RETURN TO. ~~~~~~~~~~~RESTRICTED

REPORTS DESK Report No. PTR-50aWITHiN r'L E COPY R

OSJE WEEK

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

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

APPRAISAL OF A RAILWAY PROJECT

FEDERAL REPUBLIC OF CAMEROON

May 12, 1970

Transportation Projects Department

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Currenc Eqvalents

Currency Unit:CFA Franc CFAF 1US$ 1 a CFAF 278CFAF I = US* 0.36CFAF 1,000,000 = US$ 3,600

Weight and Measures

1 Metric ton a 2,205 lb.1 Kilogram (kg) - 2.2 lb.1 Kilometer (km) -0.62 mile1 Meter (m) = 3.28 feet

Fiscal Year

July 1 - June 30

BEI - Banque Europeenne d'InvestissementCAR - Central African RepublicCCCE - Caisse Centrale de Cooperation EconomiqueFAC - Fonds d'Aide et de CooperationFED - Fonds Europeen de D4veloppementFIDES - Fonds d'Investissement et de Developpement

Economique et SocialKfW - Kreditanstalt fuer WiederaufbauOCCR/SOGREAAH/DSBI - Organisation, Controle, Conception, Realisation/

Societe Grenobloise d'Etudes et d'ApplicationsHydrauliques/Deutsche Societat BeratenderIngenieure

OCFT - Office du Chemin de Fer TranscamerounaisOFEROM - Office Central des Chemins de Fer d'Outre-MerREGIFERCAM - R6gie des Chemins de Fer du CamerounUDEAC - Union Douaniere et Economique de l'Afrique CentraleUNDP - United Nations Development ProgramUSAID - United States Agency for International Development

FEDERAL REPUBLIC OF CAMEROON

APPRAISAL OF A RAILWAY PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY ... ............................................... i

1. INTRODUCTION ......... ............................. ....... 1

2. BACKGROUND ............................................... 2

A. Economic Setting ..................................... 2B. Transport System ..................................... 3C. Transport Policy and Coordination .................... 5

3. THE REGIFERCAM .......................... 6

A. Organization, Management and Staff ................... 6B. Property .................................. 7C. Operations .................................. 9D. Tariffs ....................... ....................... 10E. Traffic .. 10

4. THE PROJECT .............................................. 11

A. Third Development Plan 1970/71-1975/76 .............. . 11B. Description of the Project ........................... 12C. The Proposed Loan .................................... 15D. Execution of the Project and Procurement .... ......... 15

5. ECONOMIC EVALUATION ..................................... 17

A. Rail Relaying ........................................ 17B. Japoma Bridge ........................................ 18C. Freight Oriented Investment ..... ..................... 18D. Passenger Oriented Investment ..... ................... 18E. Douala Station ....................................... 18F. Douala-Yaounde Realignment ........................... 19G. Conclusion ........................................... 19

6. FINANCIAL EVALUATION ..................................... 19

A. General ............................................... 19B. Past Financial Record ................................ 20C. Projected Financial Results ..... ..................... 22D. Transcamf!roon Extension and its Effect on Railway

Fi.nances ....................................... 25E. Financial Rate of Return ............................. 26F. Financial Implications of Proposed Future Extensions

and Major Realignment .......................... 26G. Audit . ................................................ 27

7 . RECOMMEN'DATIONS .......................................... 27

This Y:eport has been prepared by Messrs. Brechot (Engineer), Masse(Consultant Economist) and Sander (Financial Analyst) and has been editedby Miss V. Foster.

Table of Contents (Continued)

TABLES

1. Composition of Motive Power and Rolling Stock as of June 30, 19692. Summary of Operating Statistics3. Future Freight Traffic ('000 Tons)4. Future Passenger Traffic5. The Project - Analysis of Estimates6. The Project - Annual Expenditure Fatdftft aV& Sources of Finance7. Income Account 1963/64 to 1977/78, with Notes8. Source and Application of Funds9. Summary Balance Sheets as of June 30, 1964 - £96910. Projected Sources and Application of Funds11. Pro Forma Balance Sheets as of June 30, 1969 - 1978

ANNEXES

1. Historical Review of Railway Development inG Gat6won2. Composition of the Regifercam Board3. Proposed Line Realignment and Extensions

CHARTS

1. Organization2. Track Characteristics

MAP

Federal Republic of Cameroon, Transportat-ion - IB1RI 11235RET

FEDERAL REPUBLIC OF CAMEROON

APPRAISAL OF A RAILWAY PROJECT

SUMARY

i. The Government of the Federal Republic of Cameroon and the state-owned Regie des Chemins de Fer du Cameroun (Regifercam) have asked the Bankto assist in financing a railway rehabilitation and modernization projectconsisting of the works on existing lines included in the first three years(1970/71 - 1972/73) of the Third Railway Development Plan (1970/71 -1975/76). The proposed loan, amounting to US$5.2 million equivalent, wouldcover the foreign exchange element of civil engineering works, equipment andconsulting services for which finance from other sources is not available(US$4.6 million equivalent) and interest on the Bank loan during the con-struction period (US$0.6 million).

ii. Until recently the railway system of Cameroon was relatively small,the furthest penetration from the main port of Douala being to Yaounde, adistance of a little over 300 km. The northern part of the country waswithout rail service and its development has been retarded by high transportcosts. Construction of a 628-km railway extension to Ngaoundere was start-ed in 1964 and will be completed in 1974. The extension, which is beingbuilt to high standards of design and engineering and which will cost aboutUS$80 million, is being financed in the main part from outside sources (FAC,BEI, FED and USAID) either in the form of subventions or of loans on conces-sionary terms. The old lines are in urgent need of rehabilitation to enablethem to carry the substantial additional traffic which the extension isexpected to generate. It is to help finance this work that the Governmentand the Regie have applied to the Bank. While the amount of the proposedloan is small by comparison with the overall new investment in rail transportin Cameroon at the present time, it is nonetheless of vital importance to thecontinuation of the service.

iii. Those items of the project which will be financed by the proposedloan will consist of track renewals, reconstruction of a major bridge, thepurchase of freight cars and a small number of passenger cars, and consult-ing services. Beside the Bank-financed items, the project will also includethe purchase of locomotives, rail-cars and other equipment, extension oftraining facilities, first stage expenditure on the re-location of Doualastation and other works for which either (a) finance has been secured else-where or (b) final design and engineering have not been completed. Certainof the latter works may form the basis of a future application to the Bank.All Bank-financed goods will be subject to international competitive biddingexcept ballast, rail welding material and concrete sleepers and fastenings,which are excluded because of the smallness of the contract or the need tomaintain existing design standards.

iv. There are other major investments under consideration in Cameroon,including a major track realignment and two possible extensions, estimatedto cost about US$100 million. During negotiations it was agreed that the

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most advanced of these proposals, the major realignment, would not be under-taken unless the Guarantor and the Bank were satisfied that the investmentwas economically and financially sound. It was also agreed that the Borrowerwould incur no major debt obligation without the approval of the Bank, whichvirtually excludes the possibility of undertaking the extensions to thesystem without Bank approval.

v. Management of the Cameroon Railways is good and, if allowanceis made for certain out-moded equipment and excessively worn track, it canbe said that operations are reasonably efficient. Maintenance of trackand equipment is good. Both passenger and freight traffic have increasedsteadily in the past and are expected to grow even faster in the futurebecause of the extension of the system. Freight in particular is expectedto increase, in terms of originating tonnage, at 9% per annum and at 16%per annum in terms of ton-km, over the next eight years. Revenue fromfreight traffic represents about 75% of gross railway revenue.

vi. When the present shortage of working cash has been made good, thefinancial position of the Regie will be sound; cash generation from itsoperations will be adequate to meet its financial obligations and providea major part of its normal investment needs. Because the investment baseis being greatly enlarged by the cost of the Transcameroon extension, thefinancial return on the overall investment in railway facilities is notexpected to be much more than 4% per annum within the period of the pro-jections and in the particular circumstances of the Cameroon Railways thisis satisfactory.

vii. The economic case for the existing rail service in general andthe project works in particular has been clearly established. Economicreturns on the various elements of the project range from 18% to 36%.

viii. The project provides a suitable basis for a Bank loan of US$5.2million equivalent for a period of 25 years, including five years of grace.The proposed loan, which would be the first loan for railway purposes inCameroon, would be made to the Regie, with the guarantee of the Government.

FEDERAL REPUBLIC OF CAMEROON

APPRAISAL OF A RAILWAY PROJECT

1. INTRODUCTION

1.01 A Third Railway Development Plan 1970/71 - 1975/76 has been pre-pared by the Regifercam. This Plan includes completion of the Second Rail-way Plan as well as new works and equipment. The total cost of the ThirdPlan is estimated at about US$188 million equivalent. Of this amount, US$50million is for completion of the Transcameroon extension, for which financehas been secured; US$100 million is for extensions and realignment, the eco-nomic and financial justification of which has not yet been made. Duringnegotiations it was agreed that the most advanced of these latter proposals,a major realignment of the main line, would not be undertaken unless theGuarantor and the Bank were satisfied that the investment was economicallyand financially sound. It was also agreed that the Borrower would incur nomajor debt obligation without the approval of the Bank, which virtually ex-cludes the possibility of undertaking these extensions to the system withoutBank approval. The remaining US$38 million included in the Plan is for re-habilitation and expansion of existing lines facilities.

1.02 The Government of the Federal Republic of Cameroon and the State-owned Regie des Chemins de Fer du Cameroun (Regifercam) have asked the Bankto assist in financing a project comprising the first three years (1970/71 -1972/73) of the Third Plan. The total cost of the project is about US$20.6million equivalent.

1.03 The proposed loan amounting to US$5.2 million will finance theforeign exchange component of urgently needed works on existing lines forwhich finance has not otherwise been secured (US$4.6 million) and intereston the Bank loan during the construction period (US$0.6 million). The bal-ance of the project (US$16.0 million) will be financed by borrowing fromother sources (US$9.5 million), a subvention for training (US$1.1 million)and the Regie's own resources (US$5.4 million). The proposed loan, wlhichwould be the first Bank group loan to the Cameroon Railways, and the sec-ond operation in the transport sector, 1/ would be for track renewals,rolling stock, reconstruction of a bridge, and consulting services. Theproposed loan would be made to Regifercam with the guarantee of the Govern-ment.

1.04 This Appraisal Report is based on the findings of a Bank missionto Cameroon in November-December 1969, consisting of Messrs. Brechot (rail-way engineer), Masse (consultant economist) and Sander (financial analyst).

1/ The first operation in the transport sector was a Bank loan of US$12million and IDA credit of US$7 million, approved in February 1970,for the improvement of the Ngaoundere-Garoua and Tiko-Victoria roads.

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2. BACKGROUND

A. Economic Setting

(1) The Country (See Map)

2.01 The Federal Republic of Cameroon, formed in October 1961, comprisesthe part of Cameroon previously under French mandate and the southern partof the former British Cameroons. It is situated slightly north of the equa-tor on the west coast of Africa and covers an area of 475,000 km2, almost asgreat as that of France. The coastal and southern areas are suitable fortropical crops such as coffee, cocoa, palm oil, rubber and bananas. Tropicalrain forest spreads over 150,000 km2 within the southern half of the country.In the north conditions are suitable for cultivation of cotton, groundauts,rice and other cereals. Between these areas lies a sparsely populated highplateau with good grazing potential. Population (about 5.7 million) isgrowing at about 2.2% per annum; it is concentrated in the coastal southwestin which is situated the economic capital of Douala, in the north, andaround Yaounde, the administrative capital.

(ii) Economy

2.02 About three-quarters of the working population are engaged inagriculture, predominantly on a smallholder basis. There are a few largeplantations, mainly in West Cameroon. Prices for cocoa and coffee are es-tablished through a stabilization fund, operated by a governmental market-ing board. Apart from a bauxite deposit near Ngaoundere, the country hasfew known minerals and few manufacturing industries, a notable exceptionbeing an aluminum plant at Edea, which converts alumina imported fromGuinea into aluminum ingots for export and for the manufacture of roefingsheets and household goods for the local market. Development efforts hawebeen focused mainly on increasing agricultural production and special em-phasis has recently been placed on the expansion of timber logging.Buoyant prices for Cameroon's main exports on the world market have permit-ted imports in recent years to advance in quantity faster than exportswithout detriment to the balance of payment. Foreign trade accounts forabout 40% of gross domestic product (GDP) which now represents per capitaabout US$175 per annum and is growing at an annual rate of 6.5% at constantprices. Cameroon is a member of UDEAC (Union Douaniere et Economique del'Afrique Centrale), which includes also Central African Republic, Gabonand Congo (B).

2.03 Cameroon is well placed for handling foreign trade in transit forChad and the Central African Republic (CAR). In normal times Chad can alsouse the Nigerian Railway from Maiduguri to Lagos or the Benue and NigerRivers to Burutu, but at present neither of these routes has recovered fromthe effect of the recent hostilities. The CAR can use the trans-equatorialroutes to Bangui, the Oubangui and Congo Rivers to Brazzaville and the CougoOcean Railway to Pointe Noire. However, lower transport costs in Caroon,resulting from rail and road improvements and construction of the Trans-cameroon Railway, should attract additional traffic to the Transcameroon

route. The construction of a possible railway line from Yaounde to Yokadoumaas a first section of the railway connection to Bangui (CAR) has been recom-mended by consultants who are making a CAR-Cameroon Regional Transport Surveyfinanced by UNDP with the Bank as executing agency. If justified, this proj-ect would open new territories to development in Cameroon and CAR and provideanother access to the sea for CAR.

(iii) Timber

2.04 During the last 20 years, the exploitation of the Cameroon foresthas been limited to an area of 30,000 km2, either in proximity to harborsor, in the interior, adjacent to the railway line. With the expansion oftransport facilities, both rail and road, a further 50,000 km2 will beopened to operators under licenses granted in early 1970. The objective ofthe Water and Forest Ministry is to increase timber extraction from the cur-rent level of 300,000 tons per year to 1,350,000 tons in 1975, mostly forexport. The Ministry has a policy of conservation and reforestation. Atthe forecast rate of exploitation the reserves should last about 100 years.Since the most marketable species have growth periods of 40 to 70 years,there exists a 30-year safety period to increase the reforestation to alevel which would ensure the perpetuation of these species. New operatorsare being attracted to Cameroon from the Ivory Coast because of forest de-pletion in that country. Their broad experience in increasing the annualtimber exports of the Ivory Coast from 300,000 to 2,300,000 tons between1957 and 1968 should help Cameroon to reach its national objective.

B. Transport System

2.05 The transport system of the country is highly oriented towardexternal trade. It serves mainly to export agricultural products and bringin imports of consumer goods, raw materials, and capital goods for produc-tive investment. From the various transport projects planned, it appearsthat Cameroon will continue to invest heavily in its infrastructure duringthe third five-year Development Plan (1971/72 - 1975/76). 1/ For the secondPlan (1966/67 - 1970/71), public and private investment in roads, ports,railways and motor transport amounted to 33% of a total investment of 165billion CFAF (US$595 million).

(i) Railway

2.06 The railway network consists of two main lines originating atDouala: (a) the northern line to Nkongsamba (172 km) with a branch fromMbanga to Kumba (29 km) in West Cameroon; (b) the central line to Yaounde

1/ The Railway Development Plan is for the six years 1970/71 to 1975/76,beginning one year earlier than the Government Plan. This deviationfrom the normal five-year planning period has been made necessary byunforeseen increases in traffic, accelerated wear and tear of trackand the threatened failure of the Japoma bridge.

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(308 km) with a branch from Otele to Mbalmayo (37 km). A 628-km extensionfrom Yaounde northward towards Ngaoundere, known as the Transcameroon Rail-way, is under construction. It was opened to traffic to Belabo (293 km)in April 1969, and the remaining 335 km to Ngaoundere will probably be readyfor use in 1974. The system, which is publicly owned and operated by Regi-fercam, will be more fully described later in this report. Annex 1 presentsa historical review of railway development in Cameroon.

2.07 The railway carries over two-thirds of all traffic into and outof Douala port. The increase in timber traffic in recent years has beenmade possible only by the availability of cheap railway transport; futuretargets of greatly increased production from areas more distant from theport will depend even more heavily on this factor. In the past, the de-velopmental potential of the railway has been limited to a relativelysmall area, its farthest penetration of the hinterland being to Yaounde,a distance of only 308 km from the coast. The productive regions of north-ern Cameroon and southern Chad have been isolated from their natural outletto the sea by distance and high transport costs, and economic developmentof these regions has depended upon the capacity of alternative and cheaperrail and river routes through Nigeria. These alternative routes, for avariety of reasons, have always been inadequate and unreliable with theresult that the development of a large area of high potential has beenretarded. When the extension of the Cameroon Railways to Ngaoundere hasbeen completed and the roads northward from the railhead have been improved(for which purpose Bank and IDA finance has already been made available),a new and powerful incentive to development will be provided.

(ii) Roads

2.U8 The direction of the main national roads is from the coast, atDouala, to the northern part of the country. A main axis connects Doualato Nkongsamba and to Ngaoundere where it converges with a road from Yaoundeto continue toward the north up to Chad. The total length of the road net-work is about 20,700 km, 17,500 km in East Cameroon and 3,200 km in WestCameroon. Only 1,200 km are paved, about 10,000 km have gravel or lateritesurfaces with various standards and traffic densities, and 9,500 km areearth tracks with vehicle counts lower than 10 per day. The vehicle fleetnumbers about 30,000 in East Cameroon and 6,500 in West Cameroon. Thedistribution by type is about 20% trucks, 19% light delivery vans, 52Zpassenger cars and 9% motorcycles. The overall road network and its main-tenance are in need of improvement. Development forest roads are beingplanned in the southwest. A Bank loan of US$12 million and IDA Credit ofUS$7 million were approved in February 1970 for improvement of the Ngaoun-dere-Garoua and Tiko-Victoria roads.

(iii) Ports and Internal Navigation

2.09 The foreign trade of Cameroon is handled mainly through Douala port,which includes the wharf of Bonaberi on the opposite bank of the Wouri River.Of the total foreign trade of '1,500,000 tons in 1968, 87% passed throughDouala where the average rate of growth of 5% from 1956 to 1966 has jumped to

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14% during the last two years, mainly because of increased imports, partic-ularly petroleum products, cement and fertilizers. The lighterage portsof Tiko and Victoria in West Cameroon handled 105,000 tons and theirtraffic is declining gradually in favor of Douala. The port of Kribi andthe private port of Campo in the southwest handled 77,000 and 30,000 tonsrespectively. Internal navigation is limited to the Benue River which wasused for trade of the Northern Provinces through the port of Garoua andNigeria. The river is navigable only three months during the rainy season,limiting the port capacity to about 60,000 tons per year.

2.10 The upsurge of traffic passing through Douala port in the recentpast has strained the capacity of the port to its limits. The Government,with the assistance of the French/German consulting firm, OCCR/DSBI/SOGREAH,is currently preparing a program to ensure that port capacity, both atDouala and at other ports in the country, is maintained at a level commen-surate with traffic projections. A floating timber compound is being es-tablished at Douala and with the acquisition of mobile handling equipment itis expected that annual timber throughput capacity will be increased from300,000 to 400,000 tons in 1970 and to 1,000,000 tons later. To reduce con-gestion on the wharf front, a pipeline will be built to permit the offshoreunloading of tankers. For the longer term, the consultants are studying thefeasibility of developing a deep-sea port elsewhere, possibly in Victoria,in which case a 56-km rail line from Douala would have to be constructed.An additional berth in Bonaberi, destined to serve a new cement plant andindustrial zone, and the provision of timber handling equipment at Doualaare the major items of a first Cameroon port project now under appraisalin the Bank.

2.11 The proposed establishment of a container service to Douala bya major shipping firm may set a new pattern of cargo handling by inlandtransport. However, the containers will initially be emptied at the dockswhere handling equipment is presently available.

(iv) Aviation

2.12 International air service is provided by UTA (Union de TransportsAeriens) and by Air Afrique through Douala. Connecting services are pro-vided by Air Afrique and a number of small companies to Yaounde, Tiko,Ngaoundere, Garoua, Maroua, Foumbam, Kribi, Yagoua and Batouri. There are15 flights per week in each direction between Yaounde and Douala. Airfreight is limited to high value goods and perishables, and is minimal incomparison to total freight traffic.

C. Transport Policy and Coordination

2.13 At present, railway transport, ports and civil aviation are reg-ulated by the Federal Ministry of Transport and Telecommunications where-as road matters, construction, maintenance, road transport licenses andtariffs come under the jurisdiction of the Departments of Public Works at

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the Federated States level. No Federal ministry has full responsibilityfor the coordination of various transport modes, investment priorities,highway and bridge construction standards, collection of compatible andreliable transport statistics and vehicle registration.

2.14 There appears to be no legislative protection of transport modesfrom one another. The limitation of gross vehicle weight to five tons onthe road between Edea and Yaounde, for reason of low standards of construc-tion, works in favor of the railway, but with the exception of the Doualato Nkongsamba section, where road/rail competition does exist, the twomodes are generally complementary.

2.15 During negotiations of the recent highway development creditagreement, assurances were obtained that the Cameroon Government will studythe appropriate institutional modifications to ensure the coordination andthe strengthening at the federal level of all measures related to the trans-port sector. During negotiation of the proposed loan, assurances were ob-tained that the railway will introduce, not later than July 1, 1971, acosting system to determine marginal profitability by lines and commoditiesand thus provide a basis for a pricing policy appropriate to operations inthe increasingly competitive environment that is inevitable as the economydevelops.

3. THE REGIFERCAM

A. Organization, Management and Staff

3.01 Under a Presidential Decree dated August 18, 1965, the Regifercamis administered by a Board consisting of fourteen members, with the Ministerof Transport as Chairman (Annex 2). The General Manager of the Regie (para.3.03) and the auditor attend the meetings in an advisory capacity. TheBoard meets sufficiently often to transact its business in a timely mannerand refrains from unnecessary interference in day-to-day operations.

3.02 The Board has authority in all spheres of railway administration.Within the framework of the policy and programs approved by the Board, orin cases of urgency, the administration of the Regie is vested in a "Comitede Direction" of seven members also under the chairmanship of the Minister

of Transport.

3.03 The management of the Regie is the responsibility, under the au-thority of the Board and of the "Comite de Direction", of a General Manager,

assisted by a Deputy General Manager, both of whom are appointed under de-cree by the President of the Federal Republic. Seven departments reportto the General Manager. The internal organization of the Regie as detailed

in Chart 1 is adequate.

3.04 In 1969, 41 French technical assistants, including the General

Manager and his heads of departments, were employed by the Regifercam.

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Africanization is being carried out gradually and French technical assis-tants holding key posts are assisted by young Camerounese engineers or ad-ministrators who receive appropriate training in the Regifercam and abroad.The transfer of senior posts to Cameroon nationals will take place when thelatter are adequately trained and experienced.

3.05 Within the limits of the general rules of Government relating toconditions of employment and scales of pay, the General Manager has fullauthority over the railway staff whom he may appoint, assign, promote anddismiss in accordance with the approved rules and budgetary authorizations.During the year 1968/69, the total personnel establishment was about 3,100 -a reasonable number in the particular circumstances of the Cameroon Rail-ways (pars. 3.16).

3.06 In general, the organization of the Regifercam is satisfactory andits management is competent. Staff is properly trained; labor relations withthe existing labor unions are satisfactory.

B. Property

(i) Track

3.07 Prior to the opening of the first section of the Transcameroonextension, the Regifercam operated 546 route-km of railway. This was in-creased to 839 route-km when the extension was opened to Belabo in April 1969and will further increase to 1,174 route-km when the extension is completedto Ngaoundere, probably in 1974. The extension is being financed by sub-ventions from the "Fonds Europeen de Developpement" (FED), the "Fonds d'Aideet de Cooperation" (FAC) and by loans on concessionary terms from the Agencyfor International Development (USAID) and the Banque Europeenne d'Investisse-ment (BEI). (See paragraph 6.16.)

3.08 All lines are meter-gauge and single-track except for a shortsection, 3.5 km, between Douala and New Bell which is double. Terrainpresents difficulties on the northern line from Loum to Nkongsamba (120 mradius curves and 2.1% maximum grade over 54 km) and on the central mainline from Eseka to Yaounde (curves ranging from 150 to 300 m radius and1.67% maximum grade). On the central line from Douala to Yaounde (308 km)curves total 136 km; bridges (34) 1,991 meters; tunnels (4) 383 m.

3.09 Track is laid with several types and weights of rail and sleepers,largely over-aged in some sections as shown on Chart 2. As may be seen onthis Chart, about 30% of rails on the central line and the Douala-Nkongsambaline are at least 40 years old. About 40% of the track is very light railwhich limits speeds and axle loads; furthermore, these rails, many of themlaid as long ago as 1911 and 1914, show considerable wear.

3.10 The track, which, for the most part, is welded, is well maintainedby the efficiently planned use of modern mechanical equipment. To minimizewear in sharp curves, rails in curves are regularly lubricated every 10

days. In spite of all efforts, however, the excessive wear of rails andthe difficult profile of the line give rise to an average of 40 derailmentseach year costing the Regifercam some CFAF 24 million (US$86,000) in trackmaterial and rolling stock and claims paid to shippers.

3.11 The signalling system has been improved to ensure safe operationof trains and shunting in stations. To increase safety in the two maintowns of Douala and Yaounde, 10 level crossings have been provided withautomatic gates. Crossings in the suburbs and the industrial area ofDouala are being similarly equipped..

(ii) Motive Power and Rolling Stock

3.12 The Regifercam's motive power and rolling stock as of June 30, 1969are shown in Table 1, which also gives the age of equipment. The locowtivefleet, which is well maintained, is fully dieselized and 14 years old on theaverage. Unfortunately, 23 of the main-line locomotives are underpowered andare not equipped with controls to enable them to be used as multiple unitswith one engine-crew. In 1969, Regifercam received three 1,100 hp diesel lo-comotives financed by the CCCE and six others are to be delivered in 1970.At present the most powerful locomotives are 2,200 hp, but six more powerfullocomotives of 3,600 hp for timber traffic have been ordered. The matter ofthe best types of locomotives to meet future requirements was discussed dur-ing negotiations. It was agreed that the Regifercam, in selecting the loco-motive types, would take into consideration such operational factors asflexible power availability, frequency of service and nature of traffic.

3.13 Rolling stock is relatively modern and well maintained. Most pas-senger traffic is carried by railcars and trailers which provide adequateservice. Railcars are only four years old and about half of the passengercar fleet is less than 10 years old, the remainder being less than 20 yearsold. More than half of the total fleet of freight cars is less than 10years old and 30% is between 10 to 20 years old. Nearly all cars are bogievehicles of an average capacity of 30 tons.

(iii) Other Properties

3.14 There are 63 stations on the central line between Douala and Ya-ounde; most of these stations were rebuilt between 1930 and 1950 and arewell maintained. The Douala station installation will in the near futurebecome insufficient to cope with the growth of passenger and freight traf-fic; however, the location of the station, in the midst of a densely pop-ulated area, does not allow for extensions, and a new station will bebuilt in a new location before saturation of the old station is complete.Because of the construction of the Transcameroon extension, Yaounde stationhas been rebuilt at the terminus of the new line and connected to the ter-minus of the old line by a tunnel under part of the city.

3.15 The Regifercam has a workshop in Bassa, with a staff of about 800,where all motive power and rolling stock are repaired. Running maintenance

is also carried out in Bassa in separate sheds. Equipment is adequate andperformance is satisfactory. The Bassa workshops also include limited plantcapacity for construction of freight cars, a sleeper impregnation plant, afoundry and a rail welding plant.

C. Operations

3.16 Table 2 presents a summary of railway operating statistics forthe Regifercam over the last seven years. While operations generally havebeen improving during the past few years, most of the indices are still onthe low side; this is mainly due to the difficult profile of the lines andthe poor condition of the track, which restrict speed and load and giverise to frequent train derailments (para. 3.10). Punctuality of trains islow and has been decreasing on the central line for the last five years (in1969, 41 minutes average delay for passenger trains, 159 minutes for freighttrains). Staff productivity, at 117,000 traffic units per employee, is low.The number of existing staff is adequate for operation and maintenance ofthe old system, but short hauls, excessive terminal movements, underpoweredlocomotives and light trains militate against high manpower productivity.When heavier locomotives are introduced to haul long-distance heavy freighttrains between Ngaoundere and Douala, the productivity per man will increasesubstantially, as indicated below. Utilization of diesel locomotives andfreight cars could also be improved; for example, turn-around time of freightcars has deteriorated from 6.3 days in 1962/63 to 8.2 in 1968/69; this is dueto inadequate handling installations at Douala port and to the fact that manyfreight trains pick up and set down their loads (timber and other agricultur-al commodities) at wayside stations all along the line, a slow and time-con-suming process. The same factors which depress staff productivity affectalso the utilization of equipment but, with the construction of the Trans-cameroon extension and the development of long-haul through traffic, theutilization of power and rolling stock should markedly improve. A fewcritical yardsticks of present and potential operating efficiency are shownbelow, based on a conservative estimate of what may reasonably be achieved.

1968/69 1976/77Freight traffic only

Locomotive-km per day perlocomotive in stock 181 252

Wagon-km per day per wagonin stock 46 85

Net ton-km per day perlocomotive in stock 26,300 70,500

Net ton-km per day perwagon in stock 614 1,316

Average train-load (tons) 203 266

Staff productivity

Traffic units per annumper man employed 117,000 221,000

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D. Tariffs

3.17 Rates and fares must be approved by the Minister of Transport.Freight rates, which are set with regard to loading characteristics, valueof commodity and competitiveness of other modes, are high. Average revenueper ton-km is CFAF 8.1 (equivalent to USC4.25 per US ton-mile). Such ratesare necessary to cover the disproportionate cost of terminal operations ona railway whose size restricts the average haul to only 200 km. The basicrate is calculated on a km basis up to 308 km which is the distance betweenYaounde and Douala; a taper is applied beyond this distance to encouragethe use of the Belabo extension. The average revenue per ton-km will de-crease sharply as traffic over the extension develops (para. 6.07). Forpassengers, there are general fares corresponding to first and second-classtravelling; several reduced fares are in force for commuter traffic, andfor social and other reasons in specific areas. By African standards, pas-senger fares are also high. Average revenue per pass-km is CFAF 3.03(equivalent to UScl.75 per passenger mile).

E. Traffic

3.18 Over the period 1962/63 - 1968/69 freight traffic has increasedfrom 143 to 205 million ton-km or at the average rate of about 6-1/2% per

annum (Table 2) somewhat faster than the average growth in GDP (5%). Sinceopening of the extension to Belabo in 1969, traffic has increased dramatic-ally to an estimated 257 million ton-km in 1969/70 or by 25% in a single year

due to the greater length of haul now being obtained. Passenger traffic(Table 2) over the period 1962/63 - 1968/69 increased from 116 million to157 million pass-km or at the average annual rate of slightly over 5%. In1969/70 with the Yaounde-Belabo section open, total pass-km will reach183 million, an increase of 16% over the previous year.

3.19 Traffic prospects for the Regifercam in the next several years arevery good. Freight traffic is expected to increase from 982,000 tons in1968/69 to 2,030,000 tons in 1976/77, or at the average rate of over 9% perannum. Table 3 shows that the major increase will occur in timber trafficrepresenting 708,000 tons of a total system increase of 1,048,000 tons forthe period 1968/69 to 1976/77. The rates of growth in other commoditiesvary somewhat, but are generally slightly in excess of the growth of GDP.In view of the opening of the new line to Belabo and the expected completionof the section Belabo-Ngaoundere, leading to increased local and transittraffic, this projection of tonnage increases appears reasonable. The esti-mates of timber traffic are in line with the objectives of the Ministry ofForest and Water Resources and with projections made by the logging compa-nies, which intend to maintain supply of their existing markets as produc-tion falls off in the Ivory Coast. The overall traffic is consistent with

import-export projections made by consultants currently working for the PortAuthority. Notes to Table 3 provide details concerning the basis for theforecasts made for these commodities. The increase in terms of ton-km willbe very large since the new sources of production involve very long hauls.

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Ton-km are expected to increase from 257 million in 1969/70 to about 795million by 1976/77, a threefold increase due to a more than doubling ofthe network length and a near doubling of the average length of haul toapproximately 400 km.

3.20 Pass-km are expected almost to double, from 157 million in 1968/69to 306 million in 1976/77, on the basis of a conservatively estimated growthrate on existing lines combined with newly generated and longer-haul trafficon the extension. Pass-km per route-km will probably fall during the period(Table 4).

4. THE PROJECT

A. Third Development Plan 1970/71-1975/76

4.01 The project is defined as the equipment and works on existing linesincluded in the first three years of the Third Railway Development Plan1970/71-1975/76. The proposed loan would finance the foreign exchange costsof the project for which finance from other sources has not already been se-cured. The Third Railway Development Plan 1970/71-1975/76 is summarized be-low:

US$CFAF equivalentmillion million

(a) Equipment and existing lines works

(i) MHotive power and rolling stock 5,570 20.0(ii) Japoma bridge reconstruction 322 1.2(iii) Track relaying 470 1.7(iv) Construction of the new Douala Station 940 3.4(v) Miscellaneous additions and renewals 2,617 9.4(vi) Training school extension 320 1.1

Sub-Total 10,239 36.8

(b) Consulting services 15 0.1

36.9

(c) Line extensions and realignment

(i) Completion of the Transcameroon extension 13,952 50.2(ii) Construction of the first section of the

Yaounde-Yokadouma proposed line 17,000 61.2(iii) Construction of the D,ouala-Victoria

proposed line 2,300 8.3(iv) Douala-Yaounde realignment 8,800 31.7

Total, extensions & realignment 42,052 151.4

Grand Total 52.306 188.3

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4.02 Apart from the completion of the Transcameroon extension, for whichfinances have been fully secured, the three proposals of line extensions andrealignment may be premature. The Douala-Yaounde realignment is not yet sup-ported by adequate economic justification, and cost estimates have not so farbeen worked out with acceptable accuracy. Engineering studies are under wayto determine cost estimates, and an appropriate economic study is included inthe proposed project. If the justification is sound and the work goes ahead,nearly all the required finance will need to be found by borrowing. The con-struction of the Yaounde-Yokadouma line has been recommended by consultants(CAR - Cameroon Regional Transport Survey) in their draft final report. Thisreport is now under study by the Bank in its capacity as Executing Agencyfor the UNDP which financed the study. The construction of this extension,if justified, would also need to be financed entirely by borrowing and inview of the prior and extensive claims on available sources of finance itseems probable, as the consultants themselves point out, that the work maynecessarily have to be postponed. No decision on the construction of theDouala-Victoria line is possible until the results of the Cameroon PortStudy become available in late 1971 (para. 2.10). During negotiations itwas agreed that the most advanced of these proposals, the major realignment,would not be undertaken unless the Guarantor and the Bank were satisfiedthat the investment was economically and financially sound. It was alsoagreed that the Borrower would incur no major debt obligation without theapproval of the Bank, which virtually excludes the possibility of undertakingthese extensions to the system without Bank approval. Annex 3 gives somedetails regarding the three proposals of line extensions and realignment.None of these works has been taken into account in the financial projectionson which this report is based.

B. Description of the Project

4.03 The project comprises the equipment and works on existing lines in-cluded in the first three years of the Third Plan. It amounts to CFAF S,718million (US$20.6 million equivalent) with a foreign exchange component ofCFAF 4,565 million (US$16.4 million equivalent), or 80% of the total proposedcost. Details of the project are given in Tables 5 and 6 and are summarizedbelow:

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(CFAF million) (US$ 000) % ofLocal Foreign Total Local Foreign Total Total

(a) Equipment andexisting lines works

(i) Motive power androlling stock 87 2,806 2,893 313 10,102 10,415 50.6

(ii) Japoma bridge re-construction 66 191 257 238 688 926 4.5

(iii) Track relaying 75 352 427 270 1,267 1,537 7.5

(iv) Reconstruction,Douala Station 100 160 260 360 576 936 4.5

(v) Miscellaneous worksand equipment 477 834 1,311 1,717 3,002 4,719 22.9

(vi) Training schoolextension 320 - 320 1,152 - 1,152 5.6

(vii) Contingencies 27 208 235 97 750 847 4.1

(b) Consulting services -economic study ofrealignrment 1 14 15 4 50 54 0.3

Total Project: 1,153 4,565 5,718 4,151 16,435 20,586 100.0

4.04 The following statement, which shows how the project will be fi-nanced, includes, in addition to the cost of the works (US$20.6 million),interest during construction (US$0.6 million) included in the proposed Bankloan, making a total of US$21.2 million.

US$ million % of Total

(a) External resources

(i) Undisbursed balance of existing loans 4.6 21.6CCCE 2.7 12.5KfW .7 3.2BEI 1.2 5.9

(ii) Loans being negotiated 8.8 41.5CCCE 2.5 11.9French suppliers 1.1 5.1Proposed IBRD loan 5.2 24.5

(iii) Loans to be negotiated 1.3 6.1

(iv) Training subvention (FAC) 1.1 5.4

Total, external sources 15.8 74.6

(b) Railway resources 5.4 25.4

Total project (including interestduring construction) 21.2 100.0

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4.05 Motive power and rolling stock include six 4B type locomotives,3,600 hp, 90 box cars, 95 flat cars for the transport of timber, six trail-ers, one railcar, four shunting engines and various service and track main-tenance vehicles including one ballast tamping machine. This equipment isnecessary to meet traffic requirements and to replace old and inefficientstock.

4.06 The Japoma single track steel bridge over the Dibamba River islocated 18 km from Douala on the main central line Douala-Yaounde and istherefore of vital importance to the Regifercam traffic. The stabilityof this bridge, 320 m long (two steel spans 70 m long and three steelspans 60 m long), is imperiled by the sinking and tilting of pier No. 1on which rest the extremities of the two 70 m spans. Damage to thefoundations of pier No. 2 has also been noted. The possibility of re-construction of the bridge at the same site has been investigated andfound impracticable; it has therefore been decided to build a new bridge250 meters upstream from the present bridge and preliminary engineeringstudies have been made. The new bridge will consist of five steel spans,each 35 m long; a realignment of the track leading to the bridge will benecessary over 2 km.

4.07 About 143 km of the main-line, Douala to Yaounde, are still laidin rail of 26 kg/m and 27.8 kg/m, between 44 and 56 years old and now indangerous condition on the curves, while still in relatively good condi-tion on the straight sections. Pending a decision regarding the proposedDouala-Yaounde realignment, the Regifercam, faced with the urgent need torestore the existing line to safe condition, has decided, as a minimumoperation, to relay 52.5 km and to use the good rails thereby released forthe rehabilitation of the worst worn curves on the remaining 90.5 km. Nomaintenance stocks are available as the existing types of rails andsleepers are not now manufactured. The new track will be equipped with36 kg/m long-welded rails, of manganese steel on the sharp curves, con-crete sleepers with a density of 1,800 per km and proper ballasting. Re-placement of the remaining 90.5 km will be unavoidable within five yearswhether or not the realignment is decided upon.

4.08 The Douala passenger and freight station has reached its fullcapacity and cannot be expanded as it is situated in a densely populatednarrow valley. Furthermore the shunting yard is frequently flooded, creatingoperating difficulties which will become unacceptable when traffic increases.A new location has been selected and land acquisition almost completed.

4.09 In view of the increasing length of the network from 532 km in1969 to 1,146 km in 1974 and the development of traffic which will resultfrom line extension, the Regifercam must train an increased number of staffrequired for track and rolling stock maintenance and operations. The pres-ent training school can accommodate only 100 trainees during a three-yeartraining cycle, which will be insufficient to meet requirements. The con-struction of additional administrative buildings, class rooms, dormitories,etc., and the procurement of tools and machine tools are proposed. Whencompleted, the training school will be capable of receiving about 240trainees.

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C. The Proposed Loan

4.10 The proposed loan will finance the foreign exchange component ofworks on existing lines for which finance has not otherwise been secured andwhich are most urgently needed to rehabilitate the railway and enable it tohandle the expected increase in traffic. In addition, the proposed loan in-cludes US$612,000 for interest and other financial charges due on the loanduring the construction period. Tables 5 and 6 show the items to be fi-nanced under the proposed loan for an amount of US$4.6 million, to whichshould be added interest during construction, making a total of US$5.2 mil-lion.

4.11 The items to be financed under the proposed loan are summarizedbelow:

(CFAF million) (US$ 000) % of Total

1. Track relaying 352 1,267 24.42. Rolling stock 604 2,175 41.83. Japoma bridge reconstruction 191 688 13.24. Consulting services 14 50 1.05. Contingencies 113 408 7.8

1,274 4,588 88.26. Interest during construction 170 612 11.8

Total 1,444 5,200 100.0

4.12 Track relaying is discussed in paragraph 4.07. Rolling stock in-cludes 185 freight cars and six trailers. One of the larger shipping com-panies serving Douala has decided to introduce a container service in thenear future. The matter was discussed during negotiations because of itsbearing on the types of wagon to be acquired. Regifercam agreed that newflat cars will be designed to allow for the transport of standard sizecontainers. Bridge reconstruction is discussed in paragraph 4.06.

4.13 The provision for consulting services in the proposed loan is forthe cost of the economic study of the realignment of the central line betweenDouala and Yaounde (para. 4.02). During negotiations agreement was reachedon the terms of reference for the study.

D. Execution of the Project and Procurement

4.14 The Regifercam is competent to carry out the project. Track willbe relaid by the railways' own forces. The Regifercam, with the help ofOCFT, is technically qualified and sufficiently equipped in personnel tocarry out the engineering study, prepare bidding documents and supervisethe construction by a contractor of the new Japoma bridge.

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4.15 Cost estimates of the foreign exchange elements of the project arebased on the most recent quotations obtained under international competitivebidding for similar items financed by the Bank. Engineering contingenciesof about 5% have been provided for track renewal and 20% for the Japomabridge construction. Preliminary investigation has shown that the subsoilat the site of the new bridge offers the same poor resistance as that atthe site of the existing bridge; for this reason, and to meet with possibledifficulties in construction of the piers, a high contingency has beenprovided. Price escalation contingencies of 5X have been provided for allprocurement under the loan.

4.16 All project items to be financed by the loan will be procuredthrough international competitive bidding in accordance with the proceduresof the Bank, except:

(a) Ballast. Quantities are too small to attract internationalbids. In any case ballast will most likely be provided bythe Transcameroon contractor, who was selected after world-wide competition. Only the foreign exchange component of thecost of ballast (US$60,000) will be financed by the proposedloan.

(b) Rail welding material, to be used on existing equipmentand which will be supplied by the usual supplier (foreignexchange of US$70,000).

(c) Concrete sleepers and fastenings, which for maintenancepurposes must be of the type adopted by the Regifercamand already in use in many sections, will be suppliedby SCBM (Societe Camerounaise de Beton Manufacture), alocal company holding the concrete sleeper patent, atprices lower than imports. It is proposed that theBank finance 75% of the cost (US$450,000) representingthe foreign exchange component.

Total exceptions to international competitive bidding amount to about US$0.6million or 11% of the total loan amount.

4.17 Project items to be imported through international competitivebidding, totalling US$4 million or 76% of the total loan amount, are:

(a) Track: about 4,500 tons of rail and fastenings.

(b) Bridge: steelwork.

(c) Rolling stock: about 190 freight cars, 6 trailers, andspares.

The remaining 13% of the proposed loan will be used to pay for consultingservices and interest during construction.

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4.18 Disbursements from the loan account will be made on the basis ofactual approved foreign exchange expenditures for the purchase of rails andfastenings, welding material and rolling stock and for consulting services.In the case of concrete sleepers, ballast and bridge construction, disburse-ments will be limited to the foreign exchange component, estimated at 75% ofthe cost in each case.

4.19 Opening and analysis of bids will be performed by a Railway AwardBoard nominated by the General Manager of the Regifercam and consisting ofheads of all Departments. The procedure is satisfactory, and no undue delayis experienced.

4.20 The project is expected to start by mid-1970 and its completionis forecast for the end of 1973. Any savings from the loan should be can-celled. Disbursements from the loan account are scheduled as follows:

US$ million

1970/71 1.46

1971/72 2.17

1972/73 1.57

Total: 5.20

5. ECONOMIC EVALUATION

A. Rail Relaying

5.01 The relaying with 36 kg material of sections of the central linenow equipped with 26 kg and 27.8 kg track laid in 1914 and 1926 is imperativeand overdue. The capacity of the line would otherwise rapidly be reduced tozero because of the extremely worn condition of the existing rails. There isno question, as demonstrated in paragraph 5.04, regarding the economic roleof the railway in Cameroon compared to alternative modes. At best the dis-continuation of rail service would result in the diversion of the rail traf-fic to road transport at enormous cost to the national economy. At worst, itcould mean that a large part of the economic activity represented by presentand forecast rail traffic would be sacrificed. The economic benefits fromavoiding such drastic consequences would be enormous and could appear to jus-tify the most lavish investment solutions. The loss to the Cameroon economyfrom cessation of rail service in this critical section would in a singleyear exceed the proposed investment cost. The real economic question, there-fore, is not whether to replace the worn rails and thereby maintain rail ser-vice, but when and to what extent this rail replacement should be made. Thishas been the focus for the economic analysis.

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5.02 Altlhough there are 143 km of old, worn rail, only 52.5 km will berelaid at this time in view of the possibility of a major realignment of thecentral line planned toward the end of the Third Plan 1971/76. In the mean-time, the Regifercam will perform patch-up maintenance on the remaining sec-tion with the second-hand material recovered from the relaid section andhaving a residual life of about five years for maintenance purposes. At theend of this period, the remaining 90.5 km must be relaid. A detailed analy-sis made by the Bank shows that given an opportunity cost of capital of 10%,the timing and phasing of the investment as proposed is the least cost so-lution and economically sound.

B. Japoma BridRe

5.03 Reliable engineering studies have shown that there is continuoussinking and tilting of one pier. Although consolidation work was done in1948, technical experts are of the opinion that further work on the pierwould incur a high risk of accelerating the sinking process. The same eco-nomic considerations apply as in the case of track relaying; without thebridge there would be no rail service. As the economic justification ofthe railway is undoubted, the only question regarding the bridge replacementis that of timing. The expert opinion of the engineers is that the bridgemay become unsafe for use under traffic at any time. The consequences interms of economic losses would be so large that the investment in a newbridge must be considered as economically justified at this time.

C. Freight Oriented Investment

5.04 It would be more costly to the Cameroon economy to move by roadrather than by rail a volume of traffic equivalent to the capacity of therolling stock and motive power to be acquired during the project peried.The return on the investment in freight equipment and the related open-lineworks and maintenance eouipment has been estimated to be 36% by comparingthe railway incremental cost to the corresponding road transport cost. Ad-ditional benefits not taken into account are incremental road investmentand maintenance costs which might well be incurred if heavy timber trucksbegan operating on the road between Douala and Yaounde.

D. Passenger Oriented Investment

5.05 The investment in rail cars and trailers for the passenger ser-vices will yield a 22% return on investment when compared to the cost ofthe alternative of operating bus transportation. This return takes intoaccount a minimum amount of increased roadway maintenance which would benecessary if this traffic were transferred to the road between Douala andYaounde.

E. Douala Station

5.06 Due to the inability of Douala yard to absorb the projected in-crease in traffic and the physical impossibility of expanding the yard onits present site, the Regifercam is proposing to reconstruct it at another

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location. Although the data available do not permit an exact economicevaluation, it was estimated that a 15% return on investment would be ob-tained if the saturation of the present yard resulted in the transfer ofonly 3,300 tons of timber or 2,100 tons of general traffic to the road - anegligible tonnage compared with the expected growth of traffic.

F. Douala-Yaounde Realignment

5.07 An engineering feasibility study is currently being made. As theinvestment is likely to be very large, it is necessary that a thorough eco-nomic evaluation should be made, and a sum of US$50,000 has been included inthe loan for this purpose. The terms of reference have been agreed betweenthe Regifercam, the Government and the Bank.

G. Conclusion

5.08 The economic evaluation shows that the project, and specificallythe items subject to Bank financing, is economically justified. The sensi-tivity of the economic results to variations in future traffic from thatforecast has been tested. The rail relay and Japoma bridge investmentsare essentially replacements and are fully justified without any trafficgrowth at all. The freight and passenger rolling stock investments whichincrease system capacity would earn an estimated 32% and 18%, respectively,if future traffic grows at only half the rate forecast in this report.This low sensitivity is caused by the fact that these rolling stock acquisi-tions with 20-year economic lives will be fully utilized with an increase inton-km of 118 million and pass-km of 29 million respectively, or withinthree years even if traffic grows at only half the forecast rate.

6. FINANCIAL EVALUATION

A. General

6.01 The Regifercam has financial autonomy, with powers to amend tariffs,to raise loans and borrow by bank overdraft, approve budgets and incur expen-diture on revenue and capital account. As a corollary of its wide power, theRegie has the responsibility of maintaining financial viability, primarily byeffecting economies, and only thereafter by increasing tariffs. If Governmentshould require the Regie to reduce any rate or fare, or should oppose any in-crease thereof (after satisfying itself that all possible economies have beeneffected), the Regie is to be compensated by the Government for the loss aris-ing from Government's decision. Within the period reviewed in this report,the latter provision has not been invoked.

6.02 Railway rates and fares in the Cameroon are higher than the generalaverage of other African railways. Costs are also higher because of the com-paratively short-haul nature of the traffic (much of it requiring shunting atwayside stations), the higher maintenance cost of over-aged track and thelarge proportion of light-powered units (400/600 hp) which are not equipped

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with controls to enable them to be run as multiple units with one engine-crew.

Nevertheless, costs and prices are well below those of competing road trans-

port, even when the latter is operating on good roads. When the Transcameroonextension is completed, the average length of haul by rail is expected to in-

crease from the present 206 km to over 400 km. This alone will result in asubstantial reduction in cost per ton-km because of the spread of terminalcosts over a much longer journey. By 1976/77 most of the present small loco-

motives will have been replaced by modern power, track will,have been relaid

in heavier material and perhaps realigned, thus leading to further savingsin operating and maintenance costs. It is forecast that costs per ton-kmwill then have been reduced by 30% and the average revenue per ton-km by 25%,both at current prices. In real terms the savings will be even greater and

should place the Cameroon Railways in a strong competitive position vis-a-vis

road transport and the alternative rail/river routes through Nigeria.

B. Past Financial Record

6.03 Table 7 shows the income account of the Regie for the past six

years. Revenue from freight traffic has increased at an average rate of

4-3/4% per annum - a slightly slower rate than the increase in net ton-kmbecause of the disproportionate rise in lower rated traffic, particularly

timber. No increases in rates have been levied. Passenger revenues haverisen faster, at about 9% per annum - a combination of 6-1/2% annualgrowth in pass-km and an overall 10% increase in fares. These figures are

indicative of healthy traffic growth. A temporary hesitation in the up-

ward trend of freight receipts was experienced in 1968/69 and this unfortu-

nately coincided with a higher-than-normal rise in operating costs resulting

from a wages award of 4%, increased prices and consumption of materials and

the engagement of extra staff in anticipation of the opening of the Yaounde-

Belabo section of the Transcameroon extension. During the six-year period

to 1968/69 the operating ratio averaged 84% and the return on the net valueof the fixed assets about 5%.

6.04 Specifically, revenues and expenses have evolved as follows:

NetOperating Operating operating Interest Netrevenue expenses revenue charges income

(CFAF Million)

1963/64 1,674 1,447 227 - 227

1964/65 1,891 1,496 395 20 375

1965/66 1,946 1,639 307 27 280

1966/67 2,056 1,718 338 28 310

1967/68 2,193 1,755 438 22 416

1968/69 2,313 2,104 209 29 180

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6.05 The cash flow for the period 1963/64 to 1968/69, as shown in Table8, may be summarized as follows:

CFAF % of fundsSource of funds: million applied

Cash generation from operations 3,465 36.6Less: Debt service 622 0.8

Cash generation net of debt service 2,843 35.8

Cash balances drawn down 677 8.5

Development grants 2,244 28.2

Long-term borrowing 2,134 26.9

Total funds available 7,898 99.4

CFAF % of fundsApplication of funds million applied

Working capital 71 0.9

Investment:

Existing lines 4,039 50.8

Transcameroon extension 2,835 35.7

Mbanga-Kumba extension 1,002 12.6

Total funds applied 7,947 100.0

Cash deficit at end of period, met by bank over-draft 49 0.6

6.06 The cash flow shows a vigorous cash generation from the operationof a relatively small enterprise - sufficient to meet debt service and work-ing capital requirements and provide a substantial contribution to develop-ment. During the past six years, however, the burden of debt service wascomparatively small. As will be seen from the balance sheet (Table 9), theonly long-term debt outstanding at the beginning of the period was one dueto CCCE for CFAF 743 million for locomotives. The debt/equity ratio was afavorable 12/88. During the ensuing six years the amount of outstandingdebt increased to CFAF 2,301 million, mainly because of borrowing for theTranscameroon extension, with the result that at the end of June 1969 thedebt/equity ratio had increased to 23/77. In the same period the net valueof the fixed assets increased from CFAF 5,767 million to 9,935 million.The financial structure of the Regie will change even more radically withinthe next five years, as will be shown in the following paragraphs.

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C. Projected Financial Results

6.07 Table 7 gives a projection of the Regie's income account for theperiod 1970/71 to 1977/78. The assumptions underlying the projection are

detailed in the notes appended. In the light of past experience an estimatehas been made of possible increases in wages and prices of material and for

increases in costs resulting from the opening of the Transcameroon extensionand the substantial increase in traffic over the old lines. On the revenue

side no increase in freight rates is assumed; a 10% increase in passengerfares is proposed in 1973/74 to offset rising costs. Freight net ton-kmare expected to increase at the high rate of 16% per annum, mainly becauseof the trebling of the length of haul to and from the north via Yaounde.Average revenue per ton-km will decrease as the average length of haul in-

creases, because of the effect of the taper in the rate scales; an increas-ing proportion of low-rated timber traffic will accelerate the same tenden-cy. The average revenue per ton-km in 1968/69 was CFAF 8.1; in 1976/77 it

is expected to be CFAF 5.9.

6.08 The projected operating results may be summarized as follows:

Operating Operating Net operating Interest Netreceipts expenses receipts charges receipts

(CFAF million)

1969/70 2,711 2,353 358 98 260

1970/71 3,041 2,641 400 145 255

1971/72 3,423 2,895 528 215 313

1972/73 3,854 3,139 715 272 443

1973/74 4,275 3,399 876 417 459

1974/75 4,775 3,709 1,066 456 610

1975/76 5,489 4,197 1,292 483 809

1976/77 5,838 4,534 1,304 540 764

1977/78 6,120 4,730 1,390 526 864

6.09 Critical yardsticks of earning power are expected to fluctuateduring the forthcoming years as follows:

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Operating Times interest Debt service Return on netratio earned coverage fixed assets

1969/70 86.8 3.7 4.7 4.4

1970/71 86.8 2.8 3.2 3.8

1971/72 84.6 2.5 2.9 3.8

1972/73 81.4 2.6 2.9 4.2

1973/74 79.5 2.1 2.4 4.7

1974/75 77.7 2.3 2.2 4.1

1975/76 76.5 2.7 2.0 3.8

1976/77 77.7 2.4 1.7 3.8

1977/78 77.3 2.7 1.8 4.0

Annualaverages 80.4 2.5 2.2 3.9

6.10 A relatively low return on net fixed assets will be earned becausethe investment base will be increased by about 130% when the final sectionof the Transcameroon extension is opened for traffic and its cost is incor-porated in the books of account. The effect of the extension on the generalfinancial situation of the Regie will be discussed later in this report.

6.11 The forecast cash flow, as shown in Table 10, is satisfactory.The projection includes, inter alia, all investment needed to maintain ex-isting lines assets in good condition and to increase their capacity tohandle the expected traffic growth. It also includes expenditure necessaryto complete the Transcameroon extension but excludes any investment in majorrealignment of the existing main-line or any other extensions thereof.

6.12 In summary, the cash flow to the end of the project period, i.e.,from 1969/70 to 1972/73, is expected to be as follows:

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CPAF % of fundsmillion applied

Source of Funds:

Cash generation from operations 3,579 15.1Less: Debt service 1,115 4.7

Cash generation net of debt service 2,464 10.4

Development grants:

For existing lines works 320 1.3For Transcameroon extension 10,854 45.8

Long-term borrowing:

For existing lines works -4,072 17.2For Transcameroon extension 6,544 27.6

Total funds applied 243254 102.3

Application of Funds:

Working capital 170 0.7Investment:

Existing lines works 5-,888 24.8Transcameroon extension 17,663 74.5

Total funds available 123 721 100.0

Cash surplus for the period 533 2.3

6.13 The balance sheets of the Regie are forecast in Table 11. Thefollowing condensed summary of the balance sheets at the beginning and endof the period under review indicates the manner in which the financial con-dition of the Regie is expected to change in the near future.

Balance Sheet as of June 30:

1969 1978(CFAF million)

Fixed assets, net value 9,935 35,952

Net working capital and trade investment 245 1.39010,180 37,342

Debt 2,301 14,585

Equity equivalent 7,879 22 J 5)

10,180 37,342

- 25 -

6.14 Of the total increase of CFAF 26 billion (US$94 million) in thenet value of the fixed assets, about CFAF 16.7 billion (64%) is with respectto the construction of the Transcameroon extension and CFAF 9.3 billion (36%)with respect to purchases of locomotives and rolling stock, and existing linesworks such as track relaying in heavier material, bridge reconstruction, anew station at Douala and other works needed to handle the expected trafficgrowth. The increase in long-term debt is attributable almost equally toborrowing for the Transcameroon extension and to borrowing for other works.A large proportion of the funds required to finance the extension have beenor will be provided by development grants from FED and FAC; such grantsare classified in the balance sheets as "equity equivalent". The debt/equityratio, which was 23/77 at June 30, 1969, is expected to increase to 41/59in 1976 and to decline thereafter, reaching 39/61 in 1978, the end of thereview period.

D. Transcameroon Extension and its Effect on Railway Finances

6.15 The development of northern Cameroon and southern Chad dependsalmost entirely on the availability of cheap transport over the long distanceswhich separate the territories from the sea. In the past, the only routeavailable to Chad at a cost which was not prohibitive was via Maidugari andthe Nigerian Railway. The Benue River provided an occasional outlet fornorthern Cameroon. Inefficient railway operation and civil war in Nigeriahave reduced the capacity of the rail route and completely closed the riverand have forced Chad to rely heavily on air transport for its more urgentneeds. The alternative road transport route to Yaounde is too costly toencourage its use except in emergency or for high value goods.

6.16 With a combination of grants and loans on concessionary terms fromFED, FAC, BEI and USAID, the Government of Cameroon decided to construct theTranscameroon extension. The extension is being built to high standardswith the intention of securing all the benefits which modern railway operat-ing practices and technology can provide. While the construction cost ishigh (US$80 million equivalent), operating costs will be low. At the levelof traffic forecast for 1977/78, full costs should be no more than one-halfof comparable road costs, while incremental cost should be not more thanone-quarter of the equivalent road cost.

6.17 The railway will charge rates much below road rates in order toencourage development and thereby increase traffic over both the old linesand the extension. Rates of CFAF 3.83 per ton-km for timber and CFAF 6.1per ton-km for general merchandise are proposed; the latter might well bereduced at a later date as it is considerably above long-run variable cost.At these rates the financial rate of return on the capital invested in theextension will be no more than 1.5% in 1977/78 but even so, because of theconcessionary terms of financing, cash generation will be ample to meetdebt service and make a substantial contribution to future investment re-quirements.

- 26 -

E. Financial Rate of Return

6.18 One normal test of a railway's viability is that it should beable to generate sufficient cash from operations to provide full debt ser-vice coverage and make a satisfactory contribution toward a capital de-velopment program properly related to the traffic forecast. In the case ofthe Regifercam the cash flow projection shows that, unless it undertakesnew extensions or other extraordinary investments, the railway should be

able to do both of these things; in fact it should be able to service itsdebt and contribute towards its normal investment needs sufficient fundsto reduce the need for new borrowing to only 30% of the investment. Asof 1975/76 the railway's outstanding debt is expected to decrease.

6.19 Cash generation on this scale, when converted to net operatingincome by deduction of adequate provision for depreciation of fixed assets,and when related to the net value of the fixed assets in service, requiresthat the Regifercam should maintain a rate of return of 4% on the net valueof its fixed assets in service, including those of the Transcameroon ex-tension. In the particular circumstances of the Cameroon Railways, thisis considered to be a satisfactory rate of return. The financial projec-tions incorporate realistic forecasts of the improvements in efficiencyand cost reductions which can be expected. Rates on the established partof the system are already very high, and the average length of haul is only200 km. To raise rates on this traffic would run the clear danger of en-

coura,ing uneconomic development of road transport - i.e., the transportof traffic by truck at a cost to the economy much higher than the relevant

incremental costs of continuing to carry the traffic by rail. Rates on

the extension to Belabo and the proposed rates for traffic on the exten-sion to Ngaoundere, in the absence of precise information on the size ofpotential demand and its elasticity, are set as low as possible, consistentwith covering financial requirements, in order to generate maximum traffic.To raise rates on these sections would run the danger of dampening the

generation of production on which the long run economic rationale for

building the extension rests. In any case, for large penetration invest-

ments such as these, one could not expect high profitability for many years.At some future date, when more is known of the potential demand and itselasticity, a higher financial rate of return may well be called for. In

the early years of operation, however, the need to encourage developmentand increase output in a vast area where development has hitherto been

inhibited by lack of low-cost transport must take precedence over anydesire to maximize railway net revenue. During negotiations agreementwas reached that the Regie will take such measures as are necessary toenable it to earn an annual rate of return of not less than 4% on the netvalue of its fixed assets in service.

F. Financial Implications of Proposed Future Extensions and MajorRealignment

6.20 Without begging the question of whether the proposed investmentsin extensions to Yokadouma and Victoria, and the major realignment fromDouala to Yaounde are economically and financially justified, it is clear

- 27 -

that Regifercam cannot generate significant contributions to their financ-ing in the next several years. These very large additions to assets (75%)and system length (45%) would have to be financed almost wholly from sourcesoutside the Regifercam. It would normally not be expected that any enter-prise in a competitive environment would be able to make a significant con-tribution to such large capacity expansion from current surpluses. IfRegifercam were to borrow the whole of the US$100 million equivalent re-quired to finance these investments, its debt/equity ratio would deteriorateto 65/35, which is not unsatisfactory for a public enterprise. The debt/equity ratio could be expected to improve thereafter, provided these in-vestments are economically and financially sound.

G. Audit

6.21 In the past, the audit of Regifercam's accounts has been carriedout satisfactorily by a Commissaire aux Comptes appointed by the Ministersof Finance and Transport. The officer so appointed has been the assistantto the Director of the Government Budget, an arrangement which the Govern-ment intends to continue and which is acceptable to the Bank.

7. RECOMMENDATIONS

7.01 During negotiations of the proposed loan, the following matterswere discussed and agreed with the Government of the Federal Republic ofCameroon and the Regifercam:

(i) establishment by the railway of a costing system (para. 2.15);

(ii) debt limitation covenant (para. 4.02);

(iii) economic study of track realignment and terms of referencethereof (para. 4.13);

(iv) financial targets (para. 6.19).

7.02 The project provides a suitable basis for a Bank loan of US$5.2million equivalent to the Regifercam, with a term of 25 years, includingfive years of grace.

May 12, 1970IBRD

ANNEX 1

Page 1

CAMEROON RAILWAYS

Historical Review of Railway Development in Cameroon

The history of the Cameroon Railways starts in the early part ofthe century. A 162-km line from Bonaberi to Nkongsamba (known as thenorthern line) was studied in 1902, started in 1906 and completed in 1911by the Germans. In early 1909 the construction of the central line wasstarted and completed over 173.6 km to Eseka, in 1914. The German Govern-ment had an ambitious program totalling 3,000 km of rail from Douala toTanganyika, through the Belgian Congo, and from Douala to Fort Lamy andBangui. After the Fall of Douala in 1914, the railway came under Britishmanagement until early 1916, at which time it was handed over to Frenchauthorities.

The French Government approved the continuation of the centralline to Yaounde. It was started in 1922 and completed in 1927. Thedistance from Douala to Yaounde is 308 km.

According to the original German plan, the line was to go south-westward through the Nyong River valley in the direction of what is now theCAR, rather than to Yaounde. Following this same alignment the French builta 60-cm gauge line from Km 240 at Otele to Mbalmayo, 37 km, and opened itto traffic in early 1927. In 1932-33, this section was converted to metergauge. In early 1955, the northern and the central lines were unified throughthe construction of the bridge over the Wouri River and a railway from Doualato Bonaberi. This permitted the integration of the railway shops at Bassain 1957. After the federation of the Cameroons in 1961, with the expressedintention of unifying the two federated states by an axis of heavy transport,a 29-km line from Mbanga in East Cameroon (Km 76 on the northern line) toKumba, in West Cameroon, was started in March 1964, opened to traffic to Edikiin 1965 and completed in April 1969.

In 1930 Milhau, a French engineer, had mapped out the alignmentof a railway from Yaounde northward to Kaitia, with two extensions, one inthe direction of Fort Archambault in Chad and the other to laroua in north-ern Cameroon. Because of the economic depression and the second World Warthe project kept being shelved. It was not until 1961 that an agreement wasreached with FAC, FED and USAID to provide finance for the construction ofthe Transcameroon Extension, which was started in 1964. The first sectionof the line was opened to Belabo (293 km) in 1969. The second 335-km sectionwill be started in 1970 and is expected to reach Ngaoundere in 1974. Theline follows a good portion of the original Milhau Plan, except that atKm 349 it deviates to cross a rich bauxite deposit at Martap and then goeson to Ngaoundere.

ANNEX 1Page 2

Further projects are in the initial stages of consideration forthe construction of a line from Yaounde to Yokadouma, near the border ofthe CAR and from Douala to Victoria in West Cameroon.

SUMARY

Year Completed Route-km

1911 Northern Line, Bonaberi to Nkongsamba 162.0

1914 Central Line, Douala to Eseka 173.6

1927 Central Line, Eseka to Yaounde 134.8

1933 Branch Line, Otele-Mbalmayo 37.0

1955 Connection Bouala-Bonaberi, unifying thesystem 10.3

1957 Integrated Workshops at Bassa -

1969 Branch Line, Mbanga to Kumba 29.3

1969 Transcameroon Extension, Yaounde to belabor 29Y.,

Under Construction: Transcameroon Extension, Belabo-Ngaoundere

Source: Henri Hamel, "Les Chemins de Fer du Camerfen&".

March 13, 1970

ANNEX 2

CAMEROON RAILWAYS

Composition of the Regifercam Board

President: Minister of Transport

Vice-President: Minister of Finance, or his representative

Members Representative of Minister of Commerce and Industry

Representative of Minister of Labor

Representative of Minister of Plan and Development

President of the Economic and Social Council

Director of Public Works, West Cameroon

Director of Public Works, East Cameroon

Director of Ports and Navigable Waterways

Representative of Chamber of Commerce

Representative of Chamber of Agriculture

Two representatives of railway workers

Director of the Office du Chemin de Fer Transcamerounaisduring construction of the extension

March 13, 1970

ANNEX 3

Page 1

CAMEROON RAILWAYS

Proposed Line Realignment and Extensions

I. Douala-Yaounde Line Realignment

(a) Because of difficult operating conditions due to extensivesections of sharp curvature in broken and confused terrain,the Regifercam is considering the realignment of the centralline between Douala and Yaounde to the same standards asthose of the Transcameroon extension, namely:

500 m minimum radius curvesmaximum grade 1.25%600 m long crossing stations

(b) This is a major work, the total cost of which has beenestimated at about CFAF 8,800 million (US$32 millionequivalent). The Government has already contributed tothe cost of the topographic and soil survey and detailedengineering study, which are under the supervision of theOffice du Chemin de Fer Transcamerounais, a Governmentagency in charge of the construction of the Transcameroonextension. In addition to improving the characteristicsof the line, it is expected that the new alignment willreduce significantly the distance by rail between Doualaand Yaounde.

(c) Regifercam believes that by 1980, assuming the constructionof the proposed Yaounde-Yokadouma line, it will carry some3 million tons of traffic (about two-thirds of which wouldbe timber for export) and that such a volume of trafficcould not be handled by the existing line which has 1.7%grades, 600 curves of less than 300 m radius and 111 curvesof between 300 to 500 m radius. It is claimed by theRegifercam that the proposed work will reduce transportcosts because of the reduction in the length of haul andgreater efficiency of operation.

II. Construction of the Douala-Victoria Railway Line

(a) The proposed line would branch off from the existing Douala-Nkongsamba line at Km 12. It would be about 56 km long andwould pass through the important town of Tiko.

(b) The total estimated cost of the project amounts to aboutCFAF 2,300 million (US$8.3 million equivalent).

ANNEX 3Page 2

(c) The only reason for building this line would be to servethe proposed new deepwater port at Victoria, the con-struction of which is considered by Cameroon authoritiesto be needed to accommodate larger ships than is possibleat Douala.

III. Construction of the Yaounde-Yokadouma Line

(a) This proposed new line, about 432 km long, is intended tobe the first section of a rail link from Douala to Bangui;it would serve rich forestry areas in east Cameroon andwest CAR and encourage development in a large area (about1/5 of the total area of Cameroon). If, and when, thisfirst section is extended to Bangui, traffic from the CARwould flow, it is claimed, toward Douala, in preferenceto Pointe-Noire (via Oubangui, Congo and the Congo OceanRailway) because of the following advantages:

500 km reduction in route length,shorter transport time,avoidance of the break of load in Brazzavilleport,reduction in transport cost.

(b) The total estimated cost of this project amounts to someCFAF 17,000 million (US$60 million equivalent).

March 13, 1970

TAELE 1

CAMEROON RAILWAYS

Composition of Motive Power and Rolling Stock as ofJune 30, 1969

No. Weight HP Age.. Diesel Locomotives /

Main-line 6 52t 610 1952

12 54t 730 1955

3 54t 730 1960

2 54t 730 1964

4 56t 1,100 1969

5 8ht 2,200 1965

Shunting 10 22t 138 1955

10 30t 400 1965

9 30t 400 1968/69.. o

B. Railcars 7 43t 550 1964/65

C. Passenger Cars 68 - - 1949 to 1969

Capacity

D. Baggage and Mail Vans 12 20t - 1952 & 1964

E. Freight Cars

Flats 299 20-40t - 1948 to 1964

Gondola 149 30-4ot - 1948 to 1967

Box cars 400 20-30t - 1928 to 1965

Tank cars It 300hl - 1952

Special cars 6 17t - 1964

F. Irlivately O'wned Freight Cdj-'i 87 - - I)48 to 19C<

G. Service Vehicles 121 - - 1930 to 1960

/ Regifercam has been fully dieselized since July 1, 1955.January 30, 1970

TABLE 2

Q,UUC R*IIMLWA!

Su=al of ODerating Ststaitieo

1962/63 1963/61i 1 964f65 196/67 1967/68 1968/69I. TRAFFIC

Jassenger-km (million) 116.3 114.4 114-4 119.3 135.9 142.6 156.8Net ton-km (million) 142.6 157.5 IMA_ _ -Jt5.7 i80.6 203.2 205.3Traffic units (ton-Iu +

pass-km) (million) 258.9 271.9 287.3 29 .0 316.5 345.8 362.1

1 . OPERATIONS

Train-km (000) 1,580.4 1,677 1,821 1,817 1,867 1,896 2,162Main-line locomotive-km (000) 1,710.1 1,770 1,940 1,824 1,810 1j99 2,114Railcar-km (000) 105.4 99 168 263 421 4* 637Number of engines in fleet

(i) diesel locomotives 25 27 26 25 28 28 32(ii) railcars S 32i 6 7 7

Tota 30 32 31 0-4 73Number of freight cars

ili fleet 1/ 736 840 84D 84 879 891 916Preight car-km (000) 14,751 14,630 14,630 13,933 1I ik314 14,543 15,411Locomotive-km per locomotive-

day in use 218.9 214.9 249.6 2141 213.7 239.1 223.6Freight car-km per wagon-day 54.9 47.7 48.3 41*14 145.0 44.7 46.0Traffic units per locomotive

in fleet (million) 8.6 8.5 9-3 9.2 9.0 9.7 9.3Traffic units per train-Iou 163.8 176.5 161.3 165.3 171.2 180.2 169.3Passenger-km per passenger-

train-km (mixed train-kmand railcar-km) 122 119 114 II8 127 125 126

Pa.ssenger-km per passengercar-Io and railcar-lan 36 35 32 34 35 34 37

Passenger-km per passengercar and railcar in fleet(million) 1.9 1.9 1.9 2.0 2.4 2.b 2.3

Net ton-km per freight carin fleet (000) 194 188 206 209 205 228 224

Average turn-around offreight cars (days) 6.3 7.6 7.1 1.7 7.4 7.7 8.2

Net average load per freighttrain & mixed train (tons) 98 104 111 155 159 176 164

Actual average carrying capa-city per freight car 25.9 25.9 27*5 27.8 28.3 28.5 29.7

Average load of freight cars(loaded and empty) publictraffic only (tons) 11 12 13 14 14 15 15

Average load of freight oars(loaded cars only) (tons) 19.8 21.7 22.0 22.3 21.4 22.8 23.0

III. STAFF

Number of employeea i/ 2,629 2,631 2,631 2,755 2,874 2,942 3,111Traffic unit per employee 98,500 103,300 10*,200 107,000 110,100 117,500 116,300

1' Excluding track maintenance cars. Average in stock during tba- ;r.2 Average number employed during the year.

Marsh 4, 1970

CAMEiROON RAILWAYS

Future Freight Traffic ('0o0 Tons)

A' DLiection of Exp,rtsOleaginous Timber: logs andand Palm sawn '6) Animals

Bananas Products :ocoa Coffee Zotton Groundmits Sugar Aluwminum Old Railway Transcamr. & Fo