RESTRICTED

URNi} I ILL5 COa Y Report Nlo. PTRF5a

This report was prepared for use within the Bank and its affiliated organizations.They do not accept responsibility for its accuracy or completeness. The report maynot be! published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONST:RUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

A P P I ;B|s*_ O), ~A T Q A Tr -a'

PORT OF MONROVIA DREDGING PROJECT

REPUBLIC OF LIBERIA

June 3, 1969

Transportation Projects Department

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CUR1E30±CYL BEQUB3ALMINIS

U'S$1.00 = L1B $i.00

rn ~ ~ UNr

Tons are long tons of 2,240 lbs.1 mile = 1.61 kilometers1 foot = 0.30 meters1 cubic yard 0.77 cubic meters1 gallon = 4.54 litersAll depths of water are in feet below mean:Low water level.

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS

MFMC - The Monrovia Port Management Company, Ltd.

UNARCO - Union Maritime et Commerciale Liberia Corporation

LAMCO - Liberia American - Swedish Mining Company

NPA - National Port Authority

LMC - Liberia Mining Company

NIOC - National Iron Ore Company

BMC - Bong Mining Company

LRC - Liberia Refining Company

APIV - African Petroleum Terminals

POll - Petrol, oil and lubricants

DWTn - Deadweight tons

GDP - Gross Domestic Prodiet

REPUBLIC OF LIBERIA

APPRAISAL OFPORT OF M4OTROVIA DREDGING PROJECT

Table of Contents

Page

SU1vIARY i - ii

1. IlTRODUCTION 1

2. BACKGROUND 1

A. Country and People 1B. The Economy 2C. Transport Facilities 2

3. EXISTING PORT ORGANIZATION ANdD FACILITIES 3

A. Existing Organization 3

BM.P17Z9Y raclie a:ndTkTT ArpTration Al!1, fl'PRO\ltVEMNT OF ADMN ISlT TRAGTINl !J\JD MANAGEMENbT

A Shippi 7

B. Present and Future TrafficP-ort of. iMorLro-Uvi 8

C. Port Development 10

6. THE PROJECT 10

7. ECONOMIC JUSTIFICATION 14

A. Benefits of Dredging 14B. Economic Return 15C. Feasibility Studies 16

8. TARIFFS AND FINANCES 17

A. Tariffs 17B. Present Finances 18C. Future Finances 21

This report has been prepared by Messrs. El.sby, Jones and Parthasarathi,meml-bers of th.e appraisal mission which visited Liberia in Sep-teber 1968.

Page

9. RECOIvPIENDATICONS 26

AlPTnT)LT'rO.!

f 4.~~~Ji~~±LU4J- 1

1. P,incapes tobe Folowed and I-ff-t-ters t± .U±IL jJ±LPLti: UU ue ' WL 'coliiLL% II-UL~V.

be Covered in Establishing a NationalPort AuthU1L-iy.

2. B.ases and Assumptions Used in Financialrroject ; b.LUl O-.

TABLES

1. Imlumber of Sbip Calls, 1964-67.2. Monrovia Port, Traffic 1963-68, Forecast

1969-73.3. Statement of Revenues, Expenses, Surpluses and

Other Financial Data - ictual 1965-67,Estimated 1968-72, Years Ending,December 31.

4. Statement of Revwenues, Expenses and Other FinancialData - Estimated 1970-73, Years Ending December 31.

5. Balance Sheet Data.6. Estimate of Cash Flow - 1969-73.7. Forecast of Debt Service 1970-73.

MAPS

1. Liberia Transport Facilities.2. Port of Monrovia.

REPUBLIC OF LI1ERIA

APPRAISAL OFPORT OF MONROVIA DREDGING PROJECT

SUMARY

i. This report appraises a project for improvement of the port ofMonrovia. The proposed project consists of: dredging the harbor to 45 ftto accommodate iron-ore carriers of 90,000 dead-weight tons (dwt); nro-vision of two large tugs, a pilot launch and navigational aids; consultants'services for feasibility studies of road apnroaches to the port! advisorvservices for the newly formed National Port Authority (NPA). The estimatedcost of the project is $4.2 million, of which the foreign cost componentto be financed by the proposed loan is $3.6 million equivalent. The loanwill be made to the Government; about 3.4t million will be relent to NRAand the balance retained by the Government to carry out the road feasibilit;ystudies.

ii. The Government's intentioni in g i ing N*A is to increaseLiberian participation in the management of the public ports as a necessarypart of Liberian deveo-m.ent. It will involve NrA Ataking over:

(a) management of the port of Monrovia, the most iripor tant pub'ic portof Liberia, from the Monrovia Port Management Company Limited (MP1Pi)whose powers under itL E agreement withbl the Government extend topolicy and management and whose Board is largely composed of foreigtiusers! representatives;

(b) management of the minor ports of Greenville and Harper from theGovernment, including in the case of Harper, the role of theGuovernment in an existing cargo-handling contract with a privatecompany;

(c) jurisdiction over the large, mainly iron ore exporting port ofBuchanan, which was constructed and is cperated by LiberlaAmerican-Swedish Minerals Company (LAMCO).

iii. The newly-formed NPA will have to have management and anorganization before it can take full responsibility for the ports. Thiswill mean that day-to-day management of the ports will continue to becarried out by management contracts until NiPA is able to assume full respons.l-bility for all management functions. The project provides for training andLiberianization of port staff. The law creating NPA does not ensure aproper balance between Government representatives and port users on theN-PA Board, does not provide for the necessary degree of administrative andfinancial autonomy and, being based largely on a general Public AuthoritiesLaw, does not provide for specialized port functions. It therefore needsamendment to ensure that the ports of Liberia will provide essential servicesefficiently and will develop to meet commercial requirements. The Govern-ment has agreed to amend the law accordingly.

- ii -

iv. The financial resources available to IPMC during the remainiiigperiod of its existence and to NPA thereafter, will be sufficient to meetthe needs of the orolect. The financial forecast for NPA for the longerterm, which allows for tariff increases at Monrovia, indicates sufficientresources to cover deblt service and provide cash for caJpital investmPe-nPt.It has been agreed that a capital investment program for the ports will beprepnred by NPA in consultation wth the Governm.ent nnd the Bank. Agree-ment has been reached that the Government will provide financing for anymanjordv' Ade.m,n 1n enent+ i,nAc-+oL-.a-en Vi+ +hM B-u ,I oT>_n1 trnvuA i.nil Q ;41

'ju _ .n. V S V.s& L. i W V&*9 LS i ¼/V v - -vL -* J¼_

arny debts incurred and cover any operating deficits in respect of suchn,pronects- TI'he reqiumred m P4 r ra+W of re+urr. on av er ,maage ne+ t x vasse-. + cfor the port of Monrovia in 1972 is 7%. There will be some difficulty in

_'k n an4 aF.uu... .V44- -4 V~4 j - ~4. N ~ se 4 44

uaac. -e-ving na sa+VisIfactorLy rate Wolf ret-urnEL1 for v Wh oVweI -ports becaus of~ thesmall tonnage throughput at Greenville and Harper, which is disproportionateto 4the --- 4----4t r,ade in- their facilities. ,n IIlUl " "-J1 e Uovernnuent andU '10A huavreagreed to consult with the Bank on the steps to be taken to ensure the finan-

v. Iron ore accounts for about 70p Of the value Of Liberia's exportsand 30% of its gross domestic product. Approximately half of these iron oreexportvs - some 9.4 million tons in 1967 - are exported through the port ofMonrovia. The proposed port improvement will reduce the costs of transpor-ting iron ore by permitting the use of larger ore carriers which wlil improvthe competitive position of Liberian iron ore in world markets. The econano'rate of return of the project, based on the readily-quantifiable benefits, i-28%.

vi. Because of the highly competitive nature of the iron ore miningindustry, deepening the port is urgent. In addition, a contract between oneof the iron ore companies and a Japanese buyer, for the supply of 200,000tons of iron ore, depends on a Government commitment to provide improved depthof the port b;y April 1, 1969; this is deemed to be satisfied by commencingthe dredging on February 1, 1969, although dredging will not be completed umti.October 1969. The contract for dredging was awarded in November 1968. Bid-ding has been, and for the remaining items of the project will be, accordingto the Bank's guidelines. Retroactive financing of some US$225,000 per mont!will be involved as from February 1, 1969, the date on which dredging commen- .,.

vii. The project is suitable for a loan of $3.6 million to the Govern-ment for a period of 15 years, including 2½; years of grace.

P7PTmT.Tr OF' T TQrDT A

APPRAISAL OFPOR.T OF NO1K2OV1A flREiflaG PROJECT

1. INTRODUCTION-

1.01 un February 2, 1968, the Government of Liberia asked the Bankfor assistance in financing the dredging of the port of Monrovia to accomnm!o-date iron-ore, carriers of up to 90,000 dwt instead of the 45,O00 dwt maxinuIthat can presently be handled. The proposed loan of US$3.6 million coversthe foreign component of the cost of the project, estimated at US$4.2 millionequivalent. The loan will be made to the Government for the reasons givenin 6.04 and the Government will relend the bulk of the proceeds (US$3.385million) to the National Port Authority (NPA).

1.02 The project consists of:

(a) dredging the approaches and an area within the port toaccommodate bulk ore carriers and tankers requiring45 ft of calm water;

(b) provision of two 1,250 hp tugs and a pilot launch;

(c) provision of additional buoying and lighting of thenavigable channels;

(d) management assistance to EPA;

(e) engineering consultants' services;

(f) consultants' services for feasibility studies for the develop-ment of road approaches to the port

1.03 This report is based upon the findings of a Bank appraisal missionto Liberia in September 1968 by Messrs. Elsby (Port Engineer), Jones (Finan-cial Analyst) and Parthasarathi (Economist)o The dat(e of the appraisal mi-sionwas postponed six weeks awaiting a consultant's report on the effect thatdredrging 17 ft helow the fouin&atjhrs - f +-he alaiaters wollld have on theestability.

2. BACKGROUND

A. Country and People

2.01 Liberia is located on the south-western coast of West Africa andh.f 4300 sqJ .It" .J L). ItU Is bDordered on tlhile ntortuln by Sier-ra

Leone, on the northeast by Guinea and on the east by Ivory Coast. The popu-lation is about one million, representing a density of sorne 24 per squaxe

-2-

*,4 -an v ; v ar. is- e.t e 4to b-e L A.n at 1. rl, a 'whch is lo-w -2n cormi.JJL .L ~U.LialO.ed uu) grow±ing ad. ±L :.p a year t'Jli-1±C1 L L U(U

parisoh with other developing countries.

2.02 Beyond a level coastal plain ranging in width from 20 to 40 miles,the land slopes gradually to an altitude of 4,000 feet near the border wit!LGuinea. The climate and vegetation are tropical, with a rainfall of 200inches per zauium on the coast gradually declining to 70 inches in the irte-rior.

B. The Econorn

2.03 In 1.967, the gross domestic product (GDP) was $330 million, witha per capita income of about $210. The economy is marked by a dichotomybetween the mainly foreign-run iron ore mines and rubber plantations (whichaccounted for 30% and 10% respectively of GDP and for 70% and 15% of expo:.-.sand the rest of the largely indigenous economy. Other agriculture (includ-ing subsistence activities) provided 15% of GDP, trade 10%, government 10%,and manufacturing, construction and miscellaneous services the balance.

2.04 Economic growth, in terms of physical volumes of output of goodsand services, has been over 10% a year between 1960 and 1967, but only aroun5% per annum i.n value terms, because of the deterioration of prices for thecountry's main exports. Per capita income has grown by 31a$ a year.

2.05 Liberia has substantial mineral resources, particularly iron oreof high grade. Iron ore mining complexes have been developed by LiberiaJYining Company (LMC) at Bomi Hills, National Iron Ore Company (NIOC) atMano River, Bong Minirg Company (BMC) at Bong Range and Liberia American-Swedish Minerals Company (LAM4CO) at Mount Nimba. From these sources about18 million toris of ore were exported in 1967. There is some diamond andgold mining, and bauxite, manganese, lead, mica and ilmenite deposits havebeen located.

C. Transport Facilities

2.06 A road network has been constructed over the past 15 years, largel-ywith technical and financial aid from the USA. As compared with about 300miles of unsurfaced roads in poor condition in 1950, there are now 2,200miles of public roads (of which 200 miles are asphalt-paved) and 1.200 milesof privately-built roads open to the public (of which 40 miles are paved).The number of vehicles in operation has increased from less than 1.000 in1950 to 13,500 in 1967 (including 2,060 trucks and buses). Gasoline con-sumption has tripled between 1958 and 1967 to over 12 million gallons neryear.

2.07 There are three private railway lines totalling 303 miles inlength, one from Monrovia to Bomi Hills and Mano River; annn-i%hpr frn-m Mon-rovia to the Bong Range and the third from Buchanan to I'Mount Nimba. They

- 3 -

were designed primarily to carry iron ore and other traffic of the mining

companies. Only the Buchanan-Mount 1ximbeta lie is open to C,o,lercial +r2..

fic, which in 1967 amounted to 6,000 tons of logs and 10,000 tons of rubber.

2.08 There are four ports in Liberia - at Monrovia, Buchanan, Green-

vifle (Sinoe) and Harper (Cape Parras). Only tne first tw-o are deep-water

ports and each handles half of the country's iron ore exports. The total

general cargo traffic amounts to about 700,000 tons, about WOt) is hla e

at Mionrovia, Just over 10% at Buchanan, and the balance at Greenville andHarper.

2.09 The country has ten airports, only Roberts Field near 'rionro-va,

is an international jet airport; four can handle DC-3's and the other five

only smaller aircraft. There are, in addition, 54 landing strips, mostlyin areas not accessible by road.

3. EXISTING PORT ORGAIRIZATION AND FACILITIES

A. Existin ) Organizaticn

3.01 The breakwater port of Monrovia (Map 2) was constructed by the U',

Government between 1943 and 1948 at a cost of approximately US$19.5 million.It. is managed and operated by the Monrovia Port Management Company (MPMC)

under a contract with the Govermnent of Liberia (The Monrovia Port Manage-

ment AgremAnt'). The port of Buchanan is owned and operated by Liberia

American-&wedish Minerals Company (LINCO). The minor ports of Greenville

nnd HarPer arei owned bv the Government: Greenville is operated by a Govern-

ment Department and Harper is operated by Union Maritime et CommercialeLiberia Corpo]nat±onn (TJVARCO) under a contract with the Government. The owner-

ship of the assets, and the responsibility for the debts of the ports are

set out in Ra,tio 8. The nort of Monrovia is the largest and only substan-tial source oE public port revenues, which, under the Monrovia Port Manage-Ment hareement, nre admrinistered by EPMC.

3.02 A4 law establ±shing a National Port Authoritv (NPA) wras passed by

the legislature in April 1967, and was made operative in November 1968.The C-Jvernmen assigned TPA its role under the Monrovia Port Management

Agreement on March 29, 1969. NPA is the Government's agency for administer-ing the Monr oia Port Managemet Agreement ard the Port Harner Manaeement

Contract, and for managing the port of Greenville. It is the Government'sar,d 1KAls inter.tion Whgi MD g-rdul-aly over several years take over the

management of the port of Monrovia from PPMC.

3.03 Eight of the ten members of the Board of MPMC represent largeforeign interests inCluding Minirng, shipp±-g, oil and rbber compnles

The remaining two members are nominated by the Government. Board meetings archeld in Neui York. It possesses ;olic~' and management posers in tariff settingand the disposal of revenues independent of the Government and ri'PA. Day-to-day management staff of the port consists of twenty-one expatriates and twoLiberians, one of whom is the Acting Port Director. In New Yorkc, apart fromthe Board, the management comprises a companv secretary and small staff.

3-.n) MPHIC carries out the fuhnctions of a nort authority, includingpilotage and control of shipping within the port limits. Wharf workersare e-mrloed d-iretly by IPMjC, while stemvedores for cargo-handling aboard

ship are employed by the shipowners through stevedoring contractors. Pri-vate fims have leased large areas of the nn-rt on t.ahirh thev have constructedtheir own storage facilities.

'D. 'mac-;'ities and prain.L* .C. .LL. L

3.05 Ths physical feal es of the port of ¶ Konrovia are shown on Man 2.The water depth is 38 ft in the channels and turning basin lead:ing to and fromthe iron ore load.LLUg piers, the petroleum, per .d to.e ref -erv pr, on.-

side the general cargo berths it is 30 ft. *Mean tidal range is approximately) IX,

.0 uourrenuly, Y milli±on ±Uons of iron ore are export ed annuall±ly fro..

Monrovia by the iron ore companies (LMCO, NIOC and BMC). Iron ore is trans-ported from the mines to the port by railways ownled and operated by the orecompanies. Each company has a storage area for iron ore, and owns and operatesits owr, loading equipment. BIVIC and N!UCC own their own piers; the pier usedby LIMC is partly owned by LMC and partly by the Government. BMC equipment canload ore carriers at an hourly rate of 3,500 tons, NIOC at i,OOO tons and ICat 1,400 tons.

3.07 The Government-owned general dry cargo wharf is 2,000 ft long.All cargo is loaded and discharged by ships' gear. Ashore the cargo is movedby fork lift trucks and tractor/trailers. Mobile cranes ranging from 3 to15 tons capacity are available, as is a 50-ton crane with limited travel forheavy lifts. The transit sheds, warehouse accommodation and open storageareas are adequate for the present levels of traffic.

3.08 The T-headed petroleum pier is owned by the Government. Petroleumproducts are pumped ashore to tank farms owned by African Petroleum Terminals(APT) and Mobil Oil Company. A new oil refinery has recently been completedby Liberia Refining Company (IRC) on the outskirts of Monrovia, and this Com-pary is providing a pier between the BMC and NIOC piers for discharging crudeoil.

3.09 United Nations Drive and the Mesurado Bridge were originally builtto provide access for the construction of the port and now provide road ac-cess for port traffic. The city has developed considerably on both sides ofUnited Nations Drive and much of the traffic using it and the Mesurado Bridgeserves this development. Nevertheless, HPMC maintains the Mesurado Bridgeand reimburses the municipality for the maintenance of United Nations Drive.

MPIt also maintains the superstructure of the nearby St. Paul River Bridgewhinh fl rries NTInr. an r T rail traffic andi i-s as usedA b' y rrdl trvnffi -

3.10 MPM.G! basz Ms<ls ndm,ain+ins an efcetdytodyognzation in Monrovia for the handling, temporary storage and clearing of generaLcargo. The pt ^i+ -A -,,-a1n ing nn,, .ent are 1 main4nen'

However, much of the equipment is old and should be replaced. Similarly,da'-t'.o-day oerat:ions of 4the .UU I.T-urn Tepartr.ent, in14din- -- A ota;e nd e^',-U'~t~y ~ 0. .i.L4LJ~'.4. LiLI~ -AA A-DJ ±10.. _LLI'= IJVjO.JG. U1IItL%7 I,l U) L& 'LJJA1LA._L&jr, ±4.&..WVLtJ 'E 0.&Zt - .'A

ing and unberthing of vessels, are efficiently carried out by a small staff;yet4 the tugs h"and-'ing vessels of up t1o '0,V%J d-WYL a-re so old. as to be 'bare:L.-serviceable and are incapable of developing more than about one-third of thepo-wer requured. "or .Jthi±s puar-pose. Tjhe efficiency ofL t1he Uay-to-day ouerati;,nsand the neglect of replacements result from the port users' powerful repre.-sentation ort E'le BDoardU. mheir desire t0o Lin[Ir l±6 Lu.C i Ij EluV. ucr Up charges has

resulted in the neglect of port expansion until ship waiting time became- - j~~ ~~ j~i T7Te ' ,r ,rir r' 2xcet lU±Vt:j Lnaeuat!qUUo rUPayUriewt U1 bVIe UWD UOVUrnnent .UdLd UJ 0 1> IuJ_l JU1

for the construction of the port which was to have been repaid from surplu.,port revenues; and an inordinate level of users' outstanding accounts.

.2. IMPROVEMENT OF ADMINISTRATION AND MANAGEMENT

4.01 In NPA's take-over of the management of the Liberian ports,boththe Government and NPA are conscious of the need for maintaining the effi-ciency of the day-to-day operations at Monrovia while gradually transferringmanagement functions to NPA. The program calls for improvements in theNPA law and an orderly transfer of functions from MPMC to NPA. The present;NPA law does not ensure a proper balance between the Government and portusers on the NPA Board, does not provide for the necessary degree ofadministrative and financial autonomy, and, being based largely on a generalPublic Authorities Law, does not provide for specialized port functions.The Governmen-t has undertaken to ensure that NPA has the necessary powers,management, resources, capital structure and financial policies to enahleit to handle its responsibilities efficiently. To accomplish this it hasagreed to amend the NPA law within a year to accord with the principles setout in AppendiLx 1.

4.02 In order to modify MPM , NPA and MPMC have entered into an agreeii1,to terminate the Monrovia Port Management Agreement by June 30, 1970. The:Lragreement provides that NPA shall, prior to December 31, 1969, enter intoarrangements, satisfactory to the Bank, with MPMC or another firm, forcontinuity of day-to-day management of the Port of Monrovia and other NPAports. These arrangements will come into force on June 30, 1970, and willterminate at -the end of 1971, except as may otherwise be agreed with theBank. The management firm will:

(i) provide such management staff in Liberia as shall be agreed betweenthe Government, NPA and the Bank;

(ii) cooperate with NPA in improving the operating and accountingprocedures of NPA ports; and

'iii) promote the Liberianization of such NPA staff as are under thesupervision of the management firm and Liberianize its own staffin consuitation with NPA.

4.03 [n phasing out MPMC and transferring its functions to NPA theinfluence of the users would diminish and that of the Government increase.In order to maintain the users? influence in promoting day-to-day opera-tional efficiency and preventing uneconomic port development, agreementhas been reached for the Goverrment to ensure port users adequate represen-tation on the EPA Board.

4.04 For the purpose of developing NPA into an organization eventuallyable to handle both policy and day-to-day management of all public ports,agreement has been obtained that:

(a) NPA will promptly establish an organizational structure acceptableto the Bank, including the staff at NPA headquarters and ateach port;

(b) NPA will. in consultation with the Bank. promptly engage aPort Adviser and Port Accounting Adviser, for a period of twoyears to assist EPA in taking over the manazement of all Dublicports (8.28). The Port Adviser will advise NPA on planning andeffecting an orderlv transfer of fimntions from YiPPMC to NPA.HIe will seek to establish efficient management of all NPA'srlorts. He will aIls l dv ei o-n tnhe preparation of a dieve1onmernt

plan for the ports and on training schemes for NPA personnel;

(c) NIPA will consult the Bank about any proposed appointment to therpost of NPA's Por+ Director;

(d) NPA will establish and, as soon as practicable , fill the postof Port Engineer by a qualified and experienced engineer;

(e) the Harbor Master is at present empowered to direct and regulatethe- moeX'e. -ofU- 4essel withi the 4oto' b h uthr of

EIPMC and its Director. As the safety of shipping is involved,With power shouldU e -vesed iLn Withe 12..UU1V r± uMaste " e11jlUU L'LJ

cf any Board on which commercial interests are largely represented.Agvreemiue~lt has ubeen reaulce to ama nd hne vriA law tU prUviud Uth

Harbor Plaster directly with these powers;

(f) upon termination of the management contract referred to in 4.C02NPA will engage suitable personnel for the purpose of operatiLgthe ports; this personnel would be recruited largely from theoutgoing management firm and would in many cases be Liberian.

- 7 -

4.05 In order to provide NPA with sufficient resources to carry outits operations efficiently and to provide for needed expansion, agreementhas been reached that a rev-ised tariff will be introduced at Monroviaby May 31, 1970 to earn a rate of retiurn at this port of at least 5% in1971 and 7% in 1972. It has also been agreed that the Government andNPA will consult with the Bank on steps necessary to ensure the financialviability of other NPA ports (8.26). NPA has agreed to prepare a com-prehensive port developrment program in cousultation with the Bank andwill consult the Bank before carrying out any major port develcpment project.

4.06 The Mesurado Bridge, United Nations Drive and St. Paul RiverBridge are utilized by Port and other road traffic. They are thereforehighways as distinct from port facilities. Agreem3nt has been reachedthat the present responsibility of IYL for maintenance of these facilitieswill be given to an appropriate agency of the Government other than N?A.

5. TR•TIC ANkD POR LPlTEVE-;LUP1L1NT

A. Shipping

5.01 In 1967, a total of 2,038 ships entered Liberian por-ts of which1,622 ships totalling 6.9 million net registered tons entered the port of'Monrovia; 306 ships entered the port of Buchanan; 80 ships called atGreenville and' 30 at Harper (Table 1).

5.02 At Plonrovia the number of ship calls increased from 1,508 in1964 to 1,622 in 1967 due primarily to the increase in iron ore exports.Of the 1,o22 ships,375 were iron ore carriers. The average quantity ofiron ore taken per carrier increased from about 19,000 to 25,000 tonsduring this period. With dredging to 4r5 ft the number of iron orecarriers calling is expected to decline to about 250 vessels by 1972 withan average load of about 45,000 tons.

B. Present and Future Traffic - Port of IMlonrovia

5.03 In 1967, Monrovia handled 82% of the country's general cargotraffic, 76% of its petroleum products and 55% of its iron ore. In volume,the iron ore traffic was the most important, amounting to 9.4 million tons;general cargo traffic was next with about 360,000 tons; the total of latex,cement/clinker, rice and druimmed petroleum was 200,000 tons; and bulk petro-leum amounted to about 180,000 tons (Table 2).

5.04 The outlook for the future is that the importance of Monroviawill increase. Iron ore exports are expected to rise to 11.3 million tonsby 1972. Bulk crude petroleum imports, to feed the recently cmpleted re-finery, will replace the petroleum, oil and lubricants (POL) imports ofMonrovia and the other ports. Coastal,trade in POL from Monrovia to theother ports is expected to develop. Clinker imports into Eonrovia, for arecently-completed cement plant, have replaced cement imports through theport but this will make no significant difference in port traffic. Sometemporary increases in general cargo traffic, arising from the importationof equipment and material by DMC, which is installing an iron-ore pelleti-zing plant, are expected during 1969 and 1970.

(i) Iron Ore Traffic

5.05 The prospects for Monrovia's iron-ore exports are of crucial im-portance to the project. LM0, NCIO, and DM0 are presently the sole export.-ers of iron ore through the port. As can be seen from Table 2, their totaliron ore exports have increased steadily from 4.6 million tons in 1963 to9.4 million tons in 1967.

5.06 The world iron ore market is expected to continue as a buyer'smarket for some years This, however, is un iely to affect Liberia's ex=-ports in the near future for two reasons: firstly, about 75% of iron oreex-ports ar.- to the fCorei.. owners of t.eIAL rrLL.g comparIJles ad.d, secondly, inview of Liberia's proximity to traditional markets in Europe and the USA,it Shol-d A bne ablJe two M.I.antair. i ts frLee r,,arIket sUales at a"Jout thle presentlevel.

5.07 While 1TIC and NIOC have no plans to increase production or ex-ports, they expect to mcauintain operations at arounrd the present level ofabout 6.3 million tons per annum. The third company, DMC, is at presentoperating at a c uity of 3.6 million tons per annum. It is setting upa pelletizing plant, to go into production in 1970, when it expects to ex-port 5.0 milllion tons anniually, consisting of 3.0 million tons of ore and2.0 million tons of pellets. Overall, iron ore and pellets exports throuai2Monrovia are expected to amount to 11.3 million tons per annum by 1972.The estimated reserves of the ore companies are adequate to maintain produ^-tion at these levels for at least 15 years, and tne economic evaluation arethe term of the loan are based on this assessment.

- 9 -

(ii) GenEral Cargo and Other Traffic

5.08 Fluct,uations in general-cargo traffic in the past have generallybhen in rpsponns: to maimr investmrnt-s in the country. Excluding trafficwhich may be directly connected w,ith such large projects, general cargohas remained at; arond 250,nn0 tons annualmly. Only a slight increase inthis level, in step with the expected population groarth, is assumed overthe nexrt few years. Rice iwrnorts, how.ever, are assiqmed to stay at alevel of 50,000 tons a year since domestic production might increase toca+er for- the- es cwNt ir pop 1at V-ortS _oP ln+; r erctdtocntinue at 40,000 tons a year. Mention was made in 5.04 of the changes inp-atterns ofP 4,he, 'DOT -an --. nt- -ndu,striesl -~--- tr¢fi - -I. petro"I lem t.nfifinis expected to increase from 178,000 tons in 1967 to 460,000 tons in 1973,and clUIn er ,.IIJ.pUorts Uo ra C2. at ClaUt 60,00 tons aUl yea rC. a s are 4.

shown in Table 2.

Traffic through Other Ports

5.09 Trafi'ic through the other ports in recent years has been asfollows:

(Thousands of tons)

BuchananYear Iron Ore General Cargo Greenville Harper

1965 8,200 38 13 NA1966 8,000 68 14 291967 7,7(0 103 11 261968 N1A NA 12 (7 months) 31 (10 months)

NA - Not available.

5.10 General cargo traffic through the port of Buchanan is largelyLAMCO traffic. Tonnages are expected to remain at about the 100,000level in the next few years, of which about half will be LAIMCO traffic.About two-thirds of Greenville traffic is logs and timber and thebalance is general cargo and petroleum. Some increase in exports of logsand timber is forecast but total traffic is not expected to exceed 20,000tons. Harper braffic consists mainly of log and rubber exports andgeneral cargo :imnorts. If the exoansion plans of the Marvland LoggianaCompany are implemented, exports of logs and sawm timber from Harperwould roach an estimated 7q.OM tmnn and total traffic about 90.000 tonsannually. This program would take several years to implement.

C. Port Development

5.11 No comprehensive development program exists for the public ports.The only major investment, amounting to JS$250t 000 equivlrent, is beinemade by UYARCO in equipment for the port of Harper. The Government hasexnr.ssed the .J. Jnnt'Ln of '.JJJ.--11-- dee-pn -- ut C no shebI, a L yJe be eJ

prepared.

5.12 The traffic forecasts for Monrovia indicate no need for majornort devel--..--n for sorue years, oth-ler th,an tbe1 preentpro 4ctU1- .LS I V t.1II yL . U 'LJLI lULd.LJ lJLIU jJJ.UCULJ pIi'U

6. THE PROJECT

6.01 The project consists of the following items:

(a) Dredging of the BIC, LI4, and LRC berths to a depth of 45 ftand of the OCX. berth to a depth of u2 It beLow mean low water.Dredging of the approaches to these berths within the calmwater of the harbor to 45 ft. Dredging the narbor entranceand the approaches outside the breakwaters to 47 ft and 49 ftrsUpecuvely, to allow for the roll ana pitch of deep-draftvessels.

(b) Provision of two 1,250 hp tugs and a pilot launch.

(c) Provision of additional buoying and lighting of the dredgedchannels.

(d) Provision of management assistance to NPA for two years of:

(i) a Port Adviser; and(ii) a Port Accounting Adviser.

(e) Provision of engineering consultants' services for supervisicnof the dredging contract, and for the design, preparation ofcontract documents and inspection of the tugs, pilot launch,buoys and lights.

(f) Provision of consultants' services for feasibility studies.

6.02 The total estimated cost of the project is US$4.2 millionequivalent, including US$3.6 million equivalent for foreign costs madeup as follows:

- -1 11

Estimated Costs of the Project

(Lib$'000 or US$ '000)

% ofItem Local Foreign Total Total

________ ______ Expendi i;ur,

Dredging of Berths, Harbor and Approaches 400 1,600 2,000 h7.hL

Two 1,250 hp Tugs and a Pilot Launch 40 1,060 1,100 26.].

Additional Buoying and Lighting 10 90 100 2.4

M'lanagement Assistance to TPA 30 120 150 3.6

Engineering Consultants' Services 20 80 100 2.1,

Contingencies: (a) Physical 10% 50 295 345 8.1(b) Price 5% 30 140 170 4.0

5So 3,385 3,965 94.0

Consultants' Scr-.-I-ces for 'Feasibili cyStudies (including contingencies) 40 215 255 6.o

620 3,600 4,220 100.0

Say (U3$ million) 0.6 3.6 4.2

(a) Dredging of Berths, Harbor and Approaches

(i) The works included under this ite-m are shotn on M2ap 2.The dredging will permit iron ore carriers and tankers of up to about 90,000deft to use the tWC and LRC berths, and those of un to 65,000 dwt to use theNIOC berth. I'he NIOC berth cannot be dredged to a greater depth without ex-tensive strengthening of the pier. This would, at present; not be justifiedas few, if any-, of the carriers using the berth would exceed 65,000 dwt o iIrc,to the depth limitations of the norts of destination seri-ig the .main cus-tomers. In the event of larger carriers requiring iron ore from NIOC, arrang2-ments could be made to load through LTMGC facilities.

(ii) For carri-ers of up to 90,000 dwt to use the B1MIC berth, aturning area will be required as shown on Nlap 2. BMC has undertaken todredge the turning area at its oir. cost.

(liii) The total quantity of spoil to be dredged by IMP is 2.8million cubic yards, mainly silt and sand, but a small amount of rock, asshown on Map 2, may foul the dredged depth. uring negotiations it wasagreed that ary rock above dredged level will be removed by NPA as it haseXisting arrangements for removal of ths rock.

- 12 -

(b) Provision of fTo Tugs and a Pilot Launch

The four existing tugs are greatly under-powered for handlinglarge vessels. Thev are also in a poor ta rff repaii- andi too nldc to bhreconditioned. Two tugs of 1,250 hp are required. A pilot launch isalsn requzired to replace the existing lanch wnhich is old and l -seawvi orthy.

\_ _ _ __ - v s _ --- y -- C - - .> - .. . ... - - _ _ -- - -- F

Tvcreas- the depth a<^ th lerh of the seaward approaches,and the depth in the harbor area, will necessitate additional buoyingand lightl*ng o-P theL dge areas.

(d) W Provision O-. o*iTUCt lagemrlt Assistance tuoNP

The :need for a Port Adviser and a Port ACCUo-iLng Auviser fortwo years is explained in 4.04, 4.06 and 8.28.

(e) Provision of Engineering Consultants' Services

These services would include engineer's services under thedredging contract, and the design and preparation of contract documentsfor, and inspection of, the tugs, pilot launch, buoys and lights to beprccured.

(f) Feasibil ity Studies

A significant proportion of the road traffic utilizing thekiesurado River Bridge, United Nations Drive and the Monrovia By-passFreeway (Map 2) is traffic to and from the port of Monrovia. T'he MesuradoRiver Bridge and United Nations Drive are constructed for two-lane traffic.The traffic using the bridge and Drive is heavy and there are more than8,000 vehicles per day.. The Mesurado River Bridge is a temporary struc-ture built dur-ing World War II and is at present being under-pinned toprevent failure of the foundations. The Monrovia By-pass Freeway comprisesB4 miles of four-lane highway joining the port of Monrovia to the MainNational Highway and is largely cormiplete with the exception of the permanar.bsurfacing. Economic and engineering feasibility studies for the followingare included in the project:

(i) the replacement or reconstruction of the NesuradoRiver Bridge to provide for more than the twoexisting traffic lanes:

(ii) the best means of widening the United Nations Drive;

(iii) the tvne of suirfaohng to be nrovidd onn thA NonnnrnviaBy-pass Freeway.

- 13 -

In order to ensure that the feasibility studies do not become a chargeon NPA, the Goverrnment will retain the portion of the loan necessary tofinance the foreign exchange element of the cost of the feasibility stu(ies.The Public WATorks Department will be responsible for having the studiescarried out by consultants approved by the Bank. The Bank will also re*-view the terms of reference and the consultants' contract.

6.03 The above cost estimates are realistic as they are based on (a)the actual contract price for dLiedging (60o5j), (b) cuirrent prices forfloatiAig craft, andi (c) the Baiik's experi2-nce for consulting services.Physical contingencies of 10% avnd nrice comilnqencies of anproximatelv {on all preceding items are considered adequate.

Disbt::r semet_Procedure

6.04 Until the arrangements between NPA and IATEC referred to in 4.03are carried out and 1PA takes over the ass-ts and lJnbilits of the portof Monrovia, the financial standing and viability of NPA would not beestablished1 and NIPA would have to rely on 11iC or th.e G-vVerment for fun forthe project. The 'Loan Agreement has therefore been made wJith the Government.For the reasons given in 6.02(, $0.21 uil ofU l ; e retaIlnedby the Government for the feasibility studies and $3.385 miLLion relent totMA Th.e :loar. to 'IM A wJUll be for a per-Lo' of 15 years, ir,cluding a Iwo ax,.done-half year grace period.

6.05 Disbursement of the main (dredging) item of the loan will be basedon. 80% of the contracted dredging cost which is the foreign cost corTonerlt.Disbursement on alL other items will be based on actual approved foreign ex-chaLge expend-tures. The estimated schedule of disbursement is as follows:

Year Estimated Disbursement(US$ '000)T

1969 3,0001970 5001971 100

3,600

6.06 A4ny surplus funds available on completion of the project wNill becancelled.

6.07 As is in.dicated in Section 8 of this report, the financial projec-tions show that IPMC/APA will have ample resources to pay the local cos;Js ofthe port share of t;he project. hne local costs of the feasibility studiLeswill be included in the Public Works Department's budget.

- 14 -

Procurement

6.08 The dredging contract was let on November 20, 1968, to BauerDrp8ginop and Co:n.nt.rrn.tion Comnanvr of Htew York Citv. after internationalbidding procedures acceptable to the Bank. Dredging commenced in February196°. Contract evnrIit.1resq nncludnng Pngnppring supervision, are esti-mated at about 11S$ 225,000 per month from February 1 until September 1969..PMVTfl as -4 aetf +the (rveyrr.T+. wasch ob-rligged +n P1e. thp contract as amatter of urgency, in order to maintairl the ccompetitive position of Liberianiror. ore by per.ritting the use of larger iron ore cay and thereby re-ducing freight costs. In addition, a contract bet-w,een one of the iron ore

cor.p s -a T-ap-ns buyer for WY)00 r tons of~ iro n orep is_ depenpdeinf

upon a Government commitment to provide improved depth by April 1, 1969,-hiah1 i1 -s A -- -A , -I-- to4 be saisie b-y I- aenn Aed ng A r Fera lj 1969 Y? I-IINI"kJA4i .L~ Ut_t:IIILL UV) Utz; 01A UL.LO.L_LU LJ,Y AI iJ-.i1'U .1.J~~ ''-- -~j -. -1- -

Contracts for the provision of the two tugs, the pilot launch and additionallightinLg and bu.oyiLg will be let i accordance -with internationl biddingprocedures acceptable to the Bank. The Bank's requirements were confirmedduring negotiations.

General

6.O9 It is expected that the dredging contract will be com)letedby Oc-tober 1969. The other items, mainly procurement and services, willtake an additional two years to complete. VFA is considered competent toexecute the project with the help of the engineering consultants' servicesprovided in the project.

6.10 Lyon Associates Inc. of Arlington, Virginia, USA, have been ap-pointed as engineering consultants for the dredging. The Government andNPA were advised during negotiations of the Bank's procedures for appoint-ing and retaining consultants for other project items.

7. ECONOMIC JUSTIFICATION

A. Benefits of Dredging

7.01 The proposed port improvement will reduce the costs of trans-porting iron ore. which will improve the competitive position- sf Liberian

ore in world markets. The directly quantifiable benefits are reductionsof oce--n _ -- _ shppn cot by_ us,g lage vesl th I< - _ I _. car no be accol, 'L a, xodabed.3 -~~ J.'.LL ,%dOU L)y UOJ4 U ±e6 VUOZjU_LL UL1c C UI E .rl IUW LJt- CtLLUIWIIUUd.LAeLL,

These reductions will result from lower cargo costs per ton, both for thevoyage and for time in port, since the larger vessels can use faster loadin2-facilities. As with many similar port improvement projects, these savingswill, in the first instance, accrue largely to foreign buyers and/or exporterzof iron ore from Liberia. However, port dues to be levied on iron ore vessel.tas described in 8.02,will help recover the cost of the investment from theusers.

- 15 -

7.02 In Whe case of two of the mining companies - LMC and NIOC - salesare on an f.o.b. basis. Consequently, the savings in shipping costs resuLtb-ing from the dredging will benefit the foreign buyers. However, the miningcomnanies should be able to negotiate better f.o.b. prices on future salesas and when t]eir present contracts with buyers expire in the course of thenext. 3-4 vears. Tf - as a rApnitl th.- p.rfJts of +heSe twro companieS im-

_ _ _ _ _--_ _

prove, the Gorerment of Liberia will also benefit because it receives 50%of their net profi+s.

7.03 Tn the case of the tI-hidA irning c.mpan.y, BrRI, with sales largelyto its principals, the benefit of dredging will be an outright reductionnn 44ip', C:SS h r-vve. amens revi+sfo thi co,

4anr,ffyV~ - again,

50% of net profits, calculated on the c.i.f. price of iron ore of similarMAd a. +1,,-h-.e4 -. P 4 TJ4 41., A' .. A,.4 vt-h depe 4-4 res '4rr

4,g,

'A';-. U V AL~J, 1J.J'J V J.L JAAJ U UV,.L I.~4~4M VVU.A VII %AW!rJJ.L JL ¶A .. L .1 J-l

in shipping costs, the freight element in the c.i.f. price of iron ore wiLLbe iL~LLJ L..er U d J f4 .LLJ.jYy WV JIV~~ U FJ.L IJJJ. LLI VJ.L LIAI UJ1IIk;JC..IJ,YL3 V '-".V ~L-'Li sr'e, and consequaer.tly,the net prof-tsoftecmx-ardheCvrnment's share thereof, correspondingly larger.

7.04 In L967, the Government's receipts from LiiC, NIOC and BINC amounted.L u $ 4.9 LLL. IXIse receipts siou..LU i L sbcni L 4L±y a.f U -

pletion of the project. In order to obtain larger revenues from the miningcompanies, trle Governm-ent Of LiDeria intends to review tone concessio, aEgres-

ments to define more precisely the basis for computing their net profits.

B. Economic Return

7.05 Almost all the iron ore nowJ exported from Monrovia is destinedfor Europe and the USA. As mentioned above, total iron ore exports areexpected to increase and be maintained at a high level. The economic evalua-tion, therefore, assesses the advantages, irn minimum cost terms, of shippingthese exports in larger bulk-carriers than those now used. The Bank esti-mates that, on the average, savings in shipping costs resulting from theuse of ships requiring a depth of more than 38 ft and up to 45 ft as againstships requiring 38 ft (the present depth alongside the iron ore berths inMonrovia port) will be about 35 cents per ton of ore (or 15% of existingper ton shipping costs) on voyages to Europe and the USA. The savings couldbe even larger in the case of longer voyages to countries in the Far East.

7.06 Based on the iron ore export forecast in Section 5, the totalsavings in shipping costs have been projected for 15 years, a conservativeestimate of the life of the project. Exports beyond 1973 have been assumedto remain at that year's level. The benefits of deeper draft will not, how-ever, accrue on the entire quantity exported since larger ships can onlyenter ports deep enough to accommodate them. Considering this, and basedon discussions with the mining companies, it is estimated that, by 1973,about 6.5 million tons of ore will be carried in ships requiring more thanthe present depth of 38 ft, resulting in savings of $2.2 million per yearin shipping costs. The remaining 4.8 million tons are assumed to be car-ried in ships requiring up to 38 ft depth.

7.07 The estimated savings in shipping costs, after allowing for main-t-enance -7-e- i, w 'l yield a return of 28 Pan1 -, cost- of (i) th 4-U-u tLauI -UPI 1 V.LLJ Y.LI~U L ±L ULUI I.J LUp o 4uAi Ld UUO~~U± %1.±J Wit1, U±LU-

ing, (ii) thie two tugs required to maneuver the larger ore ships using theport, (iii) the liguhtig cund buOyinlg equipmlent essentilc for 1the safe navi-gation of the larger vessels in the deeper and externded navigational areaand (iv) the improvements in shore and other ancillary faciiities. Thelast item, which will consist of improvements to ore-loading installations,strengtheningr of piers and dolphins, etc., will be the responsibility ofthe mining companies, but the estimated costs involved have been taken intoaccount in clCculating the economic return. The possibility of adversevariations in traffic forecasts and cost estimates is expected to be negli-gible. If the savings in shipping costs are only half those estimated, theeconomic retuirn will still be 10%, which is adequate.

7.08 On the direct Liberian investments in items (i), (ii) and (iii)above, the Bank estimates the benefits to the Government alone to yield areturn of over 20%.

7.09 As and when other ports of destination increase their depth be-yond 38 ft, the quantity of iron ore shipped from Monrovia in larger ves-sels will increase and the benefits will be correspondingly larger. These,however, have not been taken into account in estimating the economic returnn;

C. Feasibilitv Studies

7.10 The project; also inrludes feasibility studies for improving theUnited Natioxis Drive, the Monrovia By-pass Freeway and the Mesurado Bridge.The volum.e ard natnire of traffin on theh t.wo roads anrd the hriripe (6.02 (1'))indicate a p2'ima facie case for their improvement. The feasibility studiesw-.ll foUcs o!n +.hp hcb-+. tnhinnG1Al nsned necn-nni s-olut+-ot%ns.

- 17 -

A TAPTVPq AI'M 1T1PTAAI\r'T'

A. Taif

8LL01 plvied by PirYln are Uarbor uUe, wharfageand handling charges, all on the basis of tonnage loaded and unloaded,pilotaL1geU adlU tuWagu ucarguu to tUe bslhLp, ana storage charges on cargu.There are also charges for hire of cranes and other equipment, supply offresh water and other miscellaneous services and facilities, and rentalsfor land and buildings within the port limits. No charges are levied onvessels carrying iron ore but the iron ore companies pay five cents foreach ton of iron ore exported. In the case of L1U, this charge is fixedin its concession agreement with the Government. LIT and NICC also paytwo cents for each ton of iron ore crossing the nearby St. Paul RiverBridge.

8.02 Two tariff studies have been carried out since TMIAC was formed,the first in 1952 (Sly-Hedden Report) and the second in 1962 (James C.Buckley, Inc.). Both recommended substantial tariff revisions includingtariff increases. Very few of the recommendations were implemented andtariffs have never been adjusted to reflect the cost of providing services.This will be remedied as follows:

(a) Elimination of the five cents per ton charge on exportsof iron ore to be replaced by a combined charge on oreexports and on ore carriers to reflect the cost of pro-viding safe anchorage. Agreement, acceptable to the Bankas to the initial level of the charge and its applicationas from December 1, 1969, has been reached between theGovernment, NPA and ANPMC on the one hand, and the orecompanies on the other. The Government has publishedthe level of charge and its date of application.

(b) A general revision of other port charges designed toreflect costs. The James C. Buckley study provides asuitable basis for revising the tariff. The Port Account-ing Adviser, whose services would be financed under theloan, would advise NPA on the carrying out of the tariffrevision (8.29). It has been agreed that tariffs willbe reasonably related to costs and that the first revisionuiUl be effeo'tcd by I'lay St, 1970.

Other Ports

8.03 The :port charges levied at Greenville are similar to but slightlyhigher than those in Monrovia. At Port Harper charges are levied foranchorage, wharfage, lighterage, towage and storage. Charges for handlingand storing genernl cargo and for pilotage and t.wage of ships are levriedat Buchanan by LADCO, owners and operators of the port.

- 18 -

B. Present Finances

Qperating Entities

8.04 To bring IMonrovia into existence as a functioning por;, the

principaL users incorporated 1MMC in 1a98 and entered into a maiagement

agreement with the Government to operate the port. The users c ntributed

the initial working capital to get port operations started. The investment

in the original port assets and the debt to the United States for port con-

struction are not shown in tbe balance sheets of MPMC as these are consid-

ered assets and liabilities of the Government of Liberia. The management

agreement provided that POMIC co-ald set aside certain fuhnds for improvements,

after which operating surpluses were to be used to amortize the cost of

port construction. Until thbe debt was repaid, the United States Government

was to retain certain rights in port operation, the setting of port charges,

and the disposal of surpluses. nowever, in 19614 Pu1l title to the port was

transferred to the Republic of Liberia by the United States Government, a

debt repayment schedule was agreed between the two Governments, and the

United States gave up its rights. The Government of Liberia then informed

MPlD that it would be expected to provide tne funds to repay the debt to the

U .S.

8.05 The new NPA has the responsibility for the other Liberian ports.

The port of Harper is operated by UIARC0 under a ten-year contract with t-he

Government made effective in September 1968. According to the terms of the

contract UNMRC() will invest $250,000 in port improvements and the Govern-

ment will share in the earnings from port operations. The Government

presently services the debt incurred in constructing the port. The port of

Greenville is onerated for the Government by port experts supplied by the

Federal Republic of Germany. Debts incurred in constructing this port also

are serviced by the Government of Liberia. The port of Buchanan was con-

structed and is operated by LhMCO. The Government, therefore, receives no

revenues and incurs no expenses in the operation of the port of Buchanan.

Port of Monrovia

8.06 The current financial position of NPM: is strong. Working capital

amounted to $1.6 million on July 31, 1968 and an additional $465,0o0 was

available to meet iunforeseen expenses.

Revenue Accounts

8.07 Revenues, expenses; surpluses and other financial data for MPMC

for the years ended December 31, 1965, 1966 and 1967 and the seven months

ended July 31, 1968 are given in Table 3 and are summarized below.

- 19 -

( uuO)

Seveni'ionths

1965 1966 1967 1968

Revenues 3,136.3 3,156.8 3,250.5 1,904.6Expenses 2,283.1 2,3992 2,501.2 1,540.2

Depreciation of FixedAssets and Amortizationof Dredging Costs 412.5 454.0 459.2 280.2

Total Onerating Exenses 2369156 2,853 2 2,960.4 1,820.4

Net Operating Tievenues 440.7 303.6 290.1 84.2Debt Service 150.0 187.5 187.5 131.3

Times Debt Service Covered 5.7x 4.Ox 4.Ox 2.8x

Operating Ratio 86% 90% 91% 96%

8.08 I?1ThM accounts reflect depreciation of the assets it has acquiredwith surplus port revenue but not depreciation of the original investmentin breakwaters, docks, piers, buildings and other assets not purchased byiPIPC. Applying the depreciation rates given in Appendix 2 to the costof the assets not purchased by IPMC, it is estimated that the annual pro-vision for depreciation is understated by $264,000 and annual net operat-ing revenues correspondingly overstated. Figures for debt service repre-sent principal payments to the Government of Liberia to amortize the debtto -the United States Government for port construction. This debt servicehas been well covered ,although coverage has deteriorated,and the operat-ing ratio has increased as revenues remained constant while expensesincreased for salaries and wages of port staff.

Balance Sheets

8.09 Summarized Balance Sheets of MPMC as of December 31, 1965, 1966and 1967 and as of July 31, 1968 are given in Table 5. The balanee sheetas of July 31, 1968 is summarized below.

Assetsvix e d Assets at net book ' v e u 1,875.4

Net Current Assets 1,557.4Other~.~ Assets 0912._3

4,345.1

Reserve for unforeseen expenses 465.4Retained earnings 3,879.7

4,345.1

- 20 -

Fixed Assets

8.10 Investments in buildings, equipment and certain port installa-tions totalling $4.3 million have been made by 1VIM4C over the years and asof July 31, 1968 had a net book value of $1.9 million. Exrept for theLMC pier w'hich was partly paid for by MPMC, the piers and installationsof the ore companies were constructed at their expense. As mentioned in8.04, the values of the original investment in breankaters, channels,piers, etc, are not shown in the acco*nts of These assets cost ap-proximately $19.5 million, which, on the basis of realistic rates of de-preciation as sholn in ApPendi.x 2, had a net book value of $12.9 mili;onon July 31, 1969.

Current Assets

8.11 The accounts receivable of MPMC as of July 31, 1968 stood at$1,154,400 made up as fol'ows:

General $ 443,680Farrell Lines and Delta Lines 286,643Iron ore billings 169,606Republic of Liberia 210,526Other 43.9

$1,154,400

8.12 Rather than following the normal practice of requiring that pay-ments be maude on a cash basis at the port, in the case of Farrell Lines.,Delta Lines, LMC and NIOC, EIPC receives payment through its New YorkOfice. Thie anount due from the Republic of Liberia as of July 31, 1968included $:L35,544 due for storage charges, from which the Government claimsit is exempt. ]9IviC has written off a further $251,755 due from Governmentfor storage in 1966 and 1967 which was considered uncollectable. The largeamounts of outstanding receivables has kept HEMC short of cash, and, there-fore, of investment funds.

Long-term Debt

8.13 Als previously mentioned, the loan from the United States to theRepublic of Liberia for port constructiorn is not shown in iMIPC's balancesheets although i'llC has made certain payments out of surplus port revenuesto amortize the debt. Until 1964, when a debt repayment schedule was agreedbetween the United States and Liberia, only $0.5 million of the loan had beenrepaid. Subsequently, a further $0.8 million was repaid by PaIC bringinLgthe outstanding balonce of the loan to $18.2 million as of July 31, l968. Theschedule provides for payments rising from $225,000 in 1969 to a final.payment of about $778,000 in 1999. The loan is interest-free.

Audit

8.14 Haskins and Sells, Certified Public Accountants of New York, havebeen performing +he external audit of rf s accounts.

Other Ports

8.15 The res uLts of operations for the ports of Greenville and Harperare summarizedi below for the years 1965-1967 and seven months in 1968.

-----------Greenville-------------- HarperSurplus Payments to

Revenues Expenses (Deficit) Government

1965 $70,030 $76,610 $ (6,580) $10,4731966 90,400 81,726 8,67h 10,2101967 56,253 80,397 (24,144) 12,0181968 (7 months) 59,750 52,766 6,984 7,h08

The above figures for Greenville do not include any provision for deprecia*-tion or interest on the port's long-term debts. The port was built at anestimated cost of $7.7 million but no balance sheets are prepared and thecosts of indivridual assets could not be obtained. At the end of 1967, therewere two outstanding loans for Greenville port construction, as follows:

Arbeitsgemeinschaft Sinoe-Lenz-Bau AG/Prien $1,552,000payments due through 1971 with interest at 7%

Kreditanstalt Fur Wiederaufbau $2,534Y000payments due through 1977 with interestat

_ _

$M,0861000

Until Septembe!r 1968, the port of Harper was managed by Messrs. Frey andLusli, a shipping agency who made the payments indicated above to theGovernment as its share of operating surpluses. No other financial datawas available. As of June 30, 1968, the Government owed the U.S. Export-Import Bank about $950.000 of the $1.6 million cost of port construction.The loan is tc be repaid by March 1980 with interest at 4-3/4%.

C. Future Finances

General

8.16 The Government intends for NPA to take over the public assetsand liabilities (including the servicing of the long-term, deb inc-urredby Government for port construction) of the ports of Monrovia, Greenville, aniHarper, and of any other port' placed under its jur-.SUctionD..Untilthe takeover o.f ilonrovia (to take place when the M4onrovia Port IIanagementcontract is te:rminated), NPA Will not have access to its cash resources

- 22 -

and will have no funds with wlhich to service the outstanding debts of

Harper and Greenville ports or to pay the local costs of the project. Durxng

this interiim period, the Government has agreed to continue to pay the debts

and any ope:rating deficits incurred at tbese ports. TIPY has agreed to

cooperate fully with NPA in carrying out the project, including provision

of funds.

8.17 When management oI Monirov`.a -s transferred from MT' to NPA pay-

ments for port services from Farrell and Delta Lines, LIM and NI0v will be

made in Liberia at the time services are rendered and there will no longer

be large outstanding balances due from these companies. NPA will be able

to collect ifor port services rendered to the Governmient when the N.PA law

is amended to prohibit the granting of any exemptions from the payment of'

port charges. This requirement is spelled out in the principles to be

followed in amending the NPA law (Appendix 1).

8.18 The effects of the above have been taken into account in the

financial projections of NPA. The following cash flow statement for ITK

for 1969 and for NPA for 1970 and 1971 (the period when the project will

be carried out and of the NPA takeover of the assets and liabilities of the

Liberian ports), highlights the importance of the tariff increases for t>.e

financial viability of NPA. Given these increases, NPA wiil have ample

resources to pay the local costs of the project.

($ '000)MPIC 1- A ----

1969 1970 1971

Casb Requirements

Proiect costs 3,510.0 390.0 65.0

Other capital expenditures 137.0 253.9 95.1

Debt servirce - Port of Monrovia 260.6 581.8 680.0

Other Ports - 609.h 9g8.0

- ,83 -11 _77A1

Cash AvailabLe

NJet operat:lng revenues (present tariffs) (40.2) (263.3) (405 4)

Addition a revenue from proiected

increases in port charges 18.5 684.8 961.0

Depreciation and amortization:Port of Monrovia 666.8 983.9 936.8

Other ports _ 153.0 306.0

IBRD Loan 2,975.0 360.0 50.0

Other 182.0 285.0 75-0

3,802.1 2,203.4 1,923.4

Annual Cash Surplus (Deficit) W5.5) 368.1 14503

Cash on Hand - BeZzinning of the Year 665L1 >59.6 927.9

Casn on Ha:cd - End of the Year 25 I77.9 2 lsO73.2

- 23 -

Port of Plonrovia

8.19 A detailed forecast of operating revenues and expenses, surplusesar.d ote Uv finanv4 - Uata iJs given V -n mabLo e , wc also si ves .Jla -formation for past years. Assumnptions and Bases used in preparing the fi-

~ ±~L 4~iL~S dL'U U L~±.L LL _UL ~I{JjJeIUJ-2 ConanciAl forecast-s au-e detaaled J- P-speniX2

Q.20 Forecasts of operating revenue are caluulated or. the assun-tiorathat a cost-based tariff is introduced by NIay 31, 1970 to produce a 7%rate of return on average net fixed assets by 1972. This wi-l require anaverage increase of about 27% on port charges other than port dues on orecarriers-,whdch has been fixed separately. On this assumption, the operatingratio and fi-nancial rate of return will be acceptable, the latter increasingfrom 57 in i97i to 770 in 1972.

National Port Authority

8.21 A detailed forecast of operating revenues and expenses, surplusesand other financial data for all ports is given in Table 4 for the fouryears beginning January 1, 1970. Pro fornia Balance Sheets are given inTable 5, a projected Cash Flow Statement i1 Table 6, and a Forecast of DebtService in Table 7. AssurEtions and Bases used in preparing the financialforecasts are given in Appendix 2.

8.22 is suLu!iary of Porecast Financial Data for 114C for 1969 and forIqPA for 197CI through 1973 is given below:

($ '000)TIC-- - - - - - - - NPA - - - - - -

19zi9 1907(' 1071 L97° 1 t7

Operating Revenues 3,283 4,250 4,802 5,013 5,075Operating Eb-penses 2 2,92 3,003 3,026 3,111Depreciation and Awrm-tization 667 1,137 1.243 1.143 1,158Total Operating axpenses 3,305 3,829 h,246 h,169 4,2839INet nperatigr Revenues (22) 421 556 PI 7PAInterest Expense 35 319 388 3h0 318Net Revenue Sur-plus r(57) -1 01 .16 504 r4. ./~~~ ~~~~~ 2UL~~~~~~~~~~ UL.L

Times Interest Covered 1 l.32 1.4x 2.5x 2.8cxTotal DetU S LV ce6 1,191 ,O61O 1,194 i,l-7Times Debt Service Covered 2.5x 1.3x l.lx 1.7x l.6xOperating P.atio 0>0 9(4 9s 83o />Financial Rate of Return on

Average Ne-t Fxed Assets - .n8%o 2.4h9 3.9% 30C)s

8.23 iat's iinancial viability will depend on Honrovia's which willaccount for about 97% of NPA's operating revenues in the period through1973, but onlAy 90,% of its operating expenses (including depreciation andamortization). While the financial. rate of return for Monrovia is expectedto reach 7% by i972, N-^A:s rill be only 3.9%A;¢. rThis is all that can be ex-pected in view of the operating losses that will be incurred for some years3

- 2L -

at Greenville and Harper due to the low levels of throughput at these poltsrelative to the investrt.+t in their phy c J c-ac44-40s. Cash generatedfrom operations will provide a small margin over debt service of NPA unti.l1972 when anrn.ual drebt SeWrd-'l -b411 over $0.4 ri''on (Tabl 7,Thereafter clebt coverage will be satisfactory.

Balance Sheets

8.24 A suimmary of the forecast Balance Sheets (Table 5) is given belowas of December -31, 1970 and 1973.

1970 1973

Assets

Fixed Assets and DeferredDredging Costs 36,367.7 36,833.3

Accurmulated Depreciationand Amortization 12,901.7 1644j.6

23,466.o 20,387.7

Other Assets 765.4 76 5.4

Net Current Assets 1,192.9 2,508.4

25,4?4.3 23,661.5

Capital

Debt 23,860.7 20,957.7

Equity 1,563.6 2,703.8

252424.3 23,661.5

Debt/Equity Ratio 94/6 89/11

Fixed assets are valued on the basis of historical cost (estimated in thecase of Greenville and Harper) less straight-line depreciation at ratesgiven in Appendix 2. No revaluation has been made at M4onrovia since port,constructiorn fas coirpleted in 1948. It has been agreed that a revaluationof all port assets of NPA, including land, will be carried out by the end.of 1970.

Cash Flow

8.25 A Cash Flow forecast for IMlPIC for 1969 and for NPA for 1970-1973is given in Table 6. Cash su pluses for 1969-1973 will total about $i.6million. No provision has been made in the financial forecasts for re-placements or- Junvest-mer-ts at ports other than Mvonrovia, but it is not con-sidered that they will exceed $100,000 during this period. Cash availabl]e atthe end of 1.973 wil amount to $2.3 mili on, plus $465,000 for unforeseen,expenses (Table 5), of wfhich it is estimated that about $2.0 million willbe available for potential future port expansion. Considering the veryhigh debt/equity ratio, future borrowing will have to be str:ictly limitedand the Government has agreed to consult the Bank before any major portdevelopment is initiated, to provide financing for any major developmentundertaken without the Bankts approval, to service any debts incurred inrespect of such projects and to cover any operating deficits.

Financial Rate of Return and Tariff Covenant

8.26 Agreement has been reached that lJPA will earn a rate of return ofat least 5', in 1971 and 7%0 in 1972 on the average net fixed assets in useat Monrovia, the fixed assets to be valued on the basis of historical costless depreciation. It has also been agreed that all NPA assets includingland, will be revalued by the end of 1970, after which the Government andNPA will consult with the Bank about the steps to be taken to ensure thefinancial viability of NPA ports other than the port of 150nrovia and areasonable rate of return on the value of NPA's assets in such ports.

Disposition of Unused Surpluses

8.27 The Borrower has agreed to exempt NIPA from making any payments toit by way of (i) return on the Borrower's equity investment in NPA, (ii)anortization on the outstanding amount of the U.S. loan, (iii) taxes,(iv) distribution of surplus revenues; -unt.il such time as NPA shall haveprepared a comprehensive port development program (5.12) when the BorrowJerwill review payments to be made by NPA to the Borrower.

Port Accounting Adviser

8.28 Until NPA assumes funll responsbillity for the .m anagement and opera-tion of the Fbrt of Monrovia and for some time thereafter, it will requirethe services of a Port Accolnting Advhiser (as provided for inr the project).He will be required to advise on cost studies needed for tariff revision,the revaluation of asse the establishm-ent of a 'ting systems at Ge.. the establishmen~St o at%cr-itr.' ng~ &J ' '4.SJ,ville and Harper ports, and planning and implementing training schemes forarccounMnti ngprersorcnelo In conj'mnction w-rithl the Psort Adviser he -will helpprepare a development plan for NPA and NPA's capital and operating budgets.

Audit

8.29 Agreement has been reached that iJPA shall have its accounts audited.annuall'y by independent and quai' led auditors acceptable to the Bank.

- 26 -

9. RECOMMENDATIONS

9.01 The Goveriment and NPA have entered -nto a satisfactory arrange-ment to terininate the Monrovia Port Management Agreement within one year ofsigning the proposed Loan Agreement (4.02).

9.02 The Government and NPA have published a satisfactory tariff ofport dues to be levied as from December 1, 1969, to recover the costs ofdredging (8.02 (a)).

9.03 During negotiations agreement was reached on the following prin-cipal points:-

(i) introduction of a cost based tariff by May 31. 1970and achievement of a 7% rate of return by end of 1972at the port of Monrovia: consultation with the Bankon steps to be taken to ensure the financial viabilityof other norts: action to strengthen the financialresources of NPA including agreement on disposal ofNPA surnpluses; payment hr the rnovernmPent of nort debtsat Greenville and Harper until the assets and liabili-ties of MPMr are t+sfed t NPA, ro¶rPrnmPnt toprovide the funds to finance any major port developmentnot aprnovae byr the Ban>, t sernice any prt debtsincurred in such development and to cover any operatingdA_fI.eficit (A ' (b), A8.I 8 OA A- A 8.h7);

$3.385 million to NPA (6.o4);

(iii) amendment of the NPA law in a manner satisfactory tovhe- D-1 -- ar. r.--4-4------ ofP -a--.-4te _______4--4onof port users on the NPA Board; NPA establishmentof.L ar. orga. g,LL i z ation.aL 0 s-u sLLLUULLL sD,isfac.Ld.UoJ.-y IA) UJ.L. JJC.ALl.

and NPA entry into a contract for day-to-day manage-.W.Ae n tJ A IoLf L V V JLr&a poJ.L U ade.L qa teIJ.L' V 44 nL NP 4.AJ a.J for

staffing the ports (4.o2, 4.o03, 4.o4 and Appendix 1);

(iv) preparation of a development program in consultation_. Ull Vio_le _- o ___n ld : __* -__a_W a 1 WJIU a cons. "L ID± at1Ull Wi. Wi 1U DwJ. UUt.LU.UU

any major investmient is muade (5.12);

(v) transfer of responsibility for maintenance of thees-uratU Bridge, 'un ed Na'ions Drive and St. Paul

River Bridge to an agency of the Government otherbknanL N PA (4,.o6).

9.04 The project is su,itable for a Bank loan of US$ 3.6 million equy.va-lent to the Government of Liberia, for a period of 15 years, including a twoand one-hali' year grace period. US$0o.aL5 million will be used by the Govern-ment to carry out the feasibility studies for port access road improvements.

June 3, 1969iBRD

APPENDIX -IPage 1

REPUBLIC OF LIBERIA

PORT OF MONROVIA DREDGING PROJECT

P'.PnTPTT)T CPC Tn TIP. OLT.TnWFn AND MATTERS TO BE COVERED IN ESTABLISHINGA NATIONAL PORT AUTHORITY

A- -,A,.er no r.ny ha "acessarv of the existing Act to Amend the

Public Authorities Law to Provide for the Creation of a National PorttA.4U--oi4- 4-- -- acor *' th, +.he fol Iweng cpnrovisions:

LLU ULLVJ.L-.L VJV ' ~ J'

.L Gwner .lUWV'L L

(a) Its d-u-ties wi be to pvd m,nninftin and operate public por4sin Liberia in accordance with these principles and such other

powers as have been conferred on it The existing Sinoe Port

Authority legislation will be amended to comply with the NPA lav.

(b) In pursuance of its functions, it will be given the greatest

deoree oL financialc and adAmi44i 'strative aul+tonomv feasible. Under

NPA's complete control, subject to the conditions stated iU

Section 2(a) and 2(c) of t-his Appenrdix, vill hp!

(i'i The planlnlg, design construction, operation, Lnn

maintenance of all NPA ports;

(ii) all funds generated by charges for services which

it provides.

(c) Within the maritime and terrestridal areas of its 4v-is Aicion N'PA

will have the powers normally enjoyed by a Port Authority such as

the powers to:

(iji control the creation OI strur-oUCues dr-edU L r,. cA

reclamation;

(ii) remove wrecks;

(iii) operate its police force; and

(iv) enforce compliance with its regulations generally0

Powers of direction and regulation of the movement of vessels

within the ports will be vested in the Harbor Master.

An appropriate agency will be authorized to define the physicia

limits of Jurisdiction of NPA.

APPW7\Tn TY t

Page 2

(d)N IPA will have the power to sue and be -ued toaand dispose of property, to assign the provision of

port ~ ~ -seice &n 1heue ofP -3:ie an4t etekM 4 t4~ * uo A. .a.AJ_~.I__L _LU OILU UV V1LIJcl-

into contracts. The disposal of land and structureswi_"' require tIe, prior approva' ofV.4L the Uvve,sL-UmnIIt:.

(e) I. W±.LjL have ±ui puwtfl- UV ii.LvLat.,e flew services Urdiscontinue existing services as required for theexercise ofL i1is . LUl1;o.

/,ON I A ~~t ~- _ 'I-(f) w1rA wiii have power Vo sell by publiC auCtiorl any

goods left in or on its premises for a period exceed-ing Uil±rUy dCyIs, subject to:

Ci) reasonable action by the Authority to givenotice of sale to the owner of the goods;

(ii) appropriate special powers of the Authorityto dispose of perishable goods;

kiii) an appropriate order of disposal of the pro-ceeds of sale, to be stated in the law.

2. Financiel Policy

(a) NPA will levy such charges for its services as it, with theapproval of the Government, may prescribe, but will be pro-hibited from granting any exemption from or reduction toits charges to any person, or department or agency of theGovernment. NPA shall ensure that the rates fixed therebyare adequate to provide sufficient revenue to cover operat-ing expenses, including adequate maintenance and deprecia.-tion, and interest payments on borrowings; and to providecash funds for debt amortization, to provide adequate work-ing capital and to set aside reasonable reserves for con-tingencies and for financing a reasonable part of the costof fuLture expansion including replacement of assets.

(b) The general borrowing powers of NPA will be defined.

(c) The operating and capital budgets of NPA will be separatefrcm those of any other agency or department. NPA willsubmit its operating budget and supplementary operatingestimates for information to the Government and its budget,plan for capital expenditures and the corresponding programfor financing them to the Government each year for approval..

(cl) NPA will maintain seDarate accounts for each port it oper-ates; these accounts will be kept on a ccmmercial basis andwill be audited by indenendent and aualified aluditornq

APPENDIXT

3, 2Eyaizwton

(a) lThle Board of Directors of NPA will include an adequate nLuberc-f mem'oers renr senMtLn r port users, Such repres,entatires -

port users will, as far as practvicable, be apointed to theBoard of' Directors upon t-he recomme..=ndation of th resectiv eorganizations of port users.

(b) The Executive Head of NPA will be appointed byr the Board and..;11; b e in fill' ch.-g or f A^vr A.,day a-iistration ol t'heEoard's policies and port operations, and will have responsi--4 .- pw 4^1 uli L~Liwaccordace - dwih vhe 1w L Jj_Lb _L .Lrespect of appointing, dismissing. suspending or reinstatinger..F^Ioye- o4-ker than sen-Lor- stcaffY ~ J J.LJ,J IALdL t±lL.JL V I.LJ..

( MP-IA wM - have responI L' y and power in accor--anca -wii whelawis of Liberia in respect of appointing, diswis3ing suspend-Ing or reiIstating its S.,i.l' b jaif3 and for fELcng th_rermneration of aUl its employees.

4, .iscellaneous

(a) NPA will be conaulted before any concessions for prive;-e portoperations are nade,

(b) N:PA w*il upon request bay the Government, provide informationwith respect to the property and activities of NPA and fuv ishthe Government with returns, accounts and other informatf.onwith regard to NPA.

5e Transitional Provisions

(a) The transfer of assets and liabilities at the listed portswill be stated and the date or such transfer, The assets willinclude the assets owned by the Government and MPC5 in thePort of' lonrovia and assets owned by the Government in all ot4h3rNPA ports. The liabilities will hic ude tne servicing of Govs=,-Tmmt debts in respect of NPA ports.

(b) Tlhe arrangements for vajuation of the assets and listing ofliabilities will be stipulated.

(e) NPA's financial structure will be defined in specific termsre2.ating to initial debt and equity capital.

(d) The status of existing depar+x-tntal svaff' transferred to NPAwill be defined and the proced*re for dealing with theirexisting pension and other ri§ats laid down 3i

Page 1

Tl'UlTnTT fT(T (r I 7 TlTr'TPTA

run± Wv rIJjLuV.LA I ,L'U±jfuu lU rnuJz J

EASES AND ASSUMPTIONS USED IN FINATCIAL PROJECTIONS

Port oI Mionrovia

1. Operating revenues have been estimated on the basis of the presenttariff except for charges on exports of iron ore and harbor clues on orecarriers which were assessed separately. Additional revenues from tariffincreases averaging 27% were assumed in all categories except harbor dues.Revised rates for iron ore exports and harbor dues on ore carriers werecalculated from December 1, 1969, other increases from Hay 31, 1970.

2. -Operating costs have been computed with price increases, includ-ing wages, at the same rate as experienced in the 1966-68 period and allow-ance made for increased throughput.

3. No allowance for depreciation on the original port assets (those,not purchased by 14RIC) is included in the estimates until 1970 vhen it isassumed NPA will take over operations from MPMC. Rates of depreciation onthese assets are as follows:

Channel, Basin and Breakwaters 1%Other Maritime Stractures 2.5%Buildings, bridges, cranes 2%Tanks. fences. utilities

1h. Provision has been mripe for mintesnnce dredring in the amountof $200,000 annually, commencing in 1971, which is considered an ampleallowance. 'hese costs sre rer.nverer in the harbnr dues and to the extentestimated maintenance dredging is high (or low) the level of harbor dues_n_ be ad-1i:-d

5. -n-to provisinv has been made for additional revenues thatearned from projected cash surpluses either from interest on deposits orrervrenueS eo +e i,v-stwentSrer

IS ,a O t e ,,na.4

e , -,a, n,n',. S a r.d o , .. a ec tio n.s o f~ r p a e . nts op ~ U 1- .LJIV CSWIMS U V.L 'D JOIU.UJ WE.i.I01 31JOC JJ.4 VA. 01

mobile and other machinery and equipment, construction of buildings andao+a. arA l--s, - -- 4- rei,ert for- y s -- 6--- gICnI 73 e!,94 -aA

5V=150 GELUSI %AI.. iuuLJv4.L A%,-L L A_'=A0 .LLU4. LA U LYU O 7Li7-7 .71 ) U_.LJLCLUdV%A

at $857,OOoI

7. The balance of $115,690 due for many years from Krutown PowerrlAIt was considLered uncollecttaole and charged to earned surplus in '916.

Ai'PP7hTDIX 2Page 2

8. ProvisioIn has been made for a Bank loan of US$ 3.385 million at6-1/2% per annum for a period of 15 years including a grace period of twJoand one half years. Interest during construction has not been added tothe loan but has been charged in the Revenue Account.

9. It is assumed that when the NPA Law is amended in accordancewith princ:iples agreed with the Bank, the Government will pay for allport services with which it is provided and that its account with NPA willbe kept current.

National Port Authority

10. Servicing of all the outstanding debts for port construction atMonrovia (zreenville and Harper is assumed by NPA, effective July 1, 1970,when it is expected that NPA will take over Monrovia port from MPMCo Untilthen, the iovernment is responsible for servicing debts incurred in portconstruction at Greenville and Harper and for all deficits or otherexpenditures incurred in regard to these ports and Buchanan.

11. The following rates were used in calculating depreciation at theports of Greenville and Harnper:

Greenville:Breakwater, wharves, etc. 2%Tra4nsit sheds1 emq-i--e

buildings 5%

Harper:A11 f i-xe asset-s5

12. It is assumed that revenues from operatons at Greenvi'le aresufficient to cover operating expenses other than depreciation and providea sma-l- -4," &nd W "hTDNP receives $000a year 1-0 frr.u.fU as W US

share in tae earnings at Port Harper. No provision was made for majormaintenance es a either porto eDenues and expenditures atBuchanan were forecast to be zero on the assumption that all services*"3o d c o A.V,n,le to bke for 4.u_ acou. of AC0.ura Lid IJV .IJ JLU Wi.'L VL aco.t O .L IA&IiUU

13. 'o provision was ,ade for irresvuents or capital expenditure aLports other than Monrovia.

TABLE 1

PORT OF MONROVIA DREDGING PROJECT

Traffic in Liberian Ports

Number of Ship Calls 1964 - 1967

Port 1964 1, 196 1967

MonrovLa - freighters 1,203 1,180 1,275 1,2-3ore carriers &tankers 305 34 66->

1,508 1;528 1,641 1,622

Buchanan 325 _6 311. 306

Greenville 90 92 88 80

Harper 3529 30

1,958 2,114 2,099 2,038

PORT OF MONROVIA TRAFFIC FOR 1963-1968 ANDFCRECAST FCX 1969-7

1968 1969 1970 1971 1972 1973;L963 1264 1965 96i6 1261 (Fetiuat) (F o r e c a a t)FaLports

Iron Ore 4614 5 8432 9 39 925°° 9950 9950 9950 1139;0 11350

Other Cargo:Latex 29 29 40 36 39 40 40 40 40 140 h0Gne-ral Cargo 26 35 40 45 38 40 40 40 40 I.1 40Sub-total -Other Cargo 6 64 80 81 71 80 80 80 80 80 80

Inorts

ulk petroleu-- 149 161 170 210 178 260 360 400 420 !9 L62Other Catrgo$ 2

CemerCat r- 87 60 83 62 66 60 60 60 60 6O0 60Ric. 37 29 17 38 56 50 50 50 50 5o 50Ntroleum in druasl/ 5 8 5 6 10 6 5 5 5 c3S42 366 403 290 275 260 300 300 270 215 280

Sub-total - Other Cargo 471 508 404 407 376 415 415 3fl8cr An icCTranshipmnent 4 58 70 84 80 85 90 2 1 0o0

Fetroleum &/O+h, -- t ^ - - t-5 140 14 15 15 15 15 15

Sub-total - Coastlal trade - - - _ - 5 cc 60 A,Total traffic other than Iron Oreand Bulk Petroleum 8 6 56 536 630 6J° 49n 6

_.d. *LdJ Ann T--ffirs. LCl. oAa Y.a 9211 13 102 109 10990 10F99 12t2f 4y .aay crude peVo1eu-m fr domestic refinery nearing completion from Octobe 1968. oducte befo at dg/ Only clinktr imports for domestic cemnt plant from mid-1968.3/ Lubricantas im~nr,.+A -IA d or+4.. I_- -19JPestroleun wrodcts shippe-d-o-rela7ce rect imports.

/ Separate data not available up to 1968.

I,T PP8ILA

'ORT OF M0N3OV'. DRCEOIGE 900JEO(.

PORT OF MONROVIA

STATENIT OF REENUERS. E:XENSES. SURPLUSES AND OTHER FINANCIAL EATA

Actual 165-1967, Estimated 1968-1972, Years rnding --cebeor 31(Figures is Thousands cf Dollars)

A C T U A L F O R E C A S TMonrovia Port

lo-eovia Port Mrangenent Conparxy 35 0ng.mrnt Co. National Port Authority'woths

L965 16966 2967 1968 1968 1969 1970 1971 1972 197

Operati :KRevenims

Receiving, s.reho=sing and de-livery 1,005.3 990.5 1,015.9 566.h 9L9.2 83h.3 856.5 866.6 876.7 895.0

Harbor des .. Iron ore tankers - - - - - 12.5 160.5 160.5 183.0 183.0Other ships 5:12.5 567.0 549.5 318.9 537.8 Sh3.6 553.0 557.3 561.6 565.0

Iron ore fees 327.7 ,01.o b35.5 276.2 h74.3 652.0 696.5 845.o 967.0 967.0

Whus-fage 583.7 524.9 551.8 262.8 SSo.5 hh6.3 h53.o h56.1 459.1 570.0

Storage 216.1 162.5 252.3 72.7 117.5 109.0 225.0 220.0 220.0 225.0

PilEE.age, voorlng anl berthing 219.2 206.6 206.7 235.1 392.6 556.5 496.5 496.5 596.5 496.5

Other 35;2.8 305.h 359.8 173.5 309.5 2h8.6 298.0 298.0 298.0 298.0

Additional revenues J're postulated275 increLose in port charges - 553.8 _ 781.5 826.2 8h5._

3,136.3 3,156.8 3,250.5 1,904.6 3,221.3 3,282.8 l192.8 4,681.5 4,888.1 5,955.0retr-t ilL Enpen es

Salaries and sages 1,356.6 1,557.5 1,523.5 950.1 1,586.0 1,581.3 1,647.1 1,702.9 1,771.1 1,851.0

Repairs and naioience 4Cq.o 522.6 517.3 271.7 483,0 500.5 590.0 500.9 506.9 515.0

Insurance 52.2 101.3 85.1 55.6 93.0 100.0 100.0 100.0 100.0 100.0

Managewent fee 78.5 78.8 81.0 .58.0 80.5 93.1 - - - -5Sc:Rdviser sereies - - - - - 35.2 75.o 65.o - -

Provision fr .waintenance dredging - - - - - - - 200.0 200.0 200.0

Other 3A6.9 349.0 395.5 215.8 293.7 327.8 335.3 329.3 3.8.oo 360.02,283.1 2,399.2 2,501.2 1,540.2 2,536.2 2,637.7 2,657.5 2,908.1 2,926.0 3,026.0

repreriation 367.3 365.8 370.6 2C6.5 358.9 519.5 696.2 693.1 637.1 652.6

Awotization of dredging costa b5.2 88.2 88.6 73.7 125.b 257.a 287.7 _ 243.7 199.7 19S.72,695.6 2,853.2 2,u6o.5 1,820.5 3,021.5 3,305.5 3,631.3 3,8hh.9 3,762.8 3,878.3

Net Operoting Revenues h5O.7 303.6 290.1 85.2 199.8 (21.7) 561.5 536.6 1,125.3 1,066.7

In.trest Expense - - - . 35.6 206.8 220.0 211.5 205.5

Net Revenue Sa-plan 4to.7 303.6 290.1 85.2 199.8 (57.3) 354.7 616.6 913.9 861.2

Tiees Interest Covered - - - - - - 2.7x 3.8x 5.31 5.2x

COuh Oleneratsd, Net Operatig Re-enuesplus 9epreslatlon st n A-artication 853.2 757.6 745.3 365.5 6P,S.1 6L5.1 1,545.5 1,773.4 1,962.1 1,919.0

To.tS Debt "svice 152.0 187.5 187.5 131.3 225.' 260.5 581.8 68o.0 761.5 770.5

Tirso Debt Service Covered 5.7c L.o, Sic- 2.8x 3.0x 2.5x 2.7x 2.6. 2.

6n 2.5s

ROt-rs on Aser-ge Net Fiod Assets 1/ . 1 El 1/ 3.3% 5.0 7.0% 7.0%

Opc:atinr RBtts li 11 1 1/ 1/ 86.6% 82.18 76.9% 78.b5

cur.. :l 5.-sc,tr modified by he Ssh :::

Not '1?.u-bie for scess-rooc:

LIBERIA TABLE 4

PORT OF MONROVIA DREDGING PROJECT

NTATIOiNIAL PORT AUTHORITY

Statement of Revenues, Expenses and Other Financial Data

Estimated 1970 - 1973 Years Ending December 31($1000)

1970 1971 1972 15711

Operating Revenues

-IN 1. _ -. I - . ,c-no Q I. A %-l if I* ARF -I Q ,Port of riuIono-La 43,192.8 4,681v.5." 14,888.1 4,94 0 .! Other Ports 58.0 120.0 125.0 130.0

L;,250.8 T,7-1.57 5, 01v.'- 5,07' .0

94erat-inig £-.Penses

Port of- Monrovia 2-6h )I7 2.908.1 2.926.0 3,026..0Other Ports 45.0 95.0 100.0 lO5.O

2T692WO 3,003.1 3.026.0 3,131.0

Deprecla+^v on" arn%nd Qorizatin+

Port of Monrovia 983.9 936.8 836.8 852.3Other Ports 153.0 3o6.o 306.0 30').0

1,136.9 1,242.8 1,142.8 1,1 Ft7

Total Cost of Opnerations 38R29QA 4,2h4.9 _Il_,8=P 4,289.3

Net Operating Revenues 421.5 555.6 844.3 785.7

Interest Expense 319.2 388.0 339.7 317.7

Net Revenue Surplus 102.3 167.6 504.6 463.0

Times Interest Covered 1.3x 1.4x 2.5x 2.8x

Cash Generated, Net OperatingRevenues plus Depreciation andAmortizatioin 1,558.4 1,798.4 1,987.1 1,94td.0

Total Debt Service 1,191.2 1,618.0 1,193.7 1,186.7

Times Debt Service Covered 1.3x i.ix 1.7x J1.5X

Return on Average Net Fi-ed Assets 1.8% 2.4% 3 9% 3.8%

Oeratino R 90.1% 88e5% 82.5 83.9%

Source . Danka S ffL.

,asJ 1 0,0

LIHORIA

PORTI MOR07Lt OOM? PROJIICTPORST oF YjXRVLk/VATlOKAL PORT A ORIRTr

BA1OC2 SHUT DATA

(Fig,.., In !hRoood Or TAilor.)

lMMp7IA rzOR MSl P ar OWVI AmoDrrT .UMLPR lg M- ALL. FMru

a&P 1m7 -1971 197 3 1T

Pid A.-t - PKl 4, aL

P,WO17 pt t .qop~ .d 86f,or.d bd-glogPrr. 3,59b.1 3,812.1 b.191.3 6,368.1 8,733.5 8.Ib7.S 8,26.1 7,,0U2.5 9,132.0 S,382.0a Aced Ud d|tica uld i E o 31-11 1,9~~~~~~~~~~~llk 222.0 2.2Wl.5 2at 2.728.8 " Ws6 - - nf 7 ^o.

1,962.7 1,890.1 1.9h8 1,8F5.1. 2,00.7 6,551.9 h,775.3 h,112.1 3,696.3 3,330.5Md As-t - h hl29

ah.r, Ir,l ddir, pln,, p-l ad wur-DZ

18,U1.3 18,1 3 18,M51.3 18,151.3

2,21.7 12,038.2 U1,99.7 U.,61.2P16d A..t - ,Um Perfl

Pf--t. rnm '-d qw -,3CO .30. i .D 9,3co.o

6,61d.o 6,104.0 0 5,96.o

T.t.1 lh,t P1"d A-t. 23,6A6.0 22,314.3 21,296.0 20,387.7

t. Xrot. Po PlP31 115.7 115.7 US. .7 5.7 - - - - -CA.h R.o. frr Mor._ an 376.9 b313.3 92.6 WA W66A t:L 6b5 Mf. bfi" WA6

I mr -fOpr-tun awgi_ W 7 AM 9 .SI ,° E 3W.0

662.3 9cg.6 MlJ n1.3 801.1 171. ' 765A -M5. ' 65j1 7 145VerU Ce,7it-'i

CU1'mt ItA

C"h 512.5 516.0 627.9 W9.3 665.1 559 92n7.9 1,073.2 1,753.1 2*,3A

Ac .ot, r...bl. 918.7 998.7 9M.9 1,15L1 937.0 010.0 6W.0 1W.O 4D.Cl 60D.0Ot6r

217.0 fla 19.5 ]j6 . 3S.0 IzA .A. -JLB .. o.2 __31,6hB.2 1,503.2 1,625.3 2,031.5 1,637.1 1,31k.6 1,m2.9 1,186.2 2,39.1 2,90.kCl- t Ub1 1t,10 295.1 ZlD,6 331.2 _...Ja 3RI.O _.AJj MA - u .... .hO) _1,353.1 1,312.6 1,29h.1 1,5S.b 1.287.1 1,03L.6 1,192.9 1,228.2 2,oa.m 2J9WA

T.Ul A..t. 3,978.1 h,.11.3 1,233.7 6,3b!;.1 b,172.9 6,7 1.9 25,63.3 26,111.9 2,t62.3 23,61.5

CAPITAL JXD LIMIZj&

Lor=-Ter bt

D o tIA Ckn f Libhri.

Port lWot of t1. 1hit1. St3.. 17,367.7 16,972.7 16,597.7 16,m.7

MD 2,915.0 3,335.0 3,300.0 3,125.0 2,935.0Oreen-ill, Port D0bt

2,bi8.0 1,T28.0 1,50L.0 1,280.0Y:.,- P--t att T760.0 680.0 600.0 -924

23.860.7 23,680,.7 21,806.7 20,957.7000100y 3eicit)

,,,r,-,r fr uoror,,En -- 376.3 1.3:.3 193.6 11;.4 1.651.)h 3,716.9 1,563.6 1,731.2 2,235.8 2,703.8I,eo>inod lornoogo ^3601.2 3.67i.0 .41.71.1 2 7 3707.5) - - - - - -_ _

3,°78.1 L,111.3 b ,233.7 b,315.1 b .172.9 6,751.9 25,b2b.3 24,L11.9 24,062.5 23,661.5

LIBERIA

POW- W M'MOfVT £-WING PBOViJCT

PORT OF MONROVIA/NATIONAL PORT AUTHORITY

Estimate of Cash Flow 1969 - 1973($1000)

Port ofMonrovia --------- ------ N-A -------------------

1969 1970 1971 1972 1973 Total

Cash Requirements

Project costs 3,510.0 390.0 65.0 3,965.0Other capital expendlitures

(Machinery and eauipment - Monrovia) 137.0 253.9 95.1 120.5 250.0 85f.5Debt Service 260.6 1.191.2 1,618.0 1,193.7 1,186.7 5,450.2

3,907.6 1,835.1 1,778.1 1,314.2 1,436.7 10,271.7

Cash Available

Net operating revenues (21.7) 421.5 555.6 844.3 785.7 2,585.4Depreciation and amcrtization 666.8 1,136.9 1,242.8 1,142.8 1,158.3 5,347.6IBRD Loan 2,975.0 360.0 50.0 3,385.0Services of advisers financed in the

project charged to ceratingexpense 35.0 75.0 65.0 175.0

Changes in other working capital items 147.0 210.0 10.0 10.0 10.0 387.0

3,802.1 2,203.4 I,9I3.h 1,997.1 1,95h.0 11,880.0

Annual Cash Surplus (Deficit) (105.5) 368.3 145.3 682.9 517.3 1,608.3

Cash on Hand - Beginning of the Year 665.1 559.6 927.9 1,073.2 1,756.1 6(q.1

Cash on Hand - End cf the Year 559.6 927.9 1,073.2 1,756.1 2,273.4 2,273. 4

Source: Bank Staff

May 1969

LIkMRIA A fLY '

PORT uF iviOF Mll-V.lH i RuLTU"' ±J TL

1ITArTIrTAT DPODR ATTHUnOT'IPV

Forenast of Debt Service 1970 - 1973($1000)

1970 1971 1972 19'a

Port of Monrovia

Government of Liberia - U.S. LoanPrincipal 375.0 375.0 375.0 375.0Interest - - - -

Total 375°0 375.0 375. 0 7

IBRDPrincipal -206.852.0 17f.r 20n.nInterest 2o6.8 220.0 211.4 205.5

Total eVjo. L) 302 36.L4 ____

,°olC 68. 76. 7, r'.I~OL.U OUU. u f U.J~. 4 J__

Port of Greenville

KreditanstAlt Fur Wiederauf'bauPrincipal 224.0 224.0 224.0 22L.0

Interest 59.- 107.4 95.0 82.7Total 283.5 331.4 319.0 306.7

Arge-Sinoe-Lenz Bau A.G.Principal 233.0 4oo.U - -

Interest 32.6 24.5Total 265o 49- U

549.4 802. 3i9.09

Port Harper

J.L&jJ ortJ Iql5Ij.,,ort Banlk

Principal 40.0 80.0 80.0 80.0

interest 20.0 36.1 29.Total 60.0 11t6 113.3 1Q%2

Grand Tntal Dehbt Service l.191.2 1,618.0 1,193.7 1,186.7

ouurce: DBlank Sitpa.L'

May 1969

L I B E R I ATRANSPORT FACILITIES _ _ _ _ _

S I E R R A / Komolo Kolohun

L E O N E / // a ' -.') t A F R I NE A

K I,/

A ~ ~~~~~~~~ ,/ f oio fLi.

j~~~~~~~~~~~/ /g Frb I D.:~~~~~~~~ ~ >, < zZ"oao _ . . -

v I d r IBA kok

|~~~~~~~~ ~ _ u /adsrae(susol)t.

ph-= I ordeCofn< \_ t6I *

-Prorne {n r n,j sr -, ">O 1

|~~~~PLNA14 R-pilva or

~~~~~~~~~~~~~~~~~~~~~~ 0if e d A T /

I r o n v i e oBO O O 4 0 S Oc . -| * -y Nationalforests MlLkS o ponho Po , n r

op,cs/I IS.D I Ziero,, A

NOVl,uBI0" R 19

FIRES7TONE

CepndN' 3 I

B I~~~~~~~~~~I

Programme.d and cccede snnyj

U,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1

- . . - ~~~~Corep Ki"og-

- AirfielIds .

Q leon aloes ~~~~~ ~~~ ~~~~0 10 20 30 40 50 .-

NOtional forets MILE lS

NOVhIO40R 191,1 10R0 18003R

S~~~~~~~~~ ~ ~ ~ ~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ ooz 0( 0!+_ X_(J~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1,I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ VPtll~ ,1,l

31d~~~~~~~~~~~~~~~~~~~~~~~~~~

N V 21 D O 01 I S NVl' 1 .I V ,OU ,,/ 0

\ ''>z /t ./ VlAOSJNOW SC) lSC)d

I ~~~~~~~~~~v