Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 18766

IMPLEMENTATION COMPLETION REPORT

PAKISTAN

KARACHI PORT MODERNIZATION PROJECTLOAN NO. 3335-PAK

December 30, 1998

Infrastructure Sector Management UnitSouth Asia Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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

CURRENCY EQUIVALENTS

US$1 = PKR 22.5(Rupees) - 1990/91PKR1 = US$0.04 - 1990/91

US$1 = PKR 46(Rupees) - November 1998PKR1 = US$0.022 - November 1998

WEIGHTS AND MEASURES

1 meter (m) =3.28 feet (ft)1 kilometer (km) =0.62 miles (mil)1 sq. kilometer (km) =0.386 sq. miles (mil)1 metric ton (ton) =2,205 pounds (LB)

ABBREVIATIONS AND ACRONYMS

ADB Asian Development BankBOT Build, Operate and Transferdwt Deadweight tons (vessel)ECC Economic Coordination Committee of the CabinetECNEC Executive Committee of the National Economic CouncilERR Economic Rate of ReturnGOP Government of PakistanICB International Competitive BiddingKPT Karachi Port TrustMOC Ministry of CommunicationsNHA National Highway AuthorityNLC National Logistics CellOP-V Oil Pier-VPAKPRO Pakistan Simplifications of International TradeSAR Staff Appraisal Report

FISCAL YEAR

July 1 - June 30

Vice President: Mieko NishimuzuCountry Director Sadiq AhmedSector Manager Frannie HumplickTask Leader: Robert Panfil

FOR OFFICIAL USE ONLY

TABLE OF CONTENTSPage No.

PREFACE ................................................................ 1I

EVALUATION SUMMA RY ................................................................. 2

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. Project Objectives ........................................................... 6B. Achievement of Project Objectives ........................................................... 7C. Major Factors Affecting the Project .......................................................... 10D. Project Sustainability .......................................................... 12E. Bank Performance .......................................................... 12F. Borrower Performance .......................................................... 13G. Assessment of Outcome .......................................................... 15H. Future Operation .......................................................... 15I. Key Lessons Leamed .......................................................... 15

PART II: STATISTICAL ANNEX

Table 1: Summary of Assessment .17Table 2: Related Bank Loans/Credits .19Table 3: Project Timetable .20Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual 20Table 5: Key Indicators for Project Implementation. 21Table 6: Key Port Operation Indicators .22Table 7: Studies Included in Project .23Table 8A: Project Costs .24Table 8B: Project Financing .25Table 9: Economic Costs and Benefits (KPT Traffic - Actual and Projected) 25Table 10: Status of Legal Covenants .26Table 11: Compliance with Operational Manual Statements .29Table 12: Bank Resources: Staff Inputs .29Table 13: Bank Resources: Missions .30

APPENDIXES

A. ICR Mission's Aide-Memoir ......................... ................................. 32B. Economic Re-evaluation .......................................................... 37C. Financial Evaluation .......................................................... 50D. Borrower's Contribution to the ICR .......................................................... 56E. Map IBRD No. World Bank 43152

IBRD 21184RIBRD 21185IBRD 21217

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

1

IMPLEMENTATION COMPLETION REPORT

PAKISTAN

KARACHI PORT MODERNIZATION PROJECT

(LOAN 3335-PAK)

PREFACE

This is the Implementation Completion Report (ICR) for the Karachi Port Modernization Projectin Pakistan, for which Loan 3335-PAK in the amount of US$91.4 million was approved on May30, 1991, and made effective on February 6, 1992.

The Project was closed on June 30, 1998, after a one-year extension granted beyond the originalclosing date of June 30, 1997. Because of foreign cost savings, US$16 million was cancelled onOctober 31, 1998. The final disbursement was made on December 18, 1998, and the remainingundisbursed balance (US$6,769,341.29 million) was cancelled.

The ICR was prepared by Robert Panfil, Lead Infrastructure Specialist with the assistance of RaulAuzmendi, Transport Economist (consultant), particularly with the economic evaluations andOmar Hayat, Financial Analyst (consultant), with the financial assessment. The report wasreviewed by Sadiq Ahmed, Country Director, Hiroaki Suzuki, Acting Infrastructure SectorManager, Lynn Bennett, Social Sector Manager, Marc Juhel, Lead Ports Specialist and PeerReviewer, Ismail Mobarek, Principal Port Engineer and Task Manager, John Tillman, SeniorEconomist and Navaid Qureshi, Senior Urban and Transport Specialist. In addition, IreneChristy, SASIN, provided active support in the preparation of the report.

Preparation of this ICR was begun during the Bank's final supervision/completion mission in June1998 and a Mission to Karachi took place in October 1998. The ICR is based on the mission'sfindings, which are included in Appendix A, material in the Project File, and discussions withofficials of the Bank and Borrower. In addition, the borrower contributed to preparation of theICR by providing an evaluation and data, which are included as Appendix D.

2

IMPLEMENTATION COMPLETION REPORT

PAKISTAN

KARACHI PORT MODERNIZATION PROJECT

(Loan 3335-PAK)

EVALUATION SUMMARY

Introduction

(i) Karachi Port Trust (KPT), located on the south side of Karachi City, is Pakistan'slargest port. The port has a 4km long entrance channel and provides access for tankersup to 75,000 DWT and general cargo/container vessels up to 22,000 DWT. Presently,KPT handles about 10 million tons of dry cargoes (60% containers, 10% break-bulk and30% bulk) and 13 million tons of liquid cargoes. Until Port Qasim was developed in theearly 1980's, KPT was Pakistan's only port. Port Qasim, located near Karachi andaccessed by a 35 km channel, was originally built to serve the Pakistan Steel complex.With the recent construction of a container terminal, PQA now is in direct competitionwith KPT.

Project Objectives

(ii) The major Project objectives were to: (a) assist with the development of anappropriate strategy for the medium/long-term development of the port subsector; (b)reduce port costs at Karachi through improved cargo handling productivity, acceleratedcargo and document clearance and improved land-side access to the port; (c) strengthenthe Karachi Port organization through changes in institutional, managerial and financialstructures; and expand liquid cargo handling facilities.

(iii) To accomplish the objectives, the Project consisted of five components: (a) CivilWorks (70% of total appraisal costs) - Construction of: a liquid products marine terminal;the Jinnah Bridge Phase II, Quay-side pavements; and the Keamari Groyne Access Road;(b) equipment (21%) - Procurement of: dredging plant, environmental protectionequipment, port operations computers and software, radar and related equipment andspare parts; (c) trade facilitation improvements; (d) Institutional strengthening inadministration, economics, marketing security and environment; and (e) projectpreparation and supervision, studies, technical assistance and training.

Implementation Experience and Results.

(iv) At the beginning, the appraisal of the Project was delayed by about 18 months(June 1988 to December 1990). The main causes of the delay were due to the PlanningCommission's concern about the use of mobile cranes and the Bank's concern thatprocurement for the major works be well advanced. The delayed appraisal allowedimportant issues to be resolved and advanced project and procurement preparation. In the

3

end, the overall project implementation period (from appraisal to completion) did notsuffer.

(v) After the project approval, the implementation of most components waseffectively carried out, although there were some delays and the Project was completedone year behind schedule. The most important delays took place with the construction ofthe Jinnah Bridge Phase II (32 months)and the procurement of the hopper barges for thenew dredger (64 months). These were mainly caused by contractor performanceproblems. Towards the end of the Project, political instability was also a major factorcausing delays and this led to the cancellation of several new components that had beenadded late in the project.

(vi) Overall the Borrower's performance was considered to be satisfactory. Ingeneral, KPT performed better on the 'physical' components than on the 'institutional'components. KPT did a good job to ensure that the works and goods were of highstandards. Also, most of the studies were well done and produced adequaterecommendations. However, follow-up on several key studies involvingcomputerization, navigational systems, trade facilitation and cargo handling operationsstill remains to be undertaken.

(vii) KPT is financially sound and has been able to generate sufficient cash to meet itsinvestment obligations. However, several important financial issues still remain to beaddressed such as the re-evaluation of fixed assets, separation of accounts based onactivity-wise cost and profit centers, rationalization of the tariff structure and marketmanagement of KPT's extensive real estate holdings.

(viii) Overall the Bank's per.formance was considered to be satisfactory. Considerableeffort was devoted to the appraisal and subsequent supervision. Having the bid price forthe major civil works before the Board Presentation reduced the risk of cost differencesand delays. Also the Bank showed flexibility by agreeing to include several additionalitems in the Project that would increase the efficiency and environrmental safety of theport. The Bank's performance would have improved if the appraisal had focused greaterattention on private sector participation and on 'shore-to-gate' (land-side) performanceindicators. Also, more supervision input and focus might have been usefully spent onport operations, private sector participation and management.

(ix) Overall the Project outcome and impact was rated as satisfactory (Table 1). Thephysical components were of high priority and are expected to have a high economic rateof return. Ship waiting and service times have decreased during the Project period.However, labor productivity in some cases did not increase as much as expected in theSAR. In addition, the outcomes from institutional strengthening are mixed. Also, whilethere have been some institutional strengthening improvements (port security andenvironment control), many noted in the Appraisal still remain to be addressed(computerization, privatization and marketing). These issues will be addressed in aproposed follow-on project (Karachi Port Development Project).

4

Key Lessons Learned.

* Trade facilitation needs high level support. KPT was not able to gain the supportand cooperation of other key stakeholders. To gain the cooperation of keystakeholders, trade facilitation efforts need strong sponsorship at the ministerial(national) level.

* Limit covenants to key policy issues. The large number of covenants (nearly 30)detracted attention from the important issues (e.g. privatization, port operations andlabor productivity) that would have a direct influence on the achievement of theProject objectives. Greater selectivity in the use of covenants will increase theirimpact.

* Obtain bids for major civil works and goods before Board Presentation. Before theProject was presented to the Board, procurement of the major components was welladvanced. The advanced procurement provided firmer cost estimates, allowed fasterinitial disbursements and provided further time for discussion of important policyissues during the preparation of the Project.

* Define agreed measurable targets for the objectives: The Project contained anumber of performance indicators which allowed a straightforward assessment ofsome of the objectives. The targets needed to be fully agreed with the counterpartagency and broadened to cover such area as institutional strengthening and 'shore togate operations'.

* Focus greater appraisal and supervision attention on port operations. Majorattention was given to the appraisal and supervision of the procurement andimplementation of civil works. While this was justified, even greater returns mighthave been gained had the appraisal and supervision included more port operations andprivate sector development specialists.

* Provide greater clarity in concession/ ROT bidding documents. The biddingdocuments for the container terminal did not sufficiently detail the responsibilities ofall involved parties and resulted in long negotiations and litigation. The importanceof clear, well prepared bid documents has been reconfirmed.

6

IMPLEMENTATION COMPLETION REPORT

PAKISTAN

KARACHI PORT MODERNIZATION PROJECT

(Loan 3335-PAK)

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. PROJECT OBJECTIVES

1. The major project objectives were to:

* assist with the development of an appropriate strategy for the medium/long-term development of the port subsector;

* reduce port costs at Karachi through improved cargo handling productivity,accelerated cargo and document clearance and improved land-side access tothe port;

- strengthen the Karachi Port organization through changes in institutional,managerial and financial structures; and

3 expand liquid cargo handling facilities.

2. The objectives were consistent with both the Government's and Bank's strategiesto increase the productivity of the transport sector and ports subsector to supportPakistan's economic and social development. These strategies involved expandingplanning and coordination within the sector/subsectors; improving the operations andmaintenance of existing assets; increasing private sector participation and competition(both to improve efficiency and provide a source of capital); and focusing investments onrehabilitation and modernization of existing assets. In addition, the Government began apolicy of decentralizing responsibilities in the ports subsector in the early 80s. Thisincluded self-financing of port operations, generating investment funds through internalcash generation, and promoting competition among ports for cargo.

3. The objectives of the Project were clear, realistic and in line with both theGovernment's and Bank's strategies in the sector. Through the training, studies andphysical investments proposed under the Project, it was expected that Karachi Port wouldoperate in an efficient and competitive manner both nationally and internationally.

7

B. ACHIEVEMENT OF PROJECT OBJECTIVES

Project Components

4. To accomplish the objectives, the Project consisted of five components:

* Civil Works (70% of total appraisal costs): Construction of: a liquid productsmarine terminal (OP-V) and of an outfitting pier and crane pier (20%); theJinnah Bridge Phase 11 (37%), quay-side pavements(12%); and the KeamariGroyne Access Road (1%);

* Equipment (21% of the total appraisal costs): Procurement of: dredging plant(16%); environmental protection equipment (1%); port operations computersand software (2%); radar and related equipment (1%); and spare parts forfloating and land based equipment(1%);

* Trade facilitation improvement: Establishment of the Pakistan Simplificationsof International Trade Procedures Committee (PAKPRO) and three taskforces to simplify trade procedures and associated data flow;

* Institutional strengthening: Study to restructure KPT's administration(reinforce the Computer Center and Finance Division); engage a transporteconomist; create a marketing cell; and set up a port security force and marineenvironmental cell;

o Project preparation and supervision assistance, studies, technical assistanceand training (9% of total appraisal costs): Feasibility, design andsupervision/procurement assistance for OP-V, Jinnah Bridge Phase II,dredging plant, and mobile cranes; Studies for (a) second stagecomputerization and institutional strengthening, (b) environmental protection,(c) rationalization of pipelines, (d) master planning and dredging, (e) radarand related equipment, and (f) improvement of general and bulk cargohandling operations; Technical assistance for cargo handling and equipmentmaintenance; and training for use of PCs and computer programming,operation and maintenance of the new dredger, marketing of port services andfacilitation of trade.

Objectives

5. Assist Development of Subsector Strategy. Fully achieved. A national masterplan study was carried out with financing by ADB and a master plan for Karachi Port tocomplement the national master plan was funded under the Project. The KPT masterplan was successfully completed and approved by the KPT Board. During the time ofpreparation of the Project there was considerable discussion about the future expansion ofthe port and how it should be carried out. Specific issues involved the development ofnew areas versus rehabilitation of the existing port, the role of private sector investmentand operations, and the landlord port operations concept. While the study was not the

8

only factor, the KPT, Government and the Bank have now agreed that the way forwardinvolves increasing the role of the private sector and putting into operation the landlordconcept. The next proposed project will further carry out this strategy.

6. Reduce port costs. Partially achieved. Port costs were expected to be reducedthrough improved capacity and productivity. Specifically, the new oil berth was expectedto allow larger vessels to be handled at a quicker rate. The new dredger was to providegreater depths in the harbor channels. The Jinnah Bridge Phase II and reconstruction ofthe quay-side pavements were to provide better port land-side access. Cargo handlingimprovements were to be derived from increased trade facilitation, computerization,private sector participation, and reorganization and training.

7 The productivity of the port, particularly for 'ship to shore' operations, hasincreased during the Project, but not to the extent expected in the appraisal. For all cargotraffic, ship waiting time, and ship turnaround time have been substantially reduced(Table 6). For container traffic, the tons handled per ship service hour have increasedwith the introduction of mobile cranes by the private sector. It appears likely that theSAR 1999/00 target of 230 tons per ship hour will be met with the new private sectorcontainer terminal just completed at KPT and increased competition from Port Qasim.However, for oil traffic, productivity has not improved and it does not appear likely thatthe SAR target of 987 tons per ship service hour will be reached.

8. For 'shore to gate' operations, the picture is more mixed and cost savings are notas evident. The construction of the Jinnah Bridge (Phase II) certainly improved access tothe port. However, relatively little progress was made with trade facilitation,computerization, private sector participation and reorganization and training. Generalcargo still stays in the port storage area for an inordinate time period. Nearly 50% of theKPT's revenue is derived from storage of cargo in the port. The Committee (PAKPRO)for the simplification of international trade procedures and appropriate task forces wereestablished in 1991 and 1992. However, while KPT has made some improvements, itwas not able to obtain the support of the interested parties to carry out major reforms. Asindicated below (para 9) implementation of computerization, private sector participationand reorganization has also been slow.

9. Institutional Strengthening Partially achieved. Under the Project KPT was tocarry out measures to strengthen its management including:

V (i) restructuring its computer center and finance division. The computer center wasrestructured and PCs were introduced under the first phase of computerization. Thesecond stage of computerization was to establish a central on-line computerized databank with inter-links to port users and associated organizations. However, afterdelays in undertaking the study and obtaining its approval, the second phase wasnever implemented after a change in Government (See Para 15).

v (ii) engaging a transport economist in the Planning and Development Division. Atransport economist was not hired.

9

V (iii) creating a marketing unit in the Operational Division. The marketing unit wasnot created.

V (iv) improving port security and environmental control. Port security wasstrengthened with the appointment of key staff. A Marine Pollution Control Cell hasbeen established and flooding booms, floating tanks, and skimmers were procured.Fines are being applied to delinquent ships, but the fines are low. Also, water qualitylaboratory equipment and surveillance facilities still need to be procured with KPT'sown resources.

V (v) improving general and bulk cargo handling operations including encouragementto the private sector. After considerable delays, a private container terminalconcession has been established and KPT is now planning to call for bids for a secondterminal. A study has been completed to encourage more extensive private sectorparticipation but it is still under consideration and may be implemented under theproposed new project.

10. Expand liquid cargo handling facilities. Fully achieved. The new liquidproducts Marine Terminal OP-V has been successfully constructed and equipped withmodem facilities for handling processed oils (including crude oil for emergencies) & nonprocessed oil products. OP-V has replaced the old oil piers OP-II and OP-III and has thecapacity to receive ships up to 75,000 DWT.

Economic Evaluation

11. An updated economic analysis was undertaken of the same major Projectcomponents evaluated at the time of the SAR. These amount to 79% of Project costs. Tobe consistent with the SAR economic evaluation, the same methodology, to the extentpossible, was employed in the reassessment (see annex 3).

Updated Economic Rates of Return

Components % of Project Cost Updated ERR (%) SAR ERR (%

Jinnah Bridge Phase II 30 20 20Oil Terminal 17 73 70

Dredger & Barges 32 17 29

ALL 3 components 79 30* 36Cost weighted average which is consistent with SAR; overall estimated ERR based on discounted flows is 22%.

12. The economic reassessment indicates that the major physical components of theProject are likely to meet their objectives. Except for the dredger, the components areexpected to have ERRs that are similar to those estimated in the SAR. The ERR for thedredger and barge component, is estimated to be less than the SAR estimate because ofthe higher costs and delays during construction, particularly the hopper barges. The

10

absence of the barges, which are not expected to be completed until January 1999, greatlylowered the dredger's productivity.

C. MAJOR FACTORS AFFECTING THE PROJECT

13. Appraisal delays. The Project was originally appraised in June 1988, but theappraisal was not finalized (post-appraisal) until December 1990. Negotiations tookplace in April 1991 and Board Presentation was in May 1991. The main reason for thedelay was due to a disagreement over the procurement of mobile container cranes. Fivemobile cranes to be owned and operated by the Port Authority were originally proposedby the KPT and the Bank. At the time container traffic was rapidly growing and bothKPT and the Bank saw the crane as an efficient intermediate step until fully equippedcontainer terminals could be developed. The planning commission, who withheldGovernment Project approval, argued that mobile cranes were relatively inefficient andwere not a worthy investment. Great pains were taken to explain the merits of the mobilecranes (speed, flexibility and quick procurement). In the end the planning commissionsaw the merits of the mobile cranes and a compromise was agreed that the cranes wouldbe procured by the private sector and not by the KPT.

14. The Project was also delayed when the Bank decided that the bids for the majorcivil works components should be available before presenting the Project to its Board. Inthe end however, overall Project implementation time was not delayed. During theeighteen months following the early appraisal, procurement documents were beingprepared and bids were being solicited.

15. Political instability and labor unrest. Particularly towards the end of the Projectin 1996/97 political conditions had affected the decision-making process of the country.The caretaker Government's attention was focused mainly on holding elections andtransferring power to an elected Government. As a result, virtually all economicdevelopment activities were suspended and various procurement items being processed orunder award were put on hold. In the case of the computerization (2nd Phase), the sole-source implementation contract was reversed after the change of Government. Also,additional items (tug boats environment control equipment and pilot vessels) which wereincluded near the end of the Project, could not be procured because of the delays. Inaddition, because of the unrest at times the supervision missions were unable to travel toKarachi. The political instability is also affecting preparation of the proposed follow-upproject. Decisions concerning private sector participation are being delayed and theinterest of the private sector to participate is also reduced.

16. Slow traffic growth. The Port of Karachi is the largest port of Pakistan, handlingover 85% of the whole dry and liquid cargo in the country. However, the traffic handledin the period 1993/94 to 1997/98 has been stagnant at a total average of 23.2 million tons,composed by 9.8 million tons of dry cargo and 13.4 millions of liquid cargo. It nowappears unlikely that the SAR projections of 30.4 million tons (11.7 dry cargo and 18.7oil) will be obtained.

11

17. The stagnation of traffic at KPT has been caused by two main factors. First, thegeneral Pakistani economy has suffered because of political turmoil in recent years.Second, possibly of more importance, Port Qasim (PQ), located about 30 km. fromKarachi Port, has developed specialized facilities for wheat and containers. In particular,a BOT container terminal established by private shippers to handle 200,000 boxes startedoperations on September 7, 1997, and is operating efficiently. This development willbring KPT into direct competition with PQ for lucrative container traffic and shouldprovide a powerful incentive to improve productivity. KPT julst put into service its firstBOT container terminal in November 1998.

18. Appraisal Risks. The SAR noted three risks - possible delays because of ECNECapproval and slow procurement, competition from an oil berth at Port Qasim andinsufficient capacity of the Jinnah Bridge layout. No risks were identified for thedredging component. As noted in the SAR, all the major components had ECNECapproval and procurement was well advanced so that the delay risk was expected to bemitigated. This certainly was true. The delay between the original appraisal and postappraisal of 18 months allowed Project preparation to advance and helped to reduceimplementation delays. Nevertheless, delays did develop during the implementation ofthe Project and most components were delayed one-to-tvvo years. In particular,contractor performance problems developed with the construction of the Jinnah Bridgeand the hopper barges for the dredger. To some extent, such risks were hard to avoid andare part of larger civil works projects. Of more concern were the delays in the studiesand institutional strengthening components. These do not appear to have been preparedand agreed in the same degree of detail as the engineering works. These componentstended to be delayed in starting for two - three years and implementation and subsequentfollow-up was also delayed and often not implemented.

19. The possible risk of another oil berth in Port Qasim did not materialize. Asindicated in Para 16, oil traffic has grown at a slower rate than projected (13.1 tons actualin 1997/98 verses the projection of 18.7 in 1999/00). There are no capacity problems inthe near future.

20. Also the risk of undercapacity of the Jinnah Bridge has not materialized. At thetime of SAR, it had been estimated that the overpass could be needed by 2012 to avoidsaturation at the Jinnah Bridge approach to the roundabout. It had been agreed then toconstruct the roundabout and the flyover together with a common foundation for theoverpass, which would be built later on as traffic warrants. However, the overpass wasbuilt at the same time as the rest of the structure. Low additional cost (about US$2.9million), availability of the contractor in place, avoidance of having to disturb trafficduring the future construction, and the current availability of the overpass to facilitatetransport and, eventually, to be used in case of emergencies, justified the decision.

12

D. PROJECT SUSTAINABILITY

21. It is likely that KPT will maintain and build upon the Project's achievements andthe Project will be sustainable. While KPT needs to modernize its organization, itpossesses a great deal of technical competence which should enable it to adjust to thefuture. It also possesses a strong asset base and sound finances which should provide themeans for further development of the organization. In addition, the fact that Port Qasimhas now become a major player, particularly for container traffic and potentially for oiltraffic, should provide a major incentive for KPT to continue to improve its productivity.

E. BANK PERFORMANCE

22. Overall the Bank's appraisal and supervision was considered satisfactory.Considerable effort was devoted both to appraisal and supervision.

23. Appraisal and Design. A thorough appraisal process was followed. The majorcost components (oil berth OPV, Jinnah Bridge quay repaving and dredger) involvedrehabilitation and replacement of existing structures/equipment. All were needed andjustified. In addition, delays between the appraisal mission and the post appraisalmission allowed the Project to become better prepared. Having the bidding price for themajor civil works before the Board Presentation reduced the risk of cost differences anddelays. Also, the decision to encourage the private sector to finance the mobile containercranes was correct. In hindsight, the privatization and labor issues needed to beaddressed more directly. Even more of the port's operating and support services couldhave been contracted out or done on a BOT basis. The next proposed project isconsidering such arrangements.

24. Performance indicators. The Bank did include several performance indicators inthe SAR and the KPT was obligated to produce additional indicators. These indicatorsallowed a fair assessment of the port's performance. However, most of the indicatorsfocused on the port's 'ship-to-shore' performance and not on the 'shore-to-gate'throughput performance indicators such as cargo clearance time and average cargostorage time. Specifically, for import containers the dwelling time in ports, time requiredfor customs clearance and percentage of containers physically controlled by customs areimportant performance indicators. Performance indicators for the institutionalstrengthening components were not indicated. These could include the number of staff ofthe Port Authority, tonnage handled per staff and revenues per staff member. In addition,additional financial indicators would have been useful such as the percentage of revenuesfrom storage and rate of return on port assets and other real estate holdings.

25. Flexibility. The Bank showed considerable flexibility in pursuing the objectivesof the Project. For instance, in August 1995, the Bank agreed to include a number ofadditional items which would increase the efficiency and environmental safety of theport. These items included financing of redundancy payments for KPT staff andprocurement of fire fighting/pollution control tugs and a harbor safety craft for night

13

navigation. Also consultant services were included in the Project for design of a newNapier Mole Bridge, deepening of the channel, and design for the refurbishment of thepipeline reticulation of OP 1 to integrate it with the pipeline system of OP5. The Bankalso showed flexibility by extending the Loan closing date to allow the additional itemsto be completed after political instability delayed Project implementation (para. 15).Unfortunately, even with the extension, because of slow processing and longer thanexpected delivery dates, many of the additional items were not undertaken.

26. Supervision personnel. The Project was mostly supervised by civil engineers.On the one hand this was appropriate because most of the day-to-day problems involvedprocurement and construction. On the other hand, more input and focus might have beenusefully spent on operations and port management. The ultimate objective of the Projectwas to improve ship-side and land-side throughput and more attention to this objectivemight have helped to fully achieve the Project's objectives.

27. Supervision Time. Because of the appraisal delays, the Bank spent a higher-than-average time on Project preparation and appraisal compared with other port projects.This, however, allowed the procurement to be well advanced by Board presentation. Thetime on supervision was about average for Bank projects.

F. BORROWER PERFORMANCE

28. Overall the Borrower's performance was satisfactory. In general, KPT performedwell on the civil engineering side. Performance on the institutional side, particularly theimplementation of study recommendations, was weaker.

29. Procurement and contractor payments. Overall most procurement wassatisfactorily executed by KPT. However, delays in approving contracts frequentlyoccurred because of the bureaucratic clearance procedures both at the KPT and nationallevels. Payments to contractors were also frequently delayed for bureaucratic reasons.The delays in payments were frequently mentioned by contractors.

30. Implementation Delays Completion delays of one to two years were common formost Project components (Table 5). For large civil engineering projects, these delays ofthis magnitude are common and, for the most part, the delays were well managed byKPT. Two of the physical components, the Jinnah Bridge (2nd Phase) and the hopperbarges suffered extensive delays. In both cases weak contractors were involved.However, the delays in undertaking institutional strengthening activities were moreavoidable. They indicated a reluctance on the part of KPT to make major changes in portoperations, particularly in the area of private sector participation. At the start of theProject it was expected that container terminals would soon be established. However,because of unclear procurement documents and prolonged negotiations, one terminal isjust now coming on stream.

31. Studies. Several important studies were carried out during Projectimplementation (Table7). In general, they were done properly, produced adequate

14

recommendations and were approved by KPT and the Bank, but the implementation ofstudy recommendations has been mixed. The Rationalization of the Oil Pipelines wascarried out and implemented concurrently with the construction of OP-V. In addition, theMaster Plan Study is, to a large extent, the basis for the strategy KPT is following in theforeseeable future. However, the Computerization Study (2nd Stage) for the improvementof port operations and for electronic inter-linking with port users has not beenimplemented. Radar and related equipment needed to monitor extended harbor limits andsupport safe ship maneuverings under the Navigational Aids, Radar and Traffic SystemsStudy has been deferred. The private sector participation recommendations under theGeneral and Bulk Cargo Handling Operations have also not been followed up.Equipment procurement under the Environment Protection Study also needs to becompleted.

32. Trade facilitation. Despite the high expectations at the beginning of the Project,only modest improvements were made in this area. KPT made significant documentaryprogress reducing the number of documents required from 32 to 4 or 6. However, theimprovement did not spread to other agencies. A stronger sponsorship from the centralgovernment was needed. KPT was not in a position to effectively influence majorstakeholders such as customs, the banking industry, Ministries of Finance and Commerceand private industry. Also, in some respects, KPT has a conflict of interest in the matter.The more efficient the port throughput, the less revenues it collects from storage fees.Presently storage fees amount to about 45% of KPT's total revenues. Trade facilitationneeds strong sponsorship at the national level, such as the Ministry of Finance orCommerce.

33. Covenant Compliance KPT's compliance with the covenants was mixed. In theend, KPT met the legal covenants, but delays were frequent. More importantly the spiritbehind the covenants was sometimes not met. Many of the covenants referred toundertaking studies. While the studies were completed, recommendations were notimplemented or only partially implemented (para 30). In hindsight, the large number ofcovenants may have lessened their effectiveness. Many were redundant in that they werealready covered by the implementation schedule. A few selective covenants, might havedrawn greater attention of both KPT and the Bank to private sector participation andincreased productivity.

34. Financial Management. The Port is financially sound and has been able togenerate a positive internal cash generation during the Project. The working ratio in1996/97 was 65% and the debt to equity was 10.5% in 1996/97. KPT has financedalmost 49% of its capital expenditure from operations which is over the Project's legalcovenant of 40%. Also, the rate of return on 'historical cost' assets in 1995/96 was over50%. In addition the audit reports, submitted by a private auditor, have generally beensatisfactory.

35. Despite KPT's apparent sound position, several important financial managementissues noted in the SAR were not addressed during the Project. In accordance with theloan covenant, KPT undertook a reevaluation of fixed assets, but the accounts have notyet been adjusted. Separate accounts based on activity-wise cost and profit centers

15

including administration and subsidiaries have also not been established. In addition, thetariff structure was to be rationalized and made more transparent, but this has not beencompleted. KPT also has extensive real estate holdings which are leased to variousparties at significantly lower than market rates. Resolution of these issues is basic toimproving KPT's financial management.

G. ASSESSMENT OF OUTCOME

36. Overall the Project outcome was rated as satisfactory (Table 1). The physicalcomponents had high priority and are expected to have a high economic rate of return.Ship waiting and service time has decreased during the Project period. On the negativeside labor productivity in some cases did not increase as much as expected in the SAR.In addition, the outcomes from institutional strengthening are mixed. Also while therehave been some institutional strengthening improvements (port security and environmentcontrol), many noted in the Appraisal still remain to be addressed (computerization,privatization and marketing).

H. FUTURE OPERATION

37. A new operation is under consideration to further extend the gains made under theKarachi Port Modernization Project. The objectives of the new project are to: (i)improve the performance of Karachi Port Trust (KPT) organization as a landlord port;(ii) assist in creating an enabling environment for private sector participation in portactivities; (iii) improve the port safety and environment; (iv) reduce the constraints totrade growth and competitiveness, in coordination with the proposed Pakistan Trade andTransport Facilitation Project, through facilitation of procedures and operations. Underthe proposed project the role of KPT would be expanded beyond that of infrastructureprovider to that of trade and hinterland transport facilitator. Project preparation willinvolve "up-front" actions which will promote the landlord port concept and privatesector participation such as corporatization and divestment of subsidiary services as wellas taking into account the lessons learned from the previous Project.

I. KEY LESSONS LEARNED

38. Trade facilitation needs high level support. Under the Project, KPT was to playa lead role in introducing trade facilitation. KPT did attempt to coordinate tradefacilitation efforts and internally did make some improvements with documentsimplification. However, to gain the cooperation of key stakeholders, trade facilitationefforts need strong sponsorship at the ministerial (national) level.

39 Limit covenants to key policy issues. The Project had nearly 30 legal covenantsranging from important policy issues to implementation dates for studies. Many of the

16

covenants were redundant. More importantly, the large number of covenants detractedattention from the important issues (e.g. privatization, port operations and laborproductivity) that would have a direct influence on the achievement of the Projectobjectives. Greater selectivity in the use of covenants should increase their impact.

40. Obtain bids for major civil works and goods before Board Presentation. Beforethe Project was presented to the Board, procurement of the major components was welladvanced. This did not eliminate later implementation delays that took place because ofweak contractors. However, it provided firmer cost estimates, allowed faster initialdisbursements and provided further time to discuss important policy issues during thepreparation of the Project.

41. Define agreed measurable targets for the objectives: The Project was advancedin this respect. It contained a number of performance indicators which made theassessment of the objectives relatively straightforward. However, the targets needed tobe fully agreed with the counterpart agency and broadened to cover such areas asinstitutional strengthening and land-side operations.

42 Focus greater supervision attention on port operations. The main objective ofthe Project was to increase productivity which would lower throughput costs of the port.Major attention was given to the supervision of the procurement and implementation ofcivil works. This effort was justified and investments are expected to increaseproductivity. However, even greater returns could have been gained if more supervisiontime were devoted to port operations. This includes shore-to-gate operations as well asship-to-shore operations.

43. Provide greater clarity in concession/BOT bidding documents. A public tenderwas undertaken for the concession of the container terminals. The open tender providedtransparence, however it was not sufficient to avoid extended subsequent negotiationsdelays and legal proceedings. The bidding documents did not sufficiently detail theresponsibilities of all involved parties and left too much discretion to the port authority.The importance of clear, well prepared bid documents has been reconfirmed.

17

Table 1: Summary of Assessments

A. Achievement of Objectives Substantial Partial Neli ibleNotapplicable(f ) (f ) 77- . (V }

Macro Policies Q l 0 I

Sector Policies 0 I 0 0

Financial Objectives Q El 0

Institutional Development DU a oPhysical Objectives 3 0 0 0

Poverty Reduction a El E Gender Issues a : 0 xOther Social Objectives n1 !J 1 Environmental Objectives j J 0 EPublic Sector Management n Q m3 0Private Sector Development C] E 0l

Other (specify) El nl El 0l

B. Project sustainability Likely Unlikely Uncertain0(V 0

C. Bank Performance Satisfactory Satisfactory Deficient(V1) ()(

IdentiflcationEJIJl

Preparation Assistance ElIX EAppraisal [ElE

Supervision El[E E

18

D. Borrower Performance satisfactozy Satisfactory Deficient(V) (/) ($)

Preparation l [3 [

Implementation [ a i:i

Covenant Compliance 1 j

Operation (if applicable) a 5 D

Highly Higl

E. Assessment of Outcome Satisfactory Satisfactory Unsatisfactory unsatisfactory

(C) (5E 0

19

Table 2: Related Bank Loans/Credits

Loan/credit title Purpose Year of Statusapproval/closing

Preceding operations

1. Loan 126-PAK, Aimed at improving and expanding 1955 1965 ClosedUS$14.8 million the port of Karachi

2. Loan 376-PAK, Aimed at improving and expanding 1964 1973 ClosedUS$17.0 million the port of Karachi

3. Credit 422-PAKt Aimed at improving and expanding 1973 1983 ClosedUS$18.0 million. the port of Karachi

4. Credit 492-PAK$ Aimed at improving and expanding 1974 1983 ClosedUS$16.0 million the port of Karachi

5.Loan 3241-PAK Aimed at implementing sectoral 6/1990US$184.0 million reforns to improve overall transport

efficiency and to meet futuretransport demand.

Following operations

1. Proposed Karachi are to: (i) improve the FYOI UnderPort Modernization performance of Karachi Port preparationProject (PK-PE-41886) Trust (KPT) organization; (ii)

assist in creating an enablingenvironment for private sectorparticipation in port activities;(iii) improve the port safety andenvironment; (iv) reduce theconstraints to trade growth andcompetitiveness throughfacilitation of procedures andoperations.

2. Proposed Pakistan To support the initial learning phase UnderTrade and Transport of Pakistan's medium-term trade and preparation as aFacilitation Project transport facilitation program LIL

including informnation flows,documentation and relatedlegislation.

20

Table 3: Project Timetable

Steps in Project Cycle Date Planned Date Actual/Latest Estimate

Identification (Executive Project Summary) January 1988 January 1988

Preparation May 1987 - June 1988 May 1987-June 1988

Appraisal June 1988 June 1988

Post-Appraisal December 1990

Negotiations April 1991

Board Presentation January 1989 May 1991

Signing November 1991

Effectiveness February 6, 1992

Project Completion December 1996 January 31, 1999

Loan Closing June 30 1997 June 30, 1998

Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual

(US$ Millions)

FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99(est)

Appraisal Estimate 14.9 50.4 77.0 89.0 91.4Actual 1.3 12.4 28.7 40.3 47.1 49.9 61.7 71.5Actual as % of Estimate 8.7% 24.6% 37.3% 45.3% 51.5% 54.6% 67.5% 74.0%Date of Final Disbursement

NOTE: US$16.0 million was cancelled in mid-1998.

Final disbursement is expected to take place in December 1998

21

Table 5: Key Indicators for Project Implementation

Key ImplementationIndicators in SAR Estimated Actual

Completion of Civil Works _

1. Oil Terminal 11/92 04/942. Jinnah Bridge Phase II 04/95 12/973. Quayside Pavement 07/94 06/984. Keamari Groyne Access 08/92 02/93

II. Completion of EquipmentProcurement

1. Dredging PlantDredger 07/93 03/95Hopper Barges 07/93 01/99

2. Cargo Handling Equipment 12/953. Computers 2nd Stage

Phase I 04/93 12/94Phase II 11/93 Not completed

4. Spare Parts 02/92 01/965. Radar and Related Equipment 07/92 Not completed6. Environmental Protection 07/92 07/97

Equipment _

III. Appointment ofSupervision Consultants

I. Marine Oil Terminal 02/91 12/922. Jinnah Bridge - Phase II 10/91 03/933. Dredging Plant (new) 10/91 07/93

IV. Completion of TechnicalAssistance and Training

1. Cargo Handling 05/94 10/942. Equipment 06/933. Computers (2nd phase) 09/94 Not complete4. Drafting Trade Facilitation 09/91 Not complete

V. Completion of OtherActivities

I.Drafting program to transfercargo handling operations toprivate sector 10/92 10/942.Revalue assets on KPT'sBalance Sheet 07/93 03/963.Establish marine environmentprotection unit 09/93 09/93

22

Table 6: Key Port Operating Indicators

Key Operating Indicators 1991/92 1996/97 1997/98 1995 1999/00 7Actual Actual Actual Appraisal Appraisal

Estimates Estimates

1. Container cargo handled per 126 170 181 230*ship service hour (tons)2. Containerized cargo in 13 20units/hr/crane

3. Average turnaround time of 207 120 97 60break-bulk cargo vessels (hrs)4. Ship waiting time for break- 66 24 10 10bulk cargo vessels (hrs)5. Break-bulk cargo handled 23 31 34 40*per ship service hour. (tons)6. Availability of cargo 75 92 90handling equipment in %

7. Bulk cargo in 340 900#tons/gang/shift8. Average turnaround time for 459 448 382bulk cargo vessels (hrs)9. Ship waiting time for bulk 153 154 64cargo vessels (hrs)10. Bulk cargo handled per ship 58 50 67 57*service hour (tons)

I1. Average turnaround time for 148 81 73oil tankers (hrs)12. Ship waiting time for oil 109 35 27tankers (hrs)13.Oil cargo handled per ship 736 711 723 987**service hour (tons)

14.Total staff 12500

* 1999/00 SAR Table 2.6 ** 1999/00 SAR Table 2.7 # assumes specialized equipment

23

Table 7: Studies Included in Project

Purpose as DefinedStudy at Appraisal/Redefined Status Impact of Study

1.2nd Stage Make recommendations and Completed KPT Board approved it onComputerization define implementation 7/31/96. As the main impact,

program for second stage use of computers in KPT hascomputerization been partly intensified. For

political problems,implementation of study onBOT basis has been delayed.

2.Environmental Formulate measures to Completed 07/94 As a result of the study, MarineProtection reduce the detrimental Pollution Control Center was

effects of port activities to created; floating booms, floatingthe environment tanks, and skimmers were

procured. Fines to delinquentships are applied. Water qualitylaboratory equipment andsurveillance facilities underprocess to be procured withKPT's own resources.

3.Rationalization of Make recommendations to Completed 08/94 The Study was carried outPipelines reduce five hazards through concurrently with, and

rehabilitation of the pipeline implemented during thetrench and enactment and construction of OP-V. Theenforcement of more hazards have been reduced.efficient parking regulations

4. Master Planning Study options for future port Completed 11/94 The Master Plan Study is, to aand Dredging development, make large extent, the basis for the

recommendations and strategy KPT is following inprepare phased program for the foreseeable future.carrying out recommended Privatization and staffmeasures rationalization are major

targets.

5. Navigational Aids, Based on studyRadar and Traffic recommendations solar poweredSystems lights and modem buoys have

been installed. A radar system atManora is being considered.

6. Improvement of Define improvements in Completed 11/94 No action program prepared orGeneral and Bulk general and bulk cargo implemented. The studyCargo Handling handling operations perhaps lacks details onOperations including encouragement of specifics of the operations.

the private sector

24

Table SA: Project Costs

Appraisal Estimate Actual/Latest Estimate

Local Foreign Total Local Foreign TotalItem Costs Costs Costs Costs

A. CIVIL WORKS1. Marine Oil Terminal (OP-V) 5.6 15.3 20.90 7.4 16.7 24.12. Jinnah Bridge Phase-lI 17.0 25.4 42.40 28.4 15.3 43.73. Quay side Pavement Reconst. 14.0 0.0 14.0 0.6 0.0 0.64. Keamari Groyne Access Road 1.50 0.0 1.5 - 0.05. Mauripur Road 8.8 8.86. Maikolachi Bypass 3.8 3.87. Crane Pier OP-V 4.2 4.2

Sub total 38.1 40.7 78.8 53.2 32.0 85.2B. EQUIPMENT1. Dredging plant 0.0 19.5 19.5 24.1 22.2 46.32. Equipment for environment 0.0 1.4 1.4 0.9 0.5 1.4protection3. Computer, software/hardware 0.0 2.5 2.5 0.6 0.0 0.64. Radar 0.0 1.5 1.5 - 0.0 0.05. Spare Parts 0.0 1.0 1.0 0.2 0.2 0.4

Sub total 0.0 25.9 25.9 25.8 22.9 48.7C. CONSULTANTS1. PPF 0.0 1.5 1.5 1.3 1.32. Retroactive Financing 0.0 4.1 4.1 0.0 0.03. Local Costs 0.4 0.0 0.4 0.0 0.04. Construction Supervision 1.0 2.8 3.8 2.4 3.9 6.35. Studies 0.6 2.0 2.6 1.8 1.5 3.36. Technical Assistance 0.2 0.5 0.7 0.3 0.3 0.67. Training 0.2 0.9 1.1 0.1 0.1

Sub total 2.4 11.80 14.2 4.6 6.9 11.5Total Base Cost 40.5 78.4 118.9Physical Contingencies 3.8 5.9 9.7Price Contingencies 7.4 7.1 14.5Labor Redundancy Payments* 9.6 9.6TOTAL COST | 51.7 91.4 143.1 83.6 71.5 155.1

Notes: - New component added to the Project.

25

Table 8B: Project Financing

Appraisal Estimate (US$M) Actual/Latest Estimate(US$M)

Local Foreign Total Local Foreign TotalSource Costs Costs Costs Costs

IBRD/IDA 91.4 91.4 71.5 71.5

Karachi PortTrust 51.7 51.7 83.6 83.6

Other External Sources

Domestic Contribution

TOTAL 51.7 91.4 143.1 83.6 67.2 155.1

Table 9: Economic Costs and Benefits*

KPT Traffic - Actual and Projected

Millions of Tons

Years Containers Break-bulk Bulk Total Liquid TotalDry Cargo Cargo Cargo

1989/90 3.4 2.1 2.2 7.7 11.3 19.01990/91 3.9 1.9 2.5 8.3 10.3 18.61991/92 4.7 2.0 2.5 9.2 11.2 20.41992/93 5.1 2.0 2.5 9.6 12.5 22.11993/94 5.2 1.6 2.4 9.2 13.3 22.51994/95 5.4 1.4 2.2 9.0 14.0 23.01995/96 5.7 1.7 2.5 9.9 13.6 23.51996/97 6.0 1.2 3.7 10.9 12.5 23.41997/98 5.9 1.0 2.7 9.6 13.1 22.7

1999/00 (SAR)* 6.8 2.3 2.6 11.7 _ 18.7 30.4See Appendix B: Economic Re-evaluation for additional information and data.**SAR Projections (Tables 2.6 and 2.7).

26

Table 10: Status of Legal CovenantsPAKISTAN

KARACHI PORT MODERNIZATION PROJECT (LOAN 3335-PAK)

Agree Section Covenant Present Original Revised Description of Comments-ment Type status fulfillment date fulfillment Covenant

date

Loan Section 01 C 01/30/1994 KPT to furnish the Bank the annual4.01(b)(ii) audited accounts and auditors opinion.

Section 3.03 02 C 06/30/1994 KPT to generate funds from intemal For FY96/97 incomeArticle IV sources equivalent to not less than exceeded expenditure by4.02(a) 40% of KPTs average annual capital Rs. 6965 million against

expenditure. capital expenditure ofRs. 1188 million.

PA Section 4.01 01 C 03/31 annually KPT to fumish the Bank the annual Complied with. .FY96197(b)(ii) audited accounts and auditor's opinion. Audited Accounts sent to

Bank

Article IV 02 C 03/31 annually KPT to review tariffs and status of 1 5% tariff increase was4.02(b) compliance with requirements set forth implemented in July 1994

in para. (2) (a) and furnish Bank with a which covered the need ofcopy. funds for 1996/97.

Article IV 02 C 03/3111994 KPT to introduce on the basis of such KPT has mounted study for4.02(c) review (para. 2(b)) such adjustments to rationalization of tariffs

KPTs tariffs shall be required to meet where further adjustmentssuch requirements. of tariffs will be studied, but

no changes in tariffstructure have beenimplemented.

Schedule 05 C 04/15/1991 KPT to establish a Committee for the PAKPRO was set up on2A, 2(a)(i) simplification of intemational trade April 15, 1991, and Task

procedures assisted by Task Forces for Forces on October 11,simplification of documents 1992.procedures and computerization andelectronic data communications.

Schedule 2, 05 CD 09/30/1991 05/12/93 Committee to prepare and fumish Draft action plan given to2(a)(ii) Bank for review, an action program to Bank for comments on

implement recommendations of ITF December 5, 1993. Bankworkshop in 1989. comments given in January

1994.

Schedule 2, 05 CD 12/01/1991 Start implementation of action plan. Started but structure2(a3(iii) changed and

implementation postponed

Schedule 09 CD Establishment of productivity targets Targets monitored until2A,2(b) and monitoring of the achievement for 1995 except for unitizedAnnexure I KPT. cargo (traffic did not

I I materialize).

Schedule 10 CD 06/30/1992 10/1/94 Employment of consultants to assist in Consultant included under2A, 2(c) preparation of program satisfactory to cargo handling equipment

the Bank for the repair and consultancy and wasreplacement of KPPs equipment. employed in December

1993. Report finalized inOctober 1994.

Schedule 09 CD Completion of construction in Major delays in Jinnah2A, 3(a) accordance with a time schedule. Bridge Phase It and

delivery of two hopperbarges.

Schedule 05 CD 08/01/1994 Preparation of a detailed list, including Both preparation of list2A, 3(b) cost estimates, of the spare parts to be procurement of equipment

financed from the loan. delayed.

27

Schedule 09 CD 06/30/1993 10/30/93 Completion and furnishing to Bank of Recommendations2A, 4(a) findings and recommendations of submitted in October 1993.

second stage computerization and the Tenders for PCs invited inpreparation of a program satisfactory January 1994. IBMto Bank for implementation of proposal to develop andrecommendations. install the system on a BOT

basis was not been acceptedand program notimplemented.

Schedule 09 CD 06/30/1992 06/30/94 Canying out of aspects of master Consultants were appointed2A, 4(b) planning study for Karachi Port with in December 1993. Final

assistance of consultants and accordin report submitted into time schedule satisfactory to Bank; November 1994. Planpreparation of phased program for approved by KPT Board.carrying out measures recommendedunder such study, in agreement withBank.

Schedule 2A 05 CD 03/06/1992 12/15/199 Employment of consultants to assist in Consultants were appointed4(c)(I) 3 canying out the study for further in December 1993. Final

improvement of general and bulk report submitted incargo handling operations including November 1994.the encouragement of privateparticipation in such operation.

Schedule 09 CD 06/30/1992 11/01/94 Canying out suitable measures to Consultants were appointed2(A) 4(c)(ii) assess the scope of private interest in in December 1993. Final

such an operation. report submited inNovember 1994.

Schedule 12 CD 09/30/1992 08/01/94 Preparation, on the basis of such Consultant's2A, 4(c)(iii) assessment and report prepared by recommendations approved

such consultants, of specific program by KPT, butprograms for transferring cargo implementation did nothandling operations to private sector follow.operations concems.

Schedule 05 CP 06/30/1992 12/01/94 Preparation and st of Only a limited number of2A, 4(d) implementation of training KPT staff training programs were

in operations and maintenance of carried out, particularly inequipment, in the use of computers, the areas of computers andmarketing and other port related marketing.activities.

Schedule 06 CP 06/01/1992 07/01/94 Formulation and implementation of Pollution Control Study2.A (5Xa) measures to reduce the detrimental complete. A Marine

effects of port activities to the Control Center has beenenvironment in Karachi Port Harbor. established. Equipment

procurement not completed.Only limited pollutioncontrol measures beingundertaken

Schedule 2A 06 C 12/01/95 Reducing frre hazards through5(a)(i) rehabilitation of the pipeline trench

and enacttnent and enforcement ofmore efficient parking regulations.

Schedule 06 CP 07/01/94 Reducing sea pollution through a A Marine Pollution Control2(A) 5(a)(ii) program to monitor and control the Cell has been established

quality of dredged materials in and equipment is in processaccordance with relevant international of being procured.standards; the establishment ofreception facilities in Karachi Port,including the fishing port area, for oiland polluted water and the monitoringand control of dumping of pollutantsby ships using the port facilities.

28

Schedule 2A 06 C 09/01/1993 Establishment in KPT of marine Unit was established in5(a)(iii) environmental protection unit. September'1993.

Schedule 2A 06 CD 03/06/1992 07/01/94 Employment of consultants to study Procurement of(5Mb) the disposal of liquid and solid waste recommended equipment is

in the Karachi Harbor and to prepare being done in phases.the bidding documents for theprocurement of environmentalprotection equipment.

Schedule 1, 05 C Employment of consultantsl 11 satisfactory to the Bank to assist KPT

in ensuring satisfactory projectimplementation.

Schedule 2.B 05 C Quarterly report to include informationAction Plan on operational statistics.b (iii)

Article IV 01 C KPT to consult with Bank prior to(Sec.4.03) approving any major modifications to

Investments Program (excluding USS5Million, annually), until thecompletion of Project.

Article IV 01 C 07/01/1993 KPT to complete in accordance withSection 4.04 principles satisfactory to the Bank, an

evaluation of its fixed assets.

Schedule 05 CP 08/01/1994 KPT to carry out the measures to Most studies have been(2AI) strengthen its management including completed, but

restructuring its computer center and procurement andfinance division, improving implementation have onlyenvironmental control, creating a been partially completed.marketing unit in the OperationalDivision, strengthening its securityunit and providing related equipment.

Article 11 10 C 05/01/1994 KPT to carry out the obligations setSection 2.03 forth in Section 9.09 of the General

Conditions relating to land Acquisitionin respect of the Project Agreement.

Covenant types:

1. = Accounts/audits 8. = Indigenous people2. = Financial performance/revenue generation from 9. = Monitoring, review, and reporting

beneficiaries 10. = Project implementation not covered by categories 1-93. = Flow and utilization of Project funds 11. = Sectoral or cross-sectoral budgetary or other resource4. = Counterpart funding allocationS. = Management aspects of the Project or executing agency 12. = Sectoral or cross-sectoral policy/ regulatory/institutional6. = Environmental covenants action7. = Involuntary resettlement 13. = Other

8. Present Status:

C = covenant complied withCD = complied with after delayCP = complied with partiallyNC = not complied with

29

Table 11: Compliance with Operational Manual Statements

No significant lack of compliance with any applicable Bank Operational Manual/Statement (OD orOP/BP) was noticed.

Table 12: Bank Resources: Staff Inputs

Stage of Planned Revised ActualProject Cycle _

Weeks US$ Weeks US$ Weeks US$

Preparation to Appraisal 54.5 128.9

Appraisal-Board 119.5 323.9

Negotiations through Board Approval 16.9 48.5

Supervision 148.9 416.6

Completion 12.1 46.5

TOTAL 351.9 964.4

30

Table 13: Bank Resources: Missions

Performance Rating

Number Specialized Implemen- DevelopmentStage of Month/ of Days in Staff Skills tation Objectives Types of

Project Cycle Year Persons Field Represented Status Problems

Through Appraisal 11/75 3 8 TE, FA, TN - - -

3/76 1 4 TE - - -

10/87 2 17 PE, TE - - -

3/88 7 26 PE, TE, EN, CS, - - -TN,FA,CH

Appraisal through Board 6/88 6 27 PE, TE, TN, FA, - - -

Approval ER, TF

5/89 2 16 PE, TE - - -

10/89 2 10 PE, TE - - -

6/90 1 8 PE - - -

11/90 4 30 PE,FA,TE,PO - -

Supervision 12/91 1 6 FA 2 1 M, P, S

10/92 2 17 PE, PO 2 1 C,M,P,S,E

3/93 2 14 PE, PO 2 1 C,M,P,S,E

7/93 I 8 FA - -

11/93 2 14 PE, PO 1 i _

5/94 1 15 PE 2 1 M,P,T,TA,S,E

7/95 2 5 PS, TE S S M,P,T,TA,S,E

3/96 4 14 PE, TE, PD, TN S S M,P,T,TA,S,E

3/97 I 4 PE S S _

Completion

Notes:

Ratings: Minor Problem: I; Moderate Problem: 2; Major Problem: 3Highly Satisfactory: HS; Satisfactory: S; Unsatisfactory: U; Highly Unsatisfactory: HU

Specialization: Port Engineer (PE); Transport Economist; (TE); Cargo Handling Specialist (CH); Environmentalist (EN);Computer Specialist (CS); Transport Engineer (TN); Financial Analyst (FA); Trade Facilitation Expert(TF); Equipment Repair Specialist (ER); Project Officer (PO); Port Specialist (PS); Private SectorDevelopment (PD)

Problems: Covenant Compliance: C; Management Performance: M; Procurement Process: P; Environment Aspects:E; Studies Progress: S; Training Progress: T; Technical Assistance Progress: TA

31

APPENDIX - A

ICR MISSION'S AIDE MEMOIRE

32

Appendix A

PAKISTAN

KARACHI PORT MODERNIZATION PROJECTLOAN NO. 3335-PAK

IMPLEMENTATION COMPLETION REPORT (ICR)MISSION

AIDE-MEMOIRE(October 20 - 26, 1998)

A. GENERAL

1. A World Bank (WB) mission composed by Transport Consultant Raul Auzmendivisited Karachi, Pakistan from October 20 to 26, 1998. The objectives of themission were: (i) to assess in place the major results achieved during theimplementation of Loan No. 3335-PAK, (ii) to gather information for thepreparation of the ICR, and (iii) to collect supporting data to undertake, on returnto WB Headquarters, the economic re-evaluation of the main components of theproject. The mission met the Chairman of Karachi Port Trust (KPT) Vice AdmiralKhalid M. Mir, and high level officials of the different divisions of KPT (for acomplete list of persons met during the mission refer to Annex I). Also, themission inspected in-situ the major project components such as Jinnah BridgePhase II, Liquid Products Marine Terminal (OP-V), the Dredging Plant, the newKarachi International Container Terminal and the Port of Qasim. The viewsexpressed herein are those of the mission and would in due course be confirmedby the WB. The mission wishes to thank all parties concerned with the project, forthe courtesies and cooperation extended to it.

B. OVERALL ASSESSMENT

2. All the physical project components were adequately completed with some delayswith respect to the original Staff Appraisal Report (SAR) schedule. These delaysare considered to be within reasonable limits for this type of projects. Thecomponents were executed within the SAR estimated costs. They were built inaccordance with the required high standards, are being properly maintained andare operating correctly, with some observations indicated in paras. 5 and 7. Mostof the studies financed by the project were properly carried out and approved bythe KPT and the Bank. In general, the recommendations were sound andapplicable to the specific conditions of the country. The degree of theirimplementation varies, and more details are included in para. 8. The overallobjective of the project was to improve the efficiency of the port, as measured by

33

specific operational targets specified in para. 3.24 of the SAR. Comparison ofthese values with the actual ones can be found in Annex II. In general, progresshas been mixed. From the time of the SAR, productivity values have remainedabout the same for movement of bulk cargo and for the average turn around timeof general cargo vessels, has shown some improvements for movements ofcontainerized cargo (carried out by mobile cranes), while significantimprovements have been obtained in ship waiting tinme and availability of cargohandling equipment. However, this has to be considered in line with a generalstagnation of the traffic handled by KPT (traffic numbers are almost the same, forall types of cargo, inl997-98 as they were in 1992-93). The operation of the newBOT container terminal installed in berths 22-24 will start in November 1, 1998.The terminal, which will be privately operated, has three modem gantry cranes,adequate lifting and transport equipment, and a well designed storage area. Thissystem would undoubtedly help improving the movement of containers to therange of 22-25 boxes/hr/crane, which is comparable with port productivityachieved in developed countries. In general, KPT is concerned about improvingproductivity, and related actions are taken through an intensification of privatizingselected port activities and reduction of its personnel (see para. 9).

C. SPECIFIC COMMENTS

3. Jinnah Bridge Phase II: The quality of the construction of the interchange,composed by a roundabout, a flyover and an overpass, is good, and the systemfunctions adequately. An area that at certain times of the day used to be highlycongested before, is now operating at a comfortable level of service. To get anindication of the impact of the structure in the system, during the mission a traveltime survey was carried out at peak hour, registering the time it takes now toconnect specific points in the project influence area. The results were comparedwith similar information gathered in 1988, before Loan approval, and the result isthat in that year it was taking 64% more time than now to connect all of the samepoints. The result is impressive, and it is conservative because obviously thesystem carries now a higher traffic volume as a result of the normal growthoccurred along ten years. Incidentally, during the mission a comparison was madebetween actual traffic counts taken by KPT in 1996 in eight links of the projectinfluence area, with the related traffic volumes in the same links as forecasted forthe same year at appraisal. The consistency is high, which validates the forecastincluded in the SAR.

4. At the time of SAR, it had been estimated that the overpass could be needed by2012 to avoid saturation at the Jinnah Bridge approach to the roundabout. It hadbeen agreed then to construct the roundabout and the flyover together with acommon foundation for the overpass, which would be built later on as trafficwarrants. However, the overpass was built now together with the rest of thestructure. Low additional cost (about US$2.9 million), availability of thecontractor in place, avoidance of having to disturb traffic during the future

34

construction, and the current availability of the overpass to facilitate transportand, eventually, to be used in case of emergencies, justified the decision.

5. The mission indicated two observations with respect to the current operation ofthe interchange. First, the system is not simple, and the users should be clearlyinstructed about the main characteristics of it. The mission is of the opinion thatthe current signing system is inadequate in number, size and content. KPTindicated that a related bid would be call for, during the next few months. Second,as happens in similar cases in other countries, the interchange dumps largevolume of traffic in the connector points, and consequently the conditions in themshould be carefully studied to avoid congestion. In particular, the mission verifiedthat this is especially bad at the connection with the Mauripur Road. Apparently,the solution consists of widening a section of about 100 meters, work that theMunicipality, together with a 30% financing by KPT, will call for bid soon.

6. Liquid Products Marine Terminal (OP-V): The construction quality andmaintenance of this terminal is good. The timing for its construction was veryappropriate, because the combined capacity of the new OP-V and the existing OP-IV (built in 1978 for 75,000 DWT tankers, under another WB loan) will beenough to satisfy the demand for some years to come. This will permit thetemporary closure of the third berth OP-I (built in 1966 for 35,OOODWT tankers)which should then be replaced by a new, larger, more modem facility. The trafficmoved in 1997-98 by OP-V was about 5.4 million tons, which represents morethan 40% of the total port traffic. Only about 10% were moved through OP-I, andthe rest was handled, almost entirely, by OP-IV. Berth occupancy before OP-Vstarted operations in April 1994, was reaching high levels around 80%, whichwith only two berths resulted in increased ship waiting time and demurragecharges. After OP-V was operational, the berth occupancy came down tocomfortable levels around 65%.

7. Dredging Plant: The bucket chain dredger is mechanically working fine, and ithas been properly maintained. In February 1997, outside the guaranty period, ithad a major breakdown, but the supplier promptly fixed the problem, at no chargefor KPT. It started operations in March 1995, but significant delays occurred inthe construction of two hopper barges, which were supposed to satisfy the haulingneeds of the dredged soil to its final deposit. These barges are now expected to bein place in early 1999. In the meantime, existing old and smaller barges have beenutilized. This seem to be one of the major reasons for the low production achievedby the dredger, that in slightly over three years of operation could only dredge anaverage of about 320,000 cubic meters of solid per year. Its theoretical capacity isabout three times that value. On top of the indicated delays in counting withadequate barges, it seems KPT is experiencing shortage of qualified manpowerand outdated working conditions. KPT is concerned with respect to this situation,and solutions are being worked out, including privatization of part of the dredgingactivities.

35

8. Studies: Several studies were carried out during project implementation. Ingeneral, they were properly done, produced adequate recommendations, wereapproved by KPT and WB, but their implementation has been mixed. The MasterPlan Study is, to a large extent, the basis for the strategy KPT is following in theforeseeable future. The Computerization Study helped in encouraging the use ofcomputers in KPT, which has been partly achieved. The study on Rationalizationof Handling Equipment and Privatization perhaps lacks details on specifics of theoperations. As a result of the Environmental Impact Study a Marine PollutionControl Center was established, and some related equipment, such as floatingbooms, skimmers, floating tanks, laboratory equipment for water quality, havebeen purchased. The Rationalization of Pipelines Study was carried outconcurrently with and implemented during the construction of OP-V.

9. KPT Strategy to Improve Productivity: Two major actions have been taken byKPT to improve efficiency: privatization and reduction of personnel strength. Atop of the line dedicated BOT container terminal at a cost of US$65 million isgoing to start operations in November 1, 1998. Private interests in developing asecond container terminal in berths 6 to 9 are going to be called for soon. Otherprivatization schemes are also under consideration. As far as reduction ofpersonnel strength is concerned, a golden handshake program is beenimplemented. Out of a total of 12,500 people, about 600 has accepted theconditions for leaving the organization.

D. CONCLUSIONS

10. In summary, the project was executed without major problems. It was executedwithin reasonable variations in cost and timing. Some US$16 millions from theLoan were cancelled because of savings in foreign exchange components of civilworks and equipment contracts. Government financed similar amount of moneyin Rupees in related works. The facilities are properly maintained. In general, thefacilities function well with some operational improvements required in certainareas. The impact of the studies was mixed. Improvements in productivity wereonly partly achieved.

Raual AuzmendiTransport ConsultantWorld Bank

October 26, 1998

36

APPENDIX B

ECONOMIC RE-EVALUATION

37

Appendix B

PAKISTAN

IMPLEMENTATION COMPLETION REPORT

KARACHI PORT MODERNIZATION PROJECT

(Loan 3335-PAK)

ECONOMIC RE-EVALUATION

I. GENERAL

1. An updated economic analysis was undertaken of the same project componentsevaluated at the time of the SAR, namely: (a) the construction of a roundabout and itsroad connectors with the city and port networks (Jinnah Bridge Phase II), (b) theconstruction of a Liquid Products Marine Terminal (Oil Pier V [OP-V]), and (c)provision of a replacement dredger and two hopper barges (Dredger Plant). These amountto 79% of project costs (see Table 8A and 9). To be consistent with the SAR economicevaluation, all inputs and outputs were converted to constant 1990 prices. Financial costestimates were converted to economic costs by applying appropriate factors as used at thetime of appraisal. All the physical project components were adequately completed withsome delays with respect to the original Staff Appraisal Report (SAR) schedule. Inparticular, the delivery of the two hopper barges is still pending. However, these delaysare considered to be within reasonable limits for this type of projects. The componentswere executed within the SAR estimated costs. They were built in accordance with therequired high standards, are being properly maintained and are operating correctly, withsome observations indicated below.

II. COSTS AND BENEFITS

2. Jinnah Bridge Phase II: The quality of the construction of the interchange,composed by a roundabout, a flyover and an overpass, is good and the system functionsadequately. An area that at certain times of the day used to be highly congested in late80's is now operating at a comfortable level of service. To get an indication of the impactof the structure in the transport system, a travel time survey, using the moving observermethod, was carried out at peak hours on October 21, 1998, registering the time it takesnow to connect specific points in the project influence area. The results were comparedwith the same information gathered in 1988, before Loan approval. The conclusion is thatin that year it was taking 64% more time than now to connect all of the same points.

38

Table BI shows the information in 1988, without the project, and the current, with theproject. This is impressive. It is also conservative because obviously the system carriesnow a higher traffic volume as a result of the normal growth occurred along ten years.

Table B1

Travel times at peak hours

(in seconds)

From\to (1) (2) (3) (4) (5) (6) (7) (8)

M.T. Khan Rd. (1) X 130 140 X 240 240 180 230

(52) (130) (135) (202) (95) (165)

linnah Bridge (2) 140 X 140 X 240 240 180 260

(100) (135) (67) (134) (90) (150)

Chundrigar Rd. (3) 180 140 X X 250 250 210 270

(100) (66) (137) (190) (130) (120)

Jinnah Rd. (4) X X X X X X X X

210 2525 23 o

Mauripur Rd. (5) (145) 250 250 X X X 230 100

_______________________ ________ (80) (140) (270) (55)

Dockyard Rd. (6) 210 250 250 X X X 230 100

(195) (148) (213) (75) (113)

West Wharf Rd. (7) 250 250 220 X 210 210 X 170

(105) (95) (120) (193) (125) (70)

A. Khan Rd. (8) 240 250 240 X 100 100 240 X

(183) (145) (90) (58) (125) (65)

Note: Travel time in black corresponds to 1988 data when the project had not been built.

Travel time in red and between parenthesis was collected in October 1998, with theproject in full operation.No travel time could be determined for links marked by X.Total travel time w/o project: 8,220 sec. Total travel time w/project: (5,006 sec.)Savings = 3,214 sec. or 64% of current time.

3. At the time of SAR, it had been estimated that the overpass could be needed by 2012to avoid saturation at the Jinnah Bridge approach to the roundabout. It had been agreedthen to construct the roundabout and the flyover together with a common foundation for

39

the overpass, which would be built later on as traffic warrants. However, the overpasswas built now together with the rest of the structure. Low additional cost (about US$2.9million), availability of the contractor in place, avoidance of having to disturb traffic laterduring the future construction, and the current availability of the overpass to facilitatetransport and, eventually, to be used in case of emergencies, justified the decision.

4. There are two observations with respect to the current operation of theinterchange. First, the system is not simple, and the users should be clearly instructedabout the main characteristics of it. The current sign system is inadequate in number, sizeand content. KPT indicated that a related bid would be call for, during the next fewmonths, adopting international standards. Second, as happens in similar cases in othercountries, the interchange dumps large volume of traffic in the connector points with theroad network, and consequently the conditions in them should be carefully studied toavoid congestion. In particular, during the ICR mission it was possible to verify that thisis especially bad at the connection with the Mauripur Road. It seems the solution shouldbe widening a section of about 100 meters, work that the Municipality, together with a30% financing by KPT, will call for bid soon.

5. To update the economic evaluation, actual financial costs were converted to 1990prices (bid prices were of 1991) and multiplied by a factor of 70% to transform them intoeconomic costs. This is the factor used in the report "Construction of Jinnah Bridge,Phase II" (CJB-PHII) by consultants, which was the basis for the SAR.

6. Moreover, one of the major matters to be confirmed is how the actual trafficvolumes compared with the corresponding traffic volumes forecasted at the time ofappraisal. The assignment model utilized for (CJB-PHII) is not available anymore Due tolimitations of time and resources, it was not possible at the ICR mission to carry out acomplete traffic survey in the project area. However, a very comprehensive TrafficSurvey had been carried out in 1996, by one of the consulting firms that had prepared thebasic report (CJB-PHII) mentioned above. That survey was conducted while the projectwas under construction, and consequently non-operational. So, the traffic volume resultsof the 1996 survey, in specific posts, were compared with the forecasted traffic volumesin the same posts and for the same year, 1996, based on the results of the original trafficsurvey conducted in 1988 for the (CJB-PHII). The results are shown in Table B2. Thevariation among posts is somewhat broader because the area is an urban one, andconsequently traffic diversions among links are likely. But the aggregate values indicatethat what was forecasted for 1996 at SAR is only 11% lower than the actual valuesregistered in the same year. The result is very good, and it could be concluded that for theupdate analysis it could be conservatively assumed the same traffic volume values of theSAR. As a final check, annual traffic growth at appraisal was assumed to be 4%, whichalso seems to be conservative if it is compared with an actual annual growth of 5.2% inthe motor vehicle registration in Karachi during 1986 to 1996 (Table B3).

40

TABLE B2COMPARISON BETWEEN ACTUAL TRAFFIC COUNTS AND FORECASTED

STATION 96 COUNTS 96 FORECASTS DIFFERENCE. PERCENT

M.T. Khan 34602 27880 6722 19%

Jinnah Bridge 61019 44875 16144 26%

Chundrigar 65737 74875 -9138 -14%

G.A. Alana 63083 43400 19683 31%

Dinshaw 46239 45700 539 1%

West Wharf 46095 44050 2045 4%

Agha Khan 38714 42850 -4136 -11%

Mauripur 46708 35800 10908 23%

TOTAL: 402197 359430 42767+11%

(a) TABLEB3

MOTOR VEHICLE REGISTRATION IN KARACHI DIVISION

YEAR Registered Motor Vehicles1986 545,3191987 565,4741988 612,5501989 650,1411990 694,4191991 740,7651992 789,2511993 832,2661994 859,4581995 880,9791996 908,408

(b) Average annual growth of registered vehicles: 5.2%

7. Table B4 shows the Updated Economic Rate of Return Analysis (ERR) for JinnahBridge Phase II. Capital Costs are the actual values converted as indicated above. GrossBenefits are the same as indicated in the SAR for the corresponding years. As shownabove the total traffic volume in the area could be considered the same as in SAR. Theonly transport infrastructure in the area is the interchange, so, undoubtedly, traffic mustbe assigned as expected at SAR, and the traffic forecast for future years seem to beconservative. Another reason that supports the conservative nature of the assumption isthat the interchange has now the contribution of the overpass, whiat in the SAR evaluationwas considered to be built later on. The ERR results to be 19.7%, almost the same as thecalculated at SAR (20%). As a switching value, if the values of the gross benefits arereduced to 54.5% of the assumed values, the project would have an ERR of 12%.Obviously, it is highly unlikely that a situation like that may hap pen.

41

TABLE B4

2. PAKISTAN

IMPLEMENTATION COMPLETION REPORT

KARACHI PORT MODERNIZATION PROJECT

(i) Jinnah Bridge Phase II

Updated Economic Rate of Return Analysis (ERR)(million of Rs)

Year Capital Costs Maintenance Costs Gross Benefits Net Benefits1992/93 98.4 -98.41993/94 61.3 -61.31994/95 86.4 -86.41995/96 146.6 -146.61996/97 170.9 -170.91997/98 194.2 __. 88.9 -105.31998/99 .. 1.4 183.7 182.31999/00 1.4 190.1 188.72000/01 1.4 195.0 193.6

2017/18 -378.9 1.4 301.5 679.0

ERR = 19.7 %Switching Value: If gross benefits are 54.5 % of the assumed values, the ERR = 12%.

Note: Gross benefits in 1997/98 are 50% of the annual value because the interchange became operational at the end ofCY97.

Source: ICR mission of October 20-26, 1998.

8. Liquid Products Marine Terminal (Oil Pier V [OP-V]): The constructionquality and maintenance of this terminal is good. The timing for its construction was veryappropriate, because the combined capacity of the new OP-V, which is designed tohandle 75,000 DWT tankers, and the existing OP-IV (built in 1978 for 75,000 DWTtankers, under another WB loan) will be enough to satisfy the demand for some years tocome. This will permit the temporary closure of the third berth OP-I (built in 1966 for35,000DWT tankers) which should then be replaced by a new, larger, more modemfacility. The traffic moved in 1997-98 by OP-V was about 5.4 million tons, whichrepresents more than 40% of the total port traffic. Only about 10% were moved throughOP-I, and the rest was handled, almost in its entirety, by the existing OP-IV. Berthoccupancy before OP-V started operations in April 1994, was reaching dangerous levelsaround 80%, which with only two berths resulted in increased ship waiting time anddemurrage charges. After OP-V was operational, the berth occupancy came down tocomfortable levels around 65%. Consequently, average tankers waiting time came downfrom a high value of 103.5 hours/ship in 1993/94, to 45.5 in the year OP-V started

42

operations, and a current value of 26.9 in 1997/98. However, the service time and thevolume of cargo unloaded per tanker have remained about the same.

9. As indicated in para. 1, in order to be consistent with the SAR economicevaluation, all inputs and outputs of the updated economic analysis must be converted toconstant 1990 prices. This was not necessary for OP-V, because its tender opening wasFebruary 28, 1990. The actual financial costs were multiplied by a factor of 80% totransform them into economic costs. This considers that part of the contract consisted ofimported materials and part was construction work.

10. The benefits of the new OP-V are twofold. First, is the difference in ship waitingtime, for the same volume of cargo, between the without project situation (only OP-IVand OP-I operate) and the with project situation, when the OP-V is incorporated into thesystem. Table 51 summarizes the calculations of the demurrages foregone (benefits), as aresult of the project. The second benefit is the savings in freight rates of tanker operatingcosts since larger tankers could be used with the new berth. In the economic analysis itwas assumed larger ships after 2002. However, statistics show that in the four years OP-V has been in operation, the cargo per ship has remained practically constant. Thisbenefit will be disregarded as part of the sensitivity analysis.

l Its methodology is based on queue theory and Poisson arrival of ships.

43

TABLE B5

Foregone Ship Demurrage (in million US$)

ITEM 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 (a) 02/03 (b) 07/08(b) 12/13 (b) 17/18 (b)

A. Cargo Volume (in million tons)

>Total Liquid Cargo 9.4 11.2 12.5 13.3 14 13.6 12.5 13.1 12.7 N. A. N. A. N. A. N. A.

>Moved at Karachi main OPs 9.4 10.7 12.1 12.6 13.9 13.5 12.4 13 12.6 14.8 18.1 21 23.7

B. w/o project facilities (OP 1,V)

>Berth occupancy (c) (in %) 72 81 92 96 106 103 94 99 96 113 138 160 180

>Time waiting/Berthing factor 0.80 1.45 3.50 4.60 5.00 5.00 4.10 4.90 4.60 5.00 5.00 5.00 5.00

>Demurrage (US$ millions) (d) 2.8 5.8 15.8 21.6 25.9 25.1 18.9 23.7 21.6 27.5 33.7 39.1 44.1

C. w/project facilities (OP l,IV,V)

>Berth occupancy (e) (in %) 71 68 63 66 64 45 55 64 72

>Time waiting/Berthing factor 0.45 0.38 0.28 0.33 0.29 0.09 0.18 0.29 0.48

>Demurrage (US$ millions) (f) 2.3 1.9 1.3 1.6 1.4 0.4 0.9 1.7 3.2

BENEFITS: 23.5 23.2 17.6 22.1 20.2 27.2 32.8 37.4 40.9

(a) Annualized from 1st Quarter(b) From Rendel Oct. 98 Report(c) As in SAR: ave. cargo 33,000 tons/ship; ave. service time 44 hours/ship, confirmed by recentstatistics(d) Annual demurrage calculated as # berth days x factor x demurrage rate per day waiting of

USS 6,700(e) Same as in (c) until 2002; afterwards, ships would range from 75,000 to 35,000 DWT tankers, with ave. cargo 45,000 tons/ship in 36 hours

service time(f) Calculated as in (d), but after 2002 using demurrage rate perday waiting of US$ 8,425

Source: ICR mission of October 20-26, 1998

44

11. Finally, Table B6 shows the Updated Economic Rate of Return Analysis (ERR) forOP-V. The ERR is 73%, slightly higher than the value of 70% derived at SAR. A veryunlikely reduction of 50% of the benefits, would reduce the ERR to a healthy 43%. If theincrease in ship size after 2002 is disregarded, the ERR remains about the same as in thebase case.

TABLE B6

PAKISTAN

IMPLEMENTATION COMPLETION REPORT

KARACHI PORT MODERNIZATION PROJECT

(ii) Liquid Products Marine Terrninal (Oil Pier V [OP-VI

Updated Economic Rate of Return Analysis (ERR)(million of US$)

Capital Costs O &M Denurrage Freight Rates Net Benefits

1991/92 2.9 -2.91992/93 6.8 i i _ _ -6.81993/94 9.5 T _ -9.51994/95 _ 0.5 23.5 23.01995/96 T 0.5 23.2 _ 22.71996/97 0.5 17.6 17.11997/98 0.5 22.1 21.61998/99 0.5 20.2 19.71999/00 0.5 23.2 22.72000/01 0.5 23.2 22.72001/02 0.5 23.2 22.72002/03 0.5 27.2 1.2 27.82003/04 0.5 28.3 1.2 29.0

2018/19 0.5 41.6 1.9 43.0

ERR = 73.1 %ERR = 42.9 % (with 50 % of the benefits)ERR = 72.9 % (without increase in the size of the ships after 2002)

Source: ICR mission of October 20-26, 1998

45

12. Dredger and two hopper barges: The bucket chain dredger is mechanicallyworking fine, and it has been properly maintained. In February 1997 it had a majorbreakdown, but the supplier promptly fixed the problem. It started operations in March1995, but significant delays occurred in the construction of the two hopper barges, whichare supposed to carry the dredged soil. These barges are now expected to be in operationin early 1999. In the meantime, existing old and smaller barges have been utilized. Thisseems to be one of the major reasons for the low productivity achieved by the dredger,that in slightly over three years of operation could only dredge an average of about320,000 cubic meters of solid per year. Its theoretical capacity is about three times thatvalue. On top of the indicated delays in counting with adequate barges, it seems KPT isexperiencing shortage of qualified manpower and outdated working conditions. Forexample, a barge that can operate with 13-14 persons, is forced to have 28 in accordancewith the rules. KPT is concerned with respect to this situation, and solutions are beingworked out, including privatization of part of the dredging activities.

13. The dredger operates, as expected at SAR, in the upper harbor, together with othertwo dredgers. A trailing suction dredger carries out the dredging of the approach channeland lower harbor. The annual maintenance dredging requirements for the upper harborare about 600,000 cubic meters of soils, which since the incorporation of the projectdredger, has roughly been the aggregate production of the three dredgers. Additionalproduction is needed for carrying out capital dredging, including progressive deepeningof the navigable channel from 32 ft. to 37 ft., the depth of Port Qasim.

14. The traffic of general cargo, bulk cargo and oil tankers handled in the Port of Karachihas shown a general stagnation during the 90's. The Chart shows the general trend,together with a projection of the traffic for the next 20 years, as prepared by consultantsTAMS in 1994 and updated in October 1998 by Rendel Palmer & Tritton. Those valueswere used in the Updated Economic Analysis of the Dredger Plant.

15. The contract price was in DEM and it was converted to US$ for the updatedeconomic analysis. Taxes are duties are not included in the contract price. The benefits ofthe dredger are basically the avoidance of the operational delays which would have beencaused to the ships in case the maintenance dredging was not entirely performed. Also,through capital dredging, it would be possible to gradually count with deeper depths,which would permit larger ships to operate in the Port of Karachi. As indicated in theSAR, to assess these benefits accurately would require a detailed study of theconsequences of siltation on ship movements. Simplifying assumptions were made atSAR to obtain an approximate ERR, and a similar approach is followed in this analysis.Table B7 gives details of the assumptions made to estimate the benefits.

46

TABLE B7

Dredging Benefits (in million US$)

Type of Cargo: 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 02/03 07/08 12/13 17/18

General Cargo 5 5.8 5.5 5.8 6.7 7.2 6.8 6.9 7.4 7.2 6.9 8.8 10.7 12.4 14

Bulk Cargo 2.8 1.9 2.3 2.5 2.6 2.5 2.4 2.2 2.4 3.7 2.7 3.1 3.8 4.4 5

Oil Tankers 9.9 10.2 11.3 10.4 11.2 12.6 13.3 14.1 13.7 12.6 13.1 16.5 20.2 23.4 26.4

TOTAL 17.7 17.9 19.1 18.7 20.5 22.3 22.5 23.2 23.5 23.5 22.7 28.4 34.7 40.2 45.4

Siltation in inch. 3 7 10 25 40 55 70(W /O) I____ _____ _____ ______ ___ _ _____ _____ ______ ____

Siltation in ft. (w/o) ___ _ 0.3 0.6 0.8 2.1 3.3 4.6 5.8Increase draft (ft) 1.5 3 5

Ave. draft (w/o) _ _ ____32 31.7 31.1 30.3 28.3 25.0 25.0 25.0Ave. draft (w/p) . 32 32 32 32 33.5 35 37 37Savings in US$ 1 = = = = = 25033981633857119560714 l_ l

NOTES:* w/o project: I inch siltation per each 100,000 cu.m. dredgingarrears; about 3 inch per year* w project: capital increase depth by 0.3 ftper year after 98/99;* Savings: number of ships x (3hrs in 1997/98, 6hrs in 2002/03, 6hrs in 2007/08,but lower ave. cargo/ship) x 8000 US$/day

Source: ICR mission of October 20-26, 1998

47

Table B8 shows the updated economic analysis. The updated ERR is a satisfactory17.2%, although substantially lower than the value of 29% of the SAR. The result is notsurprising given the operational difficulties found to obtain adequate productivity. Theanalysis is conservative because the future production of the dredger is estimated to bearound 600,000 cu. meters per year, almost twice the current production with old barges,but below its technical capacity of 900,000. As a switching value, if the values of thebenefits come down to an unlikely 64% of the assumed values, the project would have anERR of 12%.

TABLE B8

PAKISTAN

IMPLEMENTATION COMPLETION REPORT

KARACHI PORT MODERNIZATION PROJECT

Dredger and two hopper barges

Updated Economic Rate of Return Analysis (ERR)(million of US$)

Year Capital Costs O&M Ship Benefits O&M Benefits Net Benefits1993/94 12.2 -12.21994/95 7.3 -7.31995/96 0.7 0.8 -1.41996/97 - 0.8 -0.81997/98 - 0.8 2.5 0.9 2.71998/99 2.1 0.8 3.3 0.9 1.31999/00 0.8 4.0 0.9 4.22000/01 0.8 4.8 0.9 5.0

2001/02 0.8 5.6 0.9 5.7

2019/20 0.8 9.6 0.9 9.7

ERR= 17.2%Switching Value: If benefits are 64 % of the assumed values, the ERR = 12 %.

Source: ICR mission of October 20-26, 1998.

48

III. OVERALL EVALUATION

16. Based on the project costs and benefits described above, the updated economicrates of return for the three main project components and the overall are:

TABLE B9Updated Economic Rates of Return

Project Items % of Project Updated ERR (%) SAR ERR (%)Cost

Jinnah Bridge Phase II 30 19.7 20Oil Terminal 17 73.1 70

Dredger & Barges 32 17.2 29ALL 3 components 79 22.1 =

49

APPENDIX C

FINANCIAL EVALUATION

50

Appendix C

PAKISTAN

IMPLEMENTATION COMPLETION REPORT

KARACHI PORT MODERNIZATION PROJECT

(Loan 3335-PAK)

FINANCIAL EVALUATION

1. The operating results of KPT's past performance between 1991/92 and 1996/97are summarized below and detailed.

Key Financial Statistics(Rs. Millions)

91/92 92/93 93/94 94/95 95/96 96/97

Operating Revenue 2358 3043 3440 4458 5396 5544Operating Expenses 1839 2225 2493 2953 3193 3837Operating Income 519 818 947 1505 2203 1707Net Surpluses 699 1147 1405 2386 3050 2929

Working Ratio (%) 73 69 69 62 55 65Current Ratio (times) 1.6 1.9 1.4 2.0 2.2 2.2

2. Financial Performance. At the end of 1996/97, KPT's operating revenueconsisted of cargo handling (27%), cargo storage (45%), and ship movement & services(28%). The operating revenue and operating income increased from Rs. 2.4 billion andRs. 519 million in 1991/92 to Rs. 5.5 billion and Rs. 1.7 billion in 1996/97 respectively.During 1991/92 - 1995/96, KPT's operating revenue nearly doubled at an average annualgrowth rate of 23%, representing about 84% of total revenue. These increases inoperating revenue can be attributed to the combination of tariff increases implementedbetween 1991 and 1994, representing an overall tariff increase of 120% during the periodbased against the 1988 tariff schedule. However, the operating revenue increased only by3% between 1995/96 and 1996/97 mainly due to loss of cargo volume to Port Qasim. Inthe non-operating revenue category, interest on number of investments accounted forabout 75% of total non-operating revenue. KPT has invested its net surpluses of aboutRs. 6.9 billion in various Government schemes as required by the KPT Act, earning about15% per annum. The revenue from real estate property management only accounted for

51

8% of total non-operating revenue, which is a nominal amount considering the currentmarket value of properties owned by KPT.

3. The past financial performance of KPT is reflected in its cumulative surpluses, andpositive internal cash generation. The cumulative operating and net surpluses during1991/92-1996/97 amounted to Rs. 7.7 billion and Rs. 11.6 billion respectively, indicatinga very sound financial position. KPT's sound financial position is also reflected by itspositive internal cash generation over the years, which has significantly improved KPT'sliquidity. The current and acid test ratios confirm the improved liquidity of KPT, whichimproved from ratios of 1.6 and 1.4 in 1991/92 to 2.2 and 2.1 in 1996/97 respectively.The working ratio during the period from 1991/92 to 1995/96 improved from 73% to65% as a result of an increase in revenue, which has contributed to KPT's continuedsurpluses.

4. At the end of 1996/97 the term loan (local and foreign) was 1.6 billion Rupees.The leverage ratio (debt/total assets) of KPT of 0.09 times during the period clearlyshows the extent of KPT's solvency. During 1991/92-1995/96, KPT has financed almost59% of capital expenditures through annual net cash flows from its operations andremaining 41% from long-term loan. The rate of return on fixed assets valued athistorical costs in 1996/97 was about 51 %.2 The rate of return on equity is about 22%,which is satisfactory compared to other ports in the region. KPT has a strong capitalstructure with a debt to equity ratio of 11 %.

5. External audit of KPT accounts. KPT has engaged private auditing firm toaudit its accounts. The audit reports submitted to the Bank over past few years have beengenerally satisfactory.

Financial Issues Despite KPT's apparent sound financial position it faces anumber of major financial issues, many of which were discussed in the Appraisal. Theseissues will need to be addressed in any follow-up project.

6. Historical Asset Costs. KPT's operating expenses are understated, since thedepreciation charges accounted for are based on historical costs of assets which aresignificantly below the market value. Under Ln.3335-PAK, an agreement was reachedthat KPT would complete the revaluation of its assets to reflect the re-valued assets onKPT's balance sheet as of July 1, 1993. KPT confirmed that the revaluation exercise wascompleted in 1993, but it is yet to be reflected in its accounts. Also, KPT needs toconduct the physical verification of inventories with the help of private accounting firnsto reflect the actual value on the balance sheet.

Separate and improve accounting systems. Separate accounts need to be based onactivity-wise cost and profit centers including administration and subsidiaries services.Specifically, separate assets and liabilities need to be conveyed to Dredging andEngineering services subsidiaries. In addition, local experts (reputable accounting firms)

2 The estimated 1996/97 rate of return based on revalued fixed assets was about 8%.

52

will be needed to review the present administrative and technical capacity of the FinanceDivision and to identify areas to be further strengthened including cost accounting,budgetary control, and management accounting system

Reassess real estate leases. The revenue generated from estate assets leased to variousparties is significantly lower than competitive market rates. KPT needs to review thoselease and develop mechanisms to adjust lease payments every 3 to 5 years to bring themto par with going market rates.

Tariff restructuring. About 45% of KPT's revenues come from storage charges. Theoperating results show no decline in storage revenue during the project implementationperiod except during 1996/97, in which storage revenue decreased slightly from thepreceding year. KPT needs to improve the level and structure of tariffs with moreemphasis on cost-related charges. Also, the tariff structure needs to be rationalized with aview to simplifying the tariffs structure and comparing its level with the level of tariffs atsurrounding ports in the region.

Table ClPAKISTAN

KARACHI PORT TRUST

Profit & Loss StatementFor the Twelve Months ended June 30

(Rs. million)

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97

Operating Revenues:Cargo Handling 893.4 1,169.2 1,314.8 1,431.9 1,442.7 1,499.0Cargo Storage 774.0 1,042.8 1,117.8 1,699.1 2,604.9 2,515.5Ship Movement & Services 690.4 830.6 1,007.1 1,326.9 1,348.6 1,529.2

Total Operating Revenue 2,357.8 3,042.6 3,439.7 4,457.9 5,396.2 5,543.7Operating Expenses:

Personnel Costs 1,151.4 1,387.5 1,517.3 2,049.2 2,029.7 2,584.5Cess & Stevedoring 105.0 111.9 119.5 129.9 197.0 264.1Operating Materials & Supplies 264.8 282.3 293.8 270.4 378.7 404.6Repair& Maintenance 125.1 202.8 260.3 212.1 134.8 222.3Administration Overheads 73.4 118.8 175.3 86.4 229.6 137.9Depreciation 119.3 121.8 126.4 204.5 223.1 223.5

Total Operating Expenses 1,839.0 2,225.1 2,492.6 2,952.5 3,192.9 3,836.9Operating Income 518.8 817.5 947.1 1,505.4 2,203.3 1,706.8

Non-Operating Income:Property Management 94.7 90.0 102.2 94.4 112.4 119.6Interest on Investments 37.0 186.3 281.9 540.4 736.6 1,072.6Interest on Deposits 69.9 61.7 102.1 77.5 90.1 140.9Miscellaneous 43.3 70.6 58.6 89.4 95.6 89.1

Total Non-Operating Income 244.9 408.6 544.8 801.7 1,034.7 1,422.2

Non-Operating Expenses:Interest on Term Loans 65.2 78.8 93.9 142.1 150.3 179.3Prior Period Items 7.0 220.5 (38.0) (20.5)Net Income/(Loss) 698.5 1,147.3 1,405.0 2,385.5 3,049.7 2,929.2

Source: KPT.

53

Table C2

PAKISTANKARACHI PORT TRUST

Balance SheetFor the Twelve Months ended June 30

(Rs. million)

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97Assets

Current Assets:Cash 504.3 632.5 829.4 1,349.0 1,805.7 2,144.1Advances, Deposits & Other Receivable 397.3 402.9 502.8 756.9 1,338.6 1,864.8Sundry Debtors 236.0 297.3 330.4 497.0 513.0 537.9Stores & Spares 208.5 219.6 212.3 220.5 181.9 223.2

Total Current Assets 1,346.1 1,552.3 1,874.9 2,823.4 3,839.2 4,770.0Investments:

Receivable from GOP 9.8 9.8 9.8 9.8 9.8 -

Receivable in Res. of Employee W. Fund 235 250.2 31.9 - -Loans to Federal/Provincial Governments 113.7 73.7 30.7 20.7 20.7 -

Federal Investment Bonds 610.0 1,355.0 1,978.2 2,603.3 4,366.6 5,489.0Others 199.9 219.9 869.9 1,244.9 1,228.9 1,426.4

Total Investments 1,168.4 1,908.6 2,920.5 3,878.7 5,626.0 6,915.4Fixed Assets:

Land 14.9 14.9 14.9 14.9 14.9 14.9Building & Structures 1,923.5 1,997.6 2,086.4 2,873.2 3,093.6 3,260.5Plant& Equipment 1,159.5 1,195.8 1,243.7 2,291.4 2,484.7 2,667.6

Less: Accumulated Depreciation 1,481.8 1,603.6 1,730.0 1,934.5 2,157.6 2,381.0Work in Progress 95.5 492.2 1,322.7 668.2 1,157.3 2,196.6

Total Fixed Assets 1,711.6 2,096.9 2,937.7 3,913.2 4,592.9 5,758.6Total Assets 4,226.1 5,557.8 7,733.1 10,615.3 14,058.1 17,444.0

Liabilities & Capital EmployedCurrent Liabilities:

Creditors and Accrued Expenses 525.6 574.2 906.1 972.5 1,094.3 1,486.4Deposits 186.6 223.5 371.7 384.5 512.5 580.1Short-Term Loan from Bank 87.8 - - - -

Current Portion of Long-Term Debt 38.9 38.9 38.9 41.6 154.6 147.6Total Current Liabilities 838.9 836.6 1,316.7 1,398.6 1,761.4 2,214.1

Long-Term Liabilities:Long Term Debt 469.5 739.8 1,175.7 1,497.5 1,570.7 1,593.9Employees Welfare Fund 239.1 155.5 10.0 102.9 60.0 40.9

Total Long-Term Liabilities 708.6 895.3 1,185.7 1,600.4 1,630.7 1,634.8Total Liabilities 1,547.5 1,731.9 2,502.4 2,999.0 3,392.1 3,848.9Equity:

Capital Fund 0.5 0.5 0.5 0.5 0.5 0.5Capital Reserves * 51.5 51.5 51.5 51.5 51.5 51.5Revenue Reserves 911.9 911.9 911.9 911.9 911.9 912.0Retained Earnings 1,714.7 2,862.0 4,266.8 6,652.4 9,702.1 12,631.0Total Equity 2,678.6 3,825.9 5,230.7 7,616.3 10,666.0 13,595.0

Total Liabilities & Equity 4,226.1 5,557.8 7,733.1 10,615.3 14,058.1 17,443.9

Source: KPT.

54

Table C3

PAKISTANKARACHI PORT TRUST

Key Financial RatiosFor the Twelve Months ended June 30

(Rs. million)

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97Working Ratio 72.9%/e 69.1% 68.8% 61.6% 55.0% 65.2%Operating Ratio 78.0%/ 73.1% 72.5% 66.2% 59.2% 69.2%Operating Income/Operating Revenue 22.0%/o 26.90/e 27.5% 33.8% 40.8% 30.8%Net Income/Operating Revenue 29.6% 37.7% 40.8% 53.5% 56.5% 52.8%Current Ratio 1.6 1.9 1.4 2.0 2.2 2.2AcidTestRatio 1.4 1.6 1.3 1.9 2.1 2.1Rate of Retum on Fixed Assets 40.8% 54.7/o 47.8% 61.0% 66.4% 50.90/%Rate of Retum on Total Assets 16.5% 20.6% 18.2% 22.5% 21.7/o 16.8%Retum on Equity 26.1% 30.0% 26.9% 31.3% 28.6% 21.5%Debt to Equity 14.9% 16.2% 18.4% 16.4% 12.8% 10.5%Leverage Ratio 0.17 0.16 0.15 0.15 0.12 0.09

Source: KPT.

55

APPENDIX D

BORROWER'S EVALUATION

56

Appendix D

IMPLEMENTATION COMPLETION REPORT

PAKISTAN

KARACHI PORT MODERNIZATION PROJECTPORT V

(LOAN NO. 3335 - PAK)

PREFACE

The component of Karachi Port Modernization Project Port V, Loan No. 3335-PAK for US$ 91.4 million was approved and made effective from 6h Feb, 1992. Theloan extended once for 12 months, is to be closed on 301h June 1998. Final disbursementwill be made on 30h Oct 1998. The loan was partially disbursed.

This ICR is prepared by Messers Syed Adil Gilani (Project Manager (P), P&DDivision, KPT) and Mr. Hasan Arif Bilgrami (AXEN (E)/TO-I, P&D Division ,KPT)

The ICR began one month before the Loan closing date, and is based oninformation in the project files.

57

IMPLEMENTATION COMPLETION REPORTPAKISTAN

KARACHI PORT MODERNIZATION PROJECTPORT V

(LOAN NO. 3335 - PAK)

EVALUATION SUMMARY

OBJECTIVE:

a. Karachi Port, which is located on the south side of Karachi city, handled 8 milliontons of dry cargo in 1989/90 and 11 million tons of liquid cargo. The port has a 4 km longentrance channel (183 meters wide and 12.2 meters deep), and provides access fortankers up to 75,000 DWT and for general cargo/ container ships of up to 22,000 DWT.

b. Karachi Port is a medium size port which is comparison with other regional portsrequired significant improvements, especially in handling of general cargo and bulkcommodities.

c. Beside this, the landside movement of cargo beyond Karachi Port becarneconstrained by traffic congestion. The traffic problem in Karachi is caused by twofactors. First, urban development has generated considerable growth in city traffic,reaching as high as 6-7% per annum in many areas. Second, not only is the port a majorgenerator of traffic, but it is located at a central point in the city road system. Moreover,the landside access to the East Wharf area, which is located on Keamari Island, isprimarily via Jinnah Bridge Phase-I bridge, and landside traffic is thus focused on asingle point on the mainland. Severe congestion is affecting urban and port traffic, andimprovements were required to build now road/ bridge network specially Jinnah BridgePhase-II project.

d. Dry cargo traffic grew at an average rate of 6% per annum during 1979/80 and1989/90, and future trends depend upon developments in Pakistan' major import andexport commodities as well as the growth in general cargo imports and exports which aretied more closely to overall GDP development.

e. The solution to this problem is: (I) constructing and equipping specializedcontainer facilities, (ii) introducing modem second generation mobile quay cranes tohandle containers, multi-unitized general cargo and bulk (whenever unloaded inKarachi); and (iii) constructing specialized bulk handling and storage facilities andequipment would result in berth occupancy of an acceptable rate of 63% in 1999/2000.

58

f. As part of its overall privatization policy , GOP has decided that in future cargohandling equipment is to be purchased and operated by the private sector wheneverfeasible.

g. The growth rate of oil imports depended largely on the growth in the domesticconsumption of petroleum products, since Pakistan's production of crude oil is expectedto remain largely unchanged during the next 10 years. Consumption growth wasprojected to be about 7% per annum, reflecting economic development and theacceleration in the construction of fuel oil fired power stations. A modest growth in otherliquid products (edible oil and molasses) was also anticipated, resulting in overall liquidproduct cargoes increasing from 11.6 million tons in 1989 to 20.1 million tons in the year2000 at a 5.7 % annual growth rate.

h. To deal with this situation, KPT was required to construct an additional oil liquidproducts berth, that would provide liquid product handling capacity of about 19 milliontons per year at a berth occupancy rate of 60%.

Implementation Experience and Results.

a. The project will be completed satisfactorily by June 30, 1998. The closing datewas extended for one years due to a delay in the Karachi Port component which is underthe same loan.

b. Project implementation was satisfactory because all objectives were achieved:Physical components were constructed ahead of schedule, equipment was procured, andthe action plan, training and a study were carried out. Training provided extensivecourses for both managers and workers. The Master Plan and Port Optimization Studyprovided a solid basis for future development, implementation of an action plan improvedthe port environment; port operations became more efficient and physical capacity wassubstantially increased with the addition of the Oil Terminal OP-V and the Port Project.These achievements were partly due to the project's relative lack of complexity and tocoordination between the KPT and the Ministry of Communication (MOC), which hasoverall responsibility for the port sector.

c. The project benefit included savings in: (a) Cargo-handling cost, (b) Ship waitingand berthing time, and (c) cargo time. The economic internal rate of return (EIRR) forproject components in SAR was estimated at 20% percent for Jinnah Bridge Phase II,70% for Oil Terminal V, and 29% for dredgers and barges. The achieved correspondingEIRR on completion of the Project at the end of the loan closing period are, 19.7%,73.1%, and 17.2% respectively. The EIRR for two projects are satisfactory and the lowerEIRR for dredger and barges is due to delay in construction of barges.

d. Cost estimates at appraisal were reasonable. The final cost was estimated at aboutUS $ 57.31 million. In loan amount and disburse amount is due to the saving in foreigncomponent of project.

59

e. KPT financial performance is solid. Although the operational ratio (operatingcosts/operating revenues) was higher than estimated in the SAR (61.8 percent against56.5 percent) due to sharp domestic prices increases in 1992-98, KPT absorbed this byincreasing the amount of container traffic it handled. Since container traffic will mostlikely expand further, KPT's financial condition will remain solid.

f. No environmental or resettlement problems arose during implementation.

Sustainability:

g. At completion, the project appeared sustainable. Because port traffic willundoubtedly grow along with rapid economic development in the Port area , theexpanded facilities clearly needed. In fact, traffic in containerized cargo has soared, andthe project's oil terminal operate efficiently due to the modem facilities and equipmentand trained staff provided under the project. In addition KPT is financially stable and hasenough resources to maintain and operate the port properly, if it maintains its currentoperating scale.

Findings and Lessons Learned:

The finding and lessons include the following:

(i) KPT capably carried out the construction, procured equipment, conductedstudies and developed its organization; KPT completed construction ofberths four months ahead of the schedule with satisfactory quality.

(ii) With regard to the procurement of equipment & work, there is a risk thatproblems will surface when the lowest bidders of Govt. Sector Companiesare awarded contracts.

(iii) Projects should be designed as independently as, possible. Although ttheare separate and independent projects ( the project entities and

activitiesare both different), the Karachi Port Project, implementation of which wason time, could not be closed due to the delay by various reasons and hadto wait for one year.

(iv) Performance indicators with regard to port operations, maintenance andenvironment quality were clearly stated in the SAR ( to monitor theproject's progress) and proved quite useful,

(v) Project design was relatively straightforward and thus avoided problemsof coordination among various agencies; and

(vi) When tariffs are regulated and price increases are high, actual tariffscannot reflect actual costs. It is suggested that some mechanism should beadded into the tariff calculation to reflect actual operational cost.

60

KARACHI PORT MODERNIZATION PROJECTPORT V

(LOAN NO. 3335 - PAK)

PART I. IMPLEMENTATION ASSESSMENT

A. PROJECT OBJECTIVES.

1. When project was identified in the mid 1985-88, Karachi Port was badlycongested and container berths, bulk cargo berths, port equipment, storage yards andtransport infrastructure ( distribution), were in short supply. In fact, it appeared thatcongestion would threaten the expansion of Karachi foreign trade. To remedy thesituation, the Government began to reform the port in PQA in 1980-81, and graduallyapplied to other ports, through decentralization of responsibilities, which included self-financing of port operations, generating investment funds through internal cashgeneration, and promoting competition among ports for cargo.

2. The main objectives of the project were to make Karachi's handling of OilTankers & general cargo more efficient by constructing special berths with modernequipment. The project also promoted efficiency by rehabilitating existing facilities andtraining both operational and managerial staff. Finally, it optimized future developmentby studying the potential of the port to distribute and transport cargo more effectively andeconomically.

3. Development under the project consisted of:

(a) Construction of Liquid Products Marine Terminal, OP-V.

The new liquid products Marine Terminal OP-V, at a cost of Rs. 575million has been constructed in replacement of existing Oil Piers OP-IIand OP-III, having a capacity of 6 to 8 million tons, provided with modernfacilities for handling POL & Non-POL products and additional provisionof handling crude oil for emergency.

(b) Construction of Jinnah Bridge Phase-II with Flyover Connection.

The Jinnah Bridge Phase II is an extension of the Phase-I Bridge and is athree level traffic junction between the existing roads (15 level) i.e.Keamari Road, Moulvi Tamizuddin Khan Road (New Queens Road) and1.1 Chundrigar Road, (McLeod Road), accomplish by means of a freeflowing elevated roundabout (2nd level) with an elevated flyover (2nd level)

61

connection to the Mauripur Road, and an Overpass (3rd level) as a directeast-west connection, designed to fully cater for the future increasedtraffic volume in 2015. The layout and alignment of the scheme have beenplanned keeping in mind the future traffic needs of the port and willconveniently mesh into the transportation network of Karachi.

The new structure, (roundabout, flyover and overpass), is a modem,aesthetically planned and elegantly designed State-of the Art ofconstruction. The project has substantially been completed and formalinauguration ceremony was held on 10- 10-97 by the Minister.

(c) Procurement of Bucket Dredging Plant.

I. BUCKET DREDGER:

Stationary type Diesel electric bucket dredger (B.D. AFTAB)arrived at Port on 27-12-1994, under the World Bank loan (3335-PAK)having cost of DM=24,755,912, (i.e.. Rs. 408,472,548).

The dredger was in operation 26-03-1995. The salient feature of theBucket Dredger are as under:

- Capacity of dredger is about 700 Cum/ hour.

- Maximum dredging depth. 20 meters.

- Each Bucket capacity is about 850 liter.

- Chain of Bucket included 56 Buckets.

II. TWO NOS. SPLIT HOPPER BARGES.

Associated work of construction of two Hopper Barges wasawarded to Karachi Shipyard & Engineering Works and the Keel Layingwas carried out in October. 1994. Contract completion date was March1995, which has passed. The progress of work has been extremely slowand seriously delayed. Barges were finally launched during Nov./Dec.1995 and at present approx. 35% work is left for completion. Which is tobe completed by 27-01-99 as per addenda contract signed with KSEW on27-05-1998.

(d) Construction of RCC Quay-Side Pavements and Access Roads.

The existing quay-side aprons in most of Karachi Port area is in apoor state of repair and rails embedded in the aprons make it unsuitable for

62

working effectively with modem cargo handling equipment. Due to extensiveusage for the last four decades and fundamental changes in cargo handlingbrought about by containerization and utilization, the storage and transit plinthaccess roads and other areas, are in a broken and dilapidated condition, needingre-construction. KPT under the modernization project, has therefore proposed there-construction of quay side pavements of eight berths at East Wharves in aphased manner at a cost of Rs. 400 million in local currency. About 60,000 sq.mhas already been constructed and work is in hand on further similar area. Theapproach road to Keamari Groyne Cargo Complex has been completed at a costof Rs. 12 million. Reconstruction work of quay side pavements of Berth No. 12-13 has been recently completed and further work on other berths is underimplementation.

(e) STUDIES (Technical Assistance) & Training.

Various studies for improving Port efficiency and productivity under thePort Modernization Project at a cost of about Rs. 105 million, were included.They are:

I. Computerization - Stage-IIII. Enviromnental Protection.III. Master Plan Study.IV. Improvements in General and Bulk Cargo Handling Operation

Including encouragement of Private Sector Participation.V. Radar and Related Equipment.VI Hydrography study

63

KARACHI PORT MODERNIZATION PROJECTPORT V

(LOAN NO. 3335 - PAK)

PART I. IMPLEMENTATION ASSESSMENT

B. ACHIEVEMENT OF OBJECTIVE

This was the fifth Bank-assisted port project in Pakistan (KPT). The KPT hadoverall responsibility for project implementation.

Civil Works: The individual contracts were undertaken for the Oil Terminal(OP-V), Jinnah Bridge Phase-II & Reconstruction of Quay side pavement and AccessRoad. Construction was delayed due to various reasons. The detail of each project(subproject) are as under:

a) Construction of Liquid Products Marine terminal., OP-V.

The new liquid products Marine Terminal OP-V, at a cost of Rs. 575 million with69% foreign currency component, has been constructed in replacement of existing OilPiers OP-I1 and OP-III. It has a capacity of 6 to 8 million tons and is provided withmodem facilities for handling POL & Non-POL products and the additional provision ofhandling crude oil for emergency. The facility was completed by M/s. China HarbourEngineering Company of China and after successful tests & trials the formalcommissioning by the then Prime Minister of Pakistan was held on 23rd February, 1995.

Pollution control equipment under this contract arrived in Karachi in December 1996 andhas been handed over to MPCC.

b) Construction of Jinnah Bridge Phase-1l with Flyover Connection.

The Jinnah Bridge Phase-II with Flyover Connection at a cost of Rs. 933 millionwith 25% foreign exchange component was awarded to China Yunnan Corporation.China (CYC) for completion in 96 weeks and was to be completed by 18-12-95. Thework has been delayed due to lack of expertise, ability, contractual knowledge andmanagement capabilities of the Chinese Contractor. Despite signing of two MOUs inJune 94 and Sept. 95, no significant improvement in MWs. China Yunnan Corporationperformance was observed. Accordingly Contractor's responsibility from China wascalled to have a high level meeting between KPT. Consultant & Contractor, chaired ;by

64

Chairman KPT from 19-25 March 96, and some improvement were observed. AfterDecember 96, the progress again suffered due to the absence of the Chief ResidentEngineer. In Jan 1997 MWs. LA&P refused to take up further work till their alloutstanding payments are finalized.

High level meetings were held in May, 1997 between the high officials of theContractors, Consultants and KPT. However. M/s LAP did not take up the sitesupervision from May 15, 1997 as committed in these meetings. To resolve this issue,MIs. Indus Associated Consultant were appointed as Engineer for the balance work of theproject with the approval of the World Bank and Govt.

The project has substantially been completed and the formal inaugurationceremony was held on 10-10-97 by the Minister for Communications Mr. Azam Hoti andMadam Chen Muhua Special Envoy of the Peoples Republic of China. The rotary,flyover and overpass have been brought in use. Minor works like footpath, lightingpoles, roads signs and marking painting & energizing electric poles etc. are in hand andwill be completed shortly.

c) Construction of RCC quay-Side Pavements and Access Roads.

The East Wharves of the Port Of Karachi were constructed under the first phaseof Port Development during 1954-60. Due to extensive usage over the last four decadesand fundamental changes in cargo handling brought about by containerization andutilization, the storage and transit plinth, access roads and other areas are in a broken anddilapidated condition, needing re-construction. KPT under the modernization project hastherefore proposed the re-construction of quay side pavements of eight berths at EastWharves in a phased manner at a cost of Rs. 400 million in local currency. About 60,000sq.m has already been constructed and work is in hand on further similar area. Theapproach road to Keamari Groyne Cargo Complex has been completed at a cost of Rs. 12million. Reconstruction work of quay side pavements of Berths No. 12-13 has beenrecently completed and further work on other berth is under implementation.

Procurement of Bucket dredging:

The KPT Board and the Federal Government had approved procurement of a new bucketdredger with two hopper barges in replacement of old and outlived dredging fleet. Thenew plant will have a capacity of 900,000 cum. per annum.

The new Dredger was completed by DWE of Germany in their yard at Deggendorf.Germany. After confirmatory trials and final test/inspection the new Dredger "Aftab",was taken over on March 26, 1995. One year guarantee period has been completed andthe Certificate of Due Performance issued by the Engineer/KPT. The Dredger is workingsatisfactorily.

65

Associated work of construction of two Hopper Barges was awarded to Karachi Shipyard& Engineering Works and the keel laying was carried out in October, 1994. Contractcompletion date was March 1995, which has passed. The progress of work has beenextremely slow and seriously delayed. The Barges were finally launched during Nov./Dec. 1995 and at present approx. 35 % work is left for completion. The contract hassince been concelled and the remaining work on the barges will be carried out throughother agencies and Project (subproject) is being completed through KPT's own funding.

STUDIES (Technical Assistance) & Training. This includes:

a. Computerization - Stage-Ilb. Environmental Protection.c. Master Plan Study.d. Improvements in General and Bulk Cargo Handling Operation

Including encouragement of Private Sector Participation.e. Radar and Related Equipment.f Hydrography studyg. Training.

a. Computerization- Stage-II:

To establish a central on -line computerized data bank with interlinks to port usersand associated organisation a specialist firm viz. M/s. Nolmac of Netherlands, wasselected by KPT Board, for detailed study and recommendations for implementation. TheFinal Report and the recommendations were approved by the KPT Board on July 31,1996.

For phased introduction of computer applications, procurement of 100 PCs withLAN was completed. While reviewing the tenders for additional software and hardware,the World Bank advised to implement the project on BOT basis. During the then PrimeMinister's visit to USA on April 06, 1995, an MOU was signed with IBM. LOI wasissued to IBM. A draft implementation Agreement was submitted by IBM and KPT hadasked for clarifications on some issues which were not given satisfactorily by IBM.Meanwhile the validity of the LOI/offer expired. World Bank Supervision Mission(March 17-12. 1997) has recommended to advertise for fresh offers. PC-I is underpreparation to finance the project from KPT 's own resources.

b. Environmental Protection:

For effective pollution control measures in Karachi harbour and environmentalprotection in the port area, a study has been canried out by MIs. NESPAK of Pakistan inassociation with Frank Ayles and H.R. Wallingford AEA Port of Liverpool ( MereyDock) of U.K. and Final Report is received. As per recommendations of consultants thePollution Control equipment is being procured at a cost or Rs. 350 million with US $ 7.0million foreign currency. PC-I for the procurement has been approved by CDWP &ECNEC. Bids for craft and equipment were also received and evaluated but had to be

66

discharged as the procurement was not possible before the loan expiry date of June 97.As approved by Board (B.R. No. 365 dated 15-06-1997) tender for surveillance cum pilotboat were re-invited but had to be discharged as approved by KPT Board. Approval ofWorld Bank is awaited for re-inviting the tender.

C. Master Plan Study:

This study was entrusted to MWs. Tams Consultants of USA in association withM/s. I.Z. Associates of Pakistan. The work has bee completed and the Final Reportreceived. Near Medium & Long term master planning will be followed for formulationfuture development plans. The report was also considered by the KPT Board'sCommittee on Port Development and the KPT Board and approved. Further action willbe taken accordingly under the next project.

d. Radar & Related Equipment:

This study has been carried out by experts from MWs. Port of London Authority (PLA) ofU.K. Based on the study solar powered lights and modem buoys have been installed.Radar & Navigation facilities will also be installed to monitor extended harbour limitsand for safe ships maneuverings. As advised by the Planning Commission the Extent ofthe facility was re-examined and report forwarded to World Bank based on which a PC-Ihas been prepared and sent to GOP for approval during August 1996. However, theprocurement has been deferred by KPT Board. However it is now proposed to install aRadar System at Manora to monitor the movement of ships in outer anchorage and in portas advised by GM(O), with data transmission at 2 stations, one in H.O and 2n inHarbour. Master office is Keamari Groyne Area. Estimation work is in hand.

e. Improvements in General and Bulk Cargo Handling Operations includingencouragement of Private Sector Participation.

This study was entrusted to M/s. C.L.E Consult of Ireland in association with M/s.Engineering Consultants of Pakistan and was successfully completed in October 1994.The Final Report has been forwarded to World Bank and other concerned agencies/departments for information and record. Consultants recommendations are underconsideration of the KPT's Committee on Port Development and further action will betaken accordingly. On the approved by the World Bark PC-II for the 2nd phase of studywas prepared but the KPT administration has decided to defer this. The second phase ofthe Studies is comprising of: i) Optimization of Railway System., ii) Improvement ofBulk Handling Facilities, iii) Improvement and Maintenance of Manora Workshop.

f. Feasibility study of deepening the upper harbour and approach channel ofKarachi Port:

Karachi Port Trust wishes to examine the upper harbour area of the Port ofKarachi from the Boat Basin to Juna Bandar to take larger vessels with the aim ofaccommodating Panamax Container vessels of upto 12 m draft. Accordingly, the Karachi

67

Port Trust intends to engage an intemationally reputed hydraulics research consultancyfirm well equipped and experienced in carrying out hydraulic studies in the localityincluding inter-alia data collection on hydrographic, wave climate tide and tidal currentsand comprehensive hydraulics and sedimentation studies including analysis throughcomputer modeling. Karachi Port Trust invites applications from consulting firmsspecializing in the work . The scope of work in progress and comprises but is not limitedto the following elements.

1. Optimization of the Approach Channel:.

* Navigation.* Capital Dredging.* Maintenance dredging.* Beneficial use of dredged material.

2. Optimizing of the Port dredging works:

* Navigational* Capital dredging.* Beneficial use of dredging material.* Maintenance dredging.* Effect on the hydraulic region.T ^Assessment of the effects of the work on the stability of

existing structure.

The contract has been awarded to M/s. H.R. Willingford Ltd. With technicalassociation of MIs. Techno & Hydrographic consultants. This; contact is made upon the28th May 1998. The salient features of this study are as under:

i) Date of study Commencement Feb 8h 1998.ii) Date of Final Report submission Feb 8th 1999.iii) Duration of contract 9 Months.iv) Total cost of contract. LCC=Rs. 13,465,122, FCC=£ 332,820.

g. Training under the Loan 3335-Pak.

Only a limited number of training programs were carried out particularly in areasof computer and marketing. About 10 KPT officers were also sent on foreign training onvarious port operational fields. The program of training could not be fully implementedbecause of restrictions by Federal Government due to austerity measures.

KARACHI PORT MODERNIZATION PROJECT (PORTS V)Liquid Products Marine Teffninal (OPV)

General Layout

III~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r0~~~~~~~~~~~~~~~~~~~~~~~

E Ulcricground Pipe Channel

_ ~~~~~~~~~~~(Bottom Surface - 1.68 m 5.S~) { / /2

/'1Sign

I 'lSaOO

/ L Pump Stationds

Boat Basin \=l\ O^ce- Operationalt i Prtcto tor

Building~I

Note: AN Levels rotor to Kagochi Put Datum (KPD)ctio

All dimeaslons ore given ki meters. not show otherwisewall

Slcpe 1:2Slope

r B

2

a/ { v . aX 11 S~~~~~~~~~~~~Expansion Jont ~

i/ / ~~Lighted ' Electric Sub-Station_;1

>/ ' l~~Nviation 8 >sea waterA MootingaDolphins

<P/ / r e~ ~~~~~~~Pum Station

vh I / ~~~Ferxb Dlhn |0 > tl< =

_._ = ~~~~~~~~~~~~~~~~~~~~~~~~~~~~L _r

Eaistern Limit of Novgable Channel

Note Ali llsa refar to Kal Port Dattim (KPD)

All dinerElon are ghoon In mtem If not sheown othervAse.

Wold BankA3`152

IBRD 21184R

PA K ISTA N JINNAH BRIDGE

KARACHI MANS~~~~~~~~~~~~~~~~FIELD IMPORPAEIKARACHI 0 a;:0 X X RAILWAY YARD

PORT MODERNIZATION PROJECTPORTS V :

KARACHI PORT /

WESTERN / \ 5RR<6

S

BACKWATER / .1'

I , ?/(f*f <tS2// L

X~~~~~~~~~~~~~~~~~~~~ 0 Xt 0 T:S~

V ew // 7 / 00 c0 0 *:X

- lshryd \ \ ~ ~ ~~~~~/ s' = ~s

/~~~~~~~~"~~~~~~ ,.\\4 \ a

'00

b/ 0 d _ MRNETRIA

\\ IN\LAI_

% \ \ \ ~~~~~~~~ ~ ~ ~ ~ ~~~~~OIL PIER ELM Project Components

Sohld \ \\>\ ~~~~~~~~~~~~~~Paved Rovods

\> ng, | S e ~~~~~~Railroads\ \\ °£ \ )wK, _ ~~~~~~~~~~~~~~~~~~~~Transit Sheds

\ \ s \ N;OL ~~~~~~~~~~~~~~~Mangrove Swamps

\ tFO \\ \ t to Tidal Mud Flats

\ j , \ v \ \ _ _ ~~~~~~~~~~~~~~~International Boundaries

-Vp -\<- / \ 10O0 20C 3000 4000

Th. ;"-,! = 4 \ \

^Wuf rX 1041 / *0A,A~~~~~ /

f Ib /|CRANE P\

b"ki w- d. & F\O P\

=,_ tHould ir"- H...

P.4-V - i6 1.0 O.W. f -0 / ,Y

(,AFG,HANiSTAN,-- 70o- r. t or \

X j 30- Xo\ \\ ie(30,

Q \l PAKISTAN JQ< °^

7 v a INDIA

25 Karachi 25-I 2 - /

Bay at' Bengal J /

PRIL 1991

IBRD 21185

Th,s mrap has been prepared by

The World bank s staff e-c--srvetp

tbr the convenmence t theereaders and s e-ctu-veY tnr the h

Internal use ot The Wonrtd dank e°and the ntMrnat,onat FmIance /\k 0 500 1000 1500Corporat,on The denom-inat,ns-

used and the boundares shown Fon this rap do nOp rhey on the FEETpart ot The World Bank and the / /,ntornat,nnat Fmnance Cnrpnrabon /-ry .udgM,nt on he legal stat-sot /of any terntonY Sr any

endorsement or a:neptanne of 0° such boundarie 0/

Ct

I_\~~~~T K eP T X

TRAFFIC FLOW UNDEROVERHEAD FLYOVER

60b 70'

PAKISTANKARACHI PORT MODERNIZATION PROJECT - PORTS V

JINNAH BRIDGE - PHASE 11CHINA

______;j_ Round About and Flyover

ISLAMIC REP AFGHANISTAJ ,OOF IRAN | s-bsd _ Overpass

30' -JP PAK STAN /30' Paved Roads

lnAR 9-5 -'---'---- RailroadsINDIA

\.U.A E Korscht *ins\ /roMAN -International Boundaries

ASRABtAU8Cl 60° 701

FEBRUARY 1 991

IBRD 21217

|/ AFGHANISTAN A]b

I P A K I 5 T A N x "-4 Z N c/ '7,

KARACHI PORT MODERNIZATION PAKISTAN /

PROJECT - PORTS VNORTH o ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~INDIA

\ ~~~~~KARACHI/QASIM K ARACHI _S{XrL NI

\ TRANSPORTATION NETWORK g / = K c r o e h i a

\ w ~~~~~Proe-t C-Tpon-tI:,

- - - Pl.-nd I.mk, 0

\ ~~~~Ri-es/ \,!

\ \ ~~~~~~~~~KILOASETER Ss ..... .9/11

9 %S S + , ~~~ ~~E / ;PK.-k

- g \ , > x MA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~LIR

lF~~~~~L KOAG K..W'C :hi> FEBRUARY 1991