Document of The World Bank FOR OFmFCIAL USE ONLY Report No. 8408 PROJECT COMPLETION REPORT THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1889-TH) FEBRUARY 27, 1990 Infrastructure Operations Division Country Department II Asia Regional Office Ts document has a esicted dItIbton and may be used by ecin only in the pertonnamce of their officdal dutes Its contents may ot o wise be disosed wihod Wodd Bank at_1_In CURMRL QOU3AIJM3I Currency Unit -- Thailand Baht (B) US$1 - 325 (at completion) US$1 - B20 (at appraisal) HEIGHTS AND MEASURES 1 meter (m) - 3.28 feet (ft) 1 cubic meter (cu m) - 1.307 cubic yards (cu yd) 1 metric ton (ton) 0 0.98 long ton GLOSSARY OF ABBREVTATIONS dwt - deadweight tons HD - Harbour Department LWOST - Low Water Ordinary Spring Tide MOF - Ministry of Finance MOTC - Ministry of Transport and Communications OED - Operation Evaluation Department PCR - Project Completion Report SAR - Staff Appraisal Report TA - Technical Assistance FOR MML USW ONLY THE WORLD BANK Washton. ODC 20433 U.S.A. OClke dW Ocot-Ggwral February 27, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Thailand Inland Waterways and Coastal Ports Proiect (Loan 1889-TH) Attached, for information, is a copy of a report entitled "Project Completion Report on Thailand - Inland Waterways and Coastal Ports Project (Loan 1889-TH)" prepared by the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a estrcted distbutin gad may be used by repaents only In the pefomance| of their offlcil dutius Its contents may not oherise be dilosed without World Sank autod on. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1889-TH) TABLE OF CONTENTS faae No. Basic Data Sheet .................................i Evaluation Snrmary.................................... v Overview by the Bank.................................. viii PROJECT CCIPLETION REPORT BY THE BORR.WER .... ......... 1 I* INTRODUCTION. .*****..****... *********......*..o.*. . 1 II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL.. 4 III. PROJECT MPLEMENTATION AND COST .................... 17 IV. TRAFFIC AND OPERATIONS ............................. 35 V. FINANCIAL PERFOXMANCE OF THE EXECUTING AGENCY ...... 36 VI. ECONOMIC REEVALUATION ..................... ......... 36 VII. CONCLUSIONS oo.ooooooo*..................................e... 36 TABLES ..............................38 ATTACHMENT 1 - COMMENTS FROM THE BORROWER ................... 40 MAPSs IBRD 14856R2 IBRD 14857R1 IBRD 1486 1RI This document has a restricted distdbution and may be used by recipients only in the prfome of their official duties. Its contents may not otherwie be disclosed without Wold Bank audhoizato i pROJECT COMPIETIOPgE ORT THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1889-TH) This is the -roject Completion Report (PCR) for the Inland Waterways and Coastal Ports Projec. in Thailand, for which Loan 1889-TH in the amount of US$ million was approved on July 8, 1980. The loan was closed on March 31, 1989, 4 1/4 years behind schedule. Disbursements under the loan totalled US$39.662 million, and the final disbursement was made on April 13, 1988, at which time US$2.038 million was cancelled, US$11.3 million having been previously cancelled on February 17, 1987. The PCR was jointly prepared by the Infrastructure Division, Country Department II of the Asia Regional Office (pages 1 to xxiii) and the Borrower (pages 1 to 39) and is based, inter alia, on the Staff Appraisal Report (SAR); the Loan Agreement; supervision reports; the Borrower's own records; correspondence between the Bank and the Borrower; and internal Bsak memoranda. The PCR was read by the Oper2'tions Evaluation Department (OED). The draft PCR was sent to the Borrower for -ow-n and they are attached to the Report (Attachment 1). ii THAIIAND INtAND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1889-TH) ASIC DATA SHEET im Estimate Adual Tol Pwo Cast (US$ miIon) 80.4 61.1 Loan Amount (US$ miiion) 53.0 S3.0 Disbursed 39.7 Canceled (2117/87) 11.3 Canceled (4/1389) 2.0 Repaid (at 3131/89) 10.7 Date Physical Componwes Completd 12/31/83 03420/89 Pmpoiton Completed by Orgbinal Compeion Date () 100% 17% Prpotn of Time Overrun 100% Economic Rate of Raturn (%) 20% 6% (US$ VW0) RDFY 1981 1982 1983 1984 1985 1986 1987 1968 1989 Estimate 5,720 25,860 45,520 53,000 [11 121 Aaual 0 530 6,290 9,860 17,330 22,950 28,200 33,850 39,662 Adueas% d Estmte 0 2 14 19 33 43 68 81 1t0 Date of Final Dsbement 04/13/89 Commens: 1] $11.300 mii canceled from oan on 02/17/87. Revsed oan amount a $41.7 mMion 2.038 miNion cancoed fiom ban c 04/189. Final a mount. $39.662 milon iii hem Planned Ravied Actual Farst MeIn h Fis Innd Waterways 04/0676 Coastal Ports 10121/77 Govemmenre Ayllcation 10/19178 IdenifIatIon (Pfoject Bre 0823/78 Loan Neo 07180 05/12/80 Board Approval 09180 06/25/80 07/880 Loan Signature 08/27/80 Loan Effectiveness 11/25/80 3/21/81 12110/80 Loan Closing 06/30/84 06/30/85 12/31/85 12131/86 06/30/88 Loan Completon 12/31/84 03/31/89 Executing Agency HarbowrDepartment Fic Yearo Bonower October 1 - September 30 Followu Prioet None 2nd nwand Waserway Project (proposed) (aJweeks) _~~~ - FY 76 77 78 79 80 81 82 83 84 85 86 87 88 89 TOTAL Prepron 2.2 16.5 4.4 23.2 Appraisal 43.5 43.s NegoaIons 1.7 1.7 SupervIfon 9.3 4.0 9.5 16.6 10.4 16.4 3.2 7.4 3.4 80.3 Other 0.1 0.2 4.2 0.2 0.1 1.1 0.6 5.7 12.2 TOTAL 2.4 16.7 63.8 9.5 4.0 9.5 16.6 10.6 17.5 3.8 7.4 9.1 160.9 iv Stage of Month/ No. of Days Spedaaon Poef. Rting Types of Puc CytCe yew Persons in Fod Representedfl Statu2(21 Pr=blms[q3 Prapaon 1 05/76 1 3 ECN - - Prpedo 11177 2 4 EGRFECN - - PrpatlonHI 11178 2 5 EGC/ECN - - Prepralsa 02/79 2 9 EGRFNA - - Preparaion IV 06179 2 5 CHFECN - - PrepuaratloV 09/79 1 7 ECN - - AppauisaJ 11/79 3 18 EGRECIFNA - - Sup.vlslon 111/80 1 4 1GR - Supervslonin 03/81 1 4 EGR 1 M Supevbn Ul 05/81 1 4 - R SupervisionlV 02182 1 7 EGR 2 W /O Supervision V 06182 2 7 EGRx2 2 mIO Supervision VI 01/83 2 7 EGRIECN 3 MQO Superision VIl 04/83 1 2 ECN - - Sevision Vill 06/83 3 9 CHFfiGRIECN 3 IMNf0 S--rision Dt 10/83 2 8 ECNrEGR 3 MbO S*-vsnX 05/84 1 10 83R 3 M Supervhsbr,' Xl 03/85 2 7 ECNIEGR 2 M SuprvislonXll 01/6 2 7 ECNiEGR 214) -141 SnXvbislonX 09/87 2 7 ECNER 2141 -[41 Superisin XIV 02/88 2 7 ECNJEGR - - Supermisn XV 09188 2 5 ECNtGR 2 [41 -141 NOTES: 11 EON romist, EGR Engnr, FNA - FinancW Ans, CH F a DM-. Ch. [21 1 . Prbemf oa Mnor Prablems, 2 . Mderate Problems,3 - Major ProbWems (31 M - Management, F . FInancil 0 . Other. [,41 Rat systems changed, Problms no boner spechfed In Forrm 90 - SupervIsbn Summary. v PROJECT COMPLETION RPR THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1882-TH) EVALUATION UME Objectives The objective of the Inland Waterways and Coastal Ports Project was to develop the inland waterways system with the aims of reducing the trrAqsport component of the cost of exports by using a more energy-etficient mean- of transport and to stabilize the enormous costs of road maintenance (Overview para 2.1). The major components of the project aimed to: (a) improve the inland waterways system, so that it could function as a major carrier of import and export commodities throughout the year for the central and northern regions; (b) improve channel maintenance of all coastal ports and undertake capital dredging for two of the more important ports, so that loss of ship time in waiting for tides would be reduced and larger vessels could navigate the channels; and (c) strengthen the capability of the HD to perform its development and maintenance functions for the inland waterways and coastal ports. &mlmRentation 1=2rience The Inland Waterways and Coastal Ports project was appraised in November 1979 and the loan became effective in December 1980. The Bank Loan (1889-TH) for the project amounted to US$53.0 million but, as a result of the deletion of three dredgers from the project, only US$39.7 million w2s disbursed; a total of US$13.3 million was cancelled. The components of the project (Overview paras 2.3 and 2.5) to be financed under the loan consisted of, for the Inland Waterways, (a) dredging a channel through each of the shoal areas on the upper and lower sections of the Chao Phraya and Nan rivers; (b) constructing river training works to help concentrate the available dry season flow in the reduced width of the river, thus scouring out the new channel and reducing the maintenance dredging required; (c) constructing river ports at Nakhon Sawan and Taphan Hin; (d) procuring a demonstration set of four steel barges and one pusher tug, and maintenance dredging equipment comprising three cutter suction dredgers; (e) providing engineering services for final engineering of the Nan River works, procurement of equipment and supervision of contracts; and (f) providing technical assistance and training to strengthen the HD. The Coastal Ports component of the project included (a) dredging the entrance channel of the port at Bandon to a depth of 4 m; (b) dredging the vi entrance channel of the port of Pattani to a depth of 2.5 m; (c) carrying out geophysical and hydrographic studies of these channels; (4) procuring a shallow draft self-propelled trailing suction hopper dredger for maintenance; (e) providlng engineering services for final engineering, bid evaluation and supervision of contracts; and (f) providing technical assistance and training for the HD. The project started quite well with contractor prequalification documents being distributed at the time of loan negotiations, and consultants for both components being appointed a month or two ahead of schedule (Overview Table 1). Progress then stalled (Overview para 4.2) and momentum was lost, so that the first river works contract, for the Chao Phraya, was signed nearly i5 months late. The Nan River contract was signed over 32 months late, and that for the coastal ports dredging contract was 36 months late. The equipment procurement and river port contracts suffered even more, being from 40 to 79 months behind schedule, finishing only a few days before the loan eventually closed on April 30, 1989. Technical assistance and training components suffered equally badly. HD was reorganized to form separate Dredging and Maintenance Divisions for Inland Waterways and Coastal Ports, but the manpower required to fill these organizations was not forthcoming for several years. In-house training by consultantr was often poorlv ttended and the overseas training of staff is still in progress. The main reasons for the delayed implementation (Overview para 4.2) were (a) very slow processing and approval of tender documents, bid evaluations and contract awards; (b) slow land acquisition procedures; and (c) a lack of cot.tinuity of Bank staff responsible for the project. Results Because of the lack of maintenance afforded to the completed sections of the rivers (Overview para 5.4), barge owners deemed it was too dangerous to use the improved waterways and traffic in the project area has remained low, contrary to expectations. Traffic through the coastal ports does not appear to have increased to any appreciable extent (Overview para 5.2). The overall economic rate of return is estimated at 6% compared with 20% at the time of appraisal. Sustainabilui The project has not yet realized its potential benefits and it is important that the Government does not view the inland waterway and coastal ports sectors as being incapable of providing benefits to the economy (Overview par"s 6.1 to 6.3), but these benefits will not be felt for many years, and considerably later than expected during appraisal. Operator confidence in the waterway system and in the financial benefits of using different technology and the marketing of the coastal ports are the keys to eventual success. The main risks of lack of eventual success can be addre.5sed by the provision of a realistic maintenance budget and by further training and manpower reforms to ensure a satisfactorj level of competence throughout the institution to carry out effective waterway and coastal port management. vii idis and Leaonis The main objectives of the Inland Waterways and Coastal Ports Project have not yet been achieved, but the Government is now more aware of the potential of the inland waterways to provide significant cost savings sad this is to be addressed in the proposed Second Inland Waterway Project now under consideration. The Bank learned some valuable lessons (Overview para 7.3) on project preparation and staff continuity, particularly where weak institutions are involved. The Borrower also learned (Overview para 8.3) that it must support the weaker institutions, particularly those resporsible for important sectors of the economy or infrastructure, by ensuring that training is fully implemented and by using appropriate expertise (foreign if necessary) to work alongside government staff to help them develop the operational and maintenance systems that are essential to keep an investment effective. viii PRtOJECTION REPORT THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT (LOMA 1889-TH) 1.1 The Transnort Sector. Since the mid-1960s, the Thai economy has been growing at a rapid pace, generating a high demand for transport. During the 1970s, when Loan 1889-TH was being prepared, freight traffic was growing at about 8% p.a. and passenger traffic at about 12% p.a. Overall freight traffic in the late 1970s totalled some 5C million tons and 14 billion ton-km p.a., about 70% of which (in ton-km) was carried by road, 20% by rail and 10% by inland waterways. Government responded to this increase in traffic wiW large investments, mostly in roadworks, and liberal transport policies which stimulated a competitive road transport industry. By 1980, virtually the entire primary (national) roads system serving interprovincial trade was complete, and significant progress had been made towards the improvement of the secondary (provinuial) system. Railways, inland waterways and coastal shipping, confined to specific corridors or locations and handling mostly bulk commodities, also grew, but at a modest rate. 1.2 Sector Develo ment. With the progress made in developing primary and secondary roads, future transport requirements shifted towards (a) development of the tertiary road system in support of the needs of rural communities; (b) the upgrading of the performance of other modes of transport; and (c) the removal of specific capacity bottlenecks in the national transport system such as the Port of Bangkok. Tertiary roads were under-4eveloped and inadequately maintained, while the railways, inland waterways and coastal shipping, for their part, performed at below attainable output and efficiency levels, and their capacity for energy-efficient transport was underutilized. The Port of Bangkok was expected to be critically congested by the eariy 1980s. 1.3 Traffic. The direction, composition and size of the traffic flows for each of the modes of transport reflected the country's generally rural character, the agricultural strength of the Central Region and Bangkok;s central location and dominance as the country's principal port and consumption center. 30-50% of all freight was agricultural produce, of which about one half was *scported, most of it through the Port of Bangkok and the eastern seaboard loading facilities. 1.4 Transoort Plarming. The Ministry of Transport and Communications (NOTC) is responsible for transport policy, coordination and planning. During the Third and Fourth Five-Year Plans (1972-81) public sector investment in transport was about B 49 billion of which 80% was devoted to roads. In 1980, it was expected that transport invertment for the period 1982-86 would still ix concentrate on roads, but, given the worsenlng energy situation, that more attention would be pald to the development of energy-efficient modes, such as railways, inland waterways and coastal shipping. 1.5 Inland waterways. Thailand has a comprehensive and developed inland waterways system which covers well over one-third of the country and extends over some 1,300 km of navigable waterways. Most of this length is in the Northern Corridor between Bangkok and Uttaradit along the rivers which serve the central plAin, principally the Chao Phraya and Nan. The remainder is along the Mekong river on the Thai-Laotian border. Ease of navigation on these rivers is asiasonally influenced, with water levels rising in May with the arrival of the monsoon, reaching a peak in August or September. After the end of the wet season in October water levels decline to December and remain low for the remainder of the dry season. These influences are to some extent modified by a system of irrigation canala and single or multi-purpose dams. In 1980, more than 100 larger terminals and a greater number of minor loading facilities were located along the waterways. Their density is highest near population centers and major sources of agricultural products. All are privately owned and operated and most handle only one commodity. Two of the larger existing loading points on the Chao Phraya-Nan system are Nakhon Sawan and Taphan Hin. Their capacity, however, was inadequate to handle the expected traffic increase resulting from the improvement of the waterways. 1.6 Waterwan Traffic. In 1976, barge traffic in the entire Northern Corridor totalled about 8.6 million tons, of which 6 million tons were sand, 1.3 million tons were rice, maize and other crops and 0.7 million tons were cement. Average barge haul was 200 km. Ihailand's inland waterways transport industry was, and is, highly competitive and free from regulation. The barge fleet consisted of about 4,000 units with capacities of between 40 and over 300 deadweight tons (dwt) with a total capacity of 350,000 dwt. There were also about 2,000-3,000 sr4ller units. The barges were of traditional design, those below 100 dwt capacity were made of wood, whereas the larger vessels were steel hulled. All barges were moved by tugs pulling a train of up to about 8 units, which necessitates the barges being crewed. 1.7 Coastal Ports. Despite the improvements in land transport, coastal ports and shipping remained essential parts of the transport and economic system, especially in Southern Thailand. There are about 40 shallow draft seaports and inlets ranging from small fishing and cargo wharves of purely local importance to larger regional ports with annual volumes of several hundred thousand tons of cargo. Most of these ports are located on the southern peninsula and are owned and managed by local governments or private operators. These ports also serve as bases for the marine fishing industry on which the economic well-being of coastal communities depends. About 2.5 million tons of cargo and petroleum products and over 1 million tons of fish were annually loaded or discharged at these ports. The shallow depth of the port access channels was, and still is, the principal constraint under which coastal shipping operated. 1.8 Harbour Department. The agency responsible for the management of all inland waterways and coastal ports is the Harbour Department (HD) of MOTC. It has never been a strong organization, has little independence (unlike the Port Authority of Thailand) and its limited budgetary and manpower allocations did x not enable it effectively to manage and maintain the inland waterways and coastal ports for which it was responsible. 2. Proleee Obiectives and Description 2.1 Project Objectives. Having, in the past, concentrated largely on roads to develop the transport system required for the rapidly growing national economy, the Government decided, at the end of the 19708 to give closer attention to other transport modes, which had potential for development, with the ultimate aim of reducing the transport component of the cost of exports by using more energy-efficient methods of transport and of stabilizing the enormous costs of road maintenance. The main objectives of Loan 1889-TH were to (A) improve the inland waterways system, so that it could function as a major co:rier of import and export commodities throughout the year for the central and northern regions; (b) improve channel maintenance of all coastal ports and undertake capital dredging for two of the more important ports, so that loss of ship time in waiting for tides would be reduced and larger vesseis could navigate the channels; and (c) strengthen the capability of the HD to perform its development and maintenance functions for the inland waterways and coastal ports. DescriRtion of the Project 2.2 Inland Waterways. During the dry season, partly because of excessive sand dredging, parts of the Chao Phraya river upstream of Bangkok became so shallow as to be virtually impassable, especially below the Chainat Dam. As a result, barge traffic was forced to reduce payloads, or bypass the lower Chao Phraya on slow and more costly routes along the Noi and Tha Chin rivers, or cease operations. There is no bypass to the upper Chao Phraya and Nan rivers and traffic was therefore severely affected on these sections. Large quantities of agricultural bulk commodities, which are better suited to barge traffic, had to be carried by road. 2.3 The Inland Waterways component of the project included (a) dredging a channel 40 m wide and 2.2 m deep (1.7 m available depth) through each of the shoal areas on the upper and lower sections of the Chao Phraya and Nan rivers; (b) constructing river training works comprising bottom panels and/or groins and low dikes at each of the dredged shoal areas to help concentrate the available dry season flow in the reduced width of the river, thus scouring out the new channel and reducing the maintenance dredging required; (c) constructing river ports at Nakhon Sawan and Taphan Hin with both alongside and dolphin type berths, cargo handling facilities, mechanical equipment and survey and miscellaneous mai-tenance equipment; (d) procuring a demonstration set of four 700 ton, 45 m steol barges and one 550 hp pusher tug, maintenance dredging equipment comprising three cutter suction dredgers complete with floating delivery pipes and three attendant tugs; (e) providing engineering services for final engineering of the Nan River works, procurement of equipment and supervision of contracts; and (f) providing technical assistance and training to strengthen the HD. 2.4 Coastal Ports. To have provided deeper access channels for the majority of the 40 coastal ports, besides resulting in a huge quantity of capital xi dredging and an insupportable maintenance load for HD, such an undertaking was totally unjustified on the basis of the traffic using the ports. Only a few handled an appreciable level of traffic and 8ost of these were eliminated as being uneconomic or because their traffic forecasts were adversely affected by the proposed construction of the two major regional ports at Songkhla and Phuket. 2.5 The Coastal Ports component of the project included (a) dredging the entrance channel of the port at Bandon to a depth of 4 m at low water ordinary spring tide (LWOST) with a channel 60 m wide and 20 km long; (b) dredging the entrance channel of the port of Pattani to a depth of 2.5 m at LWOST with a channel 60 m wide and 5 km long; (c) carrying out geophysical and hydrographic studies of the channels at Bandon and Pattani including borings and tracer studies to determine dumping areas for dredged soil; (d) procuring a shallow draft (2 m), 400 m3 capacity, self-propelled trailing suction hopper dredger for maintenance; (e) providing engineering services for final engineering, bid evaluation and supervision of contracts; and (f) providing technical assistance and training for the HD. 3. Proiect Design and Oreanization 3.1 Although Thailand had developed a comprehensive and efficient transport system based on the extensive construction of roads and the encouragement of the trucking industry, it was was becoming apparent, in the late 1970s, that, given the rapid rise in fuel costs and the huge highway maintenance load being imposed by an ever-increasing number of (frequently overloaded) trucks, close attention would have to be paid to more energy-efficient methods of transport, which had been somewhat neglected in recent years. The concept, therefore, of improving the capacity and efficiency of the inland waterway system and of encouraging coastal shipping, was fully in line with Government thinking and the Bank's objectives of increasing a nation's competitiveness by the reduction of transport costs for its principal exports and of preserving the environment through a reduction in energy consumption. 3.2 A Bank mission identified a possible project in April 1973 when a combined Inland Waterway and Port Project was being considered, but interest waned until it was resurrected in April 1976. A number of missions followed during the ensuing three years leading up to appraisal, with the coastal ports element being introduced in November 1977 to supplement the inland waterway and deep-water port (Bangkok and Sattahip) components. The project was appraised in November 1979, but before negotiations in Nay 1980, the inland waterways and coastal ports components were separated from the Bangkok and Sattahip ports component and they became separate projects. A loan for US$53 million was approved by the Board on July 8, 1980. 3.3 The project was prepared by the HD with the assistance of its consultants financed under the Sixth Highway Project (Loan 1519-TH). The French and Australian consultants undertook feasibility studies on the respective components during 1979, and although not all recomendations put forward were adopted, there was agreement on the project components by all involved parties. xii Preparation vas thorough, despite the lack of up-to-date statistics on barge traffic and the concept of training long lengths of the Chao Phraya River was innovative in a country where river transport had traditionally been a seasonal activity ruled by the monsoonal climate. These works were, however, soundly designed using accepted training techniques well within the experience of the responsible consultants, so the unsatisfactory outcome of the project cannot be attributed to any shortfall in its design except as discussed below (para 6.3). The project implementation schedule, which was put forward by HD and its consultants, and adopted in the appraisal report, did turn out to be optimistic as discussed below (para 5.2). 3.4 This was the first Bank project undertaken by the HD and it waz realised from the outset that HD's inherent institutional weakness and lack of experience in managing such projects would require the close attention of the Bank's project officer. Though roles and responsibilities were clearly defined, these defects in the organization were contributory factors in the slow implementation of the project. 4. Prolect Imlementation 4.1 The project started quite well with contractor prequalification documents being distributed in May 1980, at the time of loan negotiations, and consultants for both components being appointed in October and November 1980, a month or two ahead of schedule (see Table 1). Progress then stalled (para 5.2) and momentum was lost, so that the first river works contract, for the Chao Phraya, was not signed until February 1982, nearly 15 months late. The Nan River contract was not signed until June 1985, over 32 months late, and that for the coastal ports dredging contract until October 1984, 36 months late. The equipment procurement and river port contracts suffered even more, being from 40 to 79 months behind schedule, finishing only a few days before the loan eventually closed on April 30, 1989. Technical assistance and training components suffered equa-ly badly. HD was reorganized to form separate Dredging and Maintenance Divisions for Inland Waterways and Coastal Ports, but tile manpower required to fill these organizations was not forthcoming for several years. In-house training by consultants was often poorly attended and the overseas training of staff is still in progress with completion scheduled for July 1989. 4.2 One of the main reasons for the delayed implementation was the very sjlo 2rocessing and approval of tender documents. bid evaluations and contract awards as compared to that expected at appraisal. This was aggravated at one stage by the necessity to resolve differences between the Bank's Procurement Guidelines and those produced by the Ministry of Finance (KOF) for use on Bank funded projects, and by a disagreement within Government itself over the contents of the MOF's standard bidding documents based on their guidelines. In addition, land acquisition for the river ports proved to be a far lengthier process than had been forecast, taking several years in each case. A lack of continuity of Bank staff reaDonsible for the project was also a contributory factor (see para 8.1 below, also PCR for Loan 1918-TH, dated June 30, 1988, which ran in parallel with Loan 1889-TH), as historical perspective and institutional memory were lost and decisions and findings arising out of one supervision mission were not necessarily followed up during the next. xiii 5. proiect Reaults 5.1 At the time of writing, although some of the works were completed over three years ago (Table 1), the inland waterways component of the project appears to have had little impact on the growth of barge traffic or on the reduction of transport costs within the northern corridor. For the reasons discussed below, fever barges than expected are using the lower Chao Phraya, especially during the flood season, which is normally the most popular time to navigate that part of the river, many preferring instead to continue using the slow, narrow and heavily locked Noi and Tha Chin rivers. All the civil works, especially the port works have been completed to a good standard. The total cost of the inland waterway component was about US$48.4 million (Table 2) which is about 24% less than the appraisal estimate. The design of the river training works was modified during construction, at no cost to the Borrower, to incorporate the latest technology and post-construction surveys have shown that their design has been effective in keeping the channels scoured out, dredging requirements being 25% less than predicted. Procurement of the equipment has been completed, but little of it has yet been put into service. The three cutter suction dredgers were taken out of the project when the Government received an offer from KfW (West Germany) to finance them. There is still no firm delivery date for these dredgers and the lack of them is having a serious effect on the annual maintenance program, with the result that the newly dredged channels, though silting up less rapidly than expected are not kept at their design depth and some users have had trouble negotiating the river even with a draft of less than 1.7 m. During the project, a floating pile-driving rig was added to the scope of supply of maintenance equipment to meet a need for such equipment within HD. The ports and the demonstration barge train have not yet been leased to private operators, because Nakhon Sawan port has no water supply becau e of delays by the local water authority, and Taphan Hin port and the Barge Train have only recently been completed. The new maintenance division in HD is more effective than the original combined division, but the training was not very effective and is not yet showing results. 5.2 Most of the elements of the coastal ports component were completed over 3 years ago (Table 1). The total cost was about US$12.7 million (Table 2), which is about 31% less than the appraisal estimate. From the scant data available, it appears that traffic at the more important of the two ports, Bandon, has increased roughly in line with the lower estimate of the appraisal report, due perhaps, in part, to completion being some 3 years late. The trailing suction hopper dredger was delivered 42 months late, but has now been in service for more than 3 years. As in the case of the inland waterways, the new coastal ports maintenance division has not yet realised the potential expected from the training, some of which is still in progress. 5.3 As a result of lower than expected bid prices, the deletion of the cutter- suction dredgers and a 25% change in the exchange rate, a total of about US$13.3 million, or about 25% of the total, was cancelled out of the loan amount of US$53 million (Table 3). The final contributions of both IBRD and the Government were about 75% of those planned in the Loan Agreement. xiv 5.4 The design for the river training works on the Chao Phraya and Nan rivers involved the use of groins, bottom panels and low dikes, which were constructed of a core of steel beams driven into the river bed with vertical concrete panels spanning between them, the groins then being surrounded by dredged soil and quarry-run rock to stabilize them against the fast currents of the wet season. Buoys were positioned at each structure to clearly locate them and to mark the navigable channel. A large number of marker buoys were quickly lost, largely because their design allowed weed to accumulate on them, which eventually overloaded the mooring and they broke loose. Also their boat-like design (aimed at reducing drag in fast currents) and fibreglass construction was attractive to the local populace and many were stolen. A redesigned steel buoy of more traditional shape was tested and incorporated into the later stages of the Nan River works. Lack of maintenance by HD meant that the various structures, unmarked and submerged during the wet season, posed a serious hazard to barges, especially as some scour and settlement around the structures allowed the steel piles to protrude well above the concrete panels and protecting rock fill. As a result, the barge owners lost confidence in the lower Chao Phraya as a safe channel in the wet season and diverted to the Noi and Tha Chin rivers, despite their narrowness and numerous locks. In the dry season, when the structures are visible, the Chao Phraya is used by empty barges, but owners of loaded barges prefer to continue using the Noi and Tha Chin as they offer deeper water, because they are used as irrigation feeder canals and are therefore kept full of water and hence allow a greater payload. The Chao Phraya, on the other hand, is deprived of water to the agreed minimum of 80 m3/s to provide the designed navigable depth of 1.7 m, which results in barges having to operate part-loaded. 5.5 This situation will persist until HD can regain the confidence of the barge owners in the safety of the Chao Phraya. HD have already fabricated and deployed large numbers of buoys of the new design, which overcomes the shortcomings of the originals, but budgetary constraints prevent the imminent replacement of all lost buoys. Also HD must change their maintenance methods which have traditionally allowed them to not do any work in the wet season, when there was ample water for the barges to operate, and instead adopt a system of regular daily maintenance patrols of the entire river throughout the year and have boats and crews readily available to immediately replace any missing navigation markers. Unless and until these measures are implemented, supported by the necessary badgetary allocations and publicity campaign and the barge owners see they are working, confidence will not be regained and the traffic will not return to the lower Chao Phraya and it will be wary of using the upper Chao Phraya and Nan rivers where there is no alternative route. 5.6 The economic rate of return (ERR) for the project calculated at appraisal was 20%. While the coastal ports component has a satisfactory ERR (Table 4), it remains below appraisal expectations. Because of maintenance problems on the Chao Phraya, traffic levels have remained low, yielding an estimated ERR of only 4%. The overall benefits from the project, at the present time, therefore remain low with an estimated ERR of 6% (Table 4). Once the river maintenance is effective, the river ports are operating and the demonstration barge train has had an effect on the composition of the barge fleet, project benefits should show a higher return on the investments already made. These measures will, however, take several years to take effect as private operators will have made xv alternative investments, mainly in trucks, to transport their goods and agricultural produce. 6. Project SustainabilitL 6.1 The project has not yet realised its potential benefits and it is important that the Government does not view the inland waterway and coastal port sectors as being incapable of providing benefits to the economy. Appreciable benefits should accrue once the components of the project have been fully implemented and they have been given time to take effect. Because of the delays in completing most of the components these benefits will not be felt for many years, and considerably later than expected during appraisal. 6.2 Given an adequate level of maintenance, an aggressive publicity campaign for inland waterways and coastal ports and a successful demonstration of the benefits of the push-tow system, there is no reason why higher benefits should not be obtained in the long term. Operator confidence in the waterway system and in the financial benefits of using different technology are the keys, especially as these new barges can be used to deliver direct to the Eastern Seaboard loading terminals or to the new port of Laem Chabang. The coastal ports should also be aggressively marketed. 6.3 The main risks are (a) the denial of adequate maintenance funding to HD; and (b) the cutting back on measures designed to strengthen HD as an institution and to strengthen its ability to effectively manage Thailand's inland waterway and coastal port assets. These risk factors can be addressed by the provision of a realistic maintenance budget and by further training and manpower reforms to ensure a satisfactory level of competence throughout the institution to carry out effective waterway and coastal port management. 7. auk erformance 7.1 Bank performance during the preparation and supervision of this project has been mixed. Performance during preparation and appraisal was good, but during the supervision phase, a high rate of staff turnover resulted in supervision being provided by five different engineers and three economists in a period of three years, a situation that elicited adverse comment from the Borrower. In addition the Borrower had to deal with 5 different division chiefs. The lack of continuity did not help the Bank's working relationship with the Borrower and executing agencies, and it is to the credit of all those involved that the relationship remained as good as it did. 7.2 The project was well designed and its objectives were realistic in that they reflected the need to reduce transport costs in an environment of rapidly rising fuel prices and represented one of several effective ways of addressing the problem. There were, however, three areas where the Bank made misjudgments. These were in assessing (a) the capability of HD to manage the project efficiently and to provide the maintenance input required for the completed river works; (b) the time required to negotiate the lengthy procurement procedures; and (c) the time needed to acquire the land for the river ports. xvi 7.3 The lessons to be learnt by the Bank are: a. Continuity of staff responsible for a project is essential for its smooth implementation and for the creation of a mutually beneficial relationship with the Borrower; b. The time needed for procurement processes and land acquisition should be more realistically appraised; alternatively, the receipt of bids for major components and land acquisition could be made a condition of Board presentation, where possible; and c. Where weak institutions are involved in a project, the Bank should press for more technical assistance and training than would normally be necessary and they should be treated more as major components, rather than being tacked on as an afterthought. 8. Borrower Performance 8.1 During the preparation and appraisal phase of the project, MOTC and HD performed well and were enthusiastic, even anxious, to get the project underway as soon as possible, though, because of a lack of management in the past, the traffic data available to the Bank was skimpy. This performance was possible because of a small number of more experienced people in HD, who were able to devote enough time to enable the preparations for the project to go ahead smoothly. Once the project got under way and it was necessary to involve other staff in the project management, the institutional weakness of HD became apparent and many important aspects of the project were not followed up or executed as expeditiously as they should have been. 8.2 HD had to transform itself during the project from an organization that carried out some seasonal channel and river maintenance, pilotage and fee collection to one that had to effectively manage the inland waterways all the year round, as well as fulfill its responsibilities for coastal ports and licensing. It is ciear that it could not attract the calibre of staff required to achieve this transformation, even in the time frame of the extended project, and the training provided under the project was either poorly attended or not implemented on the scale that had been intended. Whereas the use of expatriate management advisors has been extensively used in the Thai private sector successfully to assist in managing the booming economy, there is a reluctance by Government to bring such advisors into public sector organizations and reap the benefits from such a move. 8.3 The lessons to be learnt by the Borrower are: a. They must do more towards strengthening those weaker institutions which are responsible for important sectors of the economy or infrastructure and place due emphasis on full implementation of training components contained in projects, in order to gain the maximum benefit from the institution-strengthening components included; and b. They should give further consideration to the use of expatriate management advisors, who would work alongside government staff to help them develop the operational and maintenance system that are essential to keep an investment effective. xvii 9. a 9.1 Some good relationships were built up during this project, but the rapidly changing Bank staff situation meant that they could not be used to their full advantage to progress the project, as much staff time was spent on the learning curve and in developing relationships. 10. Consulting Barvices 10.1 HD made much use of consulting services for both the inland waterways and coastal ports components of the project, for feasibility studies (Table 5), design and supervision. In each case, HD chose the firms, which carried out the original feasibility studies, to do the design work, supervision and studies that were part of the project. Both firms of consultants performed adequately, although the French firm responsible for the inland waterways had some difficulty in preparing acceptable tender documents. 10.2 The contractors carrying out the river works, river ports and channel dredging all performed satisfactorily, with only the contractor for Taphan Hin port exceeding the contract period. The standard of workmanship at Nakhon Sawan port was very good. 10.3 Firms supplying equipment being procured under the project produced varying performances, with the overseas suppliers doing rather better than the Thai shipyards involved in constructing some of the floating equipment, some of which has been seriously delayed. 11. Project Documentation and Data 11.1 The Loan Agreement contained a number of covenants (Table 6), which were reasonable and which have all been largely complied with by the end of the project, albeit very late, with some actions still in progress. 11.2 The Staff Appraisal Report provided a good framework for the implementation of the project, although it was optimistic on timings. 11.3 Data collection during and since the project has been haphazard and it has not been possible to obtain any consistently monitored traffic figures. xviii TABLE 1. PwoLt gmofi ta o A- Ada (or hu _ _ __ _ _ _ _ ___ Contrad Stiat Complet- Contrac Stat Comp- Signing Date in Date Signing 0bde ion Date INLAND WATERWVAYS CVilWodw. Chao Phaa 12101/80 01/01/81 06130182 0212812 04J12182 08/22185 Nan FRm. 11/01/82 12101f82 06/30)83 06/11/86 07/25186 0SV08/88 PortWdois- Nakhon Sawan 05/01/82 06/01/82 12/31/83 01/15/87 03/01/87 08119/88 Ta?han 05/01/82 06/01/82 06/30/83 03/20/87 04/06/87 03/2089 Equipment . Cutter Dredgers 04/01/81 04/01/81 03/31/82 Deleted from Prasct Ple DrVer Unit 04101/t8 04/01181 03/31/82 02/13/87 0213/87 08/15188 Survey Eqpt 04/01181 04/01/81 03/31/82 02/28617 03127/87 09/15/87 Bages & Tug 04/01/81 04/01/81 03/31/82 12104/86 01/09/87 02115/89 Inspection Launches 04/01/81 04/01/81 03/31/82 10/22U85 12/01/85 02/28/88 Cargo Handling Eqpt 01/01/82 01/01/82 12/31/82 07/12188 07/12A88 01/31/89 Consultant Serfies - Supervsion - Chao Phraya 12101/80 01/01/81 09/30/82 09/17/82 03/04/82 08/22166 Nan Rer 12101/80 10/01/82 06/30/83 O6/13/86 07/20/86 09/25188 Port Woks 12/01/80 06/01/62 12/31/83 09117/82 03/01/87 03/31/89 Feasbity & Design WA 09/17/82 03/04182 OV28/83 Preetbilq Ph 2 WA 04/19/82 04/29/82 01127183 Fcas Ph 2 WA 10/31/86 11/01/86 05/26/88 TA 8 T2a Pfh TAforHarDept 03/01/81 04/01/81 09/30/82 11/29/85 01/13/86 12/31/87 OvasTrg 03/01/81 04J01/81 09/30/82 11/29/85 01/13/86 12131187 COASTAL PORTS CWad.s- _ oredging Woes 10/0181 11/01/81 09/30/82 10/09/84 11/14/84 11113/85 Equipment - HopperDredger 0O601/81 07/01/81 0440/82 10110/84 11/10/84 10109/85 Consulant Serices- Supe'rvsbn 05/01181 06/01/81 09/30/82 08/28/81 09/25/82 12/1/85 TA 8 Tra - TA for Har Dept 03/01/81 04/01/81 09/30/82 06/30/88 07/30/88 07/89 OvSeTrg 03/01/81 04101/81 09/30/82 06/30/88 07/30/88 07489 ixx TAKLE L PhoauLS rta Appraial Esntite Actual Loca Foreign Tota Loca Foreign Totd INLAND WATERWAYS Cid Wads. FVDeWohs 10,250 10,250 20,500 20,393 9,767 30,160 PotWas.- NabhonSawan 3,400 4,750 8,150 4,496 1,126 5,622 Taphan tn 1,7S0 2,000 3,750 1,389 1,389 2,778 Mechanikal Equipmert - Cargohandfng Eqpt 100 700 800 1,127 0 1,127 Maintfnance Eqt 150 600 750 226 1,013 1,239 Fbaing Caft 350 5,400 5,750 808 0 808 Consulting Seines 0 2,250 2,250 0 5,430 5,430 Technid Assstace ATtain 50 750 800 43 115 158 Subtt Basic 16,050 26,700 42,750 28,482 18,840 47,322 Physial ContinencIs 2,200 2,750 4,950 0 0 0 Pric Contingencies 4,950 8,350 13,300 0 0 0 Subtal Contingencies 7,150 11,100 18,250 0 0 0 LandtorRlverPorts 1,100 0 1,100 1,100 0 1,100 Total neand Waterway 24,300 37,800 62,100 29,582 18,840 48,422 COASTAL PORTS Dredging Woucas 1,550 4,500 6,050 815 3,260 4,075 Floan Cft 500 5,000 5,500 65 6,216 6,281 Consuling Serices 0 800 0oo 245 1,536 1,781 Techncal Assisance &Tmkft 0 1,000 1,000 56 493 549 SubSoUBasiCss 2,050 11,300 13,350 1,181 11,50S 12,686 PhyslcalCntnn 300 1,400 1,700 0 0 0 Pric Contingences 750 2,500 3,250 0 0 a Subtoa Contingences 1,050 3,900 4,950 0 0 0 TotaldCoaPorts 3,100 15,200 18,300 1,181 11,505 12,686 TOTAL 27,400 53,000 80,400 30,783 30,345 61,108 xx TABLE 3. PiOl Finnea Planned Souroe (Loan FhS US$ V00) (US$ 000) # RD Rfvw Vods-& btandpods 17,000 19,264 113% Dredin for CobsgtdPos 4,500 3,048 68% Equimedn 12,000 8,086 67% Consutant Services &Tanigt 4,800 9,264 193% Unaklcated 14.700 0 0% Sudtnta 3AD 53.000 39,662 75% Government 27,400 21,446 78% TOTAL 80,400 61,108 76% commmnts: $11.3 mifincan elCldon 02ll787 $2.038 milion canceld on 04/1319 xci TABU& - -bd Acua EOnOMIo Rat. of R.tu .- hlandWatwa 20% 4% Bandon 16% 13%-based on PI traffi data Par. 17% 12%-estffaed -notraffidata Ovoid (weighted) 20% 6% xxii TABUt & P41di. Purpose as Sludlas DefiedS at OWNu hipodof APPialsW ~~~~~StUdy Feiby and Desin Fasbty and Desin Nan River wa d Nan Rh wfto dNanRver wks Complete inlded in pno}c Ph_ll9Pr*pd Not included Complet Fo= ky StU* Fsilibt o Ind Watwap Pl_ PhU h w Pr Wawa Not induded Complete underp on -xxiii TABLU . tau of Oonaft Deadlifor Covenant Subect Status 3.02 Employ onutans td experts acom" 3b* to the Bank - Complid 3.04(c) Prepare Project Completon Reprt WthIn 6 months of conwion Complid 3.05 Acoquire ai land required for the conuction and opeaton of the facilities Included In the project 1231/81 Completed 3.06 Lease the tug and bags to an expercd, fikint and finaclk sound operator 03/31/82 in Progress 3.07 Es sblih and mainin a Wateways Manageme on In the Harbour Department 12/31/81 Complewd 3.08 Preopare and cary out a ftring program for he staff of the Hbuur Detmen 03/3181 In Prgress 3.09 Prepare and implemnt an annual maintenance program for inland wateways and provid detals of the progam untfl 1988 06/30/83 Compled 3.10 Propare and inplement an annual dredging program for coastal port and provide detal of ue pogram and channel suveys unto 1988 0830/83 Comied 3.11 Cayoutastudy on usercharges 10131/81 Completed 4.02 Maintain records an the operatons, resources and expnitures In the project - Compid 4.03 Maintain and operate machinery and equipment In acoordance with appropte administat ive, engineing, navigational and financil pracls - Complid 4.04 Require the agencis controlling re_ase of wae from varous dame to ensure that exoept In abna d yeaYo the flowing aouns f watr are a ble downstm: Bebw Chainat Dam, 80 cu Msec Below confuence of Nan and Ping, 200 cu nsec iBebw Phrom Phiram Dam, 70 cu misc - Compied 4.05 ProhibIt commeal sand dredging In the Chao Phraya bewee Ayuthya and Chanat Dam - Compled THAILAND INAIND WATERWAYS AND COASTAL PORTS PROJECT (LOAN 1889-TH) PROJECT COMPLETION REPORT I - INTROOUCTION This Itenort deals with the second part of the Phase IZI of the Inland Waterways Project, the so-called Inland Waterways Phase III Construction Project. This phase is the last touch of the development of Inland navigation on the Chao Phraya and lower Ran Rivers : it consisted of project implementation, following previous phases focussing successively on identification, pre-feasibility and final design. The Inland Waterways Project was basically aimed at streugthening the traisprrtation system in the Central Plains of Thailand (see map herewith, Appendix 3). It supplements existing road and rail systems connecting Bangkok, Nakhon Sawan and Taphan Hin and provides excellent transport facilities for such goods as agricultural products (rice, maize, tapioca, etc.), mineral ores, petroleum products and construction materials. Its hinterland covers the whole northern part of Thailand, thanks to the transhipment facilities built under the project at Nakhon Swan and Taphan Hin. This project was given a high priority by the Thai government, and as such it was made part of the country's development plan. It was undertaken by the Harbour Department of the Ministry of Communications of the Kingdom of Thailand. 2 Designed as a means to revive a traditional, cheap and energy-saving made of transport, it covered all aspects of Inland Waterways development, namely : - River improvement, by means of river training works designed to provide satisfactory navipation conditions in the channels concerned (Chao Phraya and lower Nan) all year round : the goal was to attain a target, depth of 1.70 m. minimum for standard low flows throughout the project area, thanks to (i) capital works and (ii) subsequent yearly recurrent dredging. The designed channel width is 40 m minimum. - Inland port construction, at Nakhon Sawan on the Chao Phraya river and Taphan Hin, the uppermost limit of tne project on the lower Ran river - ?todernization of the fleet operated through the introduction in Thailand of a pilot pushed-convoy - Procurement of Maintenance Equipment, including si) three cutter-suction dredgers, for channel maintenance, (ii) a Pile Driving Unit for the maintenance of river training works and (iii) miscellaneous river maintenance and survey equipment. - Procurement of Port Equipment for both ports mentioned above - Institutional adjustments within the Harbour Department (setting up of a division in charge of operation and maintenance of Inland Waterways) - Training aspects 3 This Project Completion Report L8 based on the various completion and Final Reportssubmitted by the Consultants in charge of the Inland Waterways Project i.e. : - Inland Waterays, Phase I, Final Report (BCEOM, December 1975) - Inland Waterways, Phase It, Final Report (BCEO.I, March 1977) - Inland Waterways, Phase III, Feasibility Study and Final Design, Final Report (BCEM-CNR-UECC, December 1979) - Inland Waterways, Phase III, Feasibility Study and Final Design of the Nan River Works and Port of Taphan Hin, Final Report (BCEMO-CNR-KECD, October 1984) - Chao Phraya River Works, Final Report (BCEOM--CN-KECD, 1985) - Supervision of Chao Phraya River Maintenance, Final Report (BCECK-CNR-KECD, 1986) - Nan River Works, Final Report (BCBOM-CNR-KECD, 1988) - Supply of a Pile Driving Unit, Final Report (BCEON-CNR-KECD, 1988) - Port of Nakhon Sawan, Final Report (BCEON-CNR-XECD, 1985) - Othar Interim Reports. 4 II - PROJECT IDENTIFICATION. PREPARATION AND APPRAISAL II.1 IDENTIFiCATION The project was originally formulated following experimental river training studies and tests on the Chao Phraya River in the sixties (setting up of bottom panels accross shallow reaches, under French assistance). After transferring the responsibility of Inland Waterways to the Harbour Department, the Thai government engaged in a process of development of inland navigation : the high potential of inland waterways indeed was recognized at that time of high cost of energy. The successive phases of the project were as follows (see also summary of documentation and reports above) : (a) Inland Wa_ erways_Phas_I : prepared by the Harbour Department, financed by the French government. This phase was a review of the Inland Waterways system in the Central plains of Thailand, and an identification of the most suitable projects. (b) Inland Waterways Phase It : prepared by the Harbour Department, financed by the French government. This Phase was the pre-feasibility study of the development of the so-called Northern corridor, i.e. the Chao Phraya!Nan axis. This project, identified as part of the Phase I, proposed an overall development of the Cbao Phraya nd Nan rivers up to Uttaradit (see map, appendix 3), including : (i) river improvement (ii) port construction (iii) port equipment (iv) maintenance equipment (v) modtrnization of the river craft (vi) in;titutional improvements 5 This phase sas completed early 1977. Favourable findings and bright prospects caught the attention of the Thai Government and of the World Bank. This led to the Phase III as mentioned hereafter. (c) Inland Watemays Phase III - Feasibility Study and Final Design prepared by the Harbour Department, financed by IBRD. This phase focussed on the sections of the Northern corridor bearing the highest return according to the findings of the Phase It, i.e. : - River up-grading on the Chao Phraya, up to Nakhon Sawan (380 km from river mouth) - Construction of a port at Nakhon Sawan and provision of port equipment. - Preliminary design of three dredgers for channel maintenance, and of a modern push-tow boat and associated barges adapted to Thai river conditions. This phase was completed in December 1979, along with the drafting of all specifications and tender documents for the Civil Works to be undertaken (river and port). It also included proposals for institutional adjustments necessary to allow the Harbour Department to manage, operate and maintain waterways and inland ports. (d) Inland Watervays Phase III - Construction : financed by IBRD, prepared by the Harbour Department. This phase includes the following items : (i) Bidding for and imnlementation of projects dealt with in the Feasibility Study and Final Design stage referred to in (c) above. (ii) Feasibility Study and final design of the Lower Nan River Works and of the Port of Taphan Hin, and then bidding and construction rhereof. 6 (iii) Final Design of a pilot pushed convoy, three dredgers, and port equipment for both ports mentioned above, and then bidding, construction and delivery thereof. (iv) Final Design, bidding, construction and delivery of additional maintenance equipment, namely a Pile Driving Unit and miscellaneous survey and maintenance equipment. This Phase was therefore restricted to the first section of development of the Northern corridor, i.e. covering the Chao Phraya River and the Lower Nan River up to Taphan Hin only. This phase as described in (d) herein is that which is specifically dealt with in this Report. Purther development of Inland Navigation on the Nan River up to Uttaradit is therefore left for the future, and not concerned with this phase of the Inland Waterways Project. 11.2 PREPARATION AND APPRAISAL (a) The Inland Wate ways Phase III -Construction Project is very complex as it involves both (i) feasibility and final design studies and (ii) bidding and construction of civil works and equipment as mentioned above, for a total of nine sub-projects recalled hereafter in a logical sequence : 1. Chao Phraya River Works 2. Port of Nakhon Sawan 3. Lower Nan River Works 4. Port of Taphan Hin 5. Construciton and delivery of a pusht tow boat and four barges 6. Construction and delivery of three cutter-suction dredgers 7. Supply of a Pile Driving Unit 8. Supply of miscellaneous River Maintenance and Survey Equipment 9. Procurement of Port Equipment for the ports of Nakhon Sawan and Taphan Hin. All these sub-projects were prepared by the Harbour Department and implemented with the assistanee of Consultants and Contractors/suppliers. They were originally all part of the loan agreement between the IBRD and the Thai government. However, the construction and delivery of three cutter-suction dredgers has been removed from the scope of the IBRD-financed project, following proposals from the KFW of Germany. At the time of drafting of this Report, the fate of this item is still under consideration by the Thai Government. Besides, three sub-projects are not substantially completed as yet, namely : - nThe Port of Taphan Hin, construction of which has suffered significant delays. - The Push-tow boat and four barges, construction of which has also suffered significant delays (this project is already almost one-year behind schedule) - Port Equipment for both ports, due to be delivered early 1989. (b) Generally sveakin,-the etimpljemented under this phase III Construction followed closely the principles set forth in the previous phase. 8- Indeed, river were devolopped by seans of free-f low developent woks. Ports constructed at Nakhon Sawan awd Taphan His were so at the sites originally planned, and based on the original plans except for some adjustments at Tapbha RHi due to land acquisition problems. The river craft Vas built in line with the original plans, except for some technical adjustments. The major changes to the project originally defined were in fact (i) the removal of the constmaction and delivery of the three cutter suction dredgers from the scope of the project, as *entioned above, (ii) the addition to that scope of the Pile Driving Unit and miscellaneous river maintenance ans survey Equipment (itms 7 and 8 above). This latter change was readily decided ad agreed during the overall project implme_tatioa, as it answeres to basic maintenance needs ilestified in the Final Design stage (Final Report, Inland Vaterways Phace III, SCEoDCZCRIUECC, December 1979). (iii) significant delavs suffered in most of the sub-projects, mainly linked to land acquisifton-related and adminis- trative problems. Project results were affected accordingly. Three items are worth noting with this respect - Firstly, the delav in deliverv of the three cutter-suction dreduers has made maintenance camonamns tuettectiLve over the whoLe Uhao Phrava riLver since completion at related worts in July 1985. As a consequence, recurrent dredgings after the high waters of 1985, 1986 and 1987 have been below standard and problems linked to shallow reaches have been repeatedly met in subsequent dry season. 9 This made navigation difficult and hampered traffic growth. The same is expected in 1988 and probably also in 1989 and, further, as long as there will be a lack of Equipment unless other steps be taken (e.g. contracting out these works). Secondly, the Port of Nakhon Sawan was substantially completed by mid 1988, i.e. three years after the Chao Phraya River Woiks. And even then, this port still lacks its connection to the public water supply system to be built by the Provincial Waterworks Authority (PWA). This means that transhipent facilities have been missing for three years after completion of the channel of the Chao Phraya, hamping traffic growth accordingly. Thirdly, the pilot pushed convoy aimed at demonstrating to potential private operators the advantages and low operating cost of this modern technique, has not been delivered as yet, due to constructional problems. In the meantime, the lack of economically effective vessels specifically adapted to the conditions of the waterway is another factor hampering traffic growth. (c) Besides, institutional nrvements have been undertaken rather slowly, and have been hindered by a certsin lack of experienced professional staff and adapted equipment. Training and Technical Assistance are still required, and such questions as contracting out part (or all) of the maintenance activities are still open. Related problems are extremely important since basically the success of the Qroiect depends on the oerformance of manaQement and overation and maintenance activities : the major questions, already outlined at design stage (Final Report, BCEOM/CNR/KEC", December 1979) are : 10 adequate maintenance of the river channel : this covers all aspects of river maintenance, with particular emphasis on (i) dreduine recuirements (timing and capacity) and (ii) maintenance ot Aids to Navigation. release by other agencies concerned (RID, EGAT) of the minimum flows required in dry season, i.e. s 80 mS/s in the lower Chao Phraya, below chainat dam 200 mP/s in the Upper Chao Phraya * 70 ms/s in the lover Nan River Further imrovrvmnts are still necessarv within the Harbour Department so that the above requirements, essential for the success of the project, be satisfied. They include Ci) strenethenine of the River Dredcine and Maintenance Division or tne naroour Department torganizatton and planning) iii) Technical Assistance for OM activities (iii) possibly, re-consideration of the principles of maintenance and operation tasks (contractine out part of the works, in particular dredtines and Aids to Navigation, under supervision by qualLfied engineers). (d) Althoujb some of the sub vroiects have suffered significant delays, with overall project completion now expected about 4 years behind the originally planned schedule, the time elapsed between pre-feasibility stage and final completion (about 13 years) is reasonable for this type of project. The Chao Phraya River Works proper have been speedily designed and built : this sub project was completed in three years, which is very short for river training works of such magnitude, and only 9 years after pre-feasibility stage. 11 Other delays encountered -mostly resulted from laud-acquisition problems, beyond control and more or less unavoidable, from administrative problems linked to contradiction existing between guidelines of the IBRD and of the Thai Ministry of Finance, and from constructional problems. But otherwise, the decision-making process was reasonably speedy, resulting in final completion within a very resonable time after project identification as said above. (c) Consultants have been used throughout the project (in fact from identification till final completion), for all studies required (feasibility and final design), bid evaluation assistance and construction supervision. Construction in general has adfered to design principles, apart from technical adjustments necessary because of (i) changing site conditions and/or (ii) technical Improvements over the whole project time frame and various other improvements. All such adjustments have been proposed and accepted at construction supervision stage, and made possible thanks to the good cooperation between consultants, contractors and Inspection Committees. Consultants have also been involved in training activities, both within the project and under separate contracts. 12 (f) Indentification, preparation and appraisal have concentrated throughout on the right issues The development of Inland Waterways in Thailand has from the beqinning been considered useful and beneficial. The Phase III - Construction project was devised as a very comprehensive project, covering all components of Inland Waterways. * Designs have been based on most economic investment costs in respect of expected traffic : this led to selecting free-flow developments against more sophisticated projects (dams and locks). Construction in general has been according to the capacity of the Harbour Department, and satisfactory (except for specific constructional problems for the Port of Taphan Hin and the push-tow boat and barges). Technical results of the river development works have even been excellent : maintenance requirements, in particular recurrent dredging, are well below design estimates, pointing to a very good functionning of the improved channel. Institutional and related training aspects have been pinpointed at an early stage, and steps have been taken to strengthen the capability of the Harbour Department to manage, operate and maintain the project works. But there is still ample room for improvements in this respect, and further technical assistance requirements should be considered, as well as ways to improve operation and maintenance procedures. 13 11-3 Tarsets and goals (a) The goal of the projoct is to improve inland navigation on the Chao Phraya and Nan riser, from the river mouth up to Taphan Hin. This involves all components of Inland Waterways Development, namely (i) river and channel upgrading,, (ii) construction of transshipment facilities at carefully- selected sites, (iii) provision o: operation and maintenance equipment, (iv) modernization of zhe.fleet, and, finally, (v) training and organizational aspects. (b) The limitations of the project were clearly set out in the Final Design Report of 1979. These limitations result from the type of river development proposed (free-flow scheme) as more sophisticated and costly projects (dams and locks) were not considered economically feasible at this stage in respect of traffic forecasts. These are reserved as long-term development prospects depending on the evalution of economic conditions. The main limitation is the depth restriction in dry season, down to 1.70m minimum over the whole project area from Ang Thong to Taphan Hin. This depth is understood for standard low flows as indicated in 11-2 (c) above, it results from hydraulic constraints. 14 (c) Maintaining this minimum depth over the whole dry season repuires recurrent dredgings, to be carried out every year at the end of the flood recession period. The project is entirely based on the assumption that these recurrent dredgings are properly performed, river training works and vessels were designed accordingly. The economic evaluation also was based on this assumption. As mentioned in 11-2 (f) above, the design of the channel proved good and viable technically speaking as evidenced by wost-project investigations pointing to a satisfactory behaviour of the channel (recurrent dredging requirements are about 25% below the estimated requirements). The project as completed is altogether a fine technical achievement, it makes a sound basis for navigation improvement : it is now the main target to improve O&M so that the project work satisfactorily. Such improvement is essential. (d) The Inland Waterways Phase III Construction project is part of a long-range program of Inland Waterways Development. It is the first step of the dtevelopment of The 'Northern Corridor' up to Uttaradit on the Nan River. The original master plan indeed provides for river up-grading up to Uttaradit, about 270 km. north of Taphan Hin, and for the construction of Port facilities it Pitsanulok and Uttaradit. 1S it is part of a system of watervays comprising the Pasak river and various canals connecting watervays of the Central plain. Within this system, the Chao Phraya is the backbone of central Thailand, the main artery linking the rich agricultural regions of central and northern Thailand to the Bangkok hub and the Gulf of Thailand. The project thus opens direct links between these regions, the Bangkok area and the deep-sea ports of the Eastern-sea board, allowing sizable transport cost reductions and favouring export-oriented activities. This project is therefore highly beneficial to the tr.ansport sector, and to the country's economy in general. (e) Reasonably reliable information was available at design time to allow realistic assumptions and results based on sound forecasts and projections. Haever, the economic content has significantly changed during the time elapsed between feasibility stage and final completion : - the country's growth has been rapid - energy prices have fluctuated. These are an important factor of the project feasibility, the present situation should be re-assessed accordingly. - the time taken for completion has been much longer than originally expected. As a result (i) maintenance procedures have been erratic, (ii) maintenance of the river and appurtenant works should be organized and personnel trained for maintenance of the the river and of the Port of Nakhon Sawan and (iii) traffic growth has been hampered as reported in 11-2 (b) above. 16 (f) Since the investments required for river improvements and port eonstruction have been made, priority should now be given to manaRement and 0 a N aspects. A complete re-asses_ment of (i) the economic situation, (ii) the adequate 0 6 N procedures to be set up, (iii) technical adjustments and/or improvements which would be possible after completion and tiv) further training and *echnical assistant requirements should be undertaken. Technical adjustments advisable to this stage imclude the follow ing : - to investigate the possibility of eventually increasing the minimum guaranteed depth thanks to systematic maintenance procedures as such a possibility seems to exist according to technical post-project investigations. - to improve the Aids to Navigation and to improve the existing and to reduce future maintenance costs and facilitate the task of maintenance teams. - to revise the optimum type and size of river craft taking * into account present economic conditions. - to develop maintenance centers for the Equipment operated by the Harbour Department. - io imDrove the economic data collection system in accordance with the previous Consultant's recommendations. All this may involve additional investments (river works, maintenance centers, etc.) strengthening of the organization in charge of river management and 0 8 M, promoting the waterway including broad publicity regarding the river craft and the hydro-information. 17 III - PROJECT IMPLEENTATION AND COST Construction of the first of the 9 sub-projects making up the Inland Waterways Phase III Project started in March 1982. The original time frame of 37 months for the whole project has been extended, final completion of the last sub-project is now expected early 1989 i.e. with an almost 4 years delay. III - 1-START-UP Whereas decisions were rather speedilv taken in the start-up period, problems of land acquisition at Nakhon Sawan and Taphan Hin soon faced the Harbour Department. A time-consuming process was engaged, which finally resulted in the following : - at Nakhon Sawan, construction was delayed until final settlement of the problem. Port works finally started it. January 1987, i.e. with an approximate 3.75 years delay (see section 111-3 herea. er). - at Taphan Hin, construction a&lso was delayed until final settlement of the problem. Port works finally started in April 1987, i.e. with an approximate 4 years delay (see section III-3 hereafter). In addition, and owing to the specified land conditions at Taphan Hin, construction of this port was split into 2 stages : the first stage to be started first on plots of land available, including only (i) the administration area and (ii) port of the general cargo area. Both areas were separated by unavailable land plots, and the road and rail access road as well as the overall port platform could not be made part of this stage. Happily, after the commencement of the works, most of the land plots requ_red for the 2nd stage were made available, and most of the 2nd stage works were finally added to the on going 1st stage works. This included inter alia (i) the main access road (ii) the completed general cargo area 18 (iii) tho platform between general cargo and administration areas and (iv) the extension of the slope protection all along the port waterfront. III - 2-REVISIONS Implementation of the construction project proper was based on the following: - Final design made as part of a previous study phase (feasibility study and final design, BCE0OM/CNR/UECC, 1979). This concerned the Chao Phraya River Works and the Port of Nakhon Sawan. - Final design made as part of studies included in this phase of the project (feasibility study and final design of the Nan River Works and Port of Taphan Hin, BCEOUVCNR/KECD, 1982-1983). This concerned the Nan River Works, the Port of Taphan Hin, Port Equipment, a Pile Driving Unit, a Push-tow Boat and four barges, miscellaneous river maintenance and survey equipment, three cutter-section dredgers. (a) all sub-projects mentioned above, including those whose Final Design was carried out as a component of this project, were finally implemented except the three cutter-section dredrers. This item has already been mentioned in section II above, construction of the dredgers have been taken out of the current project following proposals from the Government Federal Republic of Germany to finance this. sub-project. through a loan from KFW. (b) Major changes in the project scope, except for schedules which are separatedly dealt with in III-3 hereafter, have already been mentioned herein : 19 1. r rmal of the construction of 3 cutter-section dredgers from the scope of the proejct. 2. addition of the construction of a Pile Driving Unit and miscellaneous River Maintenance and survey equipment to the scope of the project. 3. other changes are mostly technical adjustments due to various rasons as detailed hereafter. Besides, changes mentioned in 1 and 2 above, as well as a drastically modified schedule have required significant changes in*te supervision services of the Consultants. Altogether, 6 Addenda and two Memoranda extending supervision services have been signed between the Harbour Department and Consultant as detailed hereafter. The following paragraphs successively deal with ti) technical changes brought during coDstruction, for all sub-projects concerned, and (ii) changes to the scope of the Consultants'services. (c) Technical revisions during the course of construction have mostly been the result of (i) adjustments necessary due to changes in site conditions during design stage and constrction stage, (ii) adjustments necessary to stick to latest engineering standards as required in various contract, (iii) improvements brought about in the light of experience at specific sites, or by late technological advances and (iv) external requirements (such as for initance conformity with standards or requirements of external agencies and/or problems of availability on the local market). It is worth noting that none of the technical changes, except those resulting from additional works required by the Harbour Department or proposed by the Consultants and approved by the Harbour Department, 20 have resulted in cost increases and/or OveTruns as they have bwon made with a pormanent concern for cost-related aspects. This moans that improvements brought into some parts of the work for any sub- project and causing cost increases, have been compensated by equivalent saving on the items of the same sub-projects made possible by experience and tochnical advances, without in any way lowering the quality of works in other works, the only final sub-project cost increases recorded have been the sole result of variations of quantities, changes of logislation and price escalation, while the quality of the works has been kept in accordance with the standards of the specifications and, in a number of cases, significantly improved. The main technical revisions are summarized hereafter - Chao Phraya River Works The main change concerned the strengthening of most groynes (particularly those filled with sand) by additional rock rip rap protections. Based on investigations made during the course of works (one year after commencement), it was decided to modify the design of groynes by adding much protections all along the groynes, which allowed to reTuce the driven length of steel piles forming the core of the groynes. The modified design was worked out on the basis of test made in river, during construction, which pointed to a better behaviour of groynes otherwise prone to erosion when submerged. This was made in accordance with the contract, which provided for such possibility. The extra-cost due to the additional quantity of rock rip rap was entirely compensated by savings on pile length. The revision thus allowed better technical results at no additional cost. 21 Port of Nakhon Sawen A number of design revisions were proposed by the Consultants and/or the Contractor, and approved by the Harbour Department. Altogether, they were improvements compared to the original design, mostly due to the long time gap between the Final Design (drafting of Specifications and Tender Document in 1979) and commencement of works (in 1987). The overall additional cost due to these changes was nil the total actual project cost being very slightly below the Contract Price. Items worth a mention are as follows : - the wharf has been strenathened.(additional piles) so as to conform to the latest stanaaras issued after drafting of the Specifications. - the slope protection has been smoot,uned. with a final slope at 3/2 instead of 4/3. Ttis revisio was necessary because of erosions recorded in the river since completion of the design phase, refusing the overall bank height to be increased. - the drainaRe svstem access both road and rail access has been signmtiLcantiy cnangea, so as to rame into account physical changes which took place after completion of the design phase : the construction of a road running along the part site, modifying the drainage conditions of the whole lowland area situated behind the port. The revised design took into account this road and its drainage system. - the port drainage was modified, and additional drainage and utility outlets were placed across the railroad on the area left for future. extension. This step will allow to avoid excavations under that railroad in the future, when the time comes to extend the port facilities. - the design of the railroad and rail access was revised to take into account the requirements of the State Railways of Thailand (subbase, turnouts, slopes, etc.) 22 The water suoglv system was changed. so as to take into account the recent extension ot the previousty non-existing public water supply system : reservoirs recently built by the Provincial Watervork Authority of Thailand were considered a better source of water than the well/water tower system originally designed, and it was decided to connect the Port to this new public system. Related connection works, to be by the Provincial Waterworks Authority of Thailand are still to be completed. - earth-slooes along the port area, the road access and the railroad access nave beetn further crotected against damages caused by rainwater, Dy means or addtlional top-soil covers and grassing. - the number and location of dolphins originally provided for along the future extension area have been modified so as to (i) allow proper mooring space for barges waiting tor Loading/unloading and (ii) keep future developments open on the extension area. - the Fender svstem was improved according to the proposal of the Contractor. This tender system was finally made of steel, instead of wood as originally provided for. - other miscellaneous modifications of products/materials entering construction local proauccs nave been used as far as practicable and in so far as Contract provisions and standard so allowed. - Nan River Works Design modifications proper have been scarce, and mostly the result of (i) adaptation to site conditions and (ii) experience drawn from the Chao Phraya River Works. Characteristics of groynes in general were conform to the Contract design, but details and dimensions were adapted to the Conditions prevailing at the time of construction, accord,'ng to revised designs made by the Consultants as provided for in the Contract. The main modifications worth a mention are as follows : 23 - signs on land have been made of aluminium boards tied on concrete legs, instead of steel as originally designed. -a new type of buoy has been tested during construction. This buoy was designed by the Consultants so as to avoid as far as practicable the trapping of weeds, floating plants and debris flowing down river in meduim and high water stages. Tests performed gave satisfactory results, and a total of 30 such buoys were finally placed. Long term behaviour of the system however still has to be monitored, and compared with that of othcr types of buoys. -inclined staff gauges have been designed, in place of vertical ones. -Besides, a total of 4 rew bank protection sites have been added to the project at the request of the Harbour Department. These additional bank protections concerned sensitive and critical areas. Three of them have been built according to conventional debigns by the Consultants, the fourth one has been fitted with concrete steps forming protection and providing recreational space in town. This bank has been further reinforced with a shoulder raised above low water levels due to the very poor quality of soil material, after soil investigations made at the request of the Consultants and approved by the Harbour Department, Port of Taphan Hin The general layout of this port had been modified as part of the Final Design study (1982 - 1983) at the request of the Harbour Department so as to allow works to start on land plots available (see III-1 above). First stage works were then launched in April 1987, but land availability conditions in subsequent months finally allowed to include most of the 2nd stage works within this project and at no additional cost (see tI-i above). The main related additions were thus 24 -the construction of the main access road : originally excluded from the first stage works because of land unavailability, this road was finally built after soil investigations were carried out in accordance with the Contract. -the platform between the Administration area and General Cargo area was finally completed, allowing a slight extension of the General Cargo area according to the final layout of the 2nd stage. -the slope protection has been extended all along the waterfront of the port, in accordance with the 2nd stage requirements. Besides, the slope have been graded at 3/2 instead of 4/3. -the Fender system has been improved : the design is similar to that approved at Wakhon Sawan, and adapted to specific conditions of Taphan Hin. - other miscellaneous modifications of lesser importance, concerning mostly products and/or materials entering construction (sand for fills, additional filter layer, etc.). Local products have been used as far as practicable and in so far as Contract provisions and standards so allowed. -Push-tow boat and four barges There is no major deviation compared to tne original Tender, except for some technical adjustments linked to (i) latest models producted by certain suppliers (ii) availability or unavailability of certain products and (iii) classification society requirements. -Pile Driving Unit See above 'Push-tow boat and four barges'. -River Maintenance and Survey Equipment No change compared to Tender proposals. -Port Equipment This item has not been delivered yet, however no change is expected in the scope of supply compared to the Contract requirements based on the Final Design findings. (d) Change in the Consultants' services The Consultants' services have been adapted throughout the implementation period to best fit actual supervision requirements. Change in Consultants'services were therefore linked to (i) supervision requir*-'nts and (ii) actual schedules of various sub-projects. 25 Altogether, the Consultants' services were expected to last 37 months. Although the actual completion date is still uninown, it is anticipated that the total time frame will finally cover 82 to 8S months. As already wentioned, the Consultant's original Contract has been supplemented with 6 Addenda and 2 Memoranda of Understanding as follows: - Addendum No.1 (1984) : This addendum provided for the removal of supervision services concerning the Nan River Works from the original Contract. This Addendum was the result of the delay of the Nan River Works. - Addendum No.2 (1985) : This addendum provided for an extension of the Consultants' services to cover the time-extension granted to the Contractor in charge of the Chao Phraya River Works. - Addendum No.3 (1986) : This addendum provided for additional Consultant's serwices required to supervise the-maintenance period of the Chao Phraya River Works. - Addendum No.4 (1986) : This addendum coivered the supervision of the delayed and revised Nan River Works. - Addendum No.5 (1987) : This addendum covered the additional services required for (i) bid evaluation assistance and (ii) construction supervision of the Port of Nakhon Sawan and Taphan Hin. - Addendum No.6 (1988) : This addendum covered additional Consultants' services required for the supervision of construction of (i) a Pile Driving Unit and (ii) River Maintenance and Survey Equipment, Delivery of Port Equipment and bid evaluation assistance thereof. 26 - emoramdum of Understanding for the extension of the supervision of the Nan River Works (1988) : This memorandum provided for the extension of the Consultants' services required for the supervision of extended Nan River Works. - Memorandum of Understanding for the extension of the supervision of the Taphan Hin Port Work (1988) : This memorandum concerns Consultants' supervision services extended to cover delayed Port Works at Taphan Bin. All additional and extended Consultants' services as described above were justified according to actual working and timing requirements. III - 3- IMWLEMENTATION SCHEDULE The comparison of actual and expected schedules is summarized in the Table I of Appendix 1 herewith. (a) As can beseen only the Chao Phraya River Works were almost completed within the original schedule. None of the other sub-projects started on or before the original completion date. Note that (i) Port works were delayed as aforesaid mostly because of problems related to land acquisition. (ii) The Nan River Works were then delayed accordingly, pending approval of this sub-project linked to the implementation of the Port of Taphan Hin Works. (iii) Procurement of Port Equipment was delayed according to Port Civil Works. (iv) The Push-tow boat and barges construction was delayed mostly for administrative reasons, such as late approval of Tender Documents and clifferences between Tender Conditions as s 27 required by IBRD and those of the Ministry of Finance of tL. GoverDent of Thailand. (v) The Pile Driving Unit and River Survey and Maintenance Equipment were not part of the original plan. However, both were completed before all other Equipment supplies. (vi) Further delays for the Nan River Works, Port Works and Procurement of Equipment have been due to differences between Tender Conditiors and guidelines issued by IBRD on one hand and those of the Thai Ministry of Finance on the other hand. (vii) Constructional delays linked to slow and erratic progress by some Contractors and/or Suppliers (Port of Taphan Hin, Push-tow boat and barges) have sizably increased the time taken by corresponding sub-projects, and will finally bring about an additional overall project delay estimated to between 6 and 9 months under the present cifcwmstances. (b) Some of the causes of delays as reportid above had been anticipated to some extent : schedule for land acquisition process, and for (i) approval and (ii) administrative process proved optimistic. The real nature of most causes of delays above however shows that these were more or le3s unavoidable, or beyond control. (c) Delays and disruptions in the project can be considered to have sizable effects on the project results, in terms of potential traffic lost. Traffic losses are difficult to evaluate, they may result either from loss of confidence of private users in the waterway, or from alternative investments made by private users in other transport modes (rail and road). Once traffic has been diverted away from the river, it is difficult to get it back to the river within a short period. 28 (d) In summary, the original time schedule can be considered as optimistic. III - 4-PRCUEMENT (a) The major problem which faced the Harbour Department during project implementation resulted from conflicting guidelines between IBRD and the Ministry of Finance. The Harbour Department is required to follow the guidelines of the Thai Ministry of Finance according to the regulations in force. The loan agreemeDt with IBRD on the other hand implies that IBRD's guidelines be adhered. to.. Reconcilingsomewhat conflicting guidelines proved difficolt and time-consuming. Related delays in some sub-projects are estimated to be several months. (b) There was no *ajor disagreement or claim so far in procurement and Contract proeedures with Consultants, Contractors and Suppliers, except those related to slow and erratic progress (Contractor for the Port of Taphan Min, Supplier for the Push-tow boat and barges). (c) The extent of local nrocurement proved greater than expected : all Civil Works wre contracted to Thai Contractors. shzL.vards .n charge of the Construction of the Push-tow boat, 4 barges and the Pile Driving Onit were all Thai shipyards. Local products were used as far as practicable and to a large extent in all Civil Works and only goods having no local equivalent of required standards have been imported. 31 - 2.2% for physical contingencies. Besides, the bid price in bahts was about 5.9% above the Bnginaer's estimate corresponding to economic conditions of August 1979. Convemrted into US dollars, the bid price was lower than the estimated cost of August 1979 because of variations of exchange rates in the meantime. 2. Port of Nakhon Sawan : the final cost was almost equal to the Contract Price. Price and physical contingencies actually needed were therefore nil. The bid price was about 33.5% below the Engineer's estimate. 3. Nan River Works : the final cost was about 14.7% above the bid price. These 14.7% break down into : - 4.7% for price contingencies. - 10% for physical contigencies. These 10% result from the additional bank protection works ordered by the Harbour Department. Without such additional works, the final cost of this sub-project would have been 5.5% below the bid price. The bid price was about 24.2% below the Engineer's estimate. 4. Port of Taphan Hin : the latest estimated cost is within the Contract Price, although a number of items have been added to the 1st stage works as mentioned herein. Price and physical contingencies actually needed were therefore nil. The bid price was about35.3% below tho Engineer's estimate. 32 Bid prices and final costs of (i) the Port of Nakhon Savan, (iM) the Nan River Works and (iii) the Port of Taphas Bin are all below the prices estimated at apprasial, i.e. at Final Design stage (August 1987 for Nakhon Savan, July 1982 for the Nan River and the Port of Taphan Bin). 5 Equip mnt none of the Equipment concerned was subjected to any price increase due to either price or physical contigencies. But liquidated damages were paid by suppliers for (i) the Push-tow boat and four barges (1OZ of Contract Price) (ii) the Pile Driving Unit (7.81 of Contract Price) There was consequently no cost overrun for these items. Did prices for (i) the Pusb-tow boat and four barges and (ii) the Pile Driving Unit were well below the Enginear's estimate (respectively 10 X and 411). This was mostly due to low prices proposed by local suppliers, much cheaper than those of foreign fims. The bid prices of Port Equipmeat were closed to the Estimate ( 3.9 2). The bid prices of River ?aintemanae and Survey Equipment was about 351 above the Engineer's Estimate : this was principally due to wide fluctuations of exchange rates at the time of bidding (in particular concerning the Swiss Franc and the Japanese Yen, the main currencies involved in the bid). 29 (d) Generally sMeaking, international competitive bidding raised up keen interest among Contractors, and competition has appoared fair and stiff : most of the Civil Works and goods procured have been so at prices well below the Engineer's estimates. Bid evaluation has been conducted systematically first on technical grounds, then based on price comparison for repponsive bidders. For all Civil Works, the lowest bidder was selected according to whether proposals were responsive. For the procurement of goods, the lowest responsive bidder has been selected. As aforesaid, problems have been encountered for two items :- - the Port of Taphan Hin - the Push-tow boat and barges (e) Consultants engaged under the project were groups of Consultants formed between foreign and local consulting firms. This procedure is in accordance with the Thai regulations. 111-5 COSTS The comparison of actual costs and original estimates is summarized in the Table 2 of Appendix 2 herewith. (a) Actual costs are real costs as paid under the various sub-projects, for all such sub-projects already completed. For others (Port of Taphan Hin, Push-tow boat and barges, Port Equipment), they are the latest estimates. For Consultant services, costs are also the latest estimates. 30 Ike range of accuracy of actual costs is as follows - Chao Pbraay River Works, Nan River Works, Port of Nakhon Sawan, Pile Driving Unit, River Maintenance and Survey Equipment : the related costs are roal costs. - Port of Taphan Hin : the actual cost given in the Appendix 2 is the latest estimated cost, considered to be within 5s of the final cost. Besides, the amount of liquidated damages remains uncertain. - Push-tow boat and barges : the actual cost given in the Appendix 2 is the estimated final cost, taking into account 10% liquidated damagos due by the Seller. Futher possible cost variations resulting from problems at delivery are not considered here. - Port Equipment : the actual cost given in the Appendix 2 is the final cost for this "off-the-shelf" Equipment (except in the case where liquidated daqges would be due). - Consultants' services : the actual cost is the latest estimated cost, it does not take into accolunt possible extra services linked to the supervision of delayed items (Port of Taphan Hia, Push-tow boat and barges). It can be considered within to be 52 of the actual final cost. (b) Physical and price contingencies at appraisal were adequate, as evidenced by the following details by sub-project 1. Chao Phraya River Works : the final cost was only about 7.5% above the bid price. These 7.5S break down into : - 5.3% for price contingencies, including 1.1% paid to the Contractor in compensation of business tax increase after bidding, as required in the Contract (under the heading "change in costs and legislation"). 33 6. ConsultantsI services : the final cost of these sorvices is noticeably in excess of the original Contract. This is duo to : (i) additional services requested by the Harbour Department and/or necessary for proper supervision : this concerns the additional services provided for the supervision of the maintenance period of the Chao Phraya River Works, the supervision of the Nan River and Port Works, the extension of supervision of the Chao Phraya River Works, and the supervision of Equipment not included in the original scope (Pile Driving Unit, River Maintenance and Survey Equipment). (ii) Constructional delays and general project delays. III-6 FINANCIAL SOURCES Financing of the Project was under the loan agreement between IBRD and the Thai Government relating to the "Inland Waterways aAid Coastal Ports Project". Consultants' services were financed 100X by the World Bank, whereas Civil Works and Procurement of Equipment were financed partly by the World Bank and partly by the Thai Government, in accordance with the provisions of the loan agreement. (a) Final expenditures were less than the original expectations, due to (i) the low prices of most sub-projects compared to original estimates and (ii) the very small amount of price and physical contingencies actually used. 34 (b) Exp.nditures were delayed according to delays of the varmous sub-projects. Reasons for these de:sys have slready been dealt with herein (section III-3). 111-7 PERFORMANCE OF OrSIT1TANlS CONTRACTORS AND SUPPLIERS (a) the contribution of Consultants was very comprehensive, including project design and revisions thereof, construction supervision, inspection upon delivery, coumissioning, tests and trials, and partial training of Harbour Department staff. The services provided were excellent throughout, a fact evidenced by the satisfactory behaviour of the river channel and training works in general and the adequacy of supplies. (b) the construction of Mi) the Chao Phraya River Works (ii) the Nan River Works and (iii) the Port of Nikhon Sawan gave rise to no constructional problem. Construction proceeded smoothly, and the performance of Contractors was satisfactory. (c) the same applies to the supply of River Maintenance and Survey Equipment and, to some extent, to the Pile Driving Unit, although delivery of the latter was effective with about 2.5 months delay. (d) Construction the Port of Taphan Bin, not completed yet, has proved erratic, slow and has given rise to az*mber of constructional * and other problems. Strict and very close control from the Consultants has been necessary to maintain satisfactory standards of const .-tion, and the final constructional delay is estimated to about 6 to 8 months. 35 (o) Construction of the Push-tow boat and barges also has proved orratic and slow. The delay at present is almost one year compared to the Contract schedule, and the performance of the equipment as tested upon delivery is below the requirements of the Contract. Remedial measures are therefore necessary, this will bring about further delays. IV - TRAFPIC AND OPERATIONS Owing to (i) various disruptions in sub-projects scheduled sequences and to (ii) the overall project delay, traffic has not grown as rapidly as expected. It is in fact too early to assess the actual traffic growth generated by the project, for the main following reasons : 1. Parts of the project are not completed or delivered : Port of Taphan Hin Civil Works, Water Supply connection of the Port of Nakhon Sawan, Port Equipment delivery at both Ports, Pust-tow boat and four barges. This latter item is considered essential to boost the interest of the private sector : waterways will be viable only if. the river craft is modernized. 2. Although the Chao Phraya River,Works were completed in 1985, traffic growth has been hampered by (i) the non-existence of port facilities (the Port of N4khon Sawan vas completed three years after the Chao Phraya, by mid 1988, and still lacksits connection to the public water supply system). 36 (ii) the insufficiency of operation and maintenance activities. This is mostly due to an obvious lack of equipment (dredgers necossary for the project have not been supplied as yet), and to a certain extent to a lack of adapted organizational facilities and trained staff. The administrative red tape makes it difficult to cope with the day-to-day maintenance requirements, particularly during the critical periods. V - FINANCIAL PERFORMANCE OF THE EXECUTING AGEiCY It is too early to deal with this item. VI - F-'"'MIC REEVALUATION It is too early to deal with this item. VII - CONCLUSIONS (a) The Inland Waterways - Phase III - Construction Project is not completed yet, but indications already exist concerning ti) the technical results and (ii) steps to be taken to develop traffic and attract users. (b) This irolect has been marked by significant delays due to various reasons, in particular land acquisition problems and constructional delays. Altogether, it will be completed almost 4 years behind schedule. 37 (c) Tochnically si ng, parts of the project already completed are. satisfactory : the channoels behave better than expected, recurrent dredging requirements are below the estimates, river training works work well. Ports have adequate facilities, and equipment supplied are up to the required standards. Aids to Navigation however will require iuprovements, to be uWde as part of the maintenance activities, and according to tests made under the Nan River Works (see III-2-(c)). Costs have been kept within the estimates. (d) Traffic Srowth so far has been hampered by (i) project delays and disruptions, (ii) delays of delivery of the pilot pushed convoy and (iii) insufficient maintenance. (e) EmphaS 's should now be placed on operation and mintenance activities, particularly as regards river works : recurrent channel dredging (planning, timing, execution ) and related tasks (hydrographic surveys, hydrologic records), maintenance of Aids to Navigation and of river structures. Adequate operation and maintenance procedures should be re-considered, such as the possibility to contract out part of the maintenance tasks, as well as further technical assistance requirements. (f) Maintenance works should be facilitated through a reinforcement of the facilities of the Harbour Department : this includes maintenance centers that could be set up for the-Inland Waterways. (g) Promotion is still badly needed, in particular as regards (i) the conditions of navigation, available draft, etc. (ii) the information systems to be developped and (iii) suitable river craft to be developped. APPENDIX 1 - TAIBLE 1 IMLAND VATEIWAYS PUSE Itt - CONSTIICTION PROJECt ACTUAL AND EXECTED PMIIQC INPLEU 0Ion PROJECT OONSULTANT COTRACToa DATES OF I of out Did Receipt Contract Awhrd Beginning of Vork Completion of by oxpoe COMWtNGtiT NAME NATILONAZIT Wa IAUONITt . _ltt- Actual Expected Actual Etpected Aes1 Expected Actual E_pcted data 1. Chao Phraya BCEOM/CNR French/Thai Italian- Thai JUL 81 Jul 81 MAR 82 MAR 82 NO 82 HU 82 JUL 85 OR A5 A5x. 0 River KECD Thai D.C. 2. Nakhon Sawan .. MAY 86 JUL 82 JAl 87 APR 83 JA 8 MAt 83 APR 8 AUe84 02 Port 3. Nan River N n IIOV 85 JUL 83 JUN6 6 DC 83 JUL 86 JA 84 JM 85 JUL 864 ox 4. Taphan Kin n3T SDI/ TAivWe/Thal, A0 87 WIV 82 MAR 87 APR 83 APR 87 MAY 83 5a 89 FAT 84 as Port AM* J.V. (3) S. Push-Tow Boat Thonburi Thai JAN 86 JUN 83 DEC 86 oT 83 JAN6 7 OV 83 F 889 SEP 84 Ox * Four Barges Shipyard 6. Pile Driving to I;T.S. MY 86 V/A MNR 8 N /A KR 87 MAR87 JUN 88 WAR B8 - Unit Engineerin8 7. River Mainten- o 3 separate Thai OCT 86 N/A MS 8 N/A NA 8S MAR 87 SEP 8 SEP 87 - ance A Survey suppliers or imported Eqpipment goods1 (3) 8. Port Equipment n 4 separate Thai AVG 83 JUL 88 FB 864 JUL 88 MAR 84 JAII 89 AN 84 02 suppliers frr imorted (1) Second Bidding (2) Substantial completion (3) Estimated completion date (item still not completed) APPENDIX 2 - TAtLE 2 INLAND VATUWAYS - NUBS Itt - CONSTRUCrIOX PROJCtC AClUaL AND ORIGINAL ESTIMATES OF tRoJECT COSTS ACTUAL COST CONIRACT ORIGINAL ESTyIATe OF COST WTUAL COST AS A FPRCENEAGR LOCAL FORIGCN TOTAL IN IN LOCAL CONPON. FOREIGN CONP. TOTAL IN ORIGNAL ES?. CoNTRACT (IN DANT) (IN US$) US$ UQUIVALNrT US$ aQIV (tN BA) (It US$) US$ EQUtVALE COST NT I. CHIAO PHRAYA RIVER t) 370,300.000 6,943,000 23,100,000 21,500,000 344,648,000 6,450,000 22,683,000 101.6t 107.5T A! uF NAKHONQ) 4.u.i 114,660,000 1,125,500 5,622,000 5,622,000 172,400,000 1.630,000 8,450,000 3. NAN RIVER(2) 108,018,000 2,824,000 7,060,000 6,157,000 165,660,000 1,624,000 8,121,000 4. PORT OF TAPIIAN MIN (3 2,777,SOO S. PUSH TOW BOAT (2) BARGES 80,00 6. PILt DRIVING iNIT(2) 5,731,300 646,000 871,SOO 871,500 7. RIVER I SURV£t D4UIPKFNT(2) 367,000 367,000 2s6,000o3 143,4 400 8. PORT E4UIPMENT I 9. CONSULTANTS' SERVICES 13,112,000 2,698,000 3,336.600 (1) USING AN EXCHANGE RATE OF I:$ I* 22.9 DARTS FOM ACTUAL COSTS AND CONTRACT ACTDUT AMN W$ I a 20.5 SBATS FOR ORIGINAL ERUNTIM OF C06TS. (2) USING AN EXCHANGE PATE OF US$ 1 - 25.5 DARTS FOR ACTUAL COSTS% OONTRACT AHWDt AND ORICINAL ETIMATrE Of COStS. (3) EXCLUDING CUSTOIS DUTIES AND TAXES ON IIUORTED (0o0s. 40 COMENTS FOM THE BORRowE ATTACHMENT 1 No. 0509/ 000788 Harbour Department, 1278 Yetha Road, Talardnol, SaMphanthawong District, Bangkok 10100, Thailand. 4t February B.B. 2533 (1990) Dear Sir, Subjt THAILAND - Inland Waterways.and Coastal Ports Project (WAN 1889 TH) Project Completion Report We acknowledged the receipt of your letter dated December 20, 1989 with sincere thanks for the project completion report. The Harbour Dept. vould like to draw your attention to the following comments : 1. The survey of water transport volume in the Central Basin area was exhaustively done In 1976 before the project commencement in order to obtain data for preparation of an aprropriate scheme for water transport and a long-term water transport development plan. The study was carried out for 18 months (January 1976 - June 19??) under the sponsorship of the French Government with the purpose to study the cargo volume, types of cargoes tranqported by island waterways, ship's movement, and the types of vehicles used in the inland waterways. Normally our project has to follow the following procedures : 1. Conception 2. Formulation 3. Analysis and Appraisal 4. Approval 5. Implementation 6. Reporting and Feedback 7. Transition to Normal Administration 8. Evaluation Mr. Graham Donaldson, Chief Agriculture, Infrastructure and Human Resources Division, Operations Evaluation Department, IBRD 1818 H. Street N.Y., Washington D.C. 20433, U.S.A. 41 With regard to the Inland Waterways Development Project, it is now on the seventh procedure i.e. transition to normal administration as the subproject for the supply of dredgers has not yet been finished. Upon the completion of the selection of operators for Nakhon Sawan and Taphan Bin Ports and a set of four steel barges and a pusher tug, the project will step into the eighth procedure i.e. evaluation of the project. At this stage, the exhaustive study of data and information will be collected again for the purpose of evaluation. Honc*, it is likely too fast to state in the IBRD#s report that the project appraisal is currently only G% compared with the primary appraisal of 20%. 2. The project implementation was long delay beyond what had been plan, this was due to the conflict between the Thai Ministry of Finance's regulations and the IBRD's guidelines concerning the purchase and commission. To reconcile each case was rather difficult and time consuming. Moreover, there was a lack of continuity of the staff of the Thai Ministry of Finance who supervised the implementation, each change caused somewhat delay on each step to be taken. 3. The Harbour Department has stipulated one important condition of the project which has already been accepted by the Cabinet I.e. the hydrographic situation shall be maintained as follows : - a minimum flow of 300 cubic meters per second above the Chao Phraya dam - a minimum flow of 80 ¢ubic meters per second below the Chao Phray dam In actual situation, the Royal Irrigation Department could not conform to the above-mentioned condition since 1987 as there were the scarcity of rain for 3 years consecutively (1987 - 1989) which resulted in the unequal distribution of water to different sectors i.e. agriculture, electricity and transportation. Moreover, the water demand for agriculture in the dry season had Increased tremendously due to the policy of second croppings and the attractive price of rice in the world mrket. In practice, the agricultural sector always obtain the first priority from tho Government. 42 In view of the problems mentioned above, the channel's depth is unable to be maintained at the level of 1.7 m. as determined in the project. 4. In short, the IBRD's report is acceptable to the Harbour Department and the recommendations emanating from the report will be implemented to improve our efficiency. The proposal for further technical assistance In training of our staff is very much appreciated. We wish to thank you very sincerely for your time and energy devoted to our project. We look forward to having an opportunity to work with the IBRD's staff again-Kindly inform all concerned of our heartfelt gratitude for what they have done for us. With our best regards. Yours sincerely, (Mr. Amphon Tiyabhorn) Director General Barbour Departe 6861 lSnlOn $eti 0 _ ,',',f )- .'' ",':,, tiiti mO|8 mn> v C..w \................ a. 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MY,NA UTTAAI N~ / map,J SS8< XaX 7<@PHelCO>Nr,,> I~~~~HIR"DAA UKHOTHAt A9.$gMulaoW38S: |$ a C17 I : INLAND WATERWAYS AN~~~~~ITSNUL Chao Phrya W AterwAyNPE 4 _ DEPTH OVER 2 METERS ?HETChA2KN _m DEPTH LIMIT 1.7 METERS UTHAN; t is \ / \ Y \ 3 , 15- --CHANGWAT BOUNDARIES 37 INLAN WINTERNATIONAE BOUNDARIE COASTA~NL PORS PROJECTI ,, Rin 0 CHAG5 50 CENTERS DAtOMETERS 13 D .\ --_ _ CAW BOUf DA BIEU INTERNATIONAL -BOUNDARRIA NA SI 51TTH.YA .S is ) 10°, v U_ Km ~ ~ 1Km -- -~~~~~ - NAR~~~~~~~~~kHON NAYOK) \ANCHANA 2' S B BRAIN z ~~~RATCHA SURI SA~A BO C CHON ~~~~~~~~~BURl Gdlf tho Thcnad - , cYNX t a4sJ t I L, A THAILAND INLAND WATERWAYS AND COASTAL PORTS PROJECT Typical Use of Groins, Low Dikes and Bottom Panels t P L A N -, . - -- ~~~~~~~~9 GROINS TO BE SET ON THE RIGHT BANK Son Song Cho ALA ~ LA fl, CUT OFF GROINS AND LOW DIKES GC- 0)) STAFF ei ~~~~~~~~~~~~~~~~~~~~~~~~~~~~GAUGE m Ban To N1, .- r - o Z~~~~~~~~~~~ ChOFUCFeRFISIcS of Channel tco be Dredged* t | ~~~~~~~ t . <- WIDTH A 4Dm. MINIMUM > -r r | s 4 ; ~~~~~~DEPTH: 220s BELOWY LOW WATER [ l~~~~~~~~~~~~~~~~~ A-8: STRAIGHT ALUGNMENT a 720+ | ~~~~~~~~~~~~~~+ B - C CIRCLE ARC R:1730m.+72 | > o C - D: STRAIGHT AtlGNMENT A GROINS TO BSE SET | tCHDIKE AND GROINS ELEVATION T (17.50BE o ON THE LEFt BAN2K 21~ ~ ~ ~~~~~~~~I0 O t10 0 0 31S 400 t METERS ~ ~ ~ ~ ~~A6 STAGH L13MN 20 2 a. M.1 M SC CICL AR t13m20m LONGITUDINAL~~~~~~~~~~~~L PR)FL vDSRIH LGMN El ,4CONSTOBESETS E T1fm 1.0 CRITICAL BED ELEVATION FOR .7 DEPTH ON THE LEFT DRDED._ANKlo3 REGD 10 D . 2O _ 20 M.L M-S- __2e0 IS 15 be . ._ _ _ e~~~~~~~~~~