaventura, an emergency power plant would be included in the project. - 94 - ANNEX 4 (iii) At Barranquilla 4. Emergency Power Plants: This port, more than the others, suffers continued power interruptions; the project would include two emergency plants. (iv) At Santa Marta 5. Repairs to quay 1, 2 and 3: These quays would be subject to partial reconstruction and urgent repairs because of their serious degree of deterioration due to faulty design and poor construction (no retention wall was built to contain the backfill; about 60 piles of the front row have been broken by berthing vessels; and the concrete structure's steel reinforcement is exposed and corroded). Quays 4 and 5: These quays would be repaired to replace broken piles, construct a new berthing beam and replace the existing fender system. Emergency Power Plant: An emergency power plant would be included in the project to avoid interruptions caused by unreliable municipal services to which the port is connected. C. Equipment 6. Equipment requirements are based upon: (a) operational analyses carried out by COLPUERTOS for each type of cargo operation to determine the resources required. These analyses were reviewed and found satisfactory by the appraisal mission. The methodology followed is described in Annex 3, and the full analysis is in the Project File; (b) traffic projections; Cc) physical conditions of COLPUERTOS' plant of equipment, taking into consideration an ongoing equipment rehabilitation plan undertaken by the ports; and (d) availability of privately owned equipment currently used at the project ports. 7. The project would finance the purchase of heavy load and container handling equipment, harbor craft, workshop machinery and tools, training and computer equipment. Heavy load equipment: This includes heavy forklift trucks and mobile cranes to replace old equipment purchased in 1970 or before, and additional heavy forklift trucks to cope with traffic growth; the list of heavy load equipment takes into consideration the availability of privately owned forklifts and cranes. Container handling equipment: This includes equipment supplementary to that presently existing, both COLPUERTOS' and privately owned, to cover current shortage and provide for traffic growth; in addition, to enable the ports to adopt, on a regular basis, the tractor/trailer marriage system to mobilize containers from/to shipside to container stacking area, yard tractors and trailers and 18,000-lb. and 65,000 lb. forklift trucks have also been included in the list. Harbor craft: COLPUERTOS' tugboat fleet is 35 years old and extremely expensive to maintain, making COLPUERTOS' maritime services unreliable. At Buenaventura, there are two tugs, one of which is going to be repaired with a new engine; there are no private tugs available, and, when no tugboat is available, some small navy tugs, inadequate for these services, are used; at the Atlantic ports, COLPUERTOS has four more tugs, one of which is going to be repaired with a new engine. Private tugs are available, but only two of them are appropriate to provide services to COLPUERTOS. The proposed project includes the acquisition of four second-hand tugboats to partially replace the existing fleet. Workshop, Training and Computer Equipment: This would include: (a) workshop equipment to enable the ports to provide propel - 95 - ANNEX 4 preventive and corrective maintenance services; the corresponding list would be prepared by the experts to be retained to assist COLPUERTOS in restructuring these services under the technical assistance project component; (b) training equipment, with characteristics to be defined by COLPUERTOS with the assistance of a training expert to be retained by COLPUERTOS; and (c) computer equipment for the implementation of management information systems, with characteristics to be defined by the experts assisting COLPUEkTOS to develop such systems. 8. Procurement of cargo handling equipment includes equipment to replace obsolete existing units and to cover the shortage for current traffic levels, as well as additional equipmcnt to cope with traffic growth. D. Technical Assistance 9. The technical assistance chat would be included in the proposed project consists of: (a) improvement to COLPUERTOS' financial management systems, including general and cost accounting, tariff structures, financial planning and budgetary conrrols; (b) improvement to COLPUERTOS' management information systems; (c) strengthening and improvement to the ports\ operatiuns planning procedures, cargo-handling methods and controls and simplification of port documentation; and (d) reorganizing of port maintenance and repair services. 10. An important element of this technical assistance is the upgrading of the ports' maintenance services which would be achieved with the support of carefully selected experts, -who, together with port staff, would prepare a diagnosis, an immediate plao of corrective measures, the design and regulations of a modern maintenance system followed by a period of implem3ntation and ending with an assessment of results achieved. Outlines of the scope of work for items (a) and (b) a-e given in Annex 2; and for items (c) and (d), in Annex 3. E. Training 11. The training component would include: (a) advisory services to prepare and implement a training program; (b) port planning, operations and maintenance courses and seminars for mid- and top-management; (c) COLPUERTOS' participation in regional and international ports and shipping conferences and congresses; and (d) fellowships for COLPUERTOS' professional staff. Details of the training component and the scope of the training advisory services are given in Annex 5. F. Engineering and Studies 12. The proposed project would include: (a) supervision of construction; (b) engineering studies and design for COLPUERTOS' next investment plan tc equip selected ports with full container and bulk handling facilities; and (c) feasibility studies for the expansion of Colombia's port capacity on the Pacific Coast; and (d) a study to define institutional arrangements to establish a viable dredging entity. April 1985 - 96 - ANNEX 5 COLOMBIA PORTS REHABILITATION PROJECT Details of the Training Component A. General 1. COLUERTOS' senior-level staff are generally capable; lower and middle-level prcoavanel require additional training and/or upgrading to enable them to employ more efficient work methods. During the past years, limited training activities have been carried out in each port by the respective training division under the Industrial Relations Department (IRD). 2. During project preparation, COLPUERTOS, following Bank recommendations, started to develop a training policy to strengthen the capacity of the enterprise's personnel at all levels. COLPUERTOS' management has already entered a formal agreement with SENA, which became effective on January 1, 1985, for the provision of regular training services. SENA is expected to provide: (a) regular training courses for equipment operators, mechanics, and administrative staff at each one of the project ports; and (b) semidnars on industrial safety, work incentives, managerial skills, development of working team attitudes and other subjects oriented to create an enterprise's consciousness among its employees. COLPUERTOS' training is currently being reorganized; the responsibility of social and welfare activities has been transferred to other departments. Bogota and each of the ports have two and one experts, respectively, who, at the present, are defining with SENA a preliminary training program limited to SENA's current capabilities. 3. COLPUERTOS' management agreed to the establishment of: (a) a Training Steering Committee (TSC) which would be responsible for the development of long-term training policies, approval of training programs and required budgetary allocations, monitoring of training activities and their periodical evaluation; and (b) a Training Supervisory Unit (TSU) that would be responsible for the coordination and supervision of training activities, headed by IRD and assisted by the advisory services to be retained. 4. The Project-Related Training (PRT) will imclude: (a) advisory services; (b) in-house courses/seminars; (c) selected specialized courses for mid- and top-level managers abroad; (d) participation of COLPUERTOS' staff in international/regional ports and shipping conferences/congresses; (e) working visits to selected ports to familiarize COLPUERTOS' managers, operations staff and port workers with container operations methods, systems and controls, as well as with tariff structures, methods of payment, labor participation and rationalization of operations; (f) fellowships for selected COLPUERTOS' young professionals for academic courses and practical training in port administration and planning; and (g) acquisition of training equipment and material. - 97 - ANNEX 5 5. The integrated training program, including SENA's services, would require its active participation to achieve the transference of the instructors/experts' experience and enable it to, in the future, expand its services to cover specialized port training that, at the present, it cannot cover. This is of particular importance because COLPUERTOS will continue to pay SENA for training services as a percentage of the latter's payroll, as stipulated by the law. 6. The advisory services that would be included in the proposed project to assist COLPUERTOS in strengthening its training capabilities and support the preparation and implementation of a four-year integrated training program would consist of: (a) reorganizing the training services at Bogota and at the project ports; (b) assessing the capability of personnel and determining required training; (c) adapting physical training facilities; (d) developing a phased training program, phase one covering a two-year Priority Program and phase two being a Regular Program to consolidate actions taken during phase one; (e) selecting trainees, instructors, training seminars/courses, materials and candidates for fellowships; (f) designing a training monitoring and evaluating system; and (g) organizing, coordinating and supervising the implementation of the integrated program. 7. The preparation of the training program would take into consideration all available courses/seminars and the need for coordination with the Bank and other international organizations/associations; the organization of some high level courses on a regional basis should also be analyzed. Estimates of COLPUERTOS personnel to be trained and preliminary cost estimates of the PRT are given in Tables 1 and 2 of this annex respectively. B. Plan of Action 8. To ensure the effectiveness of the PRT, COLPUERTOS has undertaken the following steps: (a) retained training experts for the advisory services referred to in preceeding paragraph 6; (b) prepared a preliminary training program to be undertaken by SENA; (c) established a TSC and TSU with SENA's participation in the latter; 9. At negotiations, COLPUERTOS agreed to implement the plan of action which would include: (a) preparation of an integrated four-year training program; (b) rehabilitation/expansion of COLPUERTOS/SENA's training facilities; (c) selection of fellowship courses and candidates; and - 98 - ANNEX 5 (d) selection of instructors/experts for courses/seminars in Colombia and abroad. Training Monitoring and Supervision 10. TSU would prepare detailed monthly reports that would be incorporated into the Quarterly Progress Report (Annex 7). TSU's reports would include, but not exclusively, details of the courses, number of participants, locations, etc., carried out during the period and of the activities programed for the next period. Selection of Instructors/Experts/Courses 11. The selection of individual experts and/or firms, organizations, associations, etc. to participate in the implementation of the training program would follow the Bank Guidelines for consultants' services. October 1985 - 99 - ANNEX 5 Table 1 COLOMBIA PORTS REHABILITATION PROJECT Estimates of Personnel to Be Trained Description Buenaventura Barranquilla Cartagena Sta. Marta Total 1. OPERATIONS 2,200 930 1,300 1,000 5,430 2. MAINTENANCE/ EQUIPMENT 120 96 74 50 340 3. FINANCE 60 70 60 40 230 TOTAL 2,380 1,096 1,434 1,090 6,000 Source: COLPUERTOS and Port Terminals June 1984 - 100 - ANNEX 5 Table 2 COLOMBIA PORTS REHABILITATION PROJECT Training Preliminary Cost Estimates 1/ Local Foreign Total (USs '000) Advisory Services 46 177 223 Training Courses by Experts 191 617 808 Courses and Seminars (abroad) - 199 199 Study Visits and Congresses - 103 103 Fellowships - 422 422 Training Materials - 50 50 Hiscellaneous (per diem for trainees) etc. - 50 50 TMTAL 237 1,321 1,528 1/ Manpower is tentatively estimated at about 66 man-months, including experts engaged for the courses and seminars abroad. Source; Mission estimates February 1985 - 101 - ANNEX 6 COLOMBIA PORTS REHABILITATION PROJECT Economic Evaluation I. General Methodology 1. For the purposes of the economic evaluation, the following project components were analyzed separately: (a) civil works, including quay repairs, paving and improvements to structures; (b) cargo-handling equipment; and (c) tugboats. The civil works components were justified mainly on the basis of avoidance of reductions in port capacity and higher operating costs through the rehabilitation of infrastructure to restore service levels. In some cases (paving, roof extensions), the civil works were also designed to improve efficiency levels. The cargo handling equipment component was designed to provide capacity to meet projected trasfic flows. Benefits include avoidance of lighterage costs and cargo handling costs with the project. The tugboats will partially replace the existing 32-year old fleet. 2. For the purposes of the economic evaluation, total investment costs include the cost of works already under way in Cartagena and Buenaventura which are required in order to achieve project benefits, even where these costs will not be financed under the project. Investment costs are exclusive of taxes and duties and include physical contingencies, engineering and supervision. A project life of 25 years was taken for quay repairs, 20 years for roof extension, and 15 years for paving improvements. For the equipment component, a project life of 15 years was taken for the second-hand tugboat repairs and 15 years for cargo handling equipment. 3. At present, approximately 30Z of foreign seaborne commerce using public ports is carried by national flag vessels and 70Z by foreign vessels. Most of the benefits from the project derived from traffic transported on foreign vessels will be passed on to the Colombian economy, since, without the project, foreign liners would impose surcharges on Colombian cargo in order to recover the costs of excessive ship service times. Surcharges have been imposed during periods of congestion in the past. With the project, these surcharges would be avoided. To account for this effect in calculating the economic return for the paving and structures works and equipment acquisition programs, only half of the benefits from reduced waiting and service time of foreign liner ships have been considered, which is conservative. - 102 - ANNEX 6 II. Economic Evaluation of Project Components A. Civil Works (i) Quay Repairs (31% of project costs) 4. The port rehabilitation project includes the renovation of berths in Buenaventura, Cartagena and Santa Marta. Present facilities are in an extreme state of disrepair, and, without the project, are expected to become inoperational over time. Table 1 of this annex shows the expected rate of deterioration in berth capacity in each of the project ports if they are not rehabilitated. In the Buenaventura and Cartagena ports, the repairs are relatively minor. The work is more difficult and costly in Santa Marta where the existing superstructure will have to be removed before rehabilitation. The economic appraisal of the project quantified four sources of benefits resulting from the proposed port improvements: ship waiting time savings, avoidance of lighterage costs, elimination of double-handling of cargo, and reduction in cargo losses due to lighterage. In order to avoid double-counting of benefits, it was assumed, in both the 'with' and "without" project case, that the other project components would be carried out. In addition, improved Santa Marta grain throughput, due to more efficient use of the silos, is assumed in both the "with' and "without" project cost. 5. Without the project, the convergence of declining berth capacity and rising traffic would create congestion, resulting in prolonged ship delays.l/ It is not likely that general cargo traffic would divert to private specialized terminals. Instead, to minimize waiting time costs, ship owners would resort to lighterage. The expected distribution of port traffic, which would tend to minimize overall ship waiting time and lighter operations, has been estimated by assuming that no ship would wait for the berth if its per ton of cargo cost of waiting exceeded the cost of lighterage. 6. In the 'with the project" case, berth capacity would be restored to original levels. However, increasing levels of traffic would eventually lead to congestion and diversion of traffic to lighterage. As such, benefits have been assumed to remain constant after the year in which the port reaches full capacity. Capacity is expected to be reached, with the project, in 1992 at Santa Marta, 1993 at Cartagena, and 1996 at Buenaventura. 2/ In all ports, repairs would be scheduled to minimize disruption to port operations and to put individual berths back to use as soon as their repairs are completed. 1/ In the analysis, it was assumed that a third shift would be introduced when port capacity, under current labor practices, is reached. 2/ Congestion at Santa Marta will be partially and temporarily relieved by diversion of some traffic to the nearby, less congested port of Barranquilla. For one to two years, the incremental congestion cost in Barranquilla would be less than the incremental cost in ship waiting time at Santa Marta. - 103 - ANNEX 6 7. Ship Waiting Time Costs. Ship waiting time costs were computed by using the Bank's shipcost model and weighing the costs of Individual ship types to reflect their actual mix in each port. Ship Time in Port Costs (US$/Day) Buenaventura . . . . . . . . . . . . . . . . . $6,818 Barranquilla . . . . . . . . . . . . . . . . . $5,227 Cartagena . . . . . . . . . . . . . . . . . . $7,373 Santa Marta . . . . . . . . . . . . . . . . . $6,829 8. Using UNCTAD's average ship waiting time tables for values corresponding to project port characteristics, ship waiting time costs per ton of cargo were estimated as a function of projected traffic growth and, for the "without the project" scenario, declining port capacity. It has been assumed that ship waiting time would remain constant after its value reaches US$12.80/ton, which is the unit cost of lighterage, including avoidable handling costs. At that point, increases in traffic would be handled more efficiently by lighterage. Diversion of traffic to lighterage would occur in 1989 at Buenaventura, 1989 at Cartagena and 1988 at Santa Marta in the "without the project" case. 9. Lighterage Costs. Lighterage costs include the cost of lighters (depreciation), auxiliary equipment and maintenance and operation. They do not include the cost of shore facilities since adequate landing facilities exist. The per ton cost of an initial lighterage system averages US$7.00 per ton at the volumes of traffic expected at the project ports. 10. Avoidable Cargo Handling Costs Due to Lighterage. According to a recent study, the avoidable cost of loading/unloading cargo between the ship and berth by lighterage was US$5.80/ton. This saving was applied to each ton of lightered cargo. 11. Cargo Losses Due to Lighterage. The most recent data indicate that the CIF value of general cargo imports at project ports is US$546 per ton. The FOB value of general cargo exports has been determined largely by coffee exports (US$1,500 per ton) and others (US$1,000 per ton). The average value per ton of general cargo traffic weighed for different import-export composition of traffic gives following values at individual project ports. Buenaventura . . . . . . . . . US$923 per ton Cartagena . . . . . . . . . . US$732 per ton Santa Marta . . . . . . . . .US$800 per ton Cargo damage and losses, normal features of lighterage operations, are estimated at one-fourth of one percent of cargo. Hence, estimated avoidable cargo losses for project ports range from US$1.46 per ton for Cartagena to US$2.00 per ton for Santa Marta and US$2.31 per ton for Buenaventura. These unit costs were applied to each ton of lightered cargo. - 104 - ANNEX 6 12. AL Santa Marta, the proposed quay improvements also include provisions for paving surfaces on and along the existing wharves and access roads. At present, general cargo imports are stored throughout the port storage areas, separated from the wharves by access roads which are either unpaved or which have riding surfaces too weak and old to support heavy equipment and provide smooth cargo-handling operations. As a result, some wharves cannot be served by heavy cargo-handling and transport equipment. Equipment operates slowly and breaks down frequently, and long detours are often necessary between the wharves and the storage areas. These problems are reflected in longer ship service time and higher cargo handling costs and cargo damages. With the project, there will be cost reductions and savings in all of the operational aspects mentioned. The reduction in ship time for unloading imports is estimated at 20%; little or no effect is likely for coffee and bananas - the primary export commodities. The ability to use appropriate equipment will benefit all port cargo, except bulk grain imports, by reducing the cargo handling cost by about 5%. There will also be some decline in cargo damage due to rough riding surfaces, estimated at 0.5% and applying primarily to general cargo imports. 13. Details of the economic analysis of the quay rehabilitation works are found in the project file. Table 2 of this annex gives the cost and benefit streams for each port. The estimated economic rates of return are high, which is consistent with the findings in most rehabilitation projects, whereby an asset is restored to originally designed service levels at a relatively low cost. The estimated economic retur-s for the rehabilitation of the Buenaventura and Cartagena ports are 86% and 63% respectively, and 38% for the Saata Marta port works. (ii) Paving and Structures (19% of project costs) 14. In addition to the paving improvements at Santa Marta, w'hich were analyzed as part of the quay repairs, the project includes paving and structural improvements in the ports of Buenaventura and Cartagera. At Buenaventura, the roof to the existing transit sheds will be extended, and the storage area and an access road will be paved. At Cartagena, existing transit sheds will be demolished, and the area will be paved to accommodate container storage. 15. Buenaventura: Roof Extension and Paving Benefits (10% of project costs). The proposed roof extension to the existing transit sheds and paving works will permit continuous cargo operations, reducing ship service time at berth and waiting time for land transport vehicles. Interruption in loading and unloading ships caused by inclement weather totaled 270 ship days in 1983. Lack of a covering for transit areas is estimated to account for about 13% of the total time lost because of inclement weather. The daily cost of the vessels which would benefit from reduced ship service times is estimated at US$11,800. The initial annual ship service time saving to be realized from extending the roof is estimated at US$269,000. At present, transit sheds benefiting from the proposed improvements handle approximately 240,000 tons of cargo annually. Trucks wait an average of 0.4 minute per each ton of cargo loaded as a result of weather-related work stoppages. With the truck time value of US$3.03 per hour, the annual cost of avoidable delays is estimated at over US$5,000. - 105 - ANNEX 6 16. Under this component, the open storage areas and access roads will be paved. In 1983, some 360,000 tons of cargo used open storage. Since it rains 602 of the time in Buenavencura, some 216,000 tons are estimated to have been exposed to the inclement weather. Particularly heavy damage has been experienced by breakbulk cargo, estimated at 150,000 tons stored in the water-clogged patio No. 1, and in the unpaved patios facing transit sheds 6, 7, 8 and 9. The project will improve drainage, thereby reduciug rain-connected losses. According to port estimates, oxidization of iron and steel product imports accounts for losses of 10-20% of their value, and losses are higher for some bagged products. Reduction in cargo damage brought about by improvements is conservatively estima':ed at 1% of the average value of port imports of US$546 per ton. 17. The main port road surface has been destroyed by rain and heavy traffic, forcing the use of adjacent unpaved areas for cargo and vehicle movements. This situation raises the cost of cargo handling, limits the use of heavy equipment and increases the damage to port cargo and land transport vehicles. A recent study estimates the increase in cargo handling cost due mainly to axle and suspenslon breakdown at 9% overall cargo handllng costs, or US$1.16 per ton. This cost would be avoided if proposed improvements are implemented. Cargo damages in transit between the ship and storage and land transport and between the storage areas are difficult to quantify. A reduction of 0.5% in the US$546 per ton value of cargo assumed for this appraisal is believed to be conservative. The economic rate of return for the roof extension and paving works at Buenaventura is estimated at 36% (Table 3 of this annex). 18. Cartagena: Paving Container Yard (9Z of project costs'. The project will demolish transit sheds and pave the area for container storage. A new transit shed will be built in a different location to provide covered storage for general cargo. The principal benefit of an additional container yard and maneuvering area on the longer berth No. I will te a reduction in ship service time. Both areas are close to the container berths, and the project will speed up the container loading and unloading process. The project will also benefit general cargo vessels using the port facilities. A reduction of 15% in ship service time is expected. The estimated economic rate of return on these works is 27% (Table 3 of this annex). B. Cargo Handling Equipment 19. The benefits of the equipment acquisition program have been estimated separately for each port and major function: container handling and heavy load general cargo handling. The analysis cf equipment requirements to meet projected traffic, taking into account the current supply of equipment owned by COLPUERTOS and the private sector, is given in Annex 6. Because the benefits from the project depend, to a great extent, upon the achievement of improved productivity, the equipment program has been divided into two tranches. The second tranche would be approved for financing under the project only after a mid-term review indicates that productivity targets have been met and traffic has developed as expected. - 106 - ANNEX 6 (i) Container Handling Equipment (12% of project costs) 20. At present, COLPUERTOS lacks appropriate container handling equipment. The use of subctitute equipment such as forklifts instead of tractors and platforms, or of two small forklifts working in tandem instead of a large one, is reflected in higher ship service time and cargo handling Costs. The equipment being procured under the project Is required to achieve a technological change which will result in improved productivity. The equipment package is also design&ed to meet the needs of traffic growth and to replace, as necessary, existing equipment which will be scrapped. Two main sources of benefits have been quantified: (a) ship service time savings; and (b) container handling cost savings. 21. In both the "with" and 'without" project case, it has been assumed that the quay rehabilitation works will be undertaken. In addition, in the without project scenario, it is assumed that existing equipment, as it reaches the end of its useful life, will be operated with declining productivity and increasing unit costs. With the project, improved methods of handling container traffic will be possible with the introduction of appropriate equipment, and productivity levels are expected to increase. SpecificaLly, the following productivity levels are expected in line with targets established in Annex 6: WITHOUT PROJECT WITH PROJECT Port (TEU/gang/hour) (TEU/gang/hour) Actual (1984) Projecred (1995) 1987 1989 Buenaventura 6 4.5 7 8 Cartagena 6 4.5 7 8 Barranquilla 4 3.0 5 6 Santa Marta 4 3.0 5 6 22. Ship Service Time Savings. Ship service time savings have been esLimated by applying the unit value of ship time in port to ship service times with and without the project, taking into consideration changes in productivity rates. The following unit ship costs were computed for the average type of vessel c&rrying containers, using the Bank's shipcost model: Buenaventura US$20,860/day Cartagena US$15,190/day Barranquilla US$6,050/day Santa Marta US$5,200/day 23. Container Handling Cost Savings. The new container equipment will also reduce the unit cost of container handling. At present, the direct operating cost (labor, fuel maintenance and repair) of COLPUERTOS' container handling equipment is estimated at US$0.34/ton. Without the project, this cost is expected to increase in line with declines in productivity as given in paragraph 21. With the project, productivity will increase by at least 10%, thereby reducing handling costs to US$0.30/ton. 24. At Buenaventura and Cartagena, the project also provides for acquisition of container stuffing/emptying equipment, which will primarily be used for coffee traffic. At present, most containers stuffed or emptied in - 107 - ANNEX 6 these ports are handled manually. It takes, on the average, four men 30 minutes to handle one container. With the project, the handling time would be reduced by 50X and only two men would be required, one of whom is the equipment operator. The estimated avoidable costs of salaries (including social benefits) and equipment maintenance, and fuel with and without the project are shown below: -US$/ton Without Project With Project Number Cost Number Cost Stackers 4 2.42 1 0.63 Equipment Operator 0 0.00 1 0.19 Subtotal 4 2.42 0.82 Equipment 0.10 Total 0.92 The resulting unit saving of US$1.50 per ton has been applied to projected traffic volumes to obtain the annual benefit. 25. The container handling equipment component has an estimated economic rate of return of 32Z at Buenaventura, 22% at Cartagena, 29% at Santa Marta, and 32% at Barranquilla (Table 4 of this annex). (ii) Heavy Load Equipment (10% of project costs) 26. At present, the ports are ill-equipped to handle heavy load traffic since the existing mobile cranes are, on average, 25 years old, with the exception of two 12-ton capacity cranes that are still in good condition. The project provides for acquisition of 40-ton and 16-ton cranes for each port to handle this type of traffic. Forklift trucks will also be acquired, in two tranches. The first will replace existing equipment, which experiences frequent breakdowns and which can no longer be repaired economically. The second tranche is designed to handle expected increases in traffic. The principal benefits of heavy load equipment will be reductions in ship service times and lower cargo handling costs. There will also be minor non-quantified benefits because of less cargo damage. Traffic which requires heavy lift equipment is shown in Table 5 of this annex. 27. With the project, productivity is expected to increase above the present level and remain there for the useful life of the equipment, provided the equipment is maintained properly. The per ton cost of handling heavy loads without the project is estimated at US$30 per hour or US$0.75 per ton. The cost of handling this traffic with the project is estimated at US$0.64 per ton with the project, which is in line with the productivity targets. - 108 - ANNEX 6 28. Reductions in ship and truck service times are also expected to result from the equipment acquisition program. Without the project, productivity is estimated to be 16 tons/hour. With the project, productivity is expected to reach 60 tons/hour. Since other factors besides availability of this equipment affect ship waiting times, it has been estimated that effective ship waiting time savings will equal only 25% of total potential ship waiting time savings with the project. For trucks, 100% of the productivity benefits are expected to be realized. The estimated economic rates of return vary from 16% in Buenaventura to 29% in Cartagena, 25% in Santa Marta, and 38Z in Barranquilla. D. Tugboats (11% of project costs) 29. The project provides for acquisition of four used tugboats to replace those which are to be scrapped since the high cost of major repairs and declining availability make their operation uneconomic. Because the tug is really an integral part of the efficient and safe operation of a port, its costs and benefits cannot readily be isolated. In this case, the cost of tug acquisition was included in the overall economic analysis of the project. The tug analysis focused upon the determination of the most economic alternative: acquisition of used tugs or acquisition of new tugs. The present value of the capital and maintenance cost of each alternative was compared. It was assumed that the used tugs would have a 15-year useful life and new tugs, a 25-year life. The acquisition of used tugs is the least cost alternative (Table 7 of this annex). October 1985 - 109 - ANNEX 6 Tahle 1 COLOKTA PORTS RMEABILIAON PROJECT Decline in Berth Ca5;city Due to Deterioration of Port Facilities without the ProJect a apacity as T of the ORginal Capacity) Il Part an Berth 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 Buenaventura 1 SO 50 40 40 30 30 20 20 0 0 2 75 70 65 * so 30 0 0 0 0 0 3 80 80 80 75 75 75 S0 S0 50 30 4 90 90 75 65 65 S0 S0 30 30 0 5 90 80 70 70 S0 50 30 30 0 0 *6 90 90 80 80 75 75 S0 S0 30 30 7 90 90 65 65 S0 S0 30 30 0 0 8 90 90 80 80 75 65 S0 50 50 30 9 90 90 75 75 50 50 130 In n n 10 100 100 100 100 100 100 100 93 83' 80 t L00 100 t00 100 L00 100 100 100 90 8S 2 70 70 65 60 S0 50 40 40 30 30 3 80 75 70 60 60 S0 50 40 40 30f 4 so SO SO 50 50 S0 S0 50 s5 50 5 80 75 70 60 60 50 50 40 40 30 6 70 70 65 60 50 S0 40 40 30 30 Santa Marta 1 60 60 SO S0 40 30 0 0 0 0 2 90 80 80 70 70 60 60 40 40 30 3 90 80 80 70 70 60 60 40 40 30 4 100 95 95 90 90 80 70 70 60 6a 5 80 80 75 75 60 60 S0 S0 40 40 1/ Berth capacity Z was deteruied taking into cosideration the actual restrictions that have alredy been Imposed in term of use of equipment, wtloading heavy cargo and trucks, and/or wagons' traffic-limitations. Zero berth cavacity indicates the yer In which the quays will have to be put out of service. Source: mission estimates April 1985 - 110 - ANNEX 6 Table 2 COLOMBIA PORT REHABILITATION PROJECT Quay Repairs - Economic Analysis (thousand US dollars) Buenaventura Cartagena Santa Marta Net Net Net Year Costs Benefits Benefits Costs Benefits Benefits Costs Benefits Benefits 1984 303 -303 1,895 -1,895 767 -767 1985 1,308 -1,308 574 -574 3,045 -3,045 1986 1,751 -1,751 703 -703 3,034 -3,034 1987 1,308 927 -381 195 1,603 1,408 4,546 1,222 -3,324 1988 3,887 3,887 3,206 3,206 4,886 4,886 1989 9,052 9,052 6,453 6,453 6,999 6,999 1990 15,604 15,604 9,923 9,923 6,431 6,431 1991 15,873 15,873 8,437 8,437 5,831 5,831 1992 17,464 17,464 7,553 7,553 5,831 5,831 1993 17,302 17,302 5,588 5,588 5,831 5,831 1994 16,585 16,585 5,588 5,588 5,831 5,831 1995 14,331 14,331 5,588 5,588 5,831 5,831 1996- 2011 11,451 11,451 5,588 5,588 5,831 5,831 Economic Rate of Return Buenaventura 86% Cartagena 63% Santa Mharta 38% Source: mission estimates October 1985 - 111 - ANNEX 6 Table 3 COLOMBIA PORT REHABILITATION PROJECT Paving and Structures - Economic Analisis (thousand US dollars) Buenaventura Cartagena Roof Extension and Paving Paving Net Net Year Costs Benefits Benefits Costs Benefits Benefits 1985 688 0 -688 0 0 0 1986 1,845 0 -1,845 1,616 0 -1,616 1987 1,844 709 -1,135 2,026 0 -2,026 1988 453 1,110 657 205 0 -205 1989 2,033 2,033 1,338 1,338 1990 2,094 2,094 1,398 1,398 1991 2,177 2,177 1,475 1,475 1992 2,285 2,285 1,598 1,598 1993 2,389 2,389 1,598 1,598 1994 2,492 2,492 1,598 1,598 1995 2,580 2,580 1,598 1,598 1996 2,580 2,580 1,598 1,598 1997 2,580 2,580 1,598 1,598 1998-2003 2,580 2,580 1,598 1,598 2004-2005 2,580 2,580 0 0 Economic Rate of Return 36Z 27% Source: mission estimates October 1985 PORTS R IIAILITATIOI PROJECT Cootelw Hadling Equlpata Ecancic Analysis (- U1$ thlusadl Sumveawturs Cutga arreeulli Santa mute Not Not Hot Not Yew Costs leilts BesItts Costs 8...it. smolts Costs sIeeits senlits Costs kmnilts slenets 19g5 1,310 1.310 1,221 -1,221 46 -46 0 0 1966 223 220 -3 64 202 -361 159 31 -122 533 0 -553 19871 i 372 2 a 303 216 10 69 59 28 84 56 1966 644 02 -42 13094 463 432 464 126 -339 28 143 III 1919 113 741 626 1 33 I6 426 32 159 128 Zs 175 147 990 1153 91 75 134 674 540 32 199 167 2 211 384 3991 351 I. 06 929 iNa aio 631 45 237 193 26 255 227 1992 I" I,16I 1,009 la6 690 702 45 253 209 39 273 234 ' 3993 35 3,253 3.095 IN 1,065 815 45 210 225 39 291 253 994 in 1,335 1.11 IN 1.131 943 45 287 242 59 31I 272 199 I5N 1,341 1,183 16 1,205 1,017 4 304 260 39 311 272 19ff 2003 203 1,343 1,313 241 1,205 964 57 3 247 39 311 272 2002 203 36 I15 241 766 525 57 21 230 203 203 269 61 241 672 431 51 as 142 Evoomlc Rote l Returan BeneCa" 32W 22W 32% 29 Assmlag Po Iowans Is prodwclvity ulth project 163 125 145 133 .cl misdo. estimates April 1985 - 113 - COLOBIA ANNX 6 Table 5 PORTS REHABITATION PROJECT General Caruo Equipent: Re=Y Traffic Forecast (thousand tons) Year lusaentura Cartc-na earranquilla Sauta Marta 1986 67 84 144 51 1987 67 87 147 54 1988 67 92 153 59 1989 69 96 157 63 1990 70 102 165 67 1991 72 110 173 70 1992 74 119 182 72 1993 77 128 19i 75 1994 79 139 201 78 1995 82 I50 210 81 Source: mission wtisate Apd. 1985 - 114 - ANNEX 6 Table 6 HOU REMBIIrATX? MW H la9y d E E5p t: Fcmxc AnalUiS (tF4 thouid) Bienubtlra cartagn Bhrrmdfla Swite Harts Net Nht Net Net Year Costs BeIefts Benefits Costs Benefits Berefits COsts Benefits Befits Costs Benefits Benefits 1985 443 -d43 149 -149 324 -324 0 0 0 1986 371 209 -162 847 275 -572 592 348 -592 510 0 -510 1987 45 209 164 49 288 239 45 360 45 25 166 141 1988 328 209 119 426 M3 -123 380 372 -380 235 179 -56 1989 59 213 154 68 312 244 62 38 62 36 193 157 1990 59 217 158 68 335 266 62 399 62 36 2D5 170 1991 83 223 140 96 361 265 87 419 87 50 216 166 1992 83 229 146 96 391 295 87 440 87 5s 223 173 1993 83 237 154 96 419 323 87 463 87 50 231 181 1994 83 245 162 96 456 360 87 486 87 50 241 191 1995 83 253 170 96 502 46 87 496 87 50 250 200 1996- 2001 106 256 150 123 583 460 111 579 111 64 253 20t3 200 60 123 63 109 519 410 82 429 82 64 253 203 2003 31 61 30 34 163 129 34 178 34 29 102 68 >cgnmaic Rate of lpturn 16X 29X 38X 25X Source: missio escr. April 1985 - 115 - AM=E 6 Tab la 7 COLONIIA PORTS RErNLTTON PROJECT Tiqbat Altitħev (S thf andl TUrCAT USE! TAT CVP1TAL MINT TOTL WITAL MAINT TITL TEU G Ps IS ST CcsT I 264 247 1347 - I7 2 132 132 15 lag '3 13 132 19 I95 4 12 137 195 185 5 132 132 1'5 195 6 132 £32 195 195 a 195 19 231 2 .* :ss 133 233 23 !1 in 19. 3 ::135 195 233 23 9 ;' 13 23 23 1 231 £3 231 233a 23 233 14 231 231 239 23 £6 M3 3 3 3 Us -!000 0 -!000 MS3 ; RATE 0.12 3iSCU MI E .012 NET P!2 VALUE M ET FIEM2 VDLU 2491 Saurce: mission estimates April 1985 - 116 - ANNEX 7 COLOMBIA PORTS REHABILITATION PROJECT Project Monitoring and Reporting COLPUERTOS would prepare quarterly progress reports covering the following areas: A. Project execution: (a) cost estimates (actual, appraisal and contracted amount; and disbursements (Table 1 of this annex); (b) procurement, including bidding documents, bid evaluation, award, completion date, etc. (Table 2); (c) progress of construction (Table 3); and (d) productivity targets (Table 4). B. Productivity Targets: (a) ton/gang hour by port and per type of cargo; (b) ton/ship/day by port and per type of cargo (Table 4). Tables 1 to 4 are attached to this annex. C. Traffic Statistics: quarterly import and export statistics by port and total, broken down by month and by commodity groups as follows: (a) break bulk general cargo, containers by size (empties and full), dry bulk and liquid bulk; (b) shipping statistics grouped by gross tonnage and type and flag (conventional general cargo vessels, container vessels, bulk carriers, etc.); and (c) average ships service and waiting time and main reasons for the latter. February 1985 ,mu ylLlT llon uuus d i W w INA li C,rx 4tfim) of MAW wa ( .i) et am PRIM m*8 5tmt %he Auj _ega V (it ___ (U J ,, 43 _ labllid nodit tq amu I =I 4 90a lb 1. goI. a. a ml I Aw uiruw 4 ad I mE~~aq fWa qds _a~ *a.t for t4ol ag had lAd. off-tm11 (d mlmi *dam. HUMM wt &,lS -Im ~- (. ~m S t_t d NIl (-inI1 ad ) 10 Psl W _WII~ 111 ~ ~ ~ ~ ~ ~ e k X m *~~~~_ ----.-- ZIm !r * **-* uiR c~~~~" I X, sl~~~ii'i. 011 I 11~~~~ 0 -w oR 7X7 W 4 5. - 119 - - ^~~~~~~~- M - - am t E - a)~~~~~~~~ u , -4 8) Vmg-s t,.2 _ a) 4* I. ~ 2. a_ "P_AN. _ . - 120 - LW In ~~ ~W of _ b) Muinlm. camt1,u 1/ r - _ _~ |fUu~ ~ inlir I~£ Ug Wina u11 ! dUm 4 ta - * >h *) _4M%md _ Bs C_mL b) MMUMMI DMS -M DU bAft~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ s .e"> _"_ ns_seour_~~tr EMB 4mxdnftsap o d Xdw O mmlss_. -121 - ANNEX 8 COLOMBIA PORTS REHABILITATION PROJECT Related Documents and Data Available in the rcoject File 1. Project Economic Analysis: Working Papers 2. Project Traffic Forecasts: Working Papers 3. Port Equipment Requirements Analysis 4. Detailed Cost Estimates by Project Item 5. COLPUERTOS-SENA Agreement 6. COLPUERTOS Organization and Functions Manuals (4 volumes) 7. COLPUERTOS Short-, Medium- and Long-Term Objectives 8. Draft Pension Law 9. Four-Year Preliminary Training Program (4 volumes) October 1985 COLOMBI A ' aAms TRANSPORTATION NETWORK car-hh-ee Sea d,^ w 0 MWd I..* rMIS MD" do _____ It'w"m Ng ;- zt ~Raw"AT ^1~ ~~bwmo Q" & ] ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~COLOMBIA $7 Mn4T t 2 PORTS REHABILITATION PROJECT / S I bp ~ Y A D Frh - CZ5@t// ;aI r- --;--;od4 )~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ba _1 Rw pw I ww 2t ~' ~ - * 1 _ 0~~~~~~~7. _-tu_'- of' '-^w 3 WA _%- 2t/oS/S i 2X >i 8!-4 ----2--~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~6 ?z6zeo be wa c-X; doroec uo Id7.M COLOMBIA / ~~~~~~~~~~~~~~~~~PORTS REHABILITATION ) ~~~~~~~~~~~~~~~~~~~~~PROJECT -. ~~~~~~~~~~~~~~SANTA MARTA ;~~~~ X - - I~~~~~~ aAM-I --7 - 9 - ,#7h I X GAAAI z ff D 50 -~ ~ ~ --- --f 9/ COLOMBIA!D PORTS REHABILITATION PROJECT 1 \fi BUENAVENTURA \ . - S~I ____w_ * 2- - t9.m I INow Shs Cmaw /Roo) I IExieth Tnnw Meh wd Aally Wl &\ps/ R., hd W SEa AlmRoi \ Si.- hcSS b .0 * \\ KC N .. w. d. .4t Ro6 =.ftwd,~~~/ @