Document of

The World Bank FILP COG/

FOR OFFICIAL USE ONLY

Report No. 4070-CV

CAPE VERDE

PRAIA PORT PROJECT

STAFF APPRAISAL REPORT

January 10, 1983

West Africa Project DepartmentTransportation Division II

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit: Cape Verde Escudos (CVEsc)US$1 CVEsc 60.0CVEsc million = US$16,666.66

FISCAL YEAR

January - December

SYSTEM OF WEIGHTS AND MEASURES: METRIC

Metric US Equivalent

I meter (m) = 3.28 feet (ft.)

1 square meter (mi) = 10.76 square feet (sq.ft.)1 kilometer (km) = 0.62 mile (mi.)I square kilometer (km2) = 0.39 square mile (sq.mi.)1 hectare (ha) 2.47 acres1 metric ton (t) = 2,205 pounds (lb.)

ABBREVIATIONS AND ACRONYMS

AfDB - African Development BankBADEA - Arab Bank for Economic Development in AfricaEIB - European Investment BankEMPA - Empresa Publica de AbastecimentoENAPOR - Empresa Nacional de Administracao dos PortosFRG - Federal Republic of GermanyJAP - Junta Autonoma dos PortosMLW - Mean Low Water

MTC - Ministry of Transport and CommunicationsTACV - Transportes Aereos de Cabo Verde

FOR OFFICIAL USE ONLY

CAPE VERDE

PRAIA PORT PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. INTRODUCTION ............................................. 1

II. THE TRANSPORT SECTOR ..................................... 2

A. Ports and Maritime Transport .. 2B. Roads ................................................ 3C. Air Transport ........................................ 3

D. Transport Policy and Planning .. 3

III. THE PORT SUB-SECTOR . . .................................... 4A. The Port System . . .................................... 4B. Port Organization . . .................................. 4C. Fixed Assets and Accounting System .................. . 5D. Staffing and Training . . . 6E. Port Facilities and Operations . . . 6

IV. THE PROJECT .............................................. 8A. Project Objectives ................................... 8B. Project Description .................................. 9C. Project Cost Estimate .. 10D. Project Financing and Disbursement . . 12E. Project Implementation .. 13F. Impact on Environment and Employment . . 14

V. TRAFFIC ............................................... 14

A. Recent Trends ........................................ 14B. Forecasts ............................................ 15

VI. ECONOMIC EVALUATION ...................................... 17A. Port of Praia ........................................ 17B. Cargo Handling Equipment ............................. 20C. Overall Rate of Return ............................... 20

VII. FINANCIAL EVALUATION ..................................... 20A. Past and Present Financial Position .................. 20B. Tariffs and Costing Systems .......................... 21C. Capitalization of the Port Enterprise ................ 22

This report was prepared by Messrs. A. Fateen (Senior Port Engineer),P. Blackshaw (Economist), A.H. Clark (Financial Analyst, Consultant) andA. Covindassamy (Financial Analyst) on the basis of an appraisal missionin February, 1982.

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Table of Contents (Continued)

D. Financial Forecasts .................................. 23E. Insurance ............................................ 28

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS . . 28

ANNEXES

1. Organization of MTC - Organization of ENAPOR2. Decree - Law No. 58/82 of June 19, 19823. Existing Port Facilities4. Project Description5. Project Implementation Schedule6. Assumptions for Financial Projections7. Documents Kept in Project File

SUPPORTING TABLES

1. Population and Area of Individual Islands, 1960-19802. Road Network3. Airport Facilities4. Domestic Air Traffic5. Transport Sector Priorilies for Four Year Plan, 1982-19856. Details of Project Cost Estimate7. Estimated Schedule of Credit Disbursement8. Traffic - All JAP Ports, 19809. Traffic - Ports of Praia and Porto Grande, 1976 - 1981

10. Cargo Traffic - Praia, Actual and Forecast, 1976-2006I1. Cargo Traffic Forecasts for JAP Ports, 1982-198612. Lighterage Costs Avoided by Project13. Ship Time Savings14. Summary of Benefits and Costs, Praia15. Economic Evaluation of Equipment16. JAP's Provisional Revised Balance Sheet as of December 31, 198017. JAP's Receipts and Payment Accounts for Years Ended March 3118. Traffic Statistics for ;NAPOR19. Projected Income Statemients, FY1980-199020. Projected Balance Sheets, FY1980-199021. Projected Sources and Applications of Funds, FY1981-1990

MAPS

IBRD - 16104 - Republic of Cape Verde

IBRD - 16440 - Praia Port Layout

IBRD - 16746 - Praia Port Project

CAPE VERDE

PRAIA PORT PROJECT

STAFF APPRAISAL REPORT

I. INTRODUCTION

1.01 Cape Verde consists of a roughly horseshoe-shaped collection often islands and five islets about 450 km off the coast of West Africa(Map IBRD 16104). Nine of the islands are inhabited. The totalpopulation is 296,000 (1980 estimate), of which about 146,000 live onSantiago, on which is the capital, Praia (Table 1). All but three of theislands are mountainous, with a steep, rocky topography and volcanicsoils. The topography and climate combine to make agriculture difficultand unproductive. Agriculture is mainly small-holder subsistencefarming. Of the country's total area (400,000 ha), about 60,000 ha arecultivated, but only about 1,800 ha are irrigated, which makes theeconomy and the domestic food supply extremely dependent on low anderratic rainfall, necessitating the importation of foodstuffs on aregular basis. GNP per capita is tentatively estimated at US$300 in1981.

1.02 Being an island nation, Cape Verde depends on interisland ship-ping in the way other nations depend on highways; ships carry domesticgoods and passengers between islands and handle the vital imports and thefew exports. Thus adequate ports on aLl islands are essential.

1.03 The principal port is Porto Grande at Mindelo on Sao Vicente.The second deepwater port is at Praia which, constructed in 1978 by thePortuguese Government, is deteriorating rapidly. Most of the otherislands have small harbors protected from the prevailing northeast windsbut generally in bad condition with very shallow water alongside smallquays, which necessitates lighterage of cargo. All the ports weremanaged until September 1, 1982, by the Junta Autonoma dos Portos(JAP) a public agency under the Ministry of Transport andCommunications. The Directorate of Marine and Ports runs a smallmaritime school for deck and engineer officers at its headquarters inMindelo.

1.04 The Government gives transport high priority in its developmentplans with special emphasis on replacing the collapsing deepwater berths

1/ All ports are now managed by Empresa Nacional de Administracao dosPortos (ENAPOR), a public enterprise under the Minister of Transport andCommunications.

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at Praia and improving interisland shipping. After assessing the

country's needs, it is proposed, in line with the Government'sdevelopment strategy, to inaugurate lending to the country with a Praiaport rehabilitation project that will make an important and immediatecontribution to the economy of Cape Verde.

1.05 At the request of the Government, the Bank Group approved anadvance from the Project Preparation Facility in December 1980, in anamount of US$100,000 for consulting services to (a) prepare a master planfor the port; (b) collect complementary economic and financial data; and(c) assist in reorganizing JAP into a financially viable autonomousgovernment enterprise. A second advance of US$100,000 was granted inFebruary 1982, to finance the completion of the preparation of tenderdocuments.

1.06 The proposed project, as appraised, is a suitable vehicle forBank Group lending. It will establish the necessary infrastructure inPraia port, improve port operation, management and accounting systems,and provide training in ports and related sectors.

II. THE TRANSPORT SECTOR

A. Ports and Maritime Transport

2.01 Cape Verde's foreign trade depends almost entirely on maritimetransport most of which is served through the ports of Porto Grande atMindelo on Sao Vincente and Praia on Santiago, from which goods are dis-tributed to other islands by interisland shipping services. Minor portterminal facilities exist for the nation's internal trade on all of theother inhabited is'Lands. The ports subsector is discussed in detail inChapter III.

2.02 The national shipping line ARCAVERDE carries approximately one-third of Cape Verde's foreign trade and provides virtually all inter-island services. There are some private operators engaged in the inter-island trade but t'hese are of minor significance.

2.03 ARCAVERDE has done its best during the six years since independ-ence to meet basic interisland and ocean transport needs within severeconstraints, particularly over-aged and inappropriate vessels, and lowpassenger and freight volume to some islands, which makes it difficult tooffer a frequent and economical service. ARCAVERDE's fleet providesdaily shuttle service between each of the two main islands and theirimmediate neighboring islands, a scheduled passenger/freight ferryservice stopping on all islands, and freight service on request to servedomestic needs as well as to bring in imports. In addition, one of itsships has been fitted for petroleum transport and has been leased to theShell Company, which distributes petroleum to the various islands.

2.04 The Federal Republ:Lc of Germany (FRG) has recently provided twonew vessels to replace the ones operating the shuttle service, and has

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agreed in principle with the Cape Verde Government to finance a replace-ment ferry for the interisland service; an FRG financed study to deter-mine the most appropriate type of vessel is in progress. Otherwise, themajor need is to replace the vessel currently used for petroleum trans-port, which does not meet insurance company specifications. ARCAVERDE isin the process of buying a small (200 - 300 DWT) vessel to distributefuel in barrels to the smaller islands. The draft Four Year DevelopmentPlan (1982-85) includes provision for a petroleum tanker for bulk distri-bution to the larger islands, but this needs to be preceded by feasibi-lity and design studies. Furthermore, a decision is required on whetherARCAVERDE or the petroleum companies should be responsible for the acqui-sition and operation of such a vessel.

B. Roads

2.05 There are some 760 km of roads, of which about 300 km are ofcobblestone, and most of the remainder are earth roads or tracks. Roadsare particularly important on the rugged islands, and the largest systemsare found on Santiago and Santo Antao (Table 2). There are no roads onBoa Vista or Maio, but these islands are flat and sparsely populated.There are some 7,000 motor vehicles, mainly on Santiago. Private carsand pick-ups predominate, with some small trucks and light buses.

C. Air Transport

2.06 Cape Verde's principal external air link is via Amilcar CabralInternational Airport on Sal Island, the only airport equipped for nightlanding. Capable of accomodating the largest international jets, itserves about 30 international flights weekly. The capital, Praia, islinked to Dakar by three flights per week by small 48-passengeraircraft. Seven of the Cape Verde islands (Table 3) are linked byTransportes Aereos de Cabo Verde (TACV), a wholly government-owned firmoperating a small fleet of aircraft. Passenger traffic has grown by 9%per year since 1967, reaching 93,750 in 1980 (Table 4) and flights areoften full, with average load factors of over 80% on the principalroutes. Additional services will be needed in the near future, but themost economic means of providing these services need to be determined.Some fleet replacement and expansion may be warranted, but utilization ofthe present fleet (in terms of hours per day) could also be improved.The installation of night landing facilities at Praia (currently inprogress) will help in this regard.

D. Transport Policy and Planning

2.07 The Ministry of Transport and Communications (MTC) is respon-sible for transport planning and policy, including overall responsibilityof the transport parastatals ARCAVERDE, ENAPOR, and TACV (Annex 1).MTC's competent but small staff is mainly occupied with day to dayadministration, with little time to devote to longer term planning

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issues. Consultants recently completed an initial screening of possibleinvestments in the sector, 1/ (Table 5) but this needs to be followed upby a more detailed analysis to develop a long-term strategy for thesector, determine the future roles of the parastatals ARCAVERDE and TACV,and identify the most urgently needed projects. The project provides fortechnical assistance to MTC to address these issues, and for follow-upproject preparation, under terms and conditions satisfactory to theAssociation.

III. THE PORT SUB-SECTOR

A. The Port System

3.01 The public port system consists of: (a) two deepwater ports,Porto Grande at Mindelo and Praia (the project port); and (b) about 30small ports or landing places on the inhabited islands (Map IBRD15079). All cargo imported into or exported from Cape Verde by sea ishandled at Porto Grande or Praia and distributed to other islands mostlyby ARCAVERDE's interisland fleet (para. 2.03). The exception is SalIsland whose three ports are privately owned and operated, two forexporting salt and the third for importing aviation fuel. However,interisland shipping is allowed to use these three ports for distributionof cargo imported through Pcrto Grande or Praia.

B, Port Organization

3.02 Up to May 7, 1982 all the ports in Cape Verde (with theexception of those on Sal Island) were operated by the Junta Autonoma dosPortos (JAP) with headquarters at Mindelo. The law that governed the JAPwas a Provincial Government Decree of November 26, 1974, No. 22/74. Uponindependence, all laws were continued "transitorially" by bulletin No. 1of the Republic of Cape Verde of July 5, 1975. Notwithstanding its name,JAP had no autonomy. The provisions in the Decree calling for a GeneralCouncil and an Administrative Commission were inoperative, and managementwas effected directly by the Minister of Transport and Communicationsthrough the Director of Marine and Ports (also headquartered at Mindelo)and the Director of Ports at JAP headquarters. Operations at the prin-cipal ports were the responsibility of Delegates, or Port Managers, underthe Director of Ports. JAP had a permanent staff of about 200 andemployed about 500 temporary labor for cargo handling. Until January 1,1981, the account.Lng system was on a budgetary cash basis.

3.03 On May 7, 1982, the Government issued a law creating a new portenterprise, Empresa Nacional De Administracao Dos Portos (ENAPOR).ENAPOR's organizal:ion chart is given in Annex 1. ENAPOR is a commercial

1/ Atree/Getram, Republique du Cap Vert: Preparation du PlanQuadriennal, Esquisse de Programmation dans le Secteur des Transports,November 1981.

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port enterprise, endowed with all the port assets, including infra-structure, and with sufficient autonomy to compel management to beresponsible for efficient and financially viable operations, with thenecessary powers and duties to exercise those responsibilities, subjectto necessary overriding control by the Minister of Transport andCommunications. This law is based upon the provisions of Decree-Law No.11(78 of January 18, 1978, "Bases Gerais das Empresas Publicas" (GeneralBases of Public Enterprises). The new law, a summary of which is givenin Annex 2, is satisfactory.

C. Fixed Assets and Accounting Systems

3.04 During 1980, JAP, with the assistance of a financial expertseconded to Cape Verde by Portugal, prepared a complete inventory of allthe fixed assets owned or operated by it (including Praia Port as it nowstands), as of December 31, 1980. An opening balance sheet as ofDecember 31, 1980, which is not audited, has been prepared includingfixed assets for cargo handling.

3.05 The Portuguese financial expert has also designed and installeda basic financial accounting system, operating from January 1, 1981, andheld training classes on the new system for the small accounting staff.This new accounting system will be continued and developed, as it isfeasible under the new legal status of ENAPOR. Technical assistance isprovided under the proposed project for that purpose (Annex 4, para.C(d)). Agreement was reached with the Government during negotiationsthat it will require ENAPOR to keep its accounts according to standardcommercial accounting principles from FY1983 onward.

3.06 There is no local auditing capability in Cape Verde and nointernational auditing firms have offices there. The Government hascreated an audit unit ultimately to be responsible for auditingGovernment enterprises, but it is not yet operational and it will taketime to recruit and train staff. The Bank of Cape Verde and theGovernment have no objection to a foreign firm being appointed asexternal auditors to audit the accounts of ENAPOR. Confirmation wasobtained during negotiations that an independent firm of auditors,acceptable to the Association, be so appointed and that audited accounts,together with the auditors' report thereon be sent to the Association,commencing with FY1983. From FY1983 onward, audited accounts will besubmitted within six months of the end of the financial year. Were itnot for the Bank Group's involvement in this project, the port enterprisewould probably not incur the costs of external audit, most of which willinvolve scarce foreign exchange. It has been agreed withthe Government to include these costs for the years 1983-1985 in theproposed project, the Association financing the foreign exchange costs(para 4.03 (f)).

D. Staffing and Training

3.07 The port enterprise is seriously short of trained personnel formanagement, operations and maintenance. Provision is made in the pro-

posed project for training of existing and necessary additional staff inthese areas. The country, as a whole, suffers from a lack of middle andlower echelon trained personnel, but it has a valuable pool of potentialtrainees now graduating from its high schools. This should be borne in

mind when considering the additional personnel to be recruited andtrained under the various technical assistance programs included in theproject.

E. Port Facilities and Operations

3.08 The port enterprise is responsible for: (a) ship berth alloca-tion; (b) hiring stevedoring and shore-handling labor; (c) providingcargo-handling equipment; (d) cargo handling operation; (e) providingtransit sheds and other storage facilities within the port area; (f)maintenance of port facilities and equipment; and (g) security. Pilotageis provided only at Porto Grande.

Porto Grande (Mindelo)

3.09 The berths at Porto Grande are constructed in the shape of areversed F, built out from the shore. Detailed information is given inAnnex 3. The port: handles the present international and interislandtraffic without excessive delays to vessels but the long narrow fingerpier system makes cargo handling cumbersome. The narrowness of the piersinhibits efficient: operations since interisland domestic cargoes andpassengers mingle freely with customs-controlled imported cargoes on the15 m wide apron of the main pier. All imported general cargo must behauled some 500-600 m to the port's three transit sheds. Considerablequantitites of bu:Lk and bagged cargo require some 10,000 truck loads peryear for their evacuation. This adds to operating difficulties. CapeVerde's only grain silo and flour mill are located in Mindelo and some75% of the imported grain arriving in bulk is bagged and re-shipped tothe other islands in smaller vessels.

3.10 The port's cargo handling equipment and maintenance facilities,which are owned arid operated by the port enterprise, are obsolete and inbad state of repair. The project includes modern cargo-handling equip-ment and assistance in the introduction of modern cargo-handling proce-dures and equipment maintenance programs, together with the necessarytraining. These will improve the efficiency of port operations to theextent possible within the constraints of the port layout.

3.11 Mindelo will serve as Cape Verde's main fishing center and a6,000 ton capacity cold stcrage facility has just been completed immedia-tely outside the port area, financed by a Dutch grant of US$4.5 millionequivalent. Fishing boats use a shallow draft marginal quay and do notinterfere with general cargo operations. A ship repair yard, initiallyto handle the repair of vessels of up to 6,500 DWT and later the cons-

truction of small vessels, is under construction, also outside the portarea. The estimated construction cost is US$38 million equivalent co-financed by EIB, AfDB, Portuguese Banks and the Cape Verde Government,participating with US$5, 13, 12 and 8 million respectively. ThePortuguese shipyard LISNAVE will manage and operate the yard. No inter-ference with general cargo operations is expected from these devel-opments, which will, however, promote the growth of traffic through theport.

Port of Praia

3.12 The existing port facilities (Map IBRD 16440) comprise two deep-water berths constructed at right angle: the outer berth based upon theport's protective breakwater is 210 m long and 9.5 m deep; and the innermarginal berth is 310 m long and 7.5 m deep at MLW.I' There are twotransit sheds of 2,400 m2 each. The port enterprise owns and operatesthe cargo-handling equiment and is responsible for its repair and mainte-nance. The port has no electricity or water supply. Water and bunkersupplies, to the extent available, are brought by trucks to the port area(details in Annex 3).

3.13 Construction of the above berths started in 1975 by thePortuguese Government and was completed in 1978. The reinforced concretecaissons proved to be underdesigned and many caissons were damaged duringand after placing. Deterioration of the structure is continuing.Analysis of existing data and available investigations indicate that,even if some of the caissons are in better shape than others and could beconsidered safe for some years, their general state of repair is suchthat the existing structure is unreliable. Total collapse of someportions of the wharf could occur at any time.

3.14 Operations at the port of Praia are severely hampered by: (a)partially old and obsolete, or new but unsuitable, cargo handling equip-ment; (b) lack of spare parts, workshop and repair facilities and equip-ment; (c) untrained port labor, and (d) lack of acceptable port operatingtechniques. These constraints contribute to inefficient handling, highincidence of cargo damage and pilferage.

3.15 The berthing facilities are inefficiently utilized. Largebatches of timber and construction equipment clutter the aprons causingdifficulties in unloading and loading of cargo from and onto vessels.There is no customs fence and control by customs officers is inefficient.The two available transit sheds for general cargo are badly stacked andsome cargo damaged and, in the absence of long-term storage facilities,they are also used as warehouses. Customs cargo has to be trucked to acustoms zone in the old port area. Prevailing customs regulations do notpermit the removal of abandoned cargo prior to payment of all duties;

11 Depth of water as given in this report is with reference to MLW.Tide range is about 1.4 m.

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cargo may remain in the sheds for 12 months before being auctioned bycustoms.

3.16 Empresa Publica de Abastecimento (EMPA), a state enterprise,handles the import of 90% of the nation's food and construction material

as well as all exports. EMPA's bulk or bagged imports of maize and ce-ment are unloaded directly from ship to truck and transported to its ownstores adjacent to the new port area. Its other cargoes are treated asgeneral imports and transferred to the port's transit sheds. EMPA's

operations in the port area seem efficient.

3.17 The port works two *short shifts 0700 to 1300 and 1400 to 1900hours, seven days a week. The port has 40 officials but employs no per-manent labor. Shore labor and stevedores are hired on a daily basis andare paid by the hour with no bonus for extra output. Considering thelack of adequate equipment and fairly unorganized conditions, labor workshard and outputs are relatively high achieving an average of 15 t pergang-hour for general cargo.

Minor Ports

3.18 With the exception of Porto Novo on Santo Antao, which was builtin 1959 mainly to service the ferry boat to Porto Grande, all the minorports are in varying stages of decay. The situation seriously affectsARCAVERDE's interisland services and improvements at some of the minorports are being considered under the Government's current developmentplan (Table 5).

IV. THE PROJECT

A. Project Objectives

4.01 The main objectives of the proposed project are:

(a) to ensure continued economic benefits from Praia port byreconstructinLg its rapidly deteriorating deep-water berthsand providing it with necessary support facilities;

(b) to increase the efficiency of port operations at Praia andPorto Grande by providing modern cargo handling and work-shop equipment as well as technical assistance, includingtraining;

(c) to enhance the training possibilities of the maritimesector by establishing a training center at Mindelo andproviding it with appropriate equipment and technicalassistance; and

(d) to improve transport planning through a national transportst tidy.

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4.02 The project components have been prepared on the basis of de-tailed analysis of existing facilities and operations and the immediatefuture requirements. The new facilities and equipment will be suitablefor modern port operations and cargo handling techniques, and togetherwith the proposed training program, will increase cargo handlingproductivity.

B. Project Description

4.03 The proposed project includes (Map IBRD 16746):

Part A:

(a) reconstruction of 520 m deep water berth of concreteblocks (210 m long and 9.5 m deep, and 310 m long and 7.5deep) (para. 3.13); and

(b) rehabilitation and reinforcement of outside protection tothe above mentioned 210 m long berth;

Part B:

(c) construction of support facilities (a transit shed,administrative building, paved areas, access road, customsfence, electricity and water supply, etc.);

(d) construction of a marginal berth (75 m long and 5.0 mdeep) for fishing and interisland vessels; and

(e) provision of cargo handling and workshop equipment forPraia Port and Porto Grande, and a weighbridge for Praia;

Part C:

(f) technical assistance to ENAPOR for training, portoperation, management and external auditing; and

(g) technical assistance to MTC to identify investmentpriorities, strengthen transport related institutions, andprepare high priority projects in the sector (para. 2.07);

Part D:

(h) provision of a building and training equipment for themaritime training center at Mindelo as well as technicalassistance for the first five years of the center'soperations.

Details of project description are given in Annex 4.

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4.04 During negotiations, project components were discussed and

agreed upon with the Governmenl:.

C. Project Cost Estimate

4.05 The total cost of the project is estimated at US$31.7 million

equivalent of which IJS$24.7 mi:Llion (78%) is in foreign currency.

Summary of the cost estimate is given below and details are given in

Table 6.

CAPE VERDEPRAIA PORT PROJECT

Summary of Project Cost -

Local Foreign Total Local Foreign Total % of TotalCVEsc million US$ million equivalent Base Cost

Part A:

1. Reconstruction of deep-water berths andoutside protection 110.40 579.60 690.00 1.84 9.66 11.50 45

2. Supervision 13.20 30.00 43.20 0.22 0.50 0.72 3

Part B:

3. Supporting facilities 43.80 92.40 136.20 0.73 1.54 2.27 94. Marginal berth 19.80 40.20 60.00 0.332/ 0.67 1.00 45. Cargo handling equipment 43.20 131.40 174.60 0.72 2.19 2.91 12

6. Supervision 3.60 6.00 9.60 0.06 0.10 0.16 1

Part C:

7. Technical assistanceto ENAPOR 3/ 9.00 51.00 60.00 0.15 0.85 1.00 4

8. Technical assistanceto MTC 6.00 36.00 42.00 0.10 0.60 0.70 3

Part D:

9. Maritime Training Center:- Building 54.00 18.00 72.00 0.90 0.30 1.20 5- Equipment 3.00 69.60 72.60 0.05 1.16 1.21 5- Technical assistance 33.60 97.20 130.80 0.56 1.62 2.18 9

Total Base Cost 4/ 339.00 1,152.00 1,491.00 5.65 19.20 24.85 100

10. Physical contingency 16.80 86.40 103.20 0.28 1.44 1.72 7

11. Price contingency 64.20 243.60 307.80 1.07 4.06 5.13 21Total contingencies 81.00 330.00 411.00 1.35 5.50 6.85 28

Total Project Cost 420.00 1,482.00 1,902.00 7.00 24.70 31.70 128

I/ No taxes included. The project is exempted of taxes except for customs duties on cargohandling equipment.

2/ Of which US$0.60 million equivalent is for customs duties.

31 Includes project preparation and technical assistance for training, port operation,management and external auditing.

4/ As of December 31, 1982 (without contingencies).

01/83

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4.06 During negotiations, the above cost estimate was discussed andagreed upon with the Government.

4.07 Cost estimates for civil works and equipment reflect December1982 prices and are based on international prices for similar works andequipment as well as recently executed projects in West Africa. Customsduties will be levied only cn imported cargo handling equipment.Estimates for technical assistance are based on an average of US$10,000per man-month. Physical contingencies are 10% on civil works and 5% onequipment. Price contingencies are: (a) 12% annually on localexpenditure; and (b) 8%, 7.5%, 7%, 6% and 6% for 1983, 1984, 1985, 1986and 1987 respectively on foreign expenditure.

D. Project Financing and Disbursement

4.08 Based on an agreement reached between the Governments of CapeVerde and Portugal. in 1981, the latter will provide a contribution,estimated at US$ 8.0 million equivalent, to cover 50% of the total costof Part A of the project (including corresponding supervision cost).BADEA will finance US$2.0 million equivalent to cover 12.5% of the totalcost of Part A as well as the total cost of Part B, estimated atUS$8.0 million equivalent (including corresponding supervision cost butexcluding customs duties on cargo handling equipment). Norway willfinance 100% of the total cost of equipment and technical assistance forpart D, estimated at US$4.0 million equivalent. IDA's contribution ofUS$7.2 million equivalent wtll cover 35% of the total cost of Part A aswell as the foreign exchange cost of Part C. ENAPOR will provideUS$1.2 million in local currency to cover (a) the remaining 2.5% of thetotal cost of Parti A; (b) the local cost of technical assistance forENAPOR under Part C; and (c) customs duties on cargo handlingequipment. The Government will provide US$1.3 million equivalent tocover the cost of the building for the training center (Part D) and thelocal costs of the technical assistance to MTC under Part C.

4.09 The financing plan will be as follows:

US$ million equivalentGovernment of

Cape Verde ENAPOR Portugal BADEA Norway IDA Total

Part A -- 0.5 8.0 2.0 -- 5.5 16.0Part B -- 0.6 -- 8.0 -- -- 8.6Part C 0.1 0.1 -- -- -- 1.7 1.9Part D 1.2 -- -- -- 4.0 -- 5.2

Total 1.3 1.2 8.0 10.0 4.0 7.2 31.7

It is recommended that at the time of Credit signing, the Associationenter into an agreement with Portugal defining the arrangements for co-financing, as well as the latter's commitments to the project. A draftagreement has been reached between the Association and Portugal. It isalso recommended that as a condition of Credit effectiveness: (a) a

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financing agreement between the Government of Cape Verde and BADEA; and(b) a subsidiary loan agreement between the Government and ENAPOR shallhave become effective.

4.10 Disbursement of funds from the Credit will be on the followingbasis:

(a) 35% of total expenditures for Part A (US$5.5 millionequivalent); and

(b) 100% of the foreign exchange costs for Part C (US$1.7million equivalent).

Estimated schedule of Credit disbursement is given in Table 7. Theproposed project is the first Bank Group operation in Cape Verde.Consequently historical disbursement data from previous operations inthis country does not exist. The proposed disbursement schedule differsfrom the profile for West Africa's past port projects mainly because anadvance payment of 20% of civil works' cost will be paid to the con-tractor upon contract signature. In addition the project is simple andno unusual problems are expected, especially as regards soil condi-tions. The 5-1/4 year period for credit disbursement compares reasonablywith the previously experienced periods in West Africa port projects of 6years average.

E. Project Implementation

4.11 The project was prepared by qualified consultants financed bytwo advances, totalling US$200,000, from the Project Preparation Facility(para. 1.05). Consultants acceptable to the Association have preparedtender documents, which have been reviewed by the Government, theAssociation and other co-financiers. Tendering is scheduled forMarch 1983.

4.12 The Ministry of Transport and Communications of Cape Verde isresponsible for project implementation, except for technical assistanceunder Part C (f) of the project, for which ENAPOR will be theimplementing agency. An agreement was reached with the Government duringnegotiations that all civil works construction and equipment procurementwill be supervised by independant consultants acceptable to theAssociation, under terms of reference satisfactory to the Association.

4.13 An agreement was reached with the Government during negotiationsthat the contract for Part A of the project will be awarded on the basisof international competitive bidding in accordance with the Association'sGuidelines for Procurement. Cape Verde and Portugal will jointly signthe contract, since Portugal considers it has a joint responsibility,under the independence agreement, for the satisfactory completion of thispart of the project. Thus, only as regards this part of the project, theconsultants will report to a Project Management Unit consisting ofrepresentatives from Cape Verde and Portugal, headed by a Cape Verdean

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designated by Cape Verde. Contracts for Part B of the project will beawarded in accordance with BADEA's procedures.

4.14 Construction is expected to start in late 1983 and be completedby mid 1987. The critical path program for project implementation hasbeen discussed and agreed upon with the Government. Barring any unfore-seen difficulty, project implementation schedule would be as shown inAnnex 5.

4.15 The Association will, help the Government prepare terms of refer-ence for: (a) technical assistance and training as provided under Part Cof the project; and (b) supervision as provided under Parts A and B ofthe project. Agreements were reached during negotiations that ENAPORwill employ, on terms and conditions satisfactory to the Association:(a) a management consultant by July 1, 1983; and (b) a port operationsexpert and a workshop expert by January 1, 1984. Responsibilities of theabove experts and consultants are outlined in Section C of Annex 4.

F. Impact on Environment and Employment

4.16 No signif:Lcant environmental impact is expected in the city ofPraia or adjacent water areas as a result of the project since all pro-posed improvements are confined to changes in existing facilities thathave operated in the same location for several years.

4.17 Some 300 skilled and unskilled labor will be required during theimplementation of i:he civil works. Training will improve skills andenhance job satisfaction of about 400 shore-handling labor and stevedoresand of management, operating and accounting staff in the ports and inENAPOR's headquarters at Mindelo. No net decline in employment isanticipated as a result of the project, since the increase inproductivity from replacing obsolete equipment is expected to be matchedby an increase in traffic by the time the project is completed.

V. TRAFFIC

A. Recent Trends

5.01 All foreign trade in general cargo (mostly imports) passesthrough Porto Grande and Praia. These two ports handle over 80% ofinterisland trade (Table 8). Traffic since 1976 at these two ports isshown in Table 9 and summarized below. For the two ports combined, totalforeign trade has increased by approximately 7% per year since 1976.Interisland traffic grew rapidly between 1976 and 1978, but declinedthereafter, mainly reflecting the fact that completion of the deep-waterport at Praia enabled that port to take more imports directly, instead oftranshipping through Porto Grande, and partly reflecting the fact thatthe satellite islands are losing population to Sao Vicente and Santiago.

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Summary of Port Traffic, Porto Grande and Praia, 1976-1981('000 tons)

1976 1977 1978 1979 1980 1981Porto Grande

Imports 75.4 96.2 82.4 61.4 84.2 81.2Exports 2.5 7.2 7.1 4.8 13.8 3.5Interisland cargo

Loaded 56.1 55.0 73.3 39.8 55.8 30.3Unloaded 7.7 7.0 8.6 10.1 8.9 8.8Total 141.7 165.4 171.4 116.1 162.7 123.8

Praia

Imports 46.0 51.3 68.7 71.8 89.5 88.1Exports 1.8 1.4 1.0 0.7 0.9 5.4Interisland cargo

Loaded 8.0 10.6 12.2 14.4 18.1 17.9Unloaded 24.1 24.3 27.1 15.3 22.1 15.1Total 79.9 87.6 109.0 102.2 130.6 126.5

Porto Grande and Praia

Foreign 125.7 156.1 159.2 138.7 188.4 178.2Interisland 95.9 96.9 121.2 79.6 104.9 72.1

Total 221.6 253.0 280.4 218.3 293.3 250.3

5.02 Looking at the two ports separately, direct imports at Praia,which were growing rapidly even before completion of the new port in1978, have continued to grow,.and Praia now accounts for 52% of the coun-try's foreign sea trade, compared with 38% in 1976. Imports at PortoGrande, on the other hand, have levelled off since the new port of Praiacame into operation. Exports at both ports are insignificant. Inter-island cargo loaded at Porto Grande and unloaded at Praia has decreasedas direct imports to Praia increased. At the same time, Praia'simportance as a source of interisland cargo has increased (from 12,000tons in 1978 to 18,000 tons in 1981). However, Porto Grande remains theprincipal port for loading interisland cargo, partly because it has thecountry's only flour mill, and also because of the greater population tobe served in its satellite islands (about 66,000 compared with about42,000 for Praia's satellite islands).

B. Forecasts

5.03 The traffic forecasts are detailed in Tables 10 and 11, andsummarized below. Further details are available in the project file.

5.04 Praia international trade consists primarily of imports of food,construction materials, consumer goods, and fuel. Imports of corn are

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projected to grow from 22,000 t in 1980 to 27,500 t by 1981 while somediversion from Porto Grande continues, and while the bulk storage silobeing constructed by the Dutch is being filled. Thereafter, corn importsare projected to grow more slowly, at 1% per year. Cement imports areprojected to grow al: 4% per year, which is the rate of growth inconstruction as pro jected in the last Bank economic report. Fuel andother general cargo imports are projected to grow at 5% per year, aboutthe same as the projected growth in real GDP.

Summary of Cargo Forecasts, All JAP Ports, 1982 - 1986('000 tons)

Actual Forecast1981 1982 1983 1984 1985 1986

PraiaImports 88.1 94.0 98.8 102.8 106.9 111.0Exports 5.4 2.0 2.0 2.0 6.5 6.5InterislandLoaded 17.9 18.4 19.0 19.6 25.1 20.8Unloaded 15.1 15.4 15.7 16.0 21.3 21.7

Total 126.5 129.8 135.5 140.4 154.8 160.0

Porto GrandeImports 81.2 88.2 90.3 92.5 94.9 98.3Exports 3.6 7.0 10.0 12.0 14.0 16.0Inter islandLoaded 30.3 30.9 31.5 32.2 32.8 33.5Unloaded 8.8 9.2 12.6 15.0 17.4 19.8

Total 123.9 135.3 144.4 152.6 159.1 167.6

Minor PortsInterislandLoaded 5.3 5.4 5.5 5.6 5.7 5.9Unloaded 47.9 48.9 49.8 50.8 51.8 52.9

53.2 54.3 55.3 56.4 57.5 58.8

5.05 Exports from Praia have been negligible, averaging less than2,000 tons per year. However, territorial waters are rich in fishingresources and a development program for the fishing industry is under-way. BADEA, Abu-Dhabi Fund, and the Saudi Fund have agreed to financemodernization and expansion of the fishing fleet, and construction of acold storage and ice making plant at Praia. In addition to promotingindigenous fishing, the Government also proposes to exploit the potentialby allowing foreign boats (with some Cape Verdean manning) to fish interritorial waters. As a result of these initiatives, it is expectedthat 5,000 tons of fish will be landed at Praia by 1986, resulting inexports of some 4,500 tons of frozen fish and fish products. Furthergrowth in the fish catch is envisaged as detailed in Table 10. Otherexports are expected to cont-Lnue to be negligible, at about 2,000 tonsper year.

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5.06 Interisland cargo unloaded at Praia has diminished since Praiastarted taking more imports directly in 1979. This diversion effect isnow largely complete, and interisland general cargo unloaded may now beexpected to grow slowly (2% per year from its 1981 figure of 15,100tons). The growth would primarily reflect flour shipped from CapeVerde's only mill at Mindelo. Interisland cargo loaded at Praia fordistribution to other islands is likely to grow somewhat slower than therate of growth of imports, as Santiago is expected to grow faster thanits satellite islands. A growth factor of 3% per year has been applied.

5.07 For the overall financial analysis of the port enterprise it isnecessary to project traffic at all other ports through 1986. Theseprojections are detailed in Table 11. Now that the diversion of importsto Praia is largely complete, imports at Porto Grande are expected togrow at an average annual rate of 4%. Exports from Porto Grande havefluctuated considerably from 4,800 tons in 1979 to 13,787 tons in 1980then back down to 3,567 tons in 1981. However, as at Praia, industrialfishing at Porto Grande is being developed through modernization andexpansion of the fishing fleet, and participation of foreign vessels.Cold storage and ice making facilities have recently been completed, withassistance from the Netherlands. Industrial fishing is expected tocontribute 9,000 tons of exports by 1986. Other exports are likely toremain at about 7,000 tons, the average for the past three years.Interisland general cargo through Porto Grande is likely to growmoderately, at 2% per year. Trade through the minor ports (all inter-island) is correspondingly projected to grow at 2% per year.

VI. ECONOMIC EVALUATION

A. Port of Praia

6.01 Prior to completion of the deep-water port late in 1978, Praiawas a lighterage port. Following the completion of the new port, light-erage was gradually abandoned and by late 1980 all cargo ship calls werealongside. As discussed in para. 3.13, because of inadequate design andconstruction, the new deep-water berths are threatened with imminentcollapse, which would necessitate a return to lighterage.

Benefits

6.02 By reconstructing the deep-water berths, the proposed projectwill provide the following benefits:

(a) savings in the capital and operating costs of lighteragefacilities (the former lighterage facilities are decrepitand would need to be replaced);

(b) savings in ship time; and

(c) reduced cargo losses.

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The detailed estimation of these benefits is described in the followingparagraphs.

6.03 Avoided Lighterage Costs - Engineering judgement is that the

existing berths could collapse at any time. The economic analysisassumes that, in the absence of the project, all cargo through the portwould revert to lighterage by 1987. Existing lighterage facilities inthe old port consist, of one decrepit and silted lighter wharf with twomobile cranes including one nearly 40 years old. Of the old lighterfleet only eight wirLd-powered barges remain but these are being sold toother islands; in arLy event, they are uneconomic for lighterage opera-tions on the scale envisaged. A new lighterage system would therefore

aeed to be established. The costs of such a system are detailed in Table12. These costs allow for the fact that cargo through Praia would beless under lighterage operations, because Praia's satellite islands wouldtend to be supplied from Porto Grande to avoid lighterage at Praia. Theadditional costs of supplying these islands through Porto Grande ratherthan Praia have not been taken into account. The estimates of lighteragecosts avoided do not include the costs of transferring cargo betweenships and barges, because this operation is similar to (though probablymore costly than) slhip to quay stevedoring operations which would occur

with the project. By the same reasoning, cargo handling costs at thelighterage berths (i.e., after cargo has been unloaded fron barges by thecranes) have been ignored as these would also have their counterpartunder the project. The costs shown in Table 12 therefore represent onlythose facilities and operations which would not be necessary with theproject.

6.04 Savings in Ship Time - Ships can discharge faster when berthingalongside than when using lighters. This applies especially duringAugust to October in Cape Verde, when unfavorable sea conditions signifi-cantly restrict lighterage operations. Details of estimated ship timesavings are presented in Table 13. All interisland cargo is carried inCape Verdean owned vessels, so all ship time savings on this trade accrueto Cape Verde. About 30% of Cape Verde's foreign trade is carried innational vessels. Furthermore, some of the ship time savings accruing inthe first instance to foreign owned vessels would be captured by CapeVerde in the form of lower freight and charter rates, or through portcharges. To reflect this, it, is assumed that 50% of foreign trade shiptime savings will accrue to Cape Verde.

6.05 Reduced Cargo Damage - The project will reduce cargo damage by:

(a) avoiding double-handling of cargo, as occurs with lighter-age operations,

(b) avoiding the transport of goods between the existing newport, area and the lighterage berths,

(c) providing stocage in the new port area, and

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(d) speeding up evacuation of cargo from the quay through theprovision of cargo handling equipment, technical assist-ance and training.

It is not possible to estimate the extent of this reduction in cargodamage with any precision, but a recent consultant's report for a similarproject in Guinea-Bissau X suggested that the reduced cargo losses couldbe equivalent to 0.4% of the value of cargo which would otherwise belightered. At an average value of CVEsc 28,000 per ton, cargo damagesavings would amount to CVEsc 17 million in 1987, rising to CVEsc 34million by 2006 (Table 14).

6.06 Benefits Not Quantified - The project is likely to generateseveral additional benefits not reflected, or not reflected fully, in theforegoing benefit streams. Vessels calling at Praia with the project maybe larger than without the project, because of superior stevedoring effi-ciency. As cost per ton declines with increasing ship size, freightrates between Cape Verde and overseas may thus be lower with theproject. Partly related to this, the project is likely to allow moreeconomical grain handling than would otherwise be the case. With theproject, grain will be discharged in bulk by grab cranes then by truckalong the quay to the silo. Without the project, bulk discharge fromvessels to barges will only be possible if vessels are equipped appro-priately and it is therefore likely that some grain will be deliveredbagged, with the loss of economies in bulk transport and handling. Tothe extent that bulk handling is still carried out with lighterage, addi-tional quay cranes would be required compared with the project case,where ships gear would be available at alongside berths. Finally, the 75metre berth will accomodate fishing vessels.

Project Costs

6.07 Project costs for the economic evaluation comprise the initialcost (including physical contingencies) of civil works, equipment, andtechnical assistance, together withi replacement costs where requiredduring the analysis period. Equipment costs include the mobile craneneeded for stevedoring, but not the forklifts, tractors and trailers usedfor cargo handling, which are the subject of separate analysis(para. 6.09). Maintenance costs are also included, on the basis speci-fied in the footnotes to Table 14, which also explain the derivation ofsalvage value.

Rate of Return

6.08 Based on the benefit and cost streams shown in Table 14 (allexpressed in December 1982 prices), the project would yield a total rateof return of 17%, and a return to Cape Verde of 14%. Benefits would have

11 NEDECO, Feasibility Study of the Improvement of the Port of Bissau,June 1981.

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to be 11% lower, or costs 12%. higher, before the rate of return to CapeVerde would fall below 12%.

B. Cargo Handling Equipment

6.09 Much of the existing cargo handling equipment at Praia and PortoGrande (Annex 3) will have reached the end of its economic life by1986. By that date, some 140,000 tons suitable for handling by forklifttrucks, tractors and trailers will, in the absence of the project, haveto be handled manually. By providing the capacity to meet this shortfall(including workshop equipmen-, spares and technical assistance), theproject will yield savings in cargo handling costs and in cargo damage.In addition, the cranes to be provided at Porto Grande under theproject!/ will supplement ships gear principally on the larger foreigntrade vessels delivering cereals and cement, and enable several hatchesto be worked at once, thereby reducing ship service time. It is assumedthat 50% of these ship time savings would accrue to Cape Verde(para. 6.04). The quantified benefits for equipment would yield a totalrate of return of 18% and a return to Cape Verde of 15% (Table 15). Inaddition, there are several important non-quantified benefits: the newcranes will permit more efficient handling of occasional heavy loads andwould also be available for non-cargo handling work (construction andrepairs).

C. Overall Rate of Return

6.10 The overall rate of return on the infrastructure, equipment andtechnical assistance components, which together account for about 80% oftotal project costs, is 17%; the return to Cape Verde is 14%. Benefitswould have to be 10% lower, or costs 11% higher, before the rate ofreturn to Cape Verde would fall below 12%.

VII. FINANCIAL EVALUATION

A. Past and Present Financial Position

7.01 JAP/ENAPGR's present financial situation is described in Tables16 and 17. These figures need to be considered cautiously, in view ofthe limited reliability of available data. JAP/ENAPOR's income statementfo FY1980 is almost balanced. This satisfactory result is conLirmed bythe high level of cash generated from operations (27% of revenue), suffi-cient at present to cover non-working expenses. The main issue is withtariff: although its average level is sufficient to cover present oper-ating expenditures, its structure does not reflect service costs, (over-

1/ The costs and benefits of the mobile crane to be provided at Praiahave been incorporated in the previous analysis (para. 6.07).

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charging merchandise and undercharging ships and rental services);improvements will be needed in this respect, when actual service costwill be known with a reasonable accuracy (para. 7.04).

7.02 The financial structure of JAP/ENAPOR is conservative andsound. It displays a large borrowing capacity, with a good repaymentcapacity (cash generation amounts to CVEsc. 20.5 million, and total debtservice less than CVEsc. 1 million) and a low level of indebtedness (witha low 10/90 debt/equity ratio, Table 16). Its working capital is posi-tive and sufficient for the present time, and its liquidity and cashsituation favorable (7 months of revenue). Hence, JAP/ENAPOR, as ofDecember 31, 1980, displayed a satisfactory financial situation.

7.03 The opening balance sheet is given in Table 16. Until 1981,JAP/ENAPOR's financial accounts were on a cash basis (Table 17);depreciation on fixed assets was not taken into account and tariffs weretherefore not based on total cost. Each year, except FY1978, shows anincrease in cash surplus from operations, up to CVEsc 30.8 million inFY1981. Capital expenses amounted to CVEsc. 11.2 million for the sameyear, leaving a sizeable net cash surplus of CVEsc. 19.6 million. Everyport, including the small cabotage ports, normally earned cash surpluses,which were derived almost exclusively from profits on stevedoring.

B. Tariff and Costing Systems

7.04 The present tariff is low by West African standards, but chargesusers for the full range of facilities and services provided by theports. In the absence of cost accounting and fixed asset valuations, thecharges were based on direct cash outlays related to each service.Therefore, the present tariffs undercharge capital intensive services,such as the utilization of the principal facility by ships. JAP/ENAPOR'stariffs were not revised between 1975 and 1982. However, a 65% increasehas been introduced in April 1982, which will generate sufficient revenueto cover all costs, including estimated depreciation, prior to thereconstruction of the Praia port. The average tariff per ton of merchan-dise, including cargo handling charges, is about US$8 per ton as of June30, 1982, as compared to US$15 in Conakry, US$12 in Bissau, and US$12 inCotonou. This is due (i) to the low level of staffing in JAP/ENAPOR(about 700), as compared to total tonnage handled (about 350,000 t); and(ii) to low non-working expenditures, resulting from present lowindebtness and value of fixed assets (excluding Praia portinfrastructure), as summarized by the high .72 working ratio for FY1980. This situation is temporary, and is bound to change considerably,after the rehabilitation of Praia port (para. 7.15). The Government hasagreed that cost-based tariffs will be introduced, requiring a costaccounting system that takes into consideration the cost of serviceprovided to users, to be implemented from FY1984 onward. Reliable datafrom the costing system will be available for calculating cost-basedtariffs by FY1987, and therefore such tariffs should be introduced byDecember 31, 1987 for Praia Port and Porto Grande. Meanwhile, tariff

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revisions should be based on t:entative cost including estimateddepreciation on infrastructure and equipment (paras. 7.15 and 7.16).

C. Capitalization of the Port Enterprise

Fixed Assets

7.05 A balance sheet as oE December 31, 1980 (para. 3.04) has beenprepared (Table 16), where fixed assets are included at 1980 prices, by

revaluing assets through a price index, provided by the Bank of Cape

Verde. This balance sheet is summarized below.

JAP/ENAPOR Balance Sheet, December 31, 1980(:in CVEsc million)

AssetsNet fixed assets in usevalued as of December 31, 1980 304.2

Current Assets 71.1Less: Current Liabilities (5.2)

Net Current Assets 65.9Total Net Assets 370.1

LiabilitiesDebt 38.8Equity 331.3

370.1

Debt/Equity Ratio: 1.0/90Current Ratio: 14.2

Debt

7.06 As past capital investment was financed almost exclusively bygrants, outstanding long terrn debt is still low. It amounts to CVEsc38.8 million of aid from the Netherlands, to be repaid by the ENAPOR overfive years, with nco interest.

Working Capital ancl Liquidity

7.07 JAP/ENAPOR's net working capital is high by normal standards: itamounts to CVEsc 66 million, or 11 months of revenue as compared toCVEsc. 5.2 million of short-term liabilities.

7.08 Its liquidity is abandant, amounting to CVEsc. 51.5 million(7 months of revenue). This high level of liquidity is confirmed by the11.3 quick ratio.

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D. Financial Forecasts

7.09 Although the project is a reconstruction rather than extensionof existing infrastructure, it involves a considerable (five-fold)increase in ENAPOR's fixed assets, partly because the existing facilityat Praia is not complete and therefore is not yet included in ENAPOR'sassets. Hence, the targets for ENAPOR's financial policy should be toachieve a financial situation under which ENAPOR would have (i) abalanced income statement; (ii) an acceptable liquidity situation; and(iii) subsidiarily, a positive and increasing financial rate of return.

7.10 The financial projections (Tables 18 to 21) indicate that theabove targets can be achieved, with substantial, but acceptable tariffadjustments (para. 7.15), and appropriate investment and financingpolicies (paras 7.18 to 7.20).

Tariff Adjustments

7.11 Substantial tariff increases will be needed between FY1983 andFY1986, in order to generate sufficient revenue to cover increasingworking expenses, rising depreciation (after completion of therehabilitation), and financial charges.

7.12 The FY1980 level of working expenses (CVEsc 53.5 million) isacceptable, due to the absence of overstaffing and to low generalexpenses. They are expected to increase in line with traffic and prices,by about 13% per annum from FY1980 to FY1990 (Table 19), reaching CVEsc.118 million FY1986, and CVEsc 186 million in FY1990.

7.13 Annual depreciation will increase considerably from CVEsc.23.3 million in FY1980 to CVEsc 99.9 million in FY1986, when the projectis completed, because of the large capital investment involved (aboutCVEsc. 1.8 billion). This large increase will arise despite the increasein the average duration of depreciation, from 22.6 years in FY1980 to24.4 years in FY1986, resulting from the predominance of infrastructurein ENAPOR's capital investment program (89% of the total).

7.14 Interest on the debt, under the financial mix described inpara. 7.19, will increase from close to zero in FY1980, toCVEsc. 72.4 million after completion of the project, in FY1986. Theaverage rate of interest on outstanding long-term debt will increase fromzero in FY1981 to only 5.9% in FY1986.

7.15 In order to cover by FY1986 working expenses, for CVEsc. 117.2million, annual depreciation for CVEsc. 99.9, and interest on the debtfor CVEsc. 72.4 million, revenues should amount to at leastCVEsc. 289.5 million. This will require that average tariff be raised by66% on top of local inflation between FY1983 and FY1986 (173% in nominalterms including an average 12.5% local annual inflation factor (Table18)). The likely timing of tariff adjustments, is follows: 32% inFY1983; 36% in FY1984; 29% in FY1985 and 18% in FY1986. Theseadjustments would raise the average tariff per ton, including cargo

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handling charges, from about US$8 in 1982 to about US$13 per ton at 1982prices in 1986. This level is reasonable in relation to other WestAfrican ports. The Government was informed during negotiations of theamount and timing of envisaged tariff increases. The correspondingworking ratio should decline from .64 in FY1982 to .47 in FY1984, and .40for FY1986. Agreement was reached during negotiations to include inENAPOR's financial targets a working ratio of .55 for FY1984, and of .45for FY1986 and thereafter.

7.16 The tariff structure will be amended, based on service cost, sothat revenues from ships reflect depreciation of the corresponding fixedassets (para. 7.01). In FY1980, these revenues represented only 6% ofJAP/ENAPOR revenue; under proposed tariff increases (Table 18), theywould represent about 19% of t:he total in FY1986. Rentals should also beraised substantially to incorporate the depreciation on equipment,following the results produced by the cost accounting system, to befinanced under the proposed project (Annex 4, para. C(d)).

7.17 The following table summarizes the financial forecasts, whichare detailed in Tables 18 to 21.

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Summary of ENAPOR's Financial Statements, FY1982-1988('000 Escudos)

1982 1984 1986 1988

Income StatementsRevenue 108,889 192,460 303,347 389,443Working expenses 69,235 91,213 117,674 149,106Annual depreciation 24,347 53,349 99,999 120,958Interest Charge 1 13,746 72,518 100,877Non-operating expenses 779 1,116 1,557 2,077

Net result 14,527 32,937 11,598 16,425

Working ratio .64 .47 .39 .38Debt service ratio 4.09 4.30 2.56 1.52

Balance SheetsNet fixed assets 255,560 980,953 1,914,187 2,027,076Current assets (less cash) 27,538 43,631 64,541 82,420Cash available 78,517 173,763 327,211 329,417Total assets 361,615 1,198,347 2,305,939 2,438,913

Equity 327,203 674,220 1,055,819 1,073,991Long-term debt 29,089 514,685 1,224,058 1,329,850Current liabilities 5,231 5,359 17,192 33,208Total liabilities 361,615 1,198,347 2,305,939 2,438,913

Debt equity ratio 8/92 43/57 54/46 55/45Rate of return on fixed assets .06 .05 .04 .06

Sources and Applications of FundsCash generation 38,875 100,132 184,116 238,261

Government contribution 0 179,035 143,730 0Borrowings 0 342,755 323,967 54,517Total long-term sources 38,875 621,921 651,813 292,778

Capital investment 0 534,708 503,564 134,761Debt service 9,696 23,541 72,519 158,362Total long-term applications 9,696 558,249 576,083 293,122Excess long-term sources/

applications 29,179 63,672 75,730 (345)

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Capital Investment and Financing Plan

7.18 ENAPOR's future capital investment for the FY1982-1986 period,comprises mainly the items included in the proposed project, amountingapproximately to CVEsc. 1.8 billion at current prices. From FY1986onward, capital investment needs have been estimated, subject to economicjustifications. They include mainly investment in secondary ports and inMindelo, for a total of approximately CVEsc. 651 million for the FY1987-

1990 period. These estimates are consistent with the envisaged sectorinvestment included in the national plan.

7.19 The corresponding financing plan for the FY1983-1986 period isbased on the breakdown of para. 4.09. ENAPOR would contribute only 3%,the remaining 97% being financed under the following terms:

(a) $6.3 million of IDA funds should be on lent at 11% payableon amounts disbursed during construction, over 25 yearswith 7 years grace period, starting from credit signature;

(b) BADEA funds are expected to be onlent at 5% over 20 yearswith 5 years grace period; and

(c) Portuguese contribution would be transfered to ENAPOR asequity.

The above terms of IDA onlend-Lng conditions were agreed upon duringnegotiations.

7.20 As capital investmeni: for the FY1986-1990 period would includesmaller components ior which :Lt is likely to be more difficult to raiseforeign funds, it is assumed that ENAPOR's contribution during thisperiod would increase to about: 50%. The remaining 50% is assumed to besupplied by concessionary funds at 6% average interest rate over 20years.

7.21 Under these financing conditions, ENAPOR's self-financing capa-city for the FY1982--1988 period will be as follows:

ENAPOR Financing Capacity, FY1982-1988('000 Escudos)

1982 1984 1986 1988

Cash generation 39,654 101,247 185,672 240,337Exceptional revenues/expenditures (778) (1,115) (1,556) (2,076)

Debt service (9,696) (23,541) (72,519) (158,362)Cash generation afterdebt service 29,180 76,591 111,598 81,925

Working capital increase (8,414) (5,236) (930) (7,255)Self-financing capacity 20,766 71,355 110,668 74,720

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This high self-financing capacity will permit ENAPOR to raiseprogressively its percentage contribution to its capital investment from3% in FY1984 to about 50% in FY1988 and FY1990. This would keep thedebt/equity ratio increase within reasonable limits; it would stillincrease from 8/92 in FY 1982 to 43/57 in FY1984, and 54/46 in FY1988. A55/45 target debt/equity ratio was agreed upon during negotiations.ENAPOR also agreed during negotiations to consult annually with theAssociation on ENAPOR's investment and financing three-year revolvingplan.

Rate of Return

7.22 The financial rate of return on fixed assets was negative inFY1981. The proposed investment plan and tariff increase would produce apositive rate from FY1982 onward. After a period of decline due to therapid increase of fixed assets during construction period, it will stabi-lize at 4% in FY1986 and increase thereafter up to 6% by FY1988.

Cash situation

7.23 Despite the high self-financing rate to be achieved from FY1986onward, ENAPOR will continue to have sizeable liquidities, as indicatedbelow:

ENAPOR's Liquidity Situation, FY1982-1988('000 Escudos)1982 1984 1986 1988

Self-financing capacity 20,766 71,355 110,668 74,720Contribution tocapital investment -- (12,919) (35,869) (82,319)

Increase in availableliquidities 20,766 58,436 74,799 (7,599)

Cash balance at theend of year 78,517 173,763 327,211 329,417

The cash level sufficient for unconstrained port operation can beestimated as 4 months of revenue, or CVEsc. 64.1 million in FY1984,CVEsc. 101.1 million in FY1986 and CVEsc. 129.8 million in FY1988. Itwas agreed with the Government during negotiations that duringimplementation of the project the excess of cash available above the fivemonths of operational revenue plus liquidities as needed for financingENAPOR's contribution for the following year to its five-year investmentplan as agreed upon with the Association (para. 7.21) will be depositedby ENAPOR into a bank account to be maintained jointly by ENAPOR and theGovernment, at the Bank of Cape Verde.

- 28 -

E. Insurance

7.24 Apart from accident insurance for the stevedores and socialsecurity insurance for permanent staff, JAP/ENAPOR carries no insur-ance. Nevertheless, there is lack of uniformity among ports in generalas to the type and extent of insurance coverage they carry. It is there-fore recommended that during negotiations ENAPOR undertake to:

(a) submit to the Association no later than September 30, 1983a proposal regarding ENAPOR's insurance coverage; and

(b) inslare, starting FY1984, to the Association'ssatisfaction, against such risks and in such amounts asshall be consistent with sound port and businesspractices.

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS

8.01 Agreement was reached during negotiations that the Governmentwill:

(a) appoint consultants acceptable to the Association on termsof reference satisfactory to the Association to carry outstudies and provide technical assistance to MTC (para.2.07);

(b) appoint independent consultants acceptable to theAssociation, on terms of reference satisfactory to theAssociation, to supervise all civil work construction andequipment prccurement (para. 4.12); and

(c) onlend $6.3 million of the IDA credit to ENAPOR at anannual interest rate of 11% payable during constructionover 25 years with 7 years grace period (para. 7.19).

8.02 Agreement was reached during negotiations that ENAPOR will:

(a) keep its accounts according to standard commercialaccounting practices from FY1983 onward (para. 3.05);

(b) appoint external auditors, satisfactory to theAssociation, to audit the financial books and accounts ofENAPOR commencing with FY1983 (para. 3.06);

(c) appoint, on terms and conditions satisfactory to theAssociation: (i) a management consultant by July 1, 1983;and (b) a port operations expert and a workshop expert byJanuary 1, 1984 (para. 4.15);

(d) take into consideration the cost of service provided tousers, as ca-Lculated through cost accounting, for amending

- 29 -

the tariff structure for Praia Port and Porto Grande, byDecember 31, 1987 (paras. 7.04, and 7.16);

(e) accept the target working ratio of .55 by FY1984, and .45by FY1986, in order to balance ENAPOR's income statement(para. 7.15);

(f) limit its borrowing, except with the Association'sagreement, so as not to exceed a debt/equity ratio of55/45 (para. 7.21);

(g) consult annually with the Association on ENAPOR'sinvestment and financing three-year revolving plan(para. 7.21);

(h) deposit in a bank account maintained jointly with theGovernment the excess of cash available above the fivemonths of operational revenue plus liquidities as neededfor financing its contribution for the following year toits five-year investment plan as agreed with theAssociation (para. 7.23); and

(i) submit to the Association by September 30, 1983 a proposalas to the type of insurance coverage appropriate forENAPOR and shall subscribe such insurance to theAssociation's satisfaction starting FY1984 (para. 7.24).

8.03 Confirmation was obtained from the Government during nego-tiations that:

(a) the project is exempted of taxes except for customs dutieson cargo handling equipment (paras. 4.05 and 4.07);

(b) it is in agreement with the cost estimate (para. 4.06) andthe project implementation schedule (para. 4.14);

(c) the contract for Part A of the project will be awarded onthe basis of international competitive bidding in accord-ance with the Association's Guidelines for Procurement(para. 4.13); and

(d) the amount of the aid from the Netherlands for the provi-sion of a transit shed and cargo-handling equipment istreated as a loan to JAP to be repaid by ENAPOR over fiveyears with no interest (para. 7.10).

8.04 The Association should enter into a cofinancing agreement withPortugal no later than the date of Credit signing. It should be a condi-tion of Credit effectiveness that (a) a financing agreement between theGovernment of Cape Verde and BADEA shall have become effective, and (b) asubsidiary loan agreement between the Government and ENAPOR shall havebecome effective (para. 4.09).

- 30 -

8.05 The proposed project is suitable for a credit of US$7.2 million

equivalent to the Government of Cape Verde on standard IDA terms.

- 31 -

ANNEX I

Page 1

.CAPE VERDEPRAIA PORT PROJECT

Organization of the Ministry of Transport and Communications

Ministry of Transport Studies and Planning

and Communications Office

.ZZI

Secretary General

Genera iretorateGneralDre General Directorate Directorate of Land

of Civil Aviation of Ports and Shipp of Post and Tele- Transport (being-communications established)

National Port Post and Tele- Urban TransportAuthority communications Service

Air Transport Company National Maritime

of Cape Verde Transport CompanyArcaverde

Source: MTC forld Bank-29316May 1982

PRAIA PORT PROJECTENAPOR's Organization Chart

I rLANNING L ___---_| WORKERS

& STUDIES COUNCIL

L TIGATION

I RELATONS

| DIRECTORATE OF | | DEPARTMENT OF DIRECTOR DIREC

ADMINISTRATION INFRASTRUCTURE PORTO DIRECTOR DIRETOR

& FINANCE & EQUIP'MENT _ GRANDE PRAIA PORTS

CNML MVEMFNT OFERIO

ADMINISTRATION WRSEQUIPMENT T HI OPERATIONS ADMINISRTOH~NAINCE

A I CX ;g j ~~~~~~~~~~~~~~~~~~~~~~~~~STORTAGE RHI & CARDIGO| WORKSHOP

| ACCOUNTING | | CASHIER | | ADMGINIS5ETpRQATION | | PERSONNEL

B LLING & MAINTENANCE|

EQUIPMENT Mf BILLING l l MARITIME

EQUIPMENT

11/82 World Bank 245B2 d >

WD

ANNEX 2- 33 - Page 1

CAPE VERDE

PRAIA PORT PROJECT

Decree-Law No. 58/82 of June 19, 1982

Charter of Empresa Nacional deAdministracao Dos Portos-EP (ENAPOR)

Main Provisions

Legal Status

1. A public enterprise with legal personality under public lawhaving administrative and financial autonomy, and its own assets for thepurpose of administering and operating Cape Verde's ports.

Organization

2. The Board of Directors comprises the Director General asChairman, three other members appointed by decree from among ENAPOR'sdepartment heads, plus one director appointed by the trade unionorganization in ENAPOR.

Government Control

3. The Minister of Transport and Communications is responsible foroverall supervision of the enterprise, with powers to give generaldirectives and instructions and to order inspections and enquiries.

4. In addition, ENAPOR must submit for the Minister's approval thefollowing:

(a) budget;

(b) financial accounts;

(c) establishment of reserves;

(d) the contracting of loans, except short-term borrowings ininternal currency for the regular operations of theenterprise;

(e) the acquisition, encumbrance and transfer of portequipment;-

1/ Clarification is being sought from Government as to whether ENAPORwill have discretion to make small commitments within specified limits.

ANNEX 2- 34 - Page 2

(f) the design, pecifications and the award of contracts forport works;1

(g) regulations regarding personnel and salary policy; and

(h) regulations for port tariffs.

Finance

5. Tariffs must be set so as to generate sufficient income to coverthe total cost of operation and amortization of the investment made bythe state in ports. However, and without prejudice to the foregoing, insetting tariffs for international services ENAPOR may adopt "competitive"tariffs. The state shall compensate ENAPOR as provided in Article 24 ofthe General Regulations for Public Enterprises, whenever it requiresENAPOR to follow different procedures, for means of economic and socialpolicy.

6. ENAPOR shall annually asertain that its book values properlyreflect real asset values.

7. The proposed annual operating and capital budget shall besubmitted to the Minister for approval by October 30 of the yearpreceding the budget year. Transfers of operating budget items up to 50%in each category, without alteration of the total amount, may be orderedat the discretion of the Board of Directors.

8. ENAPOR may establish reserves as necessary in accordance withrules approved by the Ministers of Transport and Communications and ofEconomy and Finance.

9. The surplus for the fiscal year, after deductions ofamortization, reserves and contingencies, shall be paid into theTreasury.

10. Financial statements and reports, to be submitted annually tothe Minister, by Farch of the following year, consist of:

(a) Directors' report;

(b) income account and balance sheet; and

(c) source and application of funds statement.

1/ Clarification is being sought from Government as to whether ENAPORwill have discretion to make small commitments within specified limits.

ANNEX 3Page 1

- 35 -

CAPE VERDE

PRAIA PORT PROJECT

Existing Port Facilities

A. Porto Grande (Mindelo)

Location

1. Porto Grande is located on the northwest part of the island ofSao Vincente within a large bay having a generally calm sea rendering itusable throughout the year. At the back of the bay lies the city ofMindelo.

2. Because of its stategic position astride the sea lanes linkingEurope with Asia and America, the bay of Porto Grande is frequented bynumerous transatlantic vessels, which reprovision there while carrying oncommercial operations. The lighthouse at the entrance to the harbor isequipped with long-range signalling devices to provide bearings toarriving ships and ships changing course.

Port Facilities

3. The port has 42,000 m2 of open storage areas and is served byseveral deep-water berths totalling 1,160 m long with depths rangingbetween 6.5 m and 12.0 m as well as by shallow-draft berths totalling 375m long with depths ranging between 3.5 m and 5.5 m.

4. Available equipment includes: three mobile cranes (up to 12 tonscapacity), five tractors, twenty trailers and six forklifts.

5. The following main buildings and structures are available withinthe port area:

(a) Three warehouses each with 1,400 m2 of covered area;

(b) One warehouse for goods in transit with 530m2 of coveredarea;

(c) One shed for cargo handling equipment with 136 m2 ofcovered area;

(d) One machine shop with 4,200 m2 of covered and open areas;

(e) One 20-t weighbridge;

(f) One two-story building for port administration, custonsoffice and border police with a total covered area of990 m22;

ANNEX 3Page 2

- 36-

(g) One building for a woodworking shop, spare parts warehouseand medical station with a covered area of 400 m2; and

(h) One mess hall for stevedores with 180 m2 of covered area.

6. The port facilities are built of walls of solid concrete blockson submerged rock-fill foundations. The entire port area is providedwith adequate lighting and the berths are provided with water mains andfuel-oil supply stations. The area destined for fishing operations ispresently being enlarged and will be completely separated from thecommercial area.

B. Praia Port

Location

7. The city of Praia is located at the southeast corner of SantiagoIsland. The new port, completed in 1978, is adjacent to the town in asmall bay open to the southeast.

8. The old port facilities consisted of a small pier; vessels weredischarged by lighters.

9. Studies for the new port started in 1960 by the PortugueseMinistry of Overseas. The National Hydraulic Laboratory of Portugal(LNEC) prepared broad outlines for the concept of a small port andtenders on a design and conscruct basis were invited. A contract wasnegotiated with a portuguese contractor (Construcao Tecnica Ltda.) usingtheir tender as a basis. Thes tender included construction of a 210 mlong breadwater arm with deep-water berths on its west side and a further150 m berth along a partially reclaimed shoreline. Work commenced in1973 before independence and continued through independence, after whichit was decided by the new Government, as "phase 2," to extend the 150 mberth by a further 160 m and to build two large transit sheds and anaccess road. The marine works were completed in 1977/78, the transitsheds have since been completed, however, the construction of the accessroad has not yet been completed. The work known as "phase 2" wasfinanced by Cape Verde.

10. The structure of the berths appears to have been grosslyunderdesigned. They started to show signs of deterioration even beforeconstruction completion, mainly due to inadequate thickness of concreteand insufficient reinforcement. At present, the maximum life of theberths is estimated at three to five years. Several studies have beencarried out since early 1979 to assess the degree of deterioration of theexisting 520 m deep-water berths and provide for a solution, at thelowest cost possible, to keep these facilities operational. Portugueseengineering consultants (Castanho, Reis de Carvalho and Vera Cruz),retained by the Portuguese Government in September 1980, assessed theberths to be beyond any possible repair and recommended to buildcompletely new concrete block berths in front of the existing ones and

ANNEX 3Page 3

- 37 -

construct a small breakwater. Their recommendations have been adopted asbasis for the proposed project.

11. The port's cargo handling equipment consists of: (a) fourforklifts, 3 to 5 t capacity; (b) three tractors and eight trailors, 3 to5 t capacity; (c) one 15 t mobile crane (a recent Dutch grant); (d) twoold 3 t mobile cranes (employed mainly outside the port area); and (e)twenty wooden pallets.

- 38 - ANNEX 4

Page 1

CAPE VERDE

PRAIA PORT PROJECT

Project Description

A. Main Civil Works

(a) Reconstruction of the 210 m long deep-water berth with analongside depth of 9.5 m at MLW, by building a quay wallof concrete gravity blocks in front of the existingcaissons. The 30 ton blocks will be precast at a sitesome 200 m away from the berth, hauled on special low-bedtrailers and placed one by one on a layer of crushed stoneserving as foundation. The design is such that the quaywall, can be constructed in sections of about 100 m longwhich could bt used immediately upon completion forberthing vessels, independent of the other sections.However, 30 to 50% of the existing berthing facility willbe unoperationial during the four years constructionperiod. Work will start by the construction of the 75 mmarginal shallow-draft berth (para. B(f)) to serve as astand-by berth for small vessels during deep-water berthsconstruction.

(b) Reconstructiona of the 310 m long deep-water berth with analongside depth 7.5 m at MLW. The construction is similarto (a) above.

(c) Strengthening of the existing outside protection to the210 m deep-water berth by placing heavy armor stones andconcrete bloc'ks (up to 12 t) along the sea side (350 mlong). The existing non protected vertical wallbreakwater was a wrong design from the outset. The lackof armor stone protection caused the initial difficultiesduring the placing of the caissons, and later theirfurther damage (para. 10 of Annex 3) due to permanentexposure to wave action. The proposed armor layer willprevent additional damage to the sea side of the caissonsthus providing a safe backfill and support to the new210 m long quay wall.

(d) Extending the above rehabilitated protection by providinga 40 m round head breakwater to insure adequate protectionto the southern end of the 210 m berth against waveaction.

- 39 - ANNEX 4Page 2

B. Supporting Facilities, Marginal Berth and Equipment

(a) Construction of a 1500 m2 warehouse to serve as long-termstorage for cargoes not cleared from the transit sheds.

(b) Construction of the access road (3 km long) linking theport to the city, including improvement of an existingbridge.

(c) Paving of about 10,000 m2 of open storage areas withcobblestone.

(d) Construction of an administration building for the portenterprise, customs and police.

(e) Construction of customs fence, installation of water andlighting systems and building of open and covered workshopareas for maintenance of the port cargo handlingequipment.

(f) Construction of a small marginal wharf (75 m long) with avarying alongside depth of 7.0 to 5.0 m at MLW to servemainly as working wharf for fishing trawlers andinterisland vessels. The construction system is similarto that of the main wharves (para. A(a)).

(g) For Praia Port: Six forklift trucks 2.5 t capacity, oneforklift truck 12 t capacity with container attachment,six tractors 40 t pull, ten trailers 2 to 4 t capacity,three mobile cranes (one 15 t and two 5 t capacity), onegenerator 400 KVA; one 30 t weighbridge, 1,000 standardpallets, spare parts for cargo handling equipment, andworkshop equipment. Note: one 5 t crane, one tractor andtwo trailers will be used in each of the ports of Maio andBravo.

(h) For Porto Grande: Four forklift trucks 2.5 t capacity; oneforklift truck 25 t capacity (for containers), fourtractors 40 t pull, one mobile crane 15 t capacity, onemobile crane 5 t capacity, 1,000 standard pallets, spareparts for cargo handling equipment, and workshopequipment.

C. Consulting Services and Technical Assistance

(a) Consulting services for project preparation andsupervision.

(b) Port operations: a port operating expert to: (i) deviseand install both in Porto Grande and Praia efficient portoperating and cargo-handling procedures; (ii) trainpermanent port staff and, where necessary, casual port

- 40 - ANNEX 4

Page 3

labor, in these procedures and in equipment operation; and(iii) to prepare necessary documentation (in conjunctionwith management consultants, see (c) below).

(c) Mechanical workshops: a workshop expert to: (i) set up,with the workshop equiment to be provided under theproject, mechanical workshops at Porto Grande and Praia;(ii) plan routine, preventive and emergency maintenancefor all cargo handling equipment now at the ports andthose to be provided under the project; (iii) help inrecruiting additional workshop staff and training allworkshop staff; and (iv) prepare necessary documentation(in conjunction with the management consultants).

(d) Management services: management consultants to undertakethe following tasks:

(i) review the present financial accounting system andensure its compliance with the national accountscode and international standards;

(ii) devise a cost accounting system, integrated withthe financial accounts, and based upon the tariffstruct:ure, which will provide adequate costingdata to enable management to make timely decisionsregar(ling port tariff rates;

(iii) estabLish budget preparation and control systems;

(i.v) estabLish effective internal control and auditsystems;

(v) estabLish a management information system;

(vi) prepare necessary manuals on (i) to (v) above; and

(vii) help in recruiting necessary additional staff andundertake the training of all staff in theirrespective areas, and assist management in the useof all above mentioned systems.

(e) Technical assistance to MTC in developing a long-termstrategy for the transport sector, identifying prioritiesfor investment and institutional strengthening, andproject preparation.

D. Maritime Training Center at Mindelo

A comprehensive study to assess the justification for upgradingthe existing Coastal Navigation School (under the Director of Marine andPorts to a Maritime Training Center) has been carried out by specializedconsultant in April 1980. The study was financed by the Association.

- 41 - ANNEX 4

Page 4

The study concluded that:

(a) Cape Verde's geographic and economic particularities havemade its people take to the sea to an extent which isunique in Africa, and helped to give Cape Verdeans areputation throughout the Atlantic region for being

maritime-minded and for making good sailors. Largefishermen's and seamen's settlements in the U.S.A. andelsewhere emanate from Cape Verde. Over 11,000 Cape

Verdeans are registered seamen, most of them employed inthe merchant fleets of other nations. An unknown numberof these seamen studied at maritime schools overseas andbecame officers of foreign merchant marines. Cape Verdeanofficers are found in coastal freighters in Angola and

Brazil as well as in ocean-going ships from Norway, theNetherlands, and Portugal.

(b) In spite of a strong maritime tradition, Cape Verde almosttotally lacks formally trained personnel to man itsmerchant and fishing fleets. Some personnel categoriescannot practically be trained in Cape Verde at this stage,but for others, such as deck and engineer officers andcrew for coastal and fishing vessels and radio maintenancetechnicians, good local training facilities arejustified. Such facilities can best be provided by there-establishment of the existing Coastal Navigation Schoolon a new site essentially as envisaged by theGovernment 1/

(c) Approximate but conservative estimates of maritimemanpower requirements of Cape Verde indicate a need for aCenter capable of accomodating as many as 200 students,while initial plans by the Government envisage a capacityfor 100 students. Preliminary studies of accomodationrequirements indicate an overall cost for trainingequipment of about $1.10 million for 100 student places(including boarding facilities for 30 students), and onlyabout $0.18 million more, if student capacity is increasedto 200. In view of the uncertainties involved in manpowerforecasts, and practical and staffing problems, it isproposed that the center be planned for a capacity of 200

1/ Originally a site was chosen to construct a new training center. Thecost of the new building was estimated at US$1.5 million equivalent.However, the Government allocated in 1981 an existing building(previously used as a military training school) to be occupied by the newMaritime Training Center. This is a wise decision. A local contractoris now rehabilitating this building to render it suitable for the Centerat a cost of about US$100,000 equivalent.

- 42 - ANNEX 4Page 5

students (with boarding facilities for 30), but operatedin the initial phase at an enrollment of about 100.

(d) In a small cou.ntry as dependent on maritime activities asCape Verde, it. is difficult to adequately define allnecessary personnel categories and related areas oftraining. However, reasonable quantitative estimates canbe made of the needs for some major groups, providing anindication of the order of magnitude of overall needs.

(e) For seagoing personnel of the existing merchant fleetunder Cape Verde's flag, the study indicates an immediateneed. for aboult 90 certified masters and mates, 50 ship'sengineers, 200) trained seamen (deck) and 50 engineerratings. For the fishing fleet which is still embryonic,but afforded high priority by the Government, the needsover "the next five years" are estimated at a numbersimilar to those for the merchant fleet, including 72skippers/masters/mates and 24 engineers (counted as

1i1. manning positions).

(f) For other per3onnel in the maritime field, no estimatesexist. These include harbour pilots (about five appear tobe needed at this stage), port and shippingadm:inistrators, cargo handling supervisors, shippingagents, etc. Such staff is likely to be recruited in thelong perspective, from experienced seagoing personnel.This will contribute to high turnover of maritimepersonnel. The annual turnover of ship's engineers can beexpected to be high, due to losses also to other sectorsof Cape Verde's economy. The same expectation is validfor radio and electronics maintenance technicians.

(g) Based on general observation and manpower requirements assummarized in para. (d) to (f), the following courses areproposed for the initial stage of operation of a newMaritime Training Center:

(i) Coastal navigation officer/fishing skipper(2 years);

(ii) Coastal/fishing vessel engineer officer (2 years);

(iii) Deck rating (able seaman) (1 year);

(iv) Engineering rating (mechanic) (1 year); and

(v) Radic, maintenance technician (3 years).

All the above courses are envisaged as sandwich-typecourses with periods at the Center alternating withpractice on board commercially operating vessels.

CAPE VERDEPRAIA PORT PROJECT

Schedule of Implementation

1982 1983 1984 1985 1986 1987 1988

QUATER 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

A. Civil Works

Preparation of Tender Documents

Tendering

Receipt of Tenders and Evaluation *

Contract Award *

Mobilization

Construction | . _

B. EquiPment

Preparation of SPecification

Tendering

Manufacture and SUPPlY S . s L Porto Grande Praia Port

C. Technical Assistance

Preparation of Terms of Reference

Construction SuPervision I - - - _

Port Operations Consultant - -_

Worshop Consultant - - - - - -T -Management Consultants - -m I

Source: IDA Staff WorldBank-23917

May 1982

ANNEX 6

- 44 -

ASSUMPTIONS FOR FINANCIAL PROJECTIONS

1. It has been assumed that implementation of the project willcommence early in 1983 and will be completed by the end of 1986. Thefirst full year of operations will therefore be 1987. The methodologyused in preparing these forecasts is as follows:

(a) all financial figures are in current prices. Projectphysical contingencies have been taken into account.Price contingencies have been taken into account, at anaverage 12.5% annual rate for local prices, and 7.4%annual rate for international prices. The 5% difference

was accounted for as annual devaluation of the Escudo vis-a-vis international hard currencies.

(b) tariff rates for principal traffic items were establishedto provide the revenues to cover the operating costs asprojected under (c) and financial charges resulting from

(f);

(c) staff, fuel, and supplies costs were projected taking intoconsideration traffic forecasts (as in the economic analy-sis) in tonnage and in number of ships. Salary increasesinclude a 4% below national inflation cost of livingadjustment, and an average merit/seniority increase of 3%per annum. Fuel and supplies prices were projected inline with inrternational prices, as were general expenses;

(d) annual depreciation was calculated on historical acquisi-tion cost, over 30 years for infrastructure and buildingsand 10 years for equipment; and

(e) $6.3 million of the proposed IDA credit should be onlenttc ENAPOR on approximate current Bank terms, assumed to be11% annual interest for 25 years, including seven years ofgrace. This rate is above the current rate of domesticconcessionary loans to the public sector, which is about9%. Credit and banking being under the control of theGovernment, there is no market rate on commercial loans.

2. For the purpose of this evaluation it is assumed that BADEA'sloan terms will be 5% annual interest for 20 years, including five yearsgrace, and that the loan wiLll be on lent on the same terms.

3. It is assumed that financing provided by Portugal will betreated as equity capital.

4. The resulting financial projections are detailed inTables 20-23.

- 45 -

ANNEX 7Page 1

CAPE VERDE

PRAIA PORT PROJECT

Documents Kept in Project File

1. Protocal Agreement between the Governments of Cape Verde andPortugal on the Deepwater Port at Praia and Agreement on theRehabilitation of Infrastructures and Improvement of Operating Conditionsin the Port, April 9, 1980;

2. Amendment to the above Agreement, September 30, 1980;

3. Amendment to the above Agreement, June 3, 1981;

4. Report of the Ad Hoc Committee Examining the Deep-water Port ofPraia (Portugal), March 1980;

5. Establilizacao das Estruturas Melhoramento das Condicoes deExploracao - Estudo das Condicoes de Agitacao, Porto de Longo Curso daPraia (Study of Wave Propagation in Praia Port) by the Consultants DanielVera-Cruz and Jose R. de Carvalho (Portugal), July 1980;

6. Stability of Praia Port Structures and Improvement of OperatingConditions by the Consultants Daniel Vera-Cruz and Jose R. de Carvalho,July 1980;

7. Cape Verde Transportation Study, March 1980 by B.T. Kendall,Managing Director of Kingston Marine Technology Limited (UK);

8. Report on Maritime Training School, Mindelo, by Dahlborg,Training Consultant, May 1980;

9. Preparation du Plan Quadriennal, Esquisse de Programmation dansle Secteur des Transports, Republique du Cap Vert, by ATREE/GETRAM,November 1981;

10. Official Bulletin # 25 of June 19, 1982 containing Decree #58/82 creating ENAPOR;

11. Details of Project Cost Estimate, traffic forecast and EconomicEvaluation; and

12. Draft Tender Documents for Part A and Part B of the Project bythe Consultants Richard Scheiner Associates, Switzerland.

13. Data processing programs and data files utilized for financialprojections.

14. Draft terms of reference for technical assistance.

15. Draft terms of reference for external auditing.

CAPE VERDE

PRAIA PORT PROJECT

Population and Area of Individual Islands (1960-80)

Population Annual Growth Rate (%) Area Population per Km2

1960 1970 1980 % 1960-70 1970-80 (kmi) 1980Windward Islands

Santo Antao 33,753 45,U51 43,i98 14.7 2.9 -0.4 779 55.5Sao Vicente 20,883 31,586 41,792 14.1 4.2 2.8 227 184.1

(Mindelo) (33,200)Sao Nicolau 13,772 16,320 13,575 4.6 1.7 -1.8 338 40.2Sal 2,584 5,642 6,006 2.0 8.1 0.6 216 27.8 1Boa Vista 3,218 3,463 3,397 1.1 0.7 -0.2 620 5.5 C

Subtotal 74,210 102,062 107,968 36.5 3.2 0.6 2,180 49.5 1

Leeward IslandsMaio 2,632 3,451 4,103 1.4 2.7 1.7 269 15.3Santiago 88,344 129,508 145,923 49.2 3.9 1.2 991 147.3(Praia) (55,318)

Fogo 25,571 29,692 31,115 10.5 1.5 0.5 476 65.4Brava 8,539 7,858 6,984 2.4 -0.8 -1.2 67 103.6

Subtotal 125,086 170,509 188,125 63.5 3.2 1.0 1,803 104.3

Total 199,296 272,571 296,093 100.0 3.2 0.8 3,983 74.3

Source: Direccao General de Estatistica, Population Censuses 1960, 1970 and 1980

04/82

- 47 -

Table 2

CAPE VERDE

Praia Port Project

Road Network(kilometers)

Bitumen and

Island Cobblestone Roads Improved Earth Roads Unimproved Tracks Total

6m 3.5m 6m 3.5m

Santiago 157 16 42 8 25 248

Sao Nicolau -- 18 -- 11 38 67

Fogo 3 36 23 -- 57 119

Sao Vicente 9 6 -- 38 -- 53

Santo Antao 54 14 -- 22 163 253

Sal -- -- 18 -- -- 18

Total 223 90 83 79 283 758

Source: Diagnostic Study of Road Maintenance in the Sahel, Volume 2,

Cape Verde Islands, Louis Berger, July 1977.

04/82

- 48 -Table 3

CAPE VERDE

P_aia Port Project

Arport Facilities

Length 1/Island Airport (meters) Surface Airport Capacity Passengers 1980-

Sal Amilcar Cabral. 3270 Asphalt International Service 284,300=

Santiago Praia 1300 Asphalt HS 748, no lighting 65,460'-/

Sao Nicolau Preguica 1400 Asphalt HS 748, no:lighting 11,500

Sao Vicente Sao Pedro 1200 Asphalt ES 748, no lighting 37,850

Boa Vista Rabil 1400 Hard soil Twin Otter, no lighting 4,700

Fogo Mosteiros 500 Hard Soil Twin Otter, no lighting 2,550

Fogo Sao Filipe 500 Hard Soil Twin Otter, no lighting 11,080

Maio Maio 550 Hard Soil Twin Otter, No lighting 6,160

1/ Arrivals and Departures. All domestic unless otherwise indicated.

2/ Includes 243,000 international passengers of whom 210,000 were transit passengers.

3/ Includes 8,200 international passengers.

Source: Atree/Getram. Republique du Cap Vert: Preparation du PlanQuadriennal, Esquisse de Programmation dans le Secteur desTransports, Novembre 1981.

- 49 -

Table 4

C A P E V E R D E

Praia Port Project

Domestic Air Traffic

------ Freight----(000 tons)

Excess Passenger-km Ton-kmYear Passengers Baggage Cargo Mail (million) (000)

1967 7,886 12 23 8 1.7 -

1968 11,535 19 64 9 2.2 202.8

1969 14,315 21 102 9 2.5 225.6

1970 17,596 31 130 14 3.2 286.3

1971 24,382 51 213 18 4.3 383.4

1972 34,636 77 232 26 5.1 456.1

1973 43,010 118 306 31 5.9 526.6

1974 57,787 87 620 28 8.9 797.9

1975 64,494 116 764 37 11.1 1,004.6

1976 69,629 137 883 78 11.4 1,126.9

1977 75,287 251 1,015 84 12.9 1,303.7

1978 76,396 282 832 108 13.7 1,395.5

1979 85,223 340 707 106 16.0 1,504.1

1980 93,750 368 697 118 n.a. n.a.

Source: TACV, 1982

01/83

- 50 -Table 5

CAPE VERDE

PRAIA PORT PROJECT

Transport Sector Priorities for Four Year Plan 1982-85

(CVEsc. million)

Road TransportPriority 1 Priority 2 Priority 3 Total

Road construction & rehabilitationSan Antao 169.1 125.0 72.3 366.4Santiago 143.9 61.2 117.0 322.1Other Islands 77.6 113.0 151.9 342.5

Road maintenance brigades 28.0 - - 28.0

Transcor (Govt. bu.s agency)Financial study 4.0 - - 4.0Staff training 4.0 - - 4.0Vehicles & Offices - 85.4 13.0 98.4

Creation of Public Construction AgencyStudy - 7.0 - 7.0Implementation - - 158.0 150.0

Study of Private 'Transport - 4.0 - 4.0Subtotal 426.6 395.6 504.2 1,326.4

Maritime TransportPort construction,ereconstructicn

Praia 520.0 - 100.0 620.0Palmeira 205.0 - - 205.0Fogo 90.0 - 90.0Tarrafal - 205.0 - 205.0

Cargo handling equipment, JAP 60.0 - 55.0 115.0Strengthening JAP - 26.5 - 26.5Navigation aids 55.0 - - 55.0

Minor port works & utudies 37.0 19.0 5.0 61.0Arcaverde

400aWt interisLand vessel & barges 270.0 - - 270.0300dwt interisland vessel 9.0 - 120.0 129.01200dwt overseas vessel - - 150.0 150.0

800dwt petroleum tanker - - 150.0 150.0Radio communications - 250.0 250.0Technical assistance - 10.0 - 10.0Maritime School 1,78. 0 - - 78.0

Subtotal 1,324.0 260.5 830.0 2,414.5

Air TransportAirport construction/reconstruction

Sal-runway rehabilitation 435.0 - - 435.0Santiago-lengthening runway 53.0 - - 53.0Sao Nicolau-lengthening runway 80.0 - - 80.0Fogo-new terminal 95.0 - 15.0 110.0Sao Vicente-bitumen runway - 65.0 - 65.0Boa Vista-bitumen runway - 31.0 - 31.0Maio-bitumen runway - 32.0 - 32.0Brava-new runway - - 65.0 65.0San Antao-completion runway 12.0 - - 12.0

Communications & Navigation equipment 114.0 - - 114.0Fire-fighting equipment 84.0 - - 84.0Cargo handling equipment 40.0 - - 40.0Strengthening TACV 56.0 19.0 - 75.0Training airport staff 20.0 - - 20.0Stipetal 989.0 147.0 80.0 1,216.0TOTAL 2,739.6 803.1 1,414.2 4,956.9

Source: Atree/Getram, Republique du Cap Vert; Preparation du Plan Quadriennal, Esquissede Programmation dans le Secteur des Transports - November 1981.

01/83

- 51 -Table 6

CAPE VERDE

PRAIA PORT PROJECT

Details of Project Cost Estimate /1

Local Foreign Total Local Foreign Total % of Total

CVEsc million US$ million/2 Base Cost

Part A

1. Reconstruction of deep-waterberths and outside protection 110.40 579.60 690.00 1.84 9.66 11.50 45

2. Supervision 13.20 30.00 43.20 0.22 0.50 0.72 3

3. Physical contingency 10.80 58.20 69.00 0.18 0.97 1.15 5

4. Price contingency 36.60 121.20 157.80 0.61 2.02 2.63 11Subtotal Part A 171.00 789.00 960.00 2.85 13.15 16.00 64

Part B

1. Supporting facilities 43.80 92.40 136.20 0.73 1.54 2.27 92. Marginal berth 19.80 40.20 60.00 0.33 0.67 1.00 4

3. Cargo handling equipment-for Praia Port 21.60 58.80 80.40 0.36 0.98 1.34 6-for Porto Grande 18.00 57.00 75.00 0.30 0.95 1.25 5-for Maio and Bravo Ports 3.60 15.60 19.20 0.06 0.26 0.32 1

4. Supervision 3.60 6.00 9.60 0.06 0.10 0.16 15. Physical contingency 5.40 25.20 30.60 0.09 0.42 0.51 26. Price contingency 16.20 88.20 104.40 0.27 1.47 1.74 7

Subtotal Part B 132.00 383.40 515.40 2.20 6.39 8.59 35

Part C

1. Project preparation -- 12.00 12.00 -- 0.20 0.20 12. Technical assistance to ENAPOR 9.00 39.00 48.00 0.15 0.65 0.80 33. Technical assistance to MTC 6.00 36.00 42.00 0.10 0.60 0.70 34. Price contingency 3.00 9.60 12.60 0.05 0.16 0.21 1

Subtotal Part C 18.00 96.60 114.60 0.30 1.61 1.91 8

Part D

1. Maritime Training Center- Building 54.00 18.00 72.00 0.90 0.30 1.20 5- Equipment 3.00 69.60 72.60 0.05 1.16 1.21 5- Technical assistance 33.60 97.20 130.80 0.56 1.62 2.18 9

2. Physical contingency 0.60 3.00 3.60 0.01 0.05 0.06 --3. Price contingency 8.40 24.60 33.00 0.14 0.41 0.55 2

Subtotal Part D 99.00 213.00 312.00 1.65 3.55 5.20 21Total base cost A, B, C & D /3 339.00 1,152.00 1,491.00 5.65 19.20 24.85 100Total physical contingency 16.80 86.40 103.20 0.28 1.44 1.72 7Total price contingency 64.20 243.60 307.80 1.07 4.06 5.13 21Total project cost 420.00 1,482.00 1,902.00 7.00 24.70 31.70 128

/I No taxes included. The project is exempted from taxes except for customs duties on cargo handlingequipment./2 Rate of exchange US$1.0 = CVEsc 60.0./3 As of January 1, 1983 (without contingencies).

Source: Consultants/IDA staff.

01/83

- 52 -

Table 7

CAPE VERDE

PR.AIA PORT PROJECT

Estimated Schedule of Credit Disbursement

(US$ million)

IDA Fiscal Yearand Quarter Quarter Cumulative

1983/1984, quarter ending

September 30, 1983 0.75 0.75December 31, 1983 0.26 1.01March 31, 1984 0.39 1.40June 30, 1984 0.41 1.81

1984/1985, quarter ending

September 30, 1984 0.45 2.26December 31, 1984 0.48 2.74March 31, 1985 0.49 3.23June 30, 1985 0.52 3.75

1985/1986, quarter ending

September 30, 1985 0.56 4.31December 31, 1985 0.46 4.77March 31, 1986 0.39 5.16June 30, 1986 0.30 5.46

1986/1987, quarter ending

September 30, 1986 0.27 5.73December 31, 1986 0.25 5.98March 31, 1987 0.22 6.20June 30, 1987 0.20 6.40

1987/1988, quarter ending

September 30, 1987 0.22 6.62December 31, 1987 0.20 6.82March 31, 1988 0.20 7.02June 30, 1988 0.18 7.20

Source: IDA Staff.

01/83

CAPE VERDE

PRAIA PORT PROJECT

Traffic - All JAP Ports 1980(excluding bunkering and water supply)

Cargo (Tons) Ships(a)Foreign Interisland Foreign

Import Export Total Unloaded Loaded Total Total Trade Interisland Total

JAP Ports

Santo Antao

Paul 1,307 536 1,843 1,843 -- 59 59Ponta da Sol 3,604 -- 3,604 3,604 -- 25 25Porto Novo 10,554 873 11,427 11,427 -- 421 421Tarrafal MT 5,808 -- 5,808 5,808 -- 33 33

Subtotal 21,273 1,409 22,682 22,682 -- 538 538

Sao Vicente

Porto Grande 84,187 13,787 97,974 8,895 55,791 64,686 162,660 282 592 874 0

Sao NicolauPriguica 6,693 73 6,766 6,766 - 76 76Tarrafal 3,112 299 3,411 3,411 -- 69 69

Subtotal 9,805 372 10,177 10,177

Boa VistaSal Rei 2,982 252 3,234 3,234 -- 47 47

MaioPorto Ingles 5,184 3,281 8,465 8,465 -- 97 97

SantiagoPraia 89,536 855 90,391 22,120 18,079 40,199 130,590 158 158 316Pedra Badejo 1,250 628 1,878 1,878 -- 51 51

Subtotal 23,370 18,707 42,077 132,468 158 209 367

FogoVale dos Cavaleiros -- -- 12,927 413 13,340 13,340 -- 287 287

BravaFurna - 4,010 177 4,187 4,187 -- 186 186

Total JAP Ports 173,723 14,642 188,365 88,446 80,402 168,848 357,213 440 3,452 3,892

(a) Includes passenger ferries, mostly between Porto Grande and Porto Novo.

Source: JAP

01/83

2841A4 PORTY'00 51T

Tafc -Port o ~f 1rota aol Port, ,_oodo_(1976-1981)

ltE-1odlog Overseas Ships' Onke in l 1 and Water Sn...Iy)

1__976 __ _ 1977 _______ 978 1979 _ 19771980 _____1981

Overea -t-eisia-d Total O-er.eaa ,L-toos1-d Total Ivese- 1nreria1ad TotL Oesa [er1an a OOvr-s In-i)an rS 0-e.... Int-ri.2nd TerM1

Alongside 9 -S lOt 2I70l 12 il 224 12 189 27C... RT.- - 221,913 20140 )2, 205 5 234.519 5~,029 240,348 220,547 32,023 25,7Lighterge 109 201 3(0 10615 2 9 125 143 2 74 42 16 18 56 36 92 G.RhT. 327,52 42,19 369,681 2132,215 28.1537 260,135'2 26 5,86 24,90 1 290,/0/ 184,78 3 7,0084 192,46 ]01,/ 93 10,090 191,888 - - ____

81h10 Mnemat 109 201 318 106 152 258 129 14 5 2 74 135 181 31815 158 3)6 102 173 275R.T.. 127,572 42, 159 369,681 232,215 28,137 260,352 765,86 4981 287) 46698 28024 41,22 4,17999 4223 220547 32,823 252,570

ŽgU-q (InsUnloaded 45,847 24, 146 70,091 51,303 24,288 85,991 68,695 27.142 95,837 11,81) 15,316 01(17 89,916 22,120 Ili)656 28,09 1,6 0.4

loaded ,.)~~~~~~~~:96 n, os 9_on4 os43n 10,4621 1 2 ,11,4 1.242 12,217 11,279 69 ,10 9105 18.079 18,914 5_613 17,859 23.272

Ireosii - -- -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ STotal 41,743 32,143 79.897 ~~~~~~~ ~~~~ ~~~~~52,741 1494 769 W9.787 39,379 109.1)16 7-2 ,498 29 ,7130) 102.2 -96.391 40,199 13,99,42 3951247

Disem.barked 1.778 4,174 5,952 110 3.325 3,443 19 2,829 2,044 67 2.849 2.916 3 3,304 3.307 121 4,064 4,8imbarked 854 2,926 3,580 17 2,302 7,319 5 1 ,7 63 1.168 - 2,605 2.605 3 3.056 3.059 4 4,017 4,2Tra_sit 102 - (0 408 2 4111 7 26 21 49 26 75 14 37 51 544___ -

local ~~~~~~ ~~~2,334 7, 100 9,64 543 3,629 6 ,1)72 27 3.818 3,845 116 3.480 3,596 _20 6,397 6,417 669 8,081 8,750

Aloogside 222 897 1(9 3881 19 11 0 9687 987 144 688 I .976 202 592 874 20601 85C.D.T. ~~~~~~~91313 1 27,741.)40,9 1,8,11 111,l17 1,297,89 1,007736 11,37 1.127,073 1,)7142 106,9)8 1.2,7 80663 13,56 984,0)9 84,3 15529941

Uetoded75.31 /7361 83,1119 96169~I 6,91 101~1,13 82.3)5 8,93 .28 641,420 10.7)6 1i .496 84,7187 0,95 93.082 S2I9 8,8830 9,3Loade 2,549 9686 5866 7,180 55,83 6721) 7,06) 713.299 8030 4,8 9,5 4,6 3,85791 69.578 3,567 38349 391

Transit - - - - --~~~~~~~~~~~~~~~~~~~~~~~~~~~2,1 - -55 3 7Total 77,932 63,883 141,735 (0,4 204 165,363 I 916 8. 8352 171,288 66,22 49,811 1)6,056 9,)4460 2408,759.91293

Diarba-ked 411 31,636 34,067 I2 29,064 29.576 - 31,127 31,127 - 11)717 33.7)17 30,467 30,467 -38,921 1,2Embarked 250 26,738 26,988 26.738 26 ,7 38 - 27,512 27.512 - 9,019 29,819- 29,212 29,212 39,277 327T,.-ait _8183 ____ 1,830 -

Total ~~~~~~ ~~~2,491 60.374 62,865 (2 55.802 35,014 - 869 S,1 - 3 5 6 4,3 5,7 969-78,198 78,198

Pra"s 4tt. 7,7432 32 632,4034 9073 52,741 34 34,914 36 87,655 35 69,737 44 39,379 22 109,1.6 19 72,490 52 29,730 37 102.228 47 90,391 48 40,199 38 (30,590 45 95,892 52 37,925 46 2,47 0Onren lirande 77,932 62 63,403 ~~~~~~66 141i, 735 64 103.349 66 62,014 64 165,363 63 09,436 956 81,852 60 171,288 61 6L6,225 _48 49,831 63 1 16,0_56 51 91,974 92 64.,606 62 162.660 99 84 735 48 39.1_79 44 123.934 58

Total 125,475 700 95,997 188 221,632 8D8 156.0908830 96,928080 25-3,018 18-0 1959,173 1o8 12-1 ,2-31 199 200,404 100 138.72 1(00 79.561 100 2 16 ,284 (00 (86,165 100 104,885 100 293.250 100 178,247 100 72.104 100 75,5 0

oSr-- JAP

01/83

CAPE VERDE

PRAIA PORT PROJECT

Cargo Traffic, Praia, Actual and Forecast, 1976-2006

(000 metric tons)

Actual Forecast

1976 1977 1987 1979 1980 1981 1986 1991 1996 2001 2006

Foreign Trade

ImportsCorn 15.3 22.2 n.a. 26.3 27.5 27.9 29.3 30.8

Cement 28.2 23.3 n.a. 32.6 39.6 48.2 58.7 71.3

Fuel 6.8 7.0 n.a. 9.2 11.8 15.1 19.2 24.5

General cargo 21.5 37.0 n.a. 42.9 54.7 69.9 89.2 113.8

Total 45.9 51.3 68.7 71.8 89.5 88.1 111.0 133.6 161.2 196.4 240.4

Exports 1.8 1.5 1.0 0.7 0.9 5.4 6.5 8.0 9.8 12.0 15.5U,U,

Total Foreign 47.7 52.8 69.7 72.5 90.4 93.5 117.5 141.6 171.0 208.4 255.9

Interisland Trade

UnloadedGeneral cargo 24.1 24.3 27.2 15.4 22.1 15.1 16.7 18.4 20.3 22.4 24.8

Industrial Fishing 5.0 6.6 8.7 11.5 15.0

Total 24.1 24.3 27.2 15.4 22.1 15.1 21.7 25.0 29.0 33.9 39.8

Loaded 8.0 10.6 12.2 14.3 18.1 17.9 20.8 24.1 27.9 32.3 37.5

Total Interisland 32.2 34.9 39.4 29.7 40.2 33.0 42.5 49.1 56.9 66.2 77.3

TOTAL PORT 79.9 87.7 109.1 102.2 130.6 126.5 160.0 190.7 227.9 274.6 333.2

Source: JAP/IDA Staff.

04/82I-.

- 56 -

PTable llC' A P E_ V E R D E

Praia Port Project

Cargo Traffic F'orecasts for JAP Ports, 1982-86

('000 M. tons)

(Excluding Sal Island)

Actual ____ Forecast1980 1981 1982 1983 1984 1985 1986

PRAIAForeign Trade

Impor tsCorn 22.2 n.a. 23.2 24.8 25.4 26.0 26.3

Cement 23.3 n.a. 27.9 29.0 30.1 31.3 32.6

Fuel 7.0 n.a. 7.6 8.0 8.4 8.8 9.2

General Cargo 37.0 n.a. 35.3 37.0 38.9 40.8 42.9Sub-total 89.5 8 T 94.0 98.8 102.8 106.9 111.0

ExportsFish and Fish Product - - - - - 4.5 4.5

General Cargo 0.9 5.4 2.0 2.0 2.0 2.0 2.0

Sub-total 0.9 5.4 2.0 2.0 2.0 6.5 6.STotal Foreign 90.4 93.5 96 0 100.8 104.8 112.4 117.5

Interisland TradeUnloaded - General 22.1 15.1 15.4 15.7 16.0 16.3 16.7

Fish - - - - 5.0 5.0

Loaded 18.1 17.9 18.4 19.0 19.6 25.1 20.8

Total Interisland 40.2 33.0 33.8 34.7 35.6 41.4 42.5

Total Praia 130.6 126.5 129.8 135.5 140.4 154.8 160.0

PORTO GRANDEForeign Trade

ImportsCorn 25.9 n.a. 24.9 24.3 23.7 23.1 23.4

Wheat 15.0 n.a. 15.6 15.9 16.2 16.6 16.9Cement 9.7 n.a. 10.7 11.2 11.8 12.4 13.0Fuel 2.0 n.a. 2.2 2.3 2.4 2.5 2.7General Cargo 31.6 n.a. 34.8 36.6 38.4 40.3 42.3

Sub-total 84.2 81.2 88 2 90.3 92.5 94.9 98.3

Exports13.8 3.6 7.0 10.0 12.0 14.0 16.0

_otal ForejZi 98.0 84.8 95.2 100.3 104.5 108.9 114.3

Interisland TradeUnloaded-- General 8.9 3.8 9.2 9.3 9.5 9.7 9.9

Fish - - - 3.3 5.5 7.7 9.9

Loaded 55.8 30.3 30.9 31.5 32.2 32.8 33.5

Sub-total 64.7 39.1 40.1 44.1 47.2 50.2 53.3

Total Porto Grande 162.7 123.9 135.3 144.4 152.6 159.1 167.6

MINOR PORTS (JAP only)InterislandUnloaded 54.8 47.9 48.9 49.8 50.8 51.8 52.'

Loaded 4.4 5.3 5.4 5.5 _5.6 5.7 5.9

Total Minor Port:s 59.2 53.2 54.3 55.3 56.4 57.5 58.8

Source: TDA Staff

01/83

CAPE VERDE

PORT OF PRAIA

Lighterage Costs Avoided by Project(CVEsc million)

Lighter Berths 1/ Cranes 2/ Lighter Fleet 3/Maintenance Maintenance

Year Capital Maintenance Capital & Operating Capital & Operating Total

1987 123.0 0.6 38.5 34.5 257.0 21.3 474.91988 -- 0.6 -- 35.5 -- 21.4 57.5

1989 -- 0.6 -- 36.7 -- 21.6 58.9

1990 -- 0.6 -- 37.9 30.0 23.2 91.7

1991 43.0 0.6 5.5 39.7 -- 23.4 112.2

1992 -- 0.8 -- 40.9 -- 23.5 65.2

1993 -- 0.8 -- 42.1 -- 23.7 66.61994 -- 0.8 -- 43.6 38.0 26.9 109.3

1995 -- 0.8 44.0 45.0 -- 27.1 116.9

1996 16.0 0.8 -- 46.8 -- 27.2 90.8

1997 -- 0.9 48.2 -- 27.4 76.5

1998 -- 0.9 -- 49.9 45.0 29.9 125.71999 -- 0.9 -- 51.5 -- 30.1 82.5

2000 16.0 0.9 11.0 53.9 -- 30.3 112.1-2001 -- 1.0 -- 55.9 -- 30.5 87.4

2002 -- 1.0 -- 57.7 53.0 34.6 146.3

2003 16.0 1.0 49.5 60.3 -- 34.8 161.6

2004 -- 1.0 -- 62.5 -- 35.1 98.6

2005 -- 1.0 -- 64.8 30.0 36.9 132.7

2006 16.0 1.0 5.5 67.4 -- 37.1 127.0

Salvage Value 4/ 110.5 30.8 110.0 251.3

1/ Annual capacity 30,000 tons per berth; CVEsc 16 million per berth plus one initial access ramp at CVEsc 27million and a second ramp in 1991; maintenance 0.5% p.a. H

2/ One per berth plus one spare, at CVEsc 5.5 million each; repairs and maintenance 10% p.a.; operating costs(including gang/labor) CVEsc 200 per ton.

3/ One lighter per 15,000 tons, at CVEsc 15 million each, and one tug (CVEsc 23 million) per four barges plus onespare. Operating costs including repairs and maintenance 5% p.a. for barges, and 10% p.a. plus CVEsc 25 perton for tugs.

4/ Based on linear depreciation and lives of 30 years for berths, 20 years for fleet and 8 years for cranes.

04/82

- 58 - Table 13

CAPE VERDEFRAIA PORT PROJECT73hip Time Savings

1987 1991 1996 2001 2006A. Foreign Trade

Port Traffic ('000 tons) 123 142 171 208 256

Ship CharacteristicsAverage size (dwt) 3,500 4,000 4,500 5,000 5,500Cost per day in port(Esc '000)1/ 300 340 350 380 400

Handling ProductivityAlongside (tons/ship/day) 400 430 460 490 520Lighterage (tons/ship/day) 265 270 275 280 285

Ship Time in Port: (days)2/With Project 308 330 372 424 498Without Project 487 552 653 780 938Savings in Ship Time 179 222 281 356 440

Value of Ship Time Savings(Esc '000) 53,700 75,480 98,350 135,280 176,000

B. Interisland TradePort Traffic ('000 tons)3/With Project 38 42 48 55 62Without Project 30 34 38 43 47

Ship CharacteristicsAverage size (dwt) 260 300 320 340 360Cost per day in port(Esc '000)1/ 31.2 36.0 38.4 40.7 43.2

Handling ProductivityAlongside (tons/ship/day) 160 175 190 205 220Lighterage (tons/ship/day) 100 105 110 115 120

Ship Time in Pori: (days)2/With Project 238 240 253 268 286Without Project 315 340 362 393 412Savings in ship Time 77 100 109 125 126

Value of Ship Time Savings(Esc '000) 2,402 3,600 4,186 5,088 5,443

1/ Derived from A&P Appledore Ltd. Representative Ship Costs, August 1980.2/ For lighterage (without project) assumes waiting time equivalent to 5%

of service time. Analysis of berth utilization with project suggeststhere would be no waiting time until year 2002; waiting time included inproject case from this year.

3/ Traffic with the project is as shown in Table 10, less fish catchlanded. There is less interisland traffic without the project because ifPraia returns to lighterage its satellite islands would be suppliedlargely through Porto Grande.

01/83

CAPE VERDE

PRAIA PORT PROJECT

Summary of Benefits and Costs, Praia(CVEsc Mlillion)

Year Costs Benefits

Capital & Maintenance 2/ Lighterage Costs Ship Time Reduced Cargo Benefits toReplacement 1/ Avoided 3/ Savings Damage 4/ Cape Verde 5/ Total Benefits

1983 94.2 _1984 254.0 _1985 399.8 -1986 360.7 1987 - 11.2 474.9 56.1 17.2 521.4 548.2

1988 - 11.2 57.5 66.1 17.6 107.0 136.2

1989 - 11.2 58.9 66.6 18.4 112.1 143.9

1990 _ 11.2 91.7 72.7 19.0 148.6 183.4

1991 - 11.2 112.2 79.1 19.7 173.2 211.0

1992 - 11.2 65.2 83.3 20.3 129.0 168.8

1993 - 11.2 66.6 87.7 21.1 133.5 175.41994 31.5 11.2 109.3 92.4 21.8 179.3 223.5

1995 _ 11.2 116.9 97.3 22.6 190.2 236.81996 2n.9 11.2 90.8 102.5 23.4 167.6 216.7

1997 - 11.2 76.5 109.2 24.2 157.5 209.91998 - 11.2 1.25.7 116.2 25.1 211.2 267.0

1999 _ 11.2 82.5 123.8 25.9 172.7 232.22000 - 11.2 112.1 131.9 27.0 207.4 271.0

2001 11.2 87.4 140.4 28.1 188.2 255.9

2002 31.5 11.2 146.3 147.8 29.1 251.8 323.2

2003 11.2 61.6 155.5 30.2 272.2 347.3

2004 5 11.2 98.6 163.7 31.5 214.6 293.8

2005 6 11.2 132.7 172.3 32.7 254.2 337.7

2006 - 127.0 181.4 34.0 254.4 342.4

SalvageValue 291.3 251.3 Rate of Return: 13.8% 17.0%

1/ Following economic lives assumed: 30 years for berths, 20 years for shore structures, 10 years for utilities fencing

and paving, 8 years for equipment. Salvage value based on linear depreciation. H

2/ Berths 0.5% p.a.; shore structures 2% p.a.; utilities, fencing and paving 5% p.a.; equipment 10% p.a.

3/ See Table 12 for details.4/ Equivalent to 0.4% of cargo which would have to be lightered without project, valued at CVEsc 28,OOOper ton.

5/ Assuming 100% of time savings to interisland vessels, and 5u% of time savings to foreiga trade vessels, accrue to

Cape Verde. See Table 13 for details.

01/83

CAPE VERDE

PRAIA PORT PROJECT

Ecnnomic Evaluation of Equipment(t'000 and CVEsc million)

Costs 1/ BenefitsForklifts, Tractors, and Trailers Cranes

Year Tons Handled SaVi 2/ Tons Handled Savings 3/ Benefits to Cape Verde 4/ Total Benefits

1985 112.01986 9.0 140.0 Z6.6 50.0 6.0 29.6 32.61987 9.0 146.3 27.8 52.3 6.3 31.0 34. 11988 9.0 152.9 29.1 54.6 6.6 32.4 35. 7

1989 9.0 159.8 3. 51.1 6.9 33.9 373

1990 9.0 167.0 31.7 59.6 7.2 35.3 38. 91991 9.0 174.5 33.2 62.3 7. 5 37.0 40.7 11992 9.0 182.3 34.6 65.1 7.8 33. 5 42. 4 0

1993 9.0 190.5 36.2 68.0 8.2 4J .3 44. 4

Rate of Return: 14 . 5% 18 . 3%

1/ Includes capital cost of equipment and spares, plus 5% plhysical contingencies, subsequent maintenancecost of 8% per year, and cost of workshop equipment. Cost of mobile crane at kraia kana corresponding

benefits excluded as these are incorporated in evaluation of infrastructure component (Table 14).

2/ Operating costs of forklifts, tractors and trailers estimated at CVEsc 300 per hour with a throughputof CVEsc 10 tons per hour, thus CVEsc 30 per ton. In absence of project, cargo would be handled manually,at CVEsc 110 per ton. Cargo handling savings are CVEsc 110 - 30 = 80 per ton. Prompt removal of cargo fromquayside will reduce damage and spoilage, equivalent to 0.3% of cargo handled, average value of which is

CVEsc 36,000 per ton, producing additional savings of CVEsc 110 per ton. Average value of cargo is higher min this calculation than in Table 14 because latter relates to cargo including corn, which has a relativelylow valiue per ton.

3/ It is estimated that the additional cranes will produce a 30% increase in productivity (throughput per hour)yielding slip time savings equivalent to CVEsc 210 per ton. Operating costs of CVEsc go per ton need to bededucted leaving net benefits of CVEsc 120 per ton.

4/ Assumes Cape Verde captures 50% of ship time savings.SOURCE: IDA Staff 01/83

PRATA PORT PROJECT

JAP's Provisional Revised Balance Sheet as of Decembe 31, 1980

CVEsC 000

Assets Liabilities

Net Fixed Assets in Use Equity CapitalValue as of Capital 150,000December 31, 1980 Equity 181,391

AccumulatedGross Value Depreciation Value Long-term Debt

Land 41,657 - 41,657 Government for AidInfrastructure 303,749 160,432 143,317 from Holland 38,784 v

Building 81,293 20,918 60,375Equipment 99,980 41,060 58,920 Short-term LiabilitiesTotal 526,679 222,410 304,269 304.269 Sundry Creditors 200

Debt Due 1981 5,0005,200

Current Assets Bad orDebtors lrrecoverablePre-independence 11,727 11,727 -From Operations 9,680 290 9,389Sundry 893 26 867Guarantee Deposits 542 - 542

22,844 12,044 10,799Accounts under enquiry 7,965Stores and Spares 798Cash in hand, Bank and on Deposit 51,544

71,106

375,375 375,375

Debt/Equity Ratio 10/90Quick Ratio- 13.8

Source: JAP, Revised by IDA Staff04/82

- 62 - Table 17

CAPE VERDE

PRAIA PORT PROJECT

JAP's Receipts and Payment Accounts for Years Ended March 31

(CVEsc 000)

1976 1977 1978 1979 1980 1981

ReceiptsShips:Harbor Dues 93 106 106 114 86 86Berthage 1,399 1,811 1,725 1,907 2,387 1,941Stevedoring 37,816 43,681 44,569 44,293 46,185 60,059

Towage -- 2,052 1,617 1,857 1,722 4,001

Craneage 2 65 590 1,103 2,250 2,404Provision of Water and Electricity -- 115 137 628 910 614

Subtotal 39,310 47,830 48,744 49,902 53,540 69,105

Cargo:Wharfage 1,964 2,604 1,734 2,532 3,142 3,172Storage 814 1,089 2,220 5,107 7,665 5,613

Subtotal 2,778 3,693 3,954 7,639 10,807 8,785

Passenger Dues and Baggage 569 208 117 86 119 116Miscellaneous 1,241 2,765 4,191 5,710 10,493 5,466

Total Receipts 53,898 54,496 57,006 63,337 74,959 83,472

PaymentsSalaries and Wages and Ottier

Labor Costs 28,317 27,076 30,190 31,398 37,885 40,439Oil and Fuel 742 739 1,130 1,438 1,884 2,412Repairs and Maintenance 2,247 2,256 1,974 2,264 3,336 4,738Administration 286 432 447 517 606 2,187General Operating Expenses 2,806 8,694 7,108 7,174 8,309 923Social Security, Workmen's

Accident Insurance, etc. 792 787 836 1,120 1,548 1,690Miscellaneous Expenses 221 863 2,588 289 534 237

Total Operating Payments 35,411 40,847 44,273 44,200 59,102 52,626

Cash Surplus From Operations 8,487 13,649 12,733 19,137 20,857 30,846

Deduct Capital Expenses:Construction and Large Repair Works 1,913 3,431 2,114 615 2,449 1,947Office Equipment 68 85 27 29 94 162Investments 498 1,059 5,448 1,532 2,849 9,084

Subtotal 2,479 4,575 7,589 2,176 5,392 11,193

Net Cash Surplus 6,008 9,074 5,144 16,961 15,465 19,653

Ratio, Cash Operating Expernses/Receipts % 81 75 78 70 72 63Cash Operating Expenses, includingNotional Depreciation/Receipts x 103 95 97 88 88 77

Note 1/ Operating Surplus before depreciation.Source: JAP

04/82

CAFE ')ERDEPRAIA F'ORT F'IOiECT

ENPFOR

TRA' FFIC STATISTICS FOR ENAPOR

1980 1981 1982 1963 J.9A4 1.985 1986 1987 1988 1989 1990

NUM;FP OF SHIPS 1323. 1074. 108 tO68. 1007. 970. 960. 912. 926. 882. 842. 611.

TQT(l. TONNAGE 352. 302 3t6. 33'14 748. 370. 385. 405. 427. 449. 472.

AVVFnRF STAYING TIME 1.52 1.54 1.51 1.57 1,56 1.53 1.57 1.59 1.63 1.72 1.80

F F:T 'r. T N P XE X

N1tUlttN-OL INtFLATI0N 0.15 0.150 I,-J0 0. 1.4 0 0.1A 0 .1-0 0.120 0.1l" 0 .10O 0.090 0.080

INTE;:NAVIINAI INFLArION 0.140 0 .120 0.08( 0.000 0.070 0.070 0.070 0.070 0.060( 0.060 0.060

SALA)RY INCREASES 0.160 0.120 0.12.0 0.100 0.080 0.080 0,080 0.0O0 0.070 0.070 0.070

ST IF4 NERTr INCREASE 0.040 0.030 0.030 0.0';50 0.030 0.02() 0.020 0.020 0,020 0.020 0.020

[OVESTMENT FRICE INDEX 0,000 0.000 0.000 0.0/0 0.07(0 0.070 0. 060 0.060 0.00 0.060 l.060

1JEPRECTATIMN NATTONP.L. ClURREN. 0.000 0.150 0.200 0.050 0.050 0.030 0.030 0. 020 0.020 0.020 0.020

REAL TARIFF rlHCREASF:S (1)

TARTFF IW'RFASF: ON SHIPS 0,000 -0.150 2.000 0.4 A00 0.400 (.3100 01.00 0,000 0.000 0.000 0.000

T ARIFF TNCR. ON STAYINO TIME 0.000 -0,1750 2.000 0.150 0.400, 0.300 0.100 0+000 0.00( (1.000 0.000

TARTFF INCR. ON MEFRCHANrIisE 0.000 -0.150 0.300 0,100 01.SO 0.J.(1 0+050 0.010 0+000 -0.100 0.00(

TARIFF INCRE6SE ON PENTAlS 0.000 -0.150 1.000 0,100 0.150 0.100 0.000 0.000 0,000 0.000 0-000

TARIFF INCR. FOR WORKSHOFS 0.000 0,000 0.000 0.O0 0-000 0.000 0.000 0.000 0.000 0.000 0,000

AVERACE TARIFF INCREASE 0.000 -0.150 0.65t 0.158 0.19?6 0,140 0.054 0.007 0,000 -0.072 0.000

(1) 0JN TOF- OF LOCAL INFl_ATION H

01/83

CAPF VFRDEPRAIA PORT PROJECT

ENAPORPROJFCTFD INCOMF SlATFMFNlS FY 1980-1990

(IN THOUSAND ESCUDOS)

1980 1981 1982 1983 t984 1985 l976 1987 1988 19R9 1990

REVENUES

REVENUE ON SHTPS 2473. 1963. 6735. 10500. 16140. 23465. 28354. 30658. 32122. 33449. 34793.

REVFNIJE ON STAYING TIME 2387. 1924. 6465. 10474. 15938, 22837. 28217. 30839. 33186. 36,17. 39651.

REVFNUlE ON MERCHANDISF 50057. 41980. 66086, 8/041. 118894. 157128, 192274, 224713. 260611. 268832. 305211.

RENlAlS 8575. 6805. l,569. 18413. 23249. 28601. 34119. 33971. 35593. 37065. 3R553.

MISCELLANFOUS REVENUES 10612. 12204. 14034. 1F:999. 18239, 20610. 23083. 25392. 27931, 30445. 3728eo.

REVFN!F ON WORKSHOP 0. 0. 0. 0, 0. 0. 0. 0. 0. 0. 0,FORCE ACCOLUNT 0. 0. 0. 0. 0. 0. 0. 0, 0. 0, 0,

TOTAL REVENUlE ON OPERATIONS 74104. 64876. 108889, 142428,. 192460. 252641. 303347. 345572. 389443. 406338. 451089.

EXPENtiT tlRES

STAFF COSTS 39433. 41698. 48672. 55727. 62397. 70178. 78126. 87459. 97129, 107752F. 119542.

MATERIALS AND FUELS 1884. 2091. 2700. 2942. 3222. 35i27. 383/, 4141. 4337. 4553. 4807.GENERAL FXFENlilTuRES 1225:. 1f7°3. :-e6z. 21392. 2SE9O4. 303A-7 3';712?, 4l2'A7 A7640. 5,4524. 61830.

TOTAL WOPKINV, EXPENDITURES 53568. 585R2. 69235, 80050. 91213, 104072. 117674. 132846. 149106. 166829. 186186.

CASH GENFRATION 20536. 6293. 39654. 62377, 101247, 148569. 185672, 212725. 240337. 239509. 264903.

DEPRECIATION ON INFRA 8830. 9198. 9191. 17571. 32101, 48353. 60860. 63993. 66957. 70161. 73626,

DEPRECIATION ON BUILIDTNGS 3682. 4065. 4065, 406,. 4065. 4065. 4065. 4631. ,?44. 5906. 6622.

DEPRECIATION ON EDUIPMENT 10752. 1ttOO. 11091. 11082. 17183. 25015. 35074. 46044. 48758, 51693. 54866.

TOTAL DFFR. (NON REV. ASSFTS) 23264. 24362. 24347, 32718. 53349. 77433. 99999, 114669. 120958. 1.27760. 135114.

TOTAL OPFRATING COSTS 76832. 82945. 935R2. 112768. 144562. 181505. 217673. 247515. 2/0064, 294588. 321300.

NET OFERATING REVENUE -2728. -18069. 15307, 29660. 47898. 71136. 85673, 98057. 119379. 111749. 129789.

INTEREST CHARGE 1. 1. 1. 1. 13472. 39152. 68564. 92234. 98346. 97091. 95373.LOSS (GAIN) ON FOREIGN EXCH. 0. 0. 0. 0. 374. 1704. 3954. 2278. 2531. 3981. 5381.

RESUIT ON OPERATIONS -2729. -18070. 15306, 29659. 34052. 30780. 13154. 3F745. 18502. 10677. 29034.

EXTRA OPERATIONAL REVENtUE 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.

EXTRA OPERATIONAI EXPENSES 534. 645. 779. 932. 1116. 1324, 1557. 1798. 2077. 2377. 2695.

NET RFSULT -3263. -18715. 14527. 28727, 32937. 28956, 11598. 1747. 16429. 8301. 26339.

(0

RATIO

WORKING RATIO 0.72 0.90 0.64 0.56 0.47 0.41 0.39 0.38 0.38 0.41 0.41

OPERA1ING RATIO 1.04 1.2H 0.86 0.79 0.75 0.72 0.72 0.72 0.69 0.72 0.71

INTERFST COVERAGE RATIO -2728.00**t***t*15306.8529659.56 3.46 1.74 1.18 1.04 1.20 1.13 1.33

DEBT SERVICE RATIO 20536.00 6293.38 4.09 6.43 4.30 2.94 2.56 1.77 1.52 1.43 1.52

01/83

- 65 -

CAFF VERDE Table 20FR1IA FORT FRrJECT

ENAF'ORPRO.JFCTED BAiANCE SH0 IS FY 1980-1990

(IN THOUSAND ESCUDOS)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

ASSETS

FIXED ASSETS

LAND 41657. 41657. 416'7. 41657. 41657. 41657. 41657. 416',7. 416'7. 11657. 41657.INFhKSTRUCTURE 303749. 303-,?9. 30''.9. 0798al.10093.l09.R3R8.2111781.?2099.231,315.242966S,F'UILDINS 81293. 81293. 81?93. 81293. 81293. 81293. 81293. 9:-624. lIOB75. 118121. 132442.EOUIPMFNT 99980. 99900. S9820. 99740. 1',4647. 22'13F. 315667. 414399. 438621. 465233. 493795.

TOTAL GFOSS FIXED ASSETS 526679. 526379. 526079. 802-31.133.939.1943741.2447003.2660461.2791922.2940325.3097560.

2EFRF2TATION ON INFRASTRUCT 160432. 169410. 178381. 195732. 2:7613. 27',746. 3:S6387. 400160. 466897. 536838. 610244.IE-R'CI,'TT0N ON BIILDINGS 20918. 24983. 29047. 33-12. 37177. 41241. 4,306. 49977. S'181. 61087. 67709.LEPRECIATION ON EGUIPMFNT 41060. S2080. 635091. 74093. 91196. 116132. 1',1126. 197090. 245768. 297381. 352167.

TOTAL DEPRECIATION 222410. 246472. '27019. 302937. 355986. 433119. 532818. 647187. 76784'. 895305.1030120.

OTHER INVESTMENT 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.

TOTAL NET FIXED ASSFTS 304269. 279907. 2'5560. 499594. 980953.1510622.1914187.2013273.2027076.2045020.20674'40.

OTHER FIXED ASSETS 0. 0. 0; 0. 0. 0. 0. 0. 0. 0. 0.

TOTAL FIXED ASSETS 304269. 279907. 205'J60. 49959'. 980953.15106?2.1914187.2013273.2027076.2045020.2067440.

CURRENT ASSETS

STORES 798. 902. 1206. 1327. 1467. 1619. 1775. 1926. 2024. 2132. 2259.RECF lVABLES 18764. 17380. 23982. 29013. 36517. 4',4,. 53150. 09481. 66060. 68599. 75312.;RTFA'i' EXPFNSES 0. 752. 2350. 3972. '6417. 7576. 9616. 11892. 14331. 1698?. 19893.

CASH AVAILABLE 51544. 57751. 78',17. 115327. 173763. 252412. 327211. 337016. 329417. 306181. 290095.

TC-TAL CURRENT ASSETS 71106. 76785. 106055. 149639. 217394. 307152. 391752. 410318. 411837. 393902. 387559.

TOTAL ASSETS 375375. 306691. 361610. 649232.1198347.1iR17774.230'.939.2423592.2?38913.2438922,2454999.

LIABILITIES

PERMANENT FINANCING

CAPITAL 150000. 1:,OOO. 100000. 100000. 150000 100000 100000 100000. 150000. 1',0000. 150000.RETAINFD EARNINGS 181391. 162676. 1,'7. 312249. 524220. 750A91. 9:0819. 907'66. 9:3991. 932292. 958631.LONG TERM DEBT 38784. 3h784. 29089. 181625. 514685. Q00091.1;'21008.1332818.13298S0.1321903.1312118.

TOTAL FERMANENT FINANCING 370175. 351460. 356292. 643874.118890'.1800S02.2279877.2390383.2403841.2 404195.2420749.

CURRENT LIABILITIES

ACCO'uNrS F'AYABLE 200. 231. 322. 359. 401. 446. 493. S38. 568. 600. 638.ACCRUALS 5000. 5000. 5000. S000. 9(41. 1674'. 2:i:,69. 32670. 34504. 34127. 33612.OVERDRAFTS 0°. 0. 0. 0. 0. 0. 0. 0 0. 0°. 0

TOTAL CURRENT LIABILITIES 5200. 5231. 5322. ,359. 9442. 17192. 26062. 33208. 35071. 34727. 34250.

TOTAL LIABILITIES 37537'. 37'691. 361615. 649272.1198A47.181 7774.230D939.2423:392.2437813.4238ss2 .2'¶54999.

RATIO

CURFENT RATIO 0.07 0.07 0.00, 0.04 0.04 0.06 0.07 0.09 0.09 0.09 0.0wLIOCIDITY PAT10 D.07 0.07 0.0', 0.04 0.04 0.06 0.07 0.08 0.09 0.09 0.09DlELl-FO'ITY RATIO 0.1 2 0.12 0.09 0.3v 0.76 1.00 1.16 1.26 1.24 1.22 18.1fATF OF RETURN -0.01 -0.0 0 .06 0.06 0.0i; 0.00 0.0 1 0..hO O..O, 0.06RATE Or RET. Os RFV. ASS. -0.01 -0.06 C.06 0.06 0.04 0.04 0.03 0.04 0.04 0.04 0.04

01/83

CAPE VERDEPRAlA PORT PROJECT

ENAPORPROJFCTED SOURCFS AND APPLICATIONS Of F PNDS FY 1981-1990

(IN THOUSAND ESCUDOS)

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

LONG TERh SOURCES

CASH GENERATED 6293. 39654. 62377, 101247. 148569, 185672. 212725, 240337. 239509. 264903.BORROWINGS 0. 0. 162231. 342755. 395101. 3rH3967, 134616. 54517. 58944, 63730,CAPITAL INCREASE 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.GOVFRNMFNT CONTRIBUTIONS 0. 0, 106319. 179035. 197314, 143730, 0. 0. 0. 0,NON OPERATING RFFNUES 0. 0. 0. 0. 0. 0. 0. 0. 0° 0.NON OPERATING EXPENSES -644. -77;. -931. - 1323. - 556 -1797 -2076. -237A. -2695.

TOTAL LONG TERM SOURCES 5649. 38875. 329995. 621921, 739662. 651813. 345543. 292778. 296076. 325938.

LONG TERM APPL ICATIlOS

I V ESTMET F N IFRASTRCTU n. 97A752. 479721. 536530, 412956. 103612, 9800B. 105966, 114571.INVESTMFNT ON FORCE ACCOUNT 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.INVESTMENT IN BUILDINGS 0, 0. 0. 0. 0. 0. 11331. 12251 . 132416 14321.INVESTMENT IN EOUIPMENT 0. 0. 0. 54987. 70572. 90608, 98812. 24502. 26492. 28643.

TOTAL INVESTMENT 0. 0. 276Y52. 534708. 607102, 503561, 213756. 134761, 145704. 157535.

INTEREST 1. 1. 1. 13472. 39152. 68564, 92234. 98346, 97091. 95373. aREPAYMENT 0, 9695. 9695. 9695. 9695, 0. 25856, 5/484, 66891. 73515.LOSS (GAIN) ON FOREIGN EXCHANGE 0. 0. 0. 374. 1704, 3954. 2278. 2531. 3981. i381.

TOTAL DEBT SERVICE 1. 9696. 9696. 23541. 50551. 72519. 120368. 158362. 167963, 174269.

TOTAL OTHER INVESTMENT 0. 0. 0. 0. 0. 0, 0. 0. 0, 0.

TOTAL LONG TERM APPLICATIONS 1. 9696. 286448. 558249. 657653, 576083. 334124, 293122. 313667. 331804,

EXCFSS LT. SOURCES / LT. APPLIC 5648, 29179. 43547'. 63672. 82008. 75730. 11420. -345, -17591. -5866.

SHORT TERM SOUlRCES

INCREASF ACCRUALS 0. 0. 0. 4041, 7704, 8824. 7101. 1834, -376. -515.INCREASE PAYABLES 31. 91. 36. 42, 46. 47, 45. 29. 32. 38,

SHORT TFRM APPLICATIONS H

STORE INCREASE 104. 305. 121. 140. 1,2. 155, 152. 98. 108. 127,INCREASF RECEIVABLES -1384. 6602, 5031. 7505. 9027. 7606. 6334. 6581. 2534. 6713, (DINCREASE PREFAID EXPENSFS 752. 1598. 1622. 1674. 1929. 2040. 2276. 2439, 2658. 2904,LIQUIDITY INCREASE 6207, 20766. 36810. 58436, 78650. 74799. 9805. -7599. -23235. -16087.

CASH AT THE END OF PERIOD 57751. 78517, 115327. 173763, 252412. 327211. 337016, 329417. 306181. 290095.

01/83

IBRD 16104, 00 t,7?gorto llsSo' ,52 2Or AUOJSO 99S2

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i:000;00; Airport / / PRAIA PORT PROJECTPRAIA PORT LAYOUT

PRAIA

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