The World Bank. Public Disclosure Authorized. ocument of. FOR OmCAL USE ONLY. Rqort No Public Disclosure Authorized PROJECT COMPLETION REPORT

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ocument of The World Bank FOR OmCAL USE ONLY PROJECT COMPLETION REPORT REPUBLIC OF GHANA PORT REHABILITATION PROJECT (CREDIT 1674-GH) JUNE 14, 1994 Infrastructure Operations Division Western Africa Department Africa Regional Office Rqort No This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EOUIVALENTS Currency Unit=cedi (C) US$ 1.0 (1986)=90 cedis (SAR). (1987)= 154 cedis (1988)=203 cedis (1989)= 270 cedis (1990)=326 cedis (1991)=367 cedis (1992)=437 cedis FISCAL YEAR January 1 - December 31 SYSTEM OF WEIGHTS AND MEASURES: METRIC ABBREVIATIONS AND ACRONYMS CHCL - Container Handling Company Limited EEC - European Economic Community EDF - Economic Development Fund of EEC ERP - Economic Recovery Program ERR - Economic Rate of Return ERTAP - Export Rehabilitation and Technical Assistance Project GPA - Ghana Ports Authority GPHA - Ghana Ports and Harbours Authority IDA - International Development Association MIS - Management Information System MOTC - Ministry of Transport and Communications OECF - Overseas/Economic Cooperation Fund, Japan PCU - Project Coordination Unit PPF - Project Preparation Facility of IDA RRMP - Road Rehabilitation and Maintenance Project SF - Saudi Fund TA - Technical Assistance TEU - Twenty-foot equivalent units (containers) UNDP - United Nations Development Fund WFP - World Food Programme

3 THE WORLD BANK Washington, D.C U.SA - FOR OFFICIAL USE ONLY Office of Director-General Opera-tons Evaluation June 14, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Ghana Ports Rehabilitation Project (Credit 1674-GM Attached is the t Project Completion Report on Ghana - Ports Rehabilitation Project (Credit 1674-GH)", prepared by the Africa Regional Office. The report includes a borrower contribution (Part I). The project was an essential component of the government's Economic Recovery Program launched in the mid-eighties. Its basic objective was to provide sufficient physical ports capacity to handle projected import and export traffic and to raise efficiency of the ports system. Inadequate maintenance, poor organization and management had markedly reduced port performance. The project had physical and institutional components. Implementation, which relied on a large contingent of technical assistance (TA) staff and benefitted from close Bank supervision, went very well overall After some initial delays, the physical items were completed ahead of schedule. Primarily on account of an extension of TA, to deepen the institutional impact, the project was implemented some one and three-quarters years after the scheduled date. Actual project costs exceeded estimated costs by about 20% due largely to increased purchases of ports equipment. The project achieved the intended impact: physical port capacity was restored, efficiency was raised and port institutions were strengthened. The finances of the ports system became sound. The reestimated economic rate of return on investment (ERR) is 43%, as compared to the 28% estimated at appraisal; a higher than expected increase in port productivity was the main cause for the ERR rise. Strong government commitment, good compliance with credit covenants and determined IDA support were key factors in project success. Project outcome was satisfactory, and institutional development input was substantial Sustainability is likely. The PCR was of good quality. No performance audit is planned. Attachment This document has a restricted distribution and may be used by recipienta only in the performance of I their official dutiesc Its contents may not othervise be disclosed vithout World Bank authorization.

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5 FOR OFFICIAL USE ONLY REPUBLIC OF GHANA PORTS REHABILITATION PROJECT TABLE OF CONTENTS Page No. PREFACE... i EVALUATION SUMMARY... ii PART I: PROJECT REVIEW FROM IDA'S PERSPECTIVE A. Project Identification B. Project Background C. Project Objectives and Description... 2 D. Project Design and Organization... 3 E. Project Implementation... 6 F. Major Results of the Project G. Project Sustainability H. Association Performance I. Borrower Performance J. Project Relationships K. Consulting and Contracting Services L Project Documentation PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE PART HI. STATISTICAL INFORMATION A. Related Bank Loans and Credits B. Project Timetable C. Credit Data D. Project Costs E Results of the Project F. Use of Bank Resources G. Compliance with Credit and Project Agreement Covenants H. Revaluation of the Economic Rate and Return This document has a restrictedistribution and may be used by recipients only in the performance of their L official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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7 REPUBLIC OF GHANA PORTS REHABILITATION PROJECT CREDIT 1674-GH PROJECT COMPLETION REPORT PREFACE i. This is the Project Completion Report (PCR) for the Ports Rehabilitation Project for which Credit 1674-GH in the amount of SDR 22.4 million (US$24.5 million equivalent) was approved on March 27, The final disbursement was made on April 20, The remaining funds in the credit account amounting to SDRs 2,346.1 were canceled. ii. The Preface, Evaluation Summary, Parts I and III of the PCR were prepared by the Infrastructure Operations Division of the Western Africa Department. Preparation of the PCR is based on the Staff Appraisal Report, the Credit and Project Agreements, the correspondence files, supervision reports and discussions with Bank staff. In addition, the reports of two consultants, one on the privatization of Container Handling dated April 1992, and the other on Project Completion dated January 31, 1993 provided useful and current data for the PCR. The Borrower completed Part II of the report and made minor comments on Part I. Mark Makanda (Financial Analyst, Infrastructure Division) was the Task Manager of this PCR and Mr. James Wright and Mr. Edwin Lim are the Managing Division Chief and Departmental Director, respectively for the operation. iii. Co-financiers included the Japanese Government, the Saudi Fund and the European Economic Community through its Economic Development Fund. The World Food Program contributed food which was used as an incentive for port workers. GPHA contributed funds and the Government of Ghana provided a loan to GPHA by deferring payment of customs duties on imported items.

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9 - ii- REPUBLIC OF GHANA PORTS REHABILITATION PROJECT CREDIT 1674-GH PROJECT COMPLETION REPORT EVALUATION SUMMARY Objectives i. The main project objectives were: (a) to rehabilitate the substantially run-down port facilities in Tema and Takoradi, to enable them to handle efficiently the country's export and import needs during the immediate and medium term; and (b) to help strengthen and reorganize port management and port institutions in Ghana, in order to increase the efficiency of the country's ports. Implementation Experience ii. The knowledge of ports gained by IDA staff in preparing the export rehabilitation projects contributed greatly to project identification, preparation and implementation (para. 20). iii. The civil and other works were successfully completed several months before the appraisal schedule, a successful achievement, especially given the chaotic condition of the ports at the time of project identification. Technical assistance was extended by one year to the end of March 1993 (para. 33). Results iv. The reevaluated ERR of the project is 43% as compared to 28% estimated at appraisal (para. 39). v. The project has more than achieved most of the financial covenants in the Project Agreement (paras ). Sustainabil ity vi. As GPHA is now fully operational, its staff well trained; and its finances sound, its viability should be sustainable (para. 44). Findings and Lessons Learned vii. The use of food aid as an incentive for port workers and staff was an innovative feature of the project (para. 11).

10 iii viii. The earlier export rehabilitation credits assisted the ports in carrying out emergency repairs and in assessing the major institutional problems facing the ports. This provided a sound basis for project preparation, especially for the institutional aspects (paras ). ix. 18). Other innovative features included steps to accelerate project processing by IDA (para. x. On a project in which the feasibility consultant has performed well, it makes sense to use the same firm, in some cases, on the design and supervision phases, as indicated in the Bank Guidelines for Consultant Selection (para. 33). xi. The chaotic condition of the ports when the project was first identified, the use of fast disbursing export credit and a PPF to accelerate preparation, the successful reorganization of the Ports Authority, and the expeditious implementation of a complex and difficult project would justify the use of this project as a textbook case for training Bank staff (para. 36). xii. The successful execution of the project is credited to its thorough preparation, close supervision, and careful coordination with the other major donors by IDA staff (paras ) and to the close cooperation of the Government (para.(a)). xiii. With one important exception, the Borrower, and its executing agency GPHA, performed well in achieving the objectives of the project (para. 49). xiv. The TA team performed well and contributed substantially to the progress made in rehabilitating the ports and training local personnel. The advantage of using firms to supply a large number of expert personnel rather than employing them on an individual basis was well illustrated under this project (para. 51).

11 REPUBLIC OF GHANA PORTS REHABILITATION PROJECT CREDIT 1674-GH PROJECT COMPLhTON REPO A. Poect Identification PART I: PROJECT REVIEW FROM IDA'S PERSPECTIVE Project Name: Credit No.: RVP Unit: Country: Sector: Ports Rehabilitation Project 1674-GH Infrastructure Operation Division, Western Africa Department Republic of Ghana Transportation B. Project Background" 1. In the early 1980's, inadequate port facilities were a severe handicap for Ghana, on top of a severe drought. The constraint in port capacity was adversely affecting the country's vital export traffic and its imports of food grains, spare parts and other essential goods. Even food ships arriving with supplies for drought relief often had to wait for about a month to get a berth, and many had to spend another 40 days to discharge a ship-load of 20,000 tons of food grains. Due to such delays and inefficiencies, Ghana incurred high shipping costs, freight surcharges and demurrage payments. 2. Ghana's two main ports of Tema and Takoradi were under the responsibility of the Ministry of Transport and Communication (MOTC). The Ghana Ports Authority (GPA) which, according to its enabling legislation, should have been in charge of overall port operations and management, had inadequate management and could not exercise control over the ports. Further, GPA's authority was often ignored by the two government-owned stevedoring agencies which had equal access to Government. 3. The three port agencies operated with overlapping jurisdictions and without effective coordination. Moreover, the agencies suffered from poor management because of a shortage of qualified and experienced staff and an ill-defined management structure, particularly regarding the division of responsibilities between the two ports. This caused continuous conflicts, delays to shipping, pilferage and damage to cargo. Training facilities for the ports' Source: Initiating Project Brief dated September 7, 1984 and the SAR for the Ports Rehabilitation Project dated March 3, 1986.

12 -2- personnel were particularly inadequate. During , GPA was run by an Interim Management Committee which consisted of GPA officials and worker representatives; however, port users were not represented. 4. During the early 1980's, the capacity of virtually all transport modes in Ghana was inadequate to meet even the reduced level of demand, and the transport system had nearly broken down. The Government, with IDA assistance, had started to initiate an Economic Recovery Program (ERP) in 1983 which was designed, in part, to help restore the transport sector. 5. IDA's initial contribution to the ERP included two fast disbursing export rehabilitation credits: (Credit 1435-GH, Export Rehabilitation Project and Credit 1436-GH, Export Rehabilitation Technical Assistance Project (ERTAP), see Part IH, Table A). These credits provided emergency spare parts and equipment, and technical assistance for the ports of Tema and Takoradi. The purpose of these credits was to keep the ports operating, provide training and management support, and initiate key studies of actions needed to strengthen port management and operations. This assistance provided the time to carry out adequate engineering, traffic and economic investigations.y In 1985, IDA approved a Project Preparation Facility (PPF) for USS 1.0 million to carry out preliminary and detailed engineering. 6. The Government's transport strategy emphasized maintenance and rehabilitation of the existing infrastructure. The proposed project formed one of the core projects included in Ghana's investment program, which was prepared in consultation with IDA. The project reinforced IDA's ongoing assistance to Ghana's ERP by: (a) removing physical bottlenecks to expanding exports and imports; (b) supporting suitable institution building goals in the subsector; and (c) attracting the attention and financing of other international aid agencies towards these important objectives, while directing the flow of external funds to the ports' essential needs. C. Project Objectives and Description 7. Obiectives. F The main project objectives were: (a) to rehabilitate the port facilities in Tema and Takoradi in order to enable them to handle the country's export and import needs efficiently during the immediate and medium term; and (b) to strengthen and reorganize port management and port institutions in order to increase the efficiency of the ports. 8. prject Descrigtion.1 To assist in fulfilling the objectives, the project provided financial assistance for the ports of Tema and Takoradi, as summarized below: Memorandum dated September 17, SAR, para i SAR, para

13 -3 - (a) Port Rehabilitation and Modernization (i) (ii) (iii) (iv) (v) repair and rehabilitation of existing infrastructure and facilities; removal of sunken vessels and other wrecks; provision of container and roll-on/roll-off facilities at Tema; provision of cargo handling equipment, communications and office equipment, and floating craft; and repair of salvageable equipment. (b) Institutional Strengthening (i) (ii) (iii) technical assistance to strengthen management in the GPHA, including GPHA headquarters and port management at Tema and Takoradi; training program for port managers, staff and skilled workers; and project supervision and coordination. D. Prect Design and Or'anization F 9. The project was identified in May 1984 by an IDA mission which outlined in an Aide- Memoire 1' the steps to be taken for project preparation. These included the emergency purchase of spare parts and equipment to keep the ports running and technical assistance to prepare lists of parts and equipment needed, to develop procurement procedures and for studies. The latter included a study to restructure the port organization and prepare an action plan, a study to establish a new container company to operate a new container yard to be built under the project, and a study to streamline container and ports documentation procedures. The mission also prepared an application for PPF financing to prepare an investment program which was approved on October 22, Both Tema and Takoradi had been built with ample capacity, but their effective capacity was severely limited. Many factors had contributed to the deterioration in the efficiency of Ghana's ports from their excellent condition in the sixties, when cocoa ships used to be loaded at a rate of 2,400 tons per day compared to about 280 tons in 1984, and when there were no penalties on ocean freight to or from Ghana. The main causes were the following: (a) Lack of preventive and regular maintenance. Due to the shortage of foreign exchange and resulting unavailability of spare parts, most of the port facilities and equipment had had no regular maintenance for about 10 years. Initiating Project Brief dated September 7, 1984 and the SAR for Ports Rehabilitation Project dated March 3, Aide Memoire dated June 5, 1984.

14 -4 - (b) (c) (d) Silation. Due to the poor condition of the dredgers, maintenance dredging had been neglected for years, and there was considerable accumulation of silt in the ports, reducing permissible drafts. Rough readings available showed that some of the deep water berths in Tema had about 1.0 m of silt. Port Management Problems. Due to frequent personnel changes under changing Governments, and the unclear demarcation of responsibilities and authority between the three Government agencies running port activities, port efficiency had suffered considerably. Other Factors. Other factors which inhibited port productivity were: nearabsence of night operations in the port, due to lack of lighting in the port area, lack of transport for dock workers, and curfew restrictions. Another major inhibiting factor had been the lack of food, which had resulted in high absenteeism and low productivity. 11. By early 1986, some recovery of the ports had already taken place with assistance from IDA and other lending agencies. The port agencies have benefitted from the purchase of emergency spare parts and some limited equipment and crafts financed under the ERP, and also from essential technical assistance provided through the ERTAP. Concurrently, port labor productivity had been stabilized and improved since 1984 when the World Food Programme (WFP), working in cooperation with IDA, launched a three-year program to supply imported food items as an incentive to the workers and staff of the port agencies. Since 1983, Government had allowed the port agencies to levy port charges on foreign ships in foreign exchange, and to retain 20% of the foreign exchange receipts in their own accounts to buy spare parts and other essential goods. 12. The diagnostic study by port management consultants financed under ERTAP was completed in November Based on the study's findings, Government agreed, during project appraisal in May 1985 to implement a reorganization plan on the following lines: (a) establish the Ghana Ports and Harbours Authority (GPHA) under a Board of Directors with adequate user representation, and orient GPHA's operations on commercial principles; (b) make the two ports of Tema and Takoradi semi-autonomous, and competitive with each other on the basis of service efficiency, while the GPHA Head Office would coordinate general policy, overall financing, investment planning, training and other areas of common interest; (c) reinforce the present role of the existing government-owned stevedoring companies at Takoradi with provision for future increases in the private sector share; and (d) establish a new container handling company with majority participation of the private sector (51%) and with private sector management, with the objective of ensuring efficient management. 13. According to the timetable for reorganization agreed between Government and IDA, the Govermnent undertook to reorganize the port agencies by enacting the GPHA Law and establishing GPHA in early 1986, before the proposed Credit was presented to IDA's Board. An action plan and timetable for strengthening GPHA management and operations had also been agreed. Government had further agreed that the new container company would be incorporated by June 1986 which was a condition of credit effectiveness. It was also agreed

15 -5 - that the new company would start operations, within 12 months of its incorporation, on a temporary container yard to be provided by GPHA, pending completion of a full container yard under the proposed project. 14. In addition to the Board Chairman, GPHA had a Director General as chief executive, and a Director for each port. The two port directors were members of the Board to ensure their independent status. GPHA and Government had agreed to prepare port regulations under the GPHA Law, to ensure that GPHA would operate on sound commercial principles and that the GPHA Head Office would not interfere in the day-to-day operations of the individual ports which will be semi-autonomous. GPHA would have rate making authority subject to the general guidance of the Government. Key positions in the GPHA were filled; arrangements for matching personnel to agreed job descriptions, prepared by Consultants were substantially completed by end of June The project provided for substantial expatriate expertise to strengthen GPHA management and to fill key positions. 15. By early 1986, to strengthen port management, steps had already been taken to: (a) appoint a highly competent director in charge of GPHA and appoint selected experienced managers to key positions in GPHA; (b) engage individual consultants for repairing equipment and civil works maintenance, procure equipment, and to reorganize port accounts; (c) include in the rehabilitation project a technical assistance program aimed at bringing expatriate experts to assist management of key departments on a temporary basis, and at developing a recruitment and training program; and (d) appoint port management consultants, as a followup of earlier studies, to recommend (i) a detailed management structure for the reorganized GPHA, (ii) a staff distribution and manning levels under the new organization, (iii) a uniform tariff and billing system, and (iv) organizational arrangements to be followed by the proposed new container company. Based on a review of the study's interim findings, an action plan was agreed during credit negotiations, including a timetable of main actions to be implemented to strengthen management. The action plan included operational targets for improved port productivity, and target dates for completing the restructuring of GPA management, introducing incentive wage systems, studying and proposing tariff reforms, preparing future investment plans, and taking other necessary steps. 16. To increase private participation and competition, the Government and GPHA agreed to the following measures: (a) maintain, as a minimum, the present share of 25% of stevedore operations by the two private stevedoring companies operating in Tema and Takoradi up to end-1989, and provide them with adequate foreign exchange retention and access to the training program under the project; (b) complete a study, before March 31, 1989, on measures for further increasing the role of private sector firms in port handling operations, with emphasis on competition; and (c) in light of review of the above study, agree with IDA, before June 30, 1989, on a plan for implementing an enhanced role for the private sector in port handling operations from January Another action needed to improve Ghana's port subsector was to streamline customs and port documentation procedures which were very complex and caused undue delays. GPHA had agreed to engage consultants, financed by ERTAP, to study this problem and to suggest improvements. By early 1986, an interim study had been completed and the final study was to be undertaken. The Government and GPHA agreed, during negotiations, to: (a)

16 -6 - have this study completed before December 31, 1986; and (b) prepare, before June 30, 1987, an implementation program and timetable acceptable to the Association, in light of the study findings, and to implement it accordingly. 18. The project was appraised in May 1985, by which time most issues had already been settled and the cofinancing identified. The credit was negotiated in January 1986 in three days with only one change of substance in the Loan Committee package. This change, involving a postponement in the establishment of the container company, turned out to be the only part of the project that was not implemented (para. 29). E. Prolect Implementation 19. Credit Effectiveness. The Credit was approved on March 27, 1986, signed on April 4, 1986 and became effective on November 4, A loan agreement between the Overseas Economic Cooperative Fund (OECF) of Japan and the Government of Ghana for equipment was signed on October 25, OECF closely coordinated its loan with IDA's Credit GH (para 5) and the new project. mementation 20. The knowledge of the problems of Ghana ports gained by IDA staff in preparing and supervising the Export Rehabilitation Project and the ERTAP (para 5) contributed greatly to project identification and preparation. Thus, within about 18 months after identification, major remedial measures to strengthen port institutions had already been taken. 21. The civil works were divided into four lots, one each to be financed by IDA and the Saudi Fund at Tema, and one each by IDA and the Economic Development Fund (EDF) of the European Economic Community (EEC) at Takoradi. The procurement guidelines of each financing agency had to be taken into account in the bid documentation. IDA also financed the removal of sunken vessels and other wrecks and the entire TA program, including consulting services. The OECF and IDA financed cargo handling and port equipment. 22. Prgject Start-. The first supervision visit was made in March/April 1986, at about the time of credit signing. The mission found some confusion at the ports as the GPHA law under which they were to operate had not yet been passed. However, by the end of 1986, the merger between GPA and the two private stevedoring agencies had been completed, GPHA had been established and officials appointed to the top positions at both ports. Lower level positions were still being filled. GPHA had started preparing an action plan to strengthen port management and improve operations. Also a Project Coordination Unit (PCU) had been established. 23. A contract for wreck removal was awarded on October 10, Work was started in November 1986, and by February 1987, 39 wrecks had been removed at Takoradi including 12 extra lighters and a moving buoy. 2 ' The removal of the wrecks at Tema was ZL Letter from GPHA dated February 12, 1987.

17 -7 - completed on April 20, Procurement of equipment and floating craft got underway early in Procurement of equipment posed a considerable amount of work for the TA managers and advisors, as the lists of equipment and spare parts had to be updated in the light of more detailed knowledge of the poor condition of existing equipment. 24. Project Execution. Prequalification for the civil works contracts was completed early in 1986 with as many as 50 contractors approved. Contracts were not signed until October 1987 because of delays in securing the approval for awards from the Government's Public Agreement Board. Despite the potential loss of some savings by combining contracts, GPHA did benefit by the timely performance of the four civil works contractors. This was particularly important as considerable additional work was awarded as execution progressed (para. 28). 25. A supervision report dated October 30, 1987 noted that start-up of civil works was delayed by about 14 months after the date foreseen in the SAR. However, construction time had been set at 36 months rather than the 48 months assumed at appraisal. The civil works contracts were completed well ahead of the scheduled project completion date of September 30, Takoradi Port was commissioned on September 14, 1990 while Tema Port was commissioned less than a year later on May 17, Capacity Building. The TA team consisted of 11 experts. Eight were supplied by a German firm, consisting of a project coordinator and operational and mechanical personnel. Three financial experts were supplied by a UK firm to install a Management Information System (MIS). The experts were placed in line positions with responsibility to train Ghanian counterpart personnel to take over from them. A large number of Ghanian staff at all levels were sent abroad for training in port operations. 27. An IDA supervision mission in March 1990, noted that GPHA and the MOTC were reluctant to extend the TA contracts regardless of the extent to which the technological transfer of expertise had been attained because of growing concern that there were too many expatriates occupying key positions in Ghana. 28. Additional Works. The Saudi Fund agreed to allow the remaining balance of its credit of about US$4 million for additional paving of container storage areas at Tema. The EDF financed additional civil works which were outside its original commitment. These included (i) reinforcement of a quay structure and a wharf and the rehabilitation of a wooden shed at Takoradi for US$12 million; and (ii) maintenance dredging works at Tema and Takoradi for US$4 million. IDA approved the use of some of its surplus funds for the survey and design of these additional works. 29. Container Handline Company Limited (CHCL). The establishment of this company at Tema is the single major project item on which little progress has been made to date. MOTC and GPHA have not acted to establish this company, despite a clear commitment in the Credit Agreement to do so. GPHA finally carried out a feasibility study in 1991 on privatization and how the profits would be shared between GPHA and CHCL. The study showed that

18 -8 - privatization was feasible and proposed a profit sharing scheme.r A second study carried out by the a Bank consultant in April 1992 recommended that the immediate start up of CHCL would lead to a tariff reduction of about 10%. The consultant also recommended that a second container handling company be established in 1994 to provide a better basis for competition. To date, the Government has not acted to establish a CHCL because of concerns including the reaction of the labor force. 30. Project Completion. Overall, the completion of works was ahead of schedule. The rehabilitation of cargo handling and port equipment, the strengthening of the management of the ports by the technical assistance team, and the development of the MIS were most successful achievements, especially given the chaotic state of the ports at the time of project identification. The failure to establish the CHCL is the one major commitment of the Government on which little progress has been made, although the issue has been thoroughly discussed (para. 29). 31. Procurement. The project called for a large volume of procurement including floating vessels, a contract for the removal of wrecks in both harbors, four large civil work contracts, and substantial amount of technical assistance. As the GPHA was relatively inexperienced in procurement, the project provided consultants to prepare the documentation, evaluate bids, and recommended awards. GPHA's board, management and tender committee oversaw this work and participated in the procurement process. The files indicate that procurement was generally well handled and led to only a few minor issues which were resolved. GPHA generally had no reservation about contracting for technical personnel through specialized companies to provide technical assistance, but they objected to engaging a procurement officer they had sought through the Crown Agents, and tried to hire the candidate directly. He refused to accept GPHA's offer, and GPHA awarded a contract to another firm. 32. GPHA extended the contract of its consultant for supervision in line with Bank Guidelines because of the firm's experience gained on the design work and its satisfactory performance. GPHA also reduced the supervision costs by a further US$1 million, in addition to the 12% discount from the firm, and signed the contract without any additional delay ahead of start of construction works. 33. Disbursements. The credit account was almost fully disbursed. On April 20, 1993 the remaining SDRs 2, were canceled. The closing date was extended by one year to March 31, 1993 to permit further consideration of the establishment of CHCL. 34. Project Costs. The project was completed for total cost of US$115.0 million as compared to the appraisal cost of US$95.8 million, the difference being attributable to import taxes which were not provided for during the appraisal stage. The Government of Ghana Memorandum by a consultant, dated September 30, Report on Privatization of Container Handling Tema Port, Ghana; April 1992 by a Bank Consultant.

19 - 9 - contributed about US$17.0 in deferred payment of import taxes. The appraisal and final cost estimates are shown in Table D(i). The co-financing plan is given in Table D(ii). F. Major Results of the Project 35. Traffic.. In 1975 the combined traffic of the ports of Tema and Takoradi was 4.7 million tons. Following the successful implementation of the country's economic recovery program, and the substantial completion of the project, traffic recovered to 5.0 million tons in 1990, 5.3 million tons in 1991, and an estimated 5.7 million tons in The 1990 figure represents an increase of 16.4% over that projected in the SAR. 36. A considerable variation in the flow of main commodities on a year to year basis was noted by the consultants at both ports (Tables E(i) and (ii)). In 1992 imports at Tema of velcro and cement were up substantially while liquid bulk imports declined. On the export side, large increases were noted for cocoa, general cargo and liquid bulk. In Takoradi, solid bulk exports and bauxite exports were up thanks to the improved performance of the railways, but general cargo imports were off. Port productivity has increased with the drop of ship turn around time from 3.5 days to 1.8 days in Tema and to 2.4 days in Takoradi. 37. The most striking development is the rapid growth of container traffic at Tema (Table E(iii)). The 1992 estimate of 84,000 twenty-foot equivalent units (TEU) exceeds the figure of 69,400 projected in the SAR for On the other hand, the Takoradi container throughput in 1991 was only 9100 TEU and is expected to decline further in This is a result of the commodity mix at each port and the tendency of the major shipping lines to concealrate container traffic on a limited number of ports of call. 38. Operational Performance. The Bank's consultant concluded that the daily output rates prevailing in Tema in 1991 and 1992 were generally satisfactory and an improvement over the target outputs in the SAR. This result has been made possible by the implementation of the Ports Project and the upgrading of the ports infrastructure and equipment. The three risk factors which could jeopardize the ports output performance in the coming years would be a fiurther increase in traffic levels, a relaxation of operational discipline and a reduction in the quality of equipment maintenance. On the other hand, the cargo-handling performance at Takoradi for 1992 was no better than in 1985, and was rated as disappointing. This is because the traditional traffic at Takoradi is either stagnating or declining, and container traffic is increasingly being concentrated at Tema. 39. Economic Performance. The recalculated economic rate of return (ERR) based on the project's cost and benefit flows are 49% for Tema and 36% for Takoradi. The combined ERR for the project is 43 % and compares very favorably with the SAR's estimate of 27% for Tema, 29% for Takoradi or a combined ERR of 28% (See Annex for details). The good project results are based on reduction of port congestion and an improvement of handling productivity. An additional benefit, not quantified, is that due to the dredging at Tema, the port can accommodate larger bulk carriers and thus a savings in the number of voyages required. a Source: Report on Project Completion by a Bank Consultant, dated January 31, 1993

20 Financial Performance. Annexes E(iv) to (vi) present a comparison between actual and projected financial results over the years 1986 to GPHA has met most of the financial covenants in the project agreement. GPHA was required to ensure adequate tariff increases in order to cover all operating expenses and interest costs. As evidenced in the Annexes, GPHA's financial performance in the period 1986 to 1992 exceeded the set targets in the SAR. GPHA's actual revenue growth averaged about 224% per year compared to 10% in the forecasts over the period 1986 to This was attributable mainly to: (a) the increases in tariffs; (b) the persistent devaluation of the Cedi against the major currencies in this period (50% of GPHA's revenue is in convertible currency); and (c) the upsurge in cargo volume noted in paragraphs The major operating revenue item contributors to this growth were stevedoring and shorehandling which contributed 31% and 23% respectively over the period 1986 to Operating costs fell by 175% between 1986 and 1987 and by 27% between 1990 and This has been mainly due to the decrease in payroll costs which, before and during project implementation, constituted the highest operating cost item of the operating costs. The fall in payroll costs from 81% to 40% of total operating costs between 1986 and 1992, was due to staff retrenchment from 7800 in 1985 to 2885 in 1991 following the reorganization of GPHA. 42. During period 1987 to 1991, GPHA was financially self-sufficient as evidenced by financing of the replacement capital assets through internally generally cash (Annex E(vi)). GPHA did not undertake any additional borrowing as required by the debt limitation covenant. 43. GPHA's profitability during the period 1986 to 1992 surpassed the forecasts. The annual average operating and working ratios for this period were 82% and 88% respectively and the average return on net fixed assets in operation was 60% during the project implementation period from 1986 to 1991 based on historical cost figures, but falls to 48% in 1992, after fixed assets revaluation in During the period, the average current and liquidity ratios were 4.7 and 4.4, respectively and this highlights GPHA's solid financial condition. This compares with the average forecast of 2 and 1 for the current and liquidity ratios, respectively for the period of 1986 to Since reorganization, GPHA has operated on a commercial basis with management operating on a semi-autonomous basis. 45. Receivables UI are in a somewhat worse situation than the limit set in the SAR. This is due to domestic debtors who are facing financial problems. In addition, GPHA had been lax in enforcing a tighter debt recovery policy during the period of project implementation. In order to redress this adverse position, the management is implementing the following policies: (a) advance payments by clients for any shorehandling; (b) charging interest on accrued balances; and (c) lifting the corporate veil and commit directors to honor some of their corporate debts. lk Receivables percentage is total receivables divided by the total operating revenues.

21 - I1 - GPHA - Summary of Receivables Position m j 198 I 1199 i1 11 Limits per SAR(%) Actual Result (%) I I 61 I 55 G. Project Sustainability 46. GPHA is now fully operational with its facilities completely restored under the project, and its staff adequately trained in all aspects of port administration (see para. 50). GPHA is financially sound and is playing an essential role in the country's import and export activities. In the light of the above, GPHA's viability should be sustainable. GPHA pointed out in its draft PCR I2 that the major factor in its continued success will be influenced by the privatization policies of the Government and GPHA (para. 29). H. Association Performance 47. The most important aspect of the Association's performance was the thorough nature of the preparation of the project. By the time the project was presented to IDA's Board, a long list of preparatory steps had been taken which enabled project execution to start quickly with relatively smooth implementation. This process was facilitated by the earlier ERP and ERTAP. 48. The supervision coverage was generally good with visits averaging three times a year during the busiest execution period as shown in Table H (ii). Most supervision reports were adequate except that no detailed cost data were included. Form 590's are missing for three visits. In one case, no supervision report was prepared, however, a letter was written to GPHA highlighting the findings of the mission. IDA also played a key role in the selection of the TA experts and frequently assessed the performance of each individual team member which contributed greatly to the success of the project. IDA carefully coordinated with the co-donors who also played an important role in the execution of the project. The Association was flexible in amending the lists of equipment and parts to be purchased, and in adjusting the allocations of the credit proceeds to meet current needs. I. Borrower Performance 49. The Borrower generally performed well and cooperated fully in achieving the objectives of the project with the exceptions noted in paras 27 and 29. It took the appropriate legal action in establishing the GPHA (para 2). Adequate local funding was provided, and the Ministry of Finance and Economy assisted GPHA in facilitating its contracts with co-donors whenever it was requested to do so. The Government appointed a strong and experienced Iv GPHA draft PCR, page 13.

22 administrator to head up GPHA. Upon his transfer to another organization in March 1988, he was replaced by a senior Government official who also cooperated closely with IDA. 50. The GPHA was generally soundly managed and cooperated closely with IDA. It accepted expatriate technical assistance up to about 1990 (para 27). GPHA sent key staff overseas for specialized training as recommended by advisors and on completion of training, they have returned to their positions at GPHA. The one major omission of the Government and GPHA to-date has been the failure to establish the CHCL (para 29). This step may eventually be taken since GPHA is not against privatization in principle, but is concerned about upsetting its relations with its labor force. 51. Both Part I (para. 23) and Part H (para. 3) of the PCR note the confusion at the time of the reorganization of the GPHA. Given the magnitude of the task, this would appear to have been a normal transition. The remarkable aspect is that the transition period was so short, and that the newly established GPHA took hold as quickly and effectively as it did. J. Project Relationships 52. Relations between the Government, GPHA and IDA were generally close. GPHA kept IDA well informed on progress of the work and of any difficulties that arose. Good relations also seem to have generally prevailed between GPHA, its civil works consultants, and the TA team. The GPHA noted in its draft PCR that 'a very close relationship between GPHA management and staff on one side; and consultants, contractors as well as suppliers on the other side resulted in good transfer of knowledge in all aspects of the project". K. Consulting and Contracting Services 53. The impression gained from a review of the project is that the civil works supervision consultant performed well. While there was the occasional criticism that this consultant should have uncovered earlier some of the technical problems which arose during construction, particularly with regard to the electrical system, the civil works mainly involved rehabilitation of existing structures and utilities. Under these circumstances, problems cannot always be foreseen until the works have been finished and the condition of the structures and the utilities can be more accurately assessed. 54. The TA team provided by two separate firms also performed well and contributed substantially to the progress made in rehabilitating the ports and training local personnel. The advantage of using firms to supply a large number of expert personnel, rather than employing them on an individual basis, was well illustrated under this project. Non-performing, unsuitable or ill TA staff can be replaced, and without the time consuming involvement of IDA or GPHA staff to identify replacements. The civil works contractors, the contractor for the removal of wrecks, and the equipment suppliers generally performed satisfactorily. L. Project Documentation 55. The credit and project agreements were adequate and appropriate for achieving project objectives, and the appraisal report provided a useful framework for implementation. The

23 correspondence files are complete. They contain about one dozen misfiled documents related to other projects. Some of the earlier cables and telexes are so faint that they are difficult to read.

24

25 REPUBLIC OF GHANA PORTS REHABILITATION PROJECT CREDITI 674GH PROJECT COMPLETION REPORT PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE 1. We would like to reflect and assess on the implementation of the agreements and covenants contained in the Bank's Staff Appraisal Report vis-a-vis the Bank's own guidelines and procedures and its impact on the project. The comments are as brief as possible and do not cover implementation details since all necessary information can be recalled from the quarterly project reports submitted to the Bank. 2. The Statistical Information, given in Part Ill of the PCR, tally with the data of our MIS, MAS and Finance Departments and are, therefore, accepted by GPHA. 3. On the whole, we are in harmony, with the analysis contained in Part I of our report but would like to comment on some subjects as follows: (a) One of the major problems right at the beginning of the project was the necessity to merge the three operating companies at the same time as the start up of the project was due. A minimum of 9-12 months in between these two main steps, incorporated into the project time-frame, would have allowed for consolidation of the new authority and avoided most of the managerial and personnel problems which hampered the smooth take off of the rehabilitation project. GPHA believes that it should be possible to amend the staff appraisal report with the Bank if so required.1-' Possible reasons are: (i) (ii) Changes in Government Policies (i.e. Ban on Log Export); Dynamic nature of the port industry, changes in the industrial environment (i.e. containerization of traditional export goods, like cocoa, sawn timber & veneer; development of new ships and cargo handling equipment). The SAR was well prepared during appraisal but it is, today, questionable in connection with some of the assumptions made. See Part I, para. 47.

26 (b) Although, GPHA considered the working relationship between the consultants and their counterparts very successful, it has to be mentioned that a tougher approach in selection procedures for consultants and counterparts and financially-motivated counterparts could have led to better and faster results for both parties involved. The Bank should strongly support at Governmental level the approach that better qualifications, and man-month rates or salaries do not automatically mean higher costs at the end of the project. In short, more emphasis should be put on quality and standards. (c) Especially in developing countries like Ghana, it is an absolute must to allow for standardization of technical equipment. Under the current purchase regulations of the funding agencies, it is believed that because of the high weighing given to price, this is nearly automatically excluded and thus resulting in unnecessary maintenance and operation costs after project completion. Once again, what looks reasonable at the beginning could turn out as the most expensive solution at the end. (d) One item which helped to make the project a real success was the introduction of the project implementation committee. The involvement of all levels of departments as well as the union assisted greatly in smooth implementation of the project goals. Also, at times very energy-absorbing, it was worth the effort and should be part of all complex projects like the port rehabilitation. 4. During the take off period of the project, GPHA had great difficulties in getting started. As already mentioned under item 3, the main reason was the need to undertake two major operations at the same time with insufficient time for consolidation of the reshuffled management. 5. After the first nine months, the project became an integrated part of the daily routine of GPHA, the Ministry of Transport and the Ministry of Finance. Because the authorities involved respected each others requirements and problems, the project was completed successfully. 6. Throughout the project, a very close and effective relationship between the Bank's Washington office and the Borrower was kept. The Bank also helped to establish and keep good contacts with the other funding agencies and assisted whenever necessary, even outside their responsibility, to keep the project going. 7. At the very beginning of the project, it would have been appreciated if a stronger Bank support at the ministerial level in connection with political decisions required had been put in place.

27 The project, supported by three co-financiers, was in the position to honor all contractual obligations with the exception of the contract financed by the Saudi Fund. During the project years, not a single invoice by that funding agency was paid within the contractual time limits. In order to avoid payments covering interest due to the contractor, GPHA was forced to undergo complicated prepayment procedures from its own funds. Without GPHAowned foreign funds available, the situation could have brought the Tema project to a complete standstill. 9. The EEC Delegation in Ghana was always in very close contact with the Authorities and the good cooperation played a major role in the successful completion of the project. 10. Financing the largest part of the rehabilitation and not represented in Ghana, OECF handled all activities very efficiently and allowed for smooth cooperation over the full length of their part of the project. OECF's requirement to tender in bulk led to the problem of being forced to buy via a trading company and not from the manufacturer. Thus, this resulted in extra cost not only during the project period but also during the life span of the equipment.

28 A. Related Bank Loans and Credits PART m. STATISTICAL INFORMATION Year of Loan/Credit Title Purpose Approval Status Credit 1435-GH Provided, among other items, 1984 Completed Export Rehabilitation Project. emergency spare parts, equipment and floating craft for the ports. Credit 1436-GH Included essential technical 1984 Completed Export Rehabilitation Technical assistance to help prepare the Assistance Project ports project. B. Project Timegabl Item Planned Date Revised or Credit A/ Amended Date Actual Date k/ Identification 05/84 Pre-Appraisal 02/85 canceled Appraisal 05/85 05/85 Negotiations 11/85 01/21-24/86 Board Approval 01/86 03/27/86 Signature 04/04/86 Effectiveness Date 11/04/86 Closing Date 03/31/92 3/31/92 03/31/93 Completion Date 09/30/91 fl 06/30/93 a/ Source: Initiating Project Brief dated September 7, b/ Source: Correspondence Files. _l Source: Credit Agreement.

29 C. Credit Data (i) Credit Disbursements Disbursements (in US$ Million) Bank Fiscal Year and Quarter Estimated Cumulative / Actual Cumulative _/ Actual % of Estimated b/ Source: Statements of Development Credits c/ Source: Differential between actual and estimated disbursements attributed to currency variations between US dollar and SD' in which credit was denominated

30

31 D. Proiect CoCts (i) proiect Costs ^ (in USS million) At Appraisal b/ Actual c/ Category Local Foreign Total Local Foreign Total A. Works 1. Port of Tema Port of Takoradi dy d/ _/ 3. Wreck Removal Q B. Equipment 1. Port of Tema Port of Takoradi g/ d/ d/ C. Technical Assistance D. Training Program E. Project Supervision S/ 8.12 e/ 8.88 e/ F. Repayment of PPF Import Taxes TOTAL _./ Excluding taxes _/ Source: SAR - Annex 3-5 q/ Source: GPHA (local and foreign currency breakdown reconstructed from GPHA data) _/ Covers Port of Tema and Port Takoradi _/ Figures include items C, D and E. Notes: i) Credit was made in SDRs Figures rounded ii) Appraisal and actual costs are not strictly comparable because the latter, as noted in para. 34), includes uimport taxes.

32 D. Project Costs (continued) (ii) project Finan a/ (in US$ million) Appraisal Estimate Actual Local Foreign Total Total _/ IDA Japan (OECF) Saudi Fund EDF GPHA Total Gov. of Ghana b/ TOTAL A/ Source: SAR, page iii h/ Loan to GPHA covering deferred payment of import taxes c/ Source: GPHA Notes: i) Credit was made in SDRs Figures rounded ii) Appraisal and actual costs are not strictly comparable because the latter are noted in Para. 34, includes import taxes.

33 E. Results of the Project E(i) Port of Temna: Comparison of Forecasted and Actual Throughput by Commodity (in 000 tons) FORECAST FORECAST ACTUAL ESTIMATE IMPORTS S Liquid Bulk Valcro Other dry bulk Grain Aluminum Cement clinker Transit n.a. n.a. General cargoes TOTAL IMPORTS EXPORTS FORECAST FORECAST ACTUAL ESTIMATE Liquid Bulk Aluminum Timber Cacao beans General Cargo TOTAL EXPORTS GRAND TOTAL VAR. ACTUAL % % FORECAST 1995 Source: GPHA data from Mission Bank Consultant.

34 Efii) Port of Takoradi: Comparison of Actual to Forecasted Cargo Throughputs fin 000 tons) FORECAST FORECAST ACTUAL ESTIMATE IMPORTS Liquid Bulk Grain Cement Clinker General Cargo TOTAL IMPORTS EXPORTS FORECAST FORECAST ACTUAL ESTIMATE Liquid Bulk Bauxite Manganese Ore Logs and timber Cocoa and products General Cargo TOTAL EXPORTS GRAND TOTAL VAR. ACTUAL -7.4% -5.6% FORECAST 1995 Source: GPHA data from Mission Report by Bank Consultant.

35 E(iii) Ports of Tema and Takoradi Comparison of Actual to Projected Container Throughputs (in TEU containers) TEMA FORECAST FORECAST ACTUAL ESTIMATE Loaded Cont Mt. Cont Total Cont TAKORADI FORECAST FORECAST ACTUAL ESTIMATE Loaded Cont Mt. Cont Total Cont GRAND TOTAL ,136 81,564

36 E(iv) 01W4 POR1 *43 HMOLR3 MAUrOF 94M STATEftTS # ls in 19ui ins ins TIkirid Tm Tolnt Tdtwrd TeNm Tdot * Tdia Ten Told Tdcrd Ten Tol Tdkomd Twn Toe Tdak td Tana Tldn Vws.1 SerA* FPkorW dtup 117 S32 41t ZS a65 15ot ( c B.wodwskv a4 2s S a S %Ww wwgun*y 1.0 Z0 to e19 6. I o 0 a Zo ao 21.C us5 61. Vesed F.c1k Ui*iIDune ao0 165 IlS 5S a1o 19.5 is eo its 19.5 S4.9 C4.9 I1.1 bt.bo, R.r4ndht orn a3 1I7 419 sa IS O6 s3a O.nmftldDies Ls 131.S 1o 2U6 S ga6 Z s 46al S Chip Servis: Ught g. 3ses a10 gas 14.9 o eo 12 sa6 ssho#4ww& a 0 S sa o 9 (0 S A *37.7 S ao S ( SM1.7 S S Y&*Aa Des V27.3 9S Ss6 26S S a ois9*0_s 'hwil" IOI.S 1.1 5S6 56S a m SS M SnU.y Chw o 110 1t5 60t &wnmkyinoon lao o o 12I0 1a0 Sa0 11o 1O C1O a10 1o 1o1 co TOTAL s Bao 6S in TRWF t4naese TOTAL REVDILES U10 83S Z2.2 SOL IM P.n, Cogs ISZ2 9#6.S al Fud. 3".4 PFwr nd 5639 %Ww I l I3Il Q ts. 6 lt..no.ndtki sa ao l16o 2e A O OP."qCo.a phe 107.S Sa S1.4 al ns5 Atnkikr.6v* tp.rue S Iao 11.1 a lao s2 D.d -nddmkjotis 54S ao a2 S a n V s2 65aI WInhtCode S s DspfOchionanUdMan.41on (S 2M.5 451O a OCA C'LT N1i3 COST ass6o M7 O a S s (20 833oo0 I NeCi O.ldhgfRtwnuw> S a O160 26e Op-dbgR.r-_weelf) _n- 6.S se4 253w so t.cplorml -36 en I o 593O 11o o Lmni.twom o 11o 110 1o 6s 11o las 1o 19 Q o Nei koom4.o.) 11o 7.9 elrmbltw 7.9 1O o a64 64 a3-58, zia sigrakernt Rao rhkb_go 1.0 1s a opc _ti1frgb o s s as Tlnee kiwod s 1.4 OLD _wod by ea.".mhbg A R -1a7 -I&6 Th_ DOM Al SW%*. -1o CtWod -4.9 by ao o CmhO. idiwuope _lons 2e12 11o R.een on No Fhd 4.8 Am.b In Lb() oa07 Aooewls R9cd%bWCpwvdtr 17 Rs.r(S) as sao 67.5

37 E (iv) F..g~~~~.sI ~~Ac2.,AcedF.m6IActd"76 ~~~~~~~~~~~~~~~~~~~04010f "TS2 AND 141*6U OW VICOUG SIA?1M7N26 I62-03 Acmil ltobeudt&.. od 1.b.d Isms idi?dinud Temm lak IA'""iko 'aws, T.ow Tab""i lws item Iduied lamme vood Idues I.s.O 1d Td.id 1mA lowd 7264 VW 'FOP IS.? s M IL? Sol t., * all., " MA Ndu 2g M10&* oo 224 f ) WON5s"WOm7.s ti Ill Is it t MA l& LIVO Dma 0.0~~~~~~~W i VIA I MA.t. Its4 6.4 NO MIA. #4e.bemftmdwsdWg.s2,g 2~~ We m.a4. I I4ts 02.? Gw. dpm Dow. 012I la"3 t.o AILS "me1 "A * one Luguawgs ~~~~~~~~~ , 26.? t so *0m6,*eg 602~~~~~~e MIll A wissb,. DUNs M j in l667.7 o0 son.? 20m0 C2sm,. to ioa * lo Ian16 Sr.MyCIwg.. ~~~ ~~~~ W ll IOTAL W7.) A IN.1 I lawf6p60a ) TOTAL PIEIEU A N M& W P.M.wsMwC4,64m 2M I22A A I U MA M soil Vad Ps.dW den a6 all "is6 me1 I26 " me M I ,4mwsWAsUd.I I ' i a : I it72 I t OthOpete"A"I, 23.2 " ?0 St " )7i 246a MI lost ) 2034 ASkub.bb6o,xp 7 w6s a 11 a S I"?7 2"2t A2i I Steel 0d DeqD0.6 71F ales a o22.? Ust A AMA OK p.wcbln WAusAMMa M O7LD l01 224A 471A I0IALOPINAT64COIT e o "MdPm Opurk.6m M tin wse42.64 I i MD I M60. M60 its 1W F,g, b.s mom t 10 a VIO Leee.bDAO ~SK M o f t6 M" b.awojqloe9 a uikws :* L a "M.Y WO^tA~~~ %db as6 A to t DP.." adb 1~~.4 6L1 21. w IA ay? 6.4 as 2.6 0L A as hftogged mad by "Ms Opewr6gelpesweeA -0A 22.7 as as to I to0 MA4 U OLD TIwiee Dows. UwhC~".e by CeS.b0weemmdoompummerm 2.6 *.e 2.0 g.e S F.Sem Am No noddsa.asa tloqq 6.26 US co A-Asss Reemebblaftpeemue R.s----s MA S~~~~~~~~~~~~~~~~~~

38 NET TOTALASOETh Se " E Cv) 79HA)0 FOAT 470 I1120JS AJTH1060 Is" to"6 I05lS" low ASSE29 OMURDED T~.k T.40 70k.2. 1*. T.W T T~ " T... -~..3 T.W &.d T..3 T002 T".0..3 I T.W T T.W Tk0.2., T-n Th *6p214 I W , toiz An.4.hd4q31) io7a 66306a 6250MU04GM 0= low M WIT? mm d- S.-& ~00a 60 a A s ft.o d 1110 OW4(lOldDf 30.0 la,s ,0 177 so6 766' la's as ~~~~~~~~~~ ~~~~~ tw m isms T ~~~~ ~~~~~~~~~~~~ et AG M'S s ~~~~~~~~~ 4300 ~~~~~~ 00o. ~~~~~~ C.A-d b. ~~~~ I ass is (2JF2NT L006U a I061I IS t60.0 I : 307.A BO o T76 Il.dU. T.. L-.n T..0oo g0o a ' a MN NO( CUJA012A4ST om5 ODEfEDUA0LJl5(lE 06 -I2I4. -6D S (0-062JPOALAN6ES ,2 00a 25A TaAL NET L20012J2E _ & alk , P.30o.d E.o0206..n ? s _8o L.q L A a 6.f es TOWU n "it? o.f , ~ ~ ~ ~ ~ ~ D4002(yi~~~~~~~~~~~~~~~ a a"

39 E (v) *HANAPOATS AM) Hmmoms AuTHoRrrY Bajm Shusia 1o6-U2 ASSETS EWDOV FUtE ASSET8 Fmd A Fckl Aotz Fot Adtl logo 1o loc ow TraI. Tm TOWl Takogl Ten Tla Tai.ga TTM Tota Takwi Twin TOTW Takoram Tol TTal Takor Tm TOWl Omm dqx*h met 1406U tea DomffmhId dpmkton W NodBook%ki A e 22s s2n WoVanPr*W_ SOO 100oo 50.0 OD OD 9WESTMENTS 35s 1^ A A D slbw e61601 e e005e B255A D 22e D OURRE ASSET SWIat 130A a6. 277A OOD Receklee S W S5 370D Ouh wvii*b.tarm e A 16e o e CWFfERT WLvULME s c,cs S A O0 Me*,n TeM L 3356n 0D se 05 0o o 2600 OD 0o 0 I0 T Vnlon oD on D a 411SS NFTCUtENT ASSETS s 440e o12 317A D NETTOTAL ASSETS U D J e DEFUMAD UABUIIES 00 0D -27e OD D 0D 0D OD 0D NTER-GROOP BALANCES 0D -747s O OD D TOTAL NET LABIuTIES A 15376A A D RB'AESENTED BY: ampiw o aD R.Akd Ewr*i g A D Lorg-tumLoe S J s2D 5 D0 0D 0o OA OD 311i5 O 0on 0o Tota LLaa G A o Cumt RaMo 1J J 3.1 1J A S L4ukft l W* D 3S 2.4 3S * DebtXqa*y ISO J D D0 OO

40 E(vi) GHAN PORTS AND HAMMROUlS AUThORlY Soisce and ApnOedlon of Fand cedis mcons) Forecast Atual Porc Actual Forecat Actual S Takoradi Tcma Total Takoradi Tema Total Takoradi Tema Total Takoradi Tema Total Takoradi Tema Total Takoradi Tema Total SOURCES OF FUNDS Internal Geeration o Funds NelOpecalingRevenuel(loss) Depreciation and Amrtization Non-OperatingRevenue(net) Total Borrowinsa Proposed IDW Credit DECF - Japan Saudi Fund EEC Governmcnt Loan Total Total Fundo availabk t-i APPU(CAlON OP FUNDS Proposed Project D Other Invetmcntr Debt Service Ctarges: Interest D Repayment Increasc/lDccrase Working Capital Excluding Cash D D0 Toald FPndt Applied D Cash SurpLa (deficit for the year) Cash at bcgining of the yeaw IA Cash at ihe end of tbe Year

41 E (vi).n OU"HIV Fenascaen.l AAtsa Fg.scai F-t.l Aa-l.Actaul 196 1* T.koudl T.-_ TT.g1 Takandl T.. Toul T.kac T. Teb1 Td oul Tkt.t Total T_k.ndI Tom Toel TakoA Tm. Toba1 T.kmdI Tom Tol Tskm*A T.= T96.I bssa1 0 nor d Fin WdO.1 oihaks B ) -I0CU I.9 133) no L U U S D.p..hekod Ameelalods e0 7M u2ns ) 472e 9084 U I Q N-~ot..hg R.onlt (Vt) 12Q ML I I o 0.0 Tetal 04 2L3 *12t9 21t2. 49t1.2 S A e9.) # MO0.0 2 A ) I S tll7 F.opo.d lo Co DE200- J sa.odfod EEC Go.s L_ f2s Z40 Taal U n Tr.e.IPo.ihbb ) J S J S o I2U721 " APPUlCATON KO FUNDS FPspd pr*d SO9 4375J A Ot.,. to 2.O 2n hi GA 0. a 0o 129L A A.0 GA kgmyi S2A I" Le U lmaseai.c aaohk WeAm 23U.0 COpkal EAchdb 8 30k U rt.mkdampjb S S Cm& "Ws (&1k4fkc4kt.dwnr) n tla 187 L CAA at bl.$ sdlgmb A K U ) A COsb St* db*....y., 425.) S.) M

42 F. Use of Bank Resources (i) Staff Inputs by Stage of Project Cycle in Staff Weeks Stage of Project Cycle Einal Through Appraisal 88.8 Appraisal through Board Approval 43.6 Supervision Other TOTAL 240. Source: Summary of CAM Lending Operations.

43 F. Use of Bank ResQurc (continued) (ii) Mission Data Stage of No. of Days in Specialization Performance Date of Project Cycle Month/Year Persons Field Represented / Rating Status Reports Identification 05/ PE, ec, PA /84 Preparation 1 07/ PE - 10/12/84 b/ Preparation 2 07/ PE - 10/12/84 Appraisal 05/ PE, EC, FA - 06/27/85 j/ Post-Appraisal 10/ PE, FA - 10/25/85 Supervision 1 3-4/86 3 na PE, EC, FA 1,2,1,2 05/28/86 Supervision PE, EC, PA 1,1,1,1 01/06/87 Supervision 3 04/ PE, FA 1,1,1,1 05/05/87 Supervision 4 09/ PE, FA 2,1,1,1 10/30/87 Supervision 5 01/ PE 2,1,1,1 02/05/88 Supervision 6 02/ FA 2,1,1,1 03/23/88 Supervision 7 06/ FA, EC 07/22/88 Supervision 8 01/ PE(C), FA _,1,1,1 03/10/89 Supervision 9 06/89 2 na EC, DC _ 07/28/89 d/ Supervision 10 10/ PE, FA 1,1,2,1,1 12/04/89 Supervision 11 03/ PE 1,1,2,1,1 04/02/90 Supervision 12 11/ PE, FA 1,1,2,1,1 11/21/90 Supervision 13 04/91 1 na EC 06/24/91 Supervision 14 07/91 1 na EC 1,1,2,1,1 07/18/91 Supervision 15 12/91 2 na EC, FA 1,1,12,1,1 01/21/92 Supervision PE 04115/92 Supervision 17 07/92 1 na EC 09/08/92 Supervision C 01/31/93 n/ PE = Ports Engineer EC = Economist FA = Financial Analyst DC = Division Chief PA = Procurement Advisor C = Consultant b/ Meeting in Consultant's European office. g/ Combined Issues Paper/Decision Memorandum dated June 27, d/ Lter to GPHA; no report on file.

44 G. Comvliance with Credit and Proiect Aereement Covenants Credit Agreement Section Description of Covenant Status 3.01 (b) Relending clause met 4.01 (a) Mor ta 20% of ports' and stevedoring companies' fomign currncy eaming mcd will be retained to cover maintenance and rehabilitation cost (b)(i) The Borrower and Association will review the percentage of retention in and met decide on a proper percentage. 4.02(a) The Borrower shall cause to be incorporated a limited liability company to met handle containers at Tema Port. 4.02(b)(i) The Borrower shall permit private stevedoring firms to maintain until met December 31, 1989 at least 25% of stevedoring operations at Tema and Takoradi, 4.02(b)(ii) The Borrower shall carry out a study of ways to increase private sector met participation in port handling operations. 4.02(b)(iii) The Borrower shau propose a plan providing for an increase in private sector mdt participation in cargo handling operation. 4.02(b)(iv) Thc Borrower shall commence the implementation of said plan. not met 4.03 The agreement to defer the payment of import duties on project goods. met 4.04 The Borrower shall assist GPHA (A) in carrying out the customs and port A - met documentation study (B) in preparing the program for carrying out the B - met recommendations and finding of said study Thc directors of Tema and Takoradi are to be giver autonomy in order to met administrate their ports on sound commercial lincs. Project Agreement 2.02 Establish a project coordinating unit (PCU). met 2.03(a)(i) Assign capable Ghanaian counterparts to work with all the consultants to be partiauy met employed. 2.03(a)(ii) Shall at least six months before the end of employment of the consultant, met appoint capable Ghanaians to assume the responsibility of said position 2.03(b) GPHA shall prepare and fumish the Association the terms of reference of a met container operation expert who shall be employed and assigned to the new container handling company Follow IDA procurement guidelines, met 2.07(a) GPHA shall exchange views with the Association with regard to the progress mdt of the project, the performance of its obligation under the agreement and the Subsidiary Loan Agreement, and other matters rel Lrg to the purposes of the Credit. 2.07(b) GPHA shall promptly inform the Association of any condition which t interferes or threatens to interfere with the progrs of the project, the accomplishment of the purpose of the Credit, or the performance by GPHA of its obligations under this agreement and under the Subsidiary Loan Agreement.

45 GPHA shall prepare and carry out an action plan utisfactory to the met Association to strengthen its port management and improve its port operations GPHA shall at all times opemte and maintain its plant, machinery, equipment generally met and other property 3.03 GPHA shall take out and maintain insurance with responsible insurer. 3.04(i) GPHA shall carry out and complete the report of a study on customs and port met documentation. 3.04(u) GPHA shall prepare a program for carrying out the study's recommendations met and findings. 3.04(iii) GPHA shall carry out such parts of the program as related to GPA met 4.0(a) GPHA shall maintain separate records and accounts adequate to reflect its met operations and financial condition. 4.01(b)(i) GPHA shall have the accounts and financial statements and the special account met audited by independent auditors. 4.01(b)(ii) Furnish to IDA not later than five months after the end of each year certified met copies of the statements and the auditor's reports GPHA shall adjust its rates to generate revenues to cover its expenditures. met 4.05 GPHA shall not renew any debts other than to finance the costs of the project. met met

46 H (i) RZVALUATION OF THE ECONOMIC RATE OF RETUR 1/ 1. Based on the actual traffic (throughput) handled by the ports of Tema and Takoradi in 1991 and 1992, the projected Economic Rate of Return (E.R.R.) has been recalculated, following the same methodology as used in the SAR, and applying the UNCTAD queueing tables for port projects to estimate the expected waiting times. Compared to the initial calculation of the E.R.R. some crucial parameters have significantly changed. These are briefly discussed in the following paragraphs. (i) In the SAR, the total investment cost of the Ports Rehabilitation Project was estimated at million US dollars (exclusive of taxes and customs duties). By the end of 1992, the total cost of the project amounted to million US dollars (again exclusive of taxes and customs duties). This figure includes the cost of all the project activities funded by IBRD/IDA, the cofinancing institutions and GPHA. Of this total investment, 58 percent was spent on Tema's rehabilitation, 42 percent on Takoradi's. Table E 1 summarizes the project's disbursements for the period 1986 to (ii) The traffic volumes assumed in the SAR for Tema and Takoradi were respectively: million tons in million tons in million tons in million tons in 1995 The actual traffic development has been more favorable than forecasted in 1985, with following throughput results recorded by GPHA: million tons in million tons in million tons in million tons in million tons in 1992 However, these total throughput volumes include the tonnages handled at specialized and private berth. In the E.R.R. recalculation, the cargoes that were loaded or discharged at the multi-purpose berths (11 in Tema and 3 in Takoradi) have been included, whilst also the bulk cargoes handled at the specialized berths in Takoradi have been taken into account because of the positive impact of the rehabilitation scheme on the performance of these berths. The cargoes handled at the GPHA multi-purpose berths are: I/ by Bank Consultant.

47 H (i) million tons in Tema and million tons in Takoradi in million tons in Tema and million tons in Takoradi in 1992, and compare with the following values retained in the SAR: million tons in Tema and million tons in Takoradi in million tons in Tema and million tons in Takoradi in million tons in Tema and million tons in Takoradi in 2000 From these traffic data, it is obvious that in Tema the throughput of the GPHA berths in 1992 was already well in excess of the projected value for In contrast the 1992 throughput of the GPHA berths in Takoradi lagged behind the forecasted throughput for In the recalculation of the E.R.R. the throughput levels of 1992 have been assumed to peak, i.e. these are used as the projected throughput for 1995 and For Tema, the logic behind this choice is that the throughput realized in 1992 already exceeds the maximum expected for the project by 35 percent, and hence that any further increase would logically require additional facilities. For Takoradi, the situation is very different. The expected throughput levels at GPHA's multi-purpose facilities have not been attained because the cargoes, which constitute the port's traditional mix are either stagnating or declining. Moreover no new traffic flows have been gained and the handling of the container traffic is increasingly being concentrated on Tema. It would therefore be unrealistic, unless a major policy change were introduced by the Government, to expect ttie throughput figures to improve beyond the 1992 level. As for the bulk cargoes in Takoradi, the throughput values of 1992 have been mainatined up to the year For Takoradi, the assumptions used in the SAR calculation of the E.R.R. with regard to the handling of cocoa, logs and timber at the multi-purpose berths (namely that 20 percent of the total traffic of these cargoes in the port will be handled at GPHA berths) has been retained in the absence of reliable data with respect to the actual tonnages handled. However, this assumption is validated by the low occupancy levels (30 to 40 percent) which have been recorded for the GPHA multi-purpose berths in 1991 and 1992 and which tally with a relatively minor traffic of these three commodities across the multi-purpose