L¸-/V 3 S6i- C I6 Y4. Document of The Warld Bank FOR OFFICIAL USE ONLY M I tC31,() I OTCH F CO PY Report No.: 11120-CHA Type: ("AR) Title: SHANGHAI PORT RESTPUCTEJRTINQ AN Reprt No. 11120-CA Aut.hc.lr: PARTHASAiATH4. M.,. Ext.:8'2925 FooMr:E80E3 Dept.: ASTIN STAFF APPRAI'AL REPORT CHINA SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT NOVEMBER 23, 1992 Transport Operations Division China and Mongolia Department East Asia and Pacific Region This docunent hs a restded distibuton and may be used by nepens only in the peformance of their officl dutes. Its contens may no otherwise be dised wihout Wodd Bank sahikateon. CURRENCY EQUIVALENTS (as of July 1, 1992) Currency Name - Renminbi Currency Unit - Yuan (Y) Y 1 $0.018 $1.00 . Y 5.45 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES 1 cubic meter - 35.31 cubic feet 1 ton - 1.1023 tons (short) tph - tons per hour 2 - square meter ppm parts per million TEU - twenty-foot equivalent unit ABBDIATIONS CIF - Cost, insurance, and freight COSCO - China Ocean Shipping Company EPB - Environmental Protection Bureau FYP - Five Year Plan GEF - Global Environment Facility GOC - Government of China HSA - Harbor Superintendency Administration ICB - International competitive bidding LCB - Local competitive bidding MARPOL - International Convention for the Prevention of Marine Pollution MEPB - Municipal Environmental Protection Bureau HOC - Ministry of Communications MOF - Ministry of Finance MOR - Ministry of Railways PCMIS - Port Costing and Management Information System SAA - State Audit Administration SMG - Shanghai Municipal Government SOA - State Oceanic Administration SPA - Shanghai Port Authority SPC - State Planning Commission TOR - Terms of Reference This report was prepared by Ismail Mobarek, M.S. Parthasarathi, K.C. Chung, M.N. Rasheed, and Han-Kang Yen, and is based on the information collected during project appraisal in May-June 1992. Peer reviewers are: Messrs. G. Tharakan (Economics), E. Vernigora (Engineering), L. Morrell (Finance), and A. Bruestle (Environment). The Country Director is Mr. Shahid Javed Burki and the Division Chief is Mr. Daud Ahmad. FOR OFFCIAL USE ONLY CHI SKANCHA PtrT RURC ING MN DEVILOPI4PT PROW= LoAn and Project 8ummarv People's Republic of China AeMUR ar: Shanghai Port Authority (SPA) $150.0 million equivalent hags^: 20'years, including five years' grace, at the Bank's standard variable interest rate Onlendins Termo: Between the Borrower and Shanghai Municipality and the Shanghai Port Authority: 20 years, including five years' grace, at an interest rate equal to 90 percent of the Bank's variable interest rate per annum. The foreign exchange risk and the commitment fee (0.75 percent per annum on the unwithdrawn balance) would be.borne by SPA. Prolect Oiective: To assist the Shanghai Port Authority in (a) rationalizing the long-term development of the port by gradually shifting operations away from the city center and by promoting terninal specialization, (b) providing needed additional capacity in an optimla, environmentally sound way, and (c) increasing efficiency by introducing modern methods of operational and financial management. Project DegariLtion: (a) Formulation and implementation of an action plan for restructuring the existing port facilities on the Huangpu river to rationalize their use and move cargo operations away from the city center, (b) provision of new and replacement cargo handling equipment for existing terminals, (c) measures to improve the Port Authority's financial condition through tariff restructuring and other measures, (d) construction of new termiunls at Vaigaoqiao and Luojing on the Yangtze river, and installation of the necessary cargo handling equipment, and (s) technical assistance and training. The main risks relate to potential delays in project implementation and the project impact on the environment. Based on past experience with Bank-financed port projects in China, the implementation risks are being minimized through closer supervision, advancing the procurement process in the project cycle and tightening the prequalification process. On the institutional side, SPA could face considerable financial risks if it does not adopt management/financial reforms in a timely manner; SPA has, however, agreed to take reform-oriented actions on tariffs and institutional and financial improvements. As regards th environment, all potential remedial measures are being taken by the Port Authority and safety features are being incorporated in the project design. Thisdocumenthas ansftted distibution and may be used by raipWntsonly in X ofrmn of thek oflia! duticLItscof aw ts amynctothorwi be diuksed without WwddEhakauthodiatknL - iti. Local Foreign Total -------($ million) ----------- IltImalAd poits Civil Works 163.13 25.12 188.25 Equip_ent 19.91 128.25 148.16 Technical Assistanc./TrarAing 0.15 1.65 1.80 Sub-total (Base cost) 183.19 155.02 338.31 Physical contingency 18.31 15.36 33.67 Price contingency 27.01 25.39 52.49 Total project cost 228.51 1Z 42Ia SPA 228.51 45.77 274.28 IRD 150.00 150.00 Total LJL95.77 J4E IBRD FY 1993 1994 1995 1996 1997 1998 1999 '----($ million) -------------------- Annual 2.0 14.5 22.5 33.0 31.5 36.0 10.5 Cumulative 2.0 16.5 39.0 72.0 103.5 139.5 150.0 AeGmlc Rato of Return 36.7 percant (weighted average) N M IBRD Non. 24093, 24101 and 24102 - ili - SHANGHAI PORT RUTRUCTTRING AND DEVL E PROJECT Table of Contents P No. I. THE TRANSPOR. SECTOR . . . . . . . . . . . . . . . . . . . . . . . 1 A. Introduction . . . . . . . . . . . . . . . . . . . . B. Traffic . .. . . . . . . . . . . . . . . . . 1 C. Investment . . . . . . . . . . . . . . . . . . . . . . . . . 2 D. Transport losues and Objectives . . . . 2 S. Bank Group Participation in Transport Sector . . . . . . . . 4 II. THE PORT SUBSECTOR . . . . . . . . . . . . . . . . . . . 8 A. Port Traffic . . . . . . . . .8 . . . . . . B. Reforms i Port Subsectort . . . . . . . . . . 8 C. Operations and Naintenance 9 D. Naritime Environmnt . . . . . . . . . . 11 R. Investment Priorities and Tecbnology . ... . . 11 F. Port Costing and Tariff Restructuring... . . . 12 G. The Role of the Bank . ...13 H. Experience in Pst Lending to Port.s 14 III. TiH PORT OF SJ HAN . . . . . .. . . . . . . . . . . . . . . . . 15 A. Locstion and Faclitlies................. 15 A. Hinterland ........ ........ ...... 16 C. Operations . . . ....... . . . .. . . 16 D. Envirorment in the Shanh Area... 17 E SPA Nanagement and Organization ...18 F. Planning, Budgeting, Accounting and Audit . . . . . . . . . . 20 0. Traffic--Past and Future .............21 H. Future Development of Shangai Port . ....... 22 IV. Tl PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 A. Project Objectives and Scope . .... . . . ........ ... 25 S. Details of the Project . ................. . 25 C. Cost Estiates . . . . . . ..... . . . . . . .. . . . . . 28 D. Finacing Plan . . . . . . . . . . . . . . . . . . . .. . . 28 3. Status of Preparation .... . . . ............................ 29 F. Project Implematation .................. ......... 29 G. Pro reent . . . . . . . . . . . . . . . . . . .. . . 30 H. Disbursmets _ n t . . . . . . . .#. . . . . . . . . . . . . 31 1. Project Monitoring . . . . . . . . . . . . . . . . . . . . . 32 J. Project Impact on Ecology and Environent . . . . . . . . . . 32 * iv - V. ECONOMC EVALUATION. ........ ...... ..*.*. . Ss A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . 35 B. Costs and Benefits of the Proposed Project . . . . . . . . . 36 C. Economic Return and Sensitivity Analysis . . . . . . . . . 37 VI. FINCIAL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . 40 A. Introduction . . . . . . . . .*. . . . . . . . . . . . . . . 40 D. SPA's Past and Present Financial Performance . . . . . . . . 41 C. Lon8-Term Financial Objective . . . . . . . . . . . . . . . . 42 D. SPA's Financial Reforms and Institutional Developmnt . . . . 42 E. Future Financial Performance . . . . . . . . . . . . . . . 43 F. Sensitivity Analysis.. . . . . ....... . 45 G. Management Reforms and Training Program . . . . . . . . . . . 45 VII. AGREEMES REACHED AND RECOMMENnTIONS . . . . . . . . . . . . . . 47 1. List of Documents in Project File 2. Status Report on Recommendations of the October 1987 World Bank Mission 3. Unitization Study 4. Environmental Impact Assessment S. Dangerous Cargo Handling Study 6. Traffic Origin/Destination Analysis and Cargo Owners' Survey for Major Commodities 7. SPA's Long-Term Restructuring Action Plan 8. Technical Note on Fly Ash 9. Outline of Semi-Annual Progress Reports 10. Notes and Major Assumptions Underlying SPA's Financial Forecast for 1992-1997 11. Outline for the Training Program for SPA's Financial Staff 12. Corporate Financial Action Plan 134 Financial and Operating Performanee Targets 1.1 China: Freight Traffic 1.2 China: Passenger Traffic 143 China: Investment in the Transport Sector (Including Posts and Telecommunications) 1.4 Transport Investment vs. Economic Output 3.1 Port Traffic (1981-1991) and Forecast (to 2005) 3.2 Port Traffic by Modes 4.1 Summary of Project Cost Estimates 4.2 Project Cost Estimates - Luojing 4.3 Project Cost Estimates - Waigaoqiao 4.4 Project Cost Estimtes - Replacement and Additional Equipment for Existing Terminals 4.5 8quipment for Valgaoqiao 4.6(a) Implementation Schedule 4.6(b) Project Launch Action Table 4.7 Bqulpment to be Procured under Local Competitive Bidding Procedure (LCB) 4.8 Procurement Packaging 4.9 Estimated Disbursement Schedule 5.1 Operational Parameters Assumed for Economic Evaluation 5.2 Economic Project Cost 5.3 Price Conmersion Factor for Capital Costs 5.4 Summary of Port Traffic 5.5(a) Cargo Randling Without and With Proposed Berths (Break Bulk Berths) 5.5(b) Cargo Handling Without and With Proposed Berths (Construction Materials) 5.5(c) Cargo Handling Without and With Proposed Berths (Coal Berths) 5.5(&) Cargo Handling Vithout and With Proposed Berths (Container Berths) 5.5(e) Cargo Handling Without and With Proposed Berths (Bulk Fertilizer Berths) 5.6 Loading/Unloading Cost Savings 5.7 Economic Benefits Summary 5.8(a) Economic Rate Return Summary 5.8(b) & 5.8(c) Economic Rate of Return (ERR) and Sensitivity Analysis 6.1 PA's Income Statement: Actual, 1984-91; Fore2ast, 1992-97 6.2 PA's Cash Flow Statement: Forecast, 1992-97 6.3 SPA's balance Sheet: Actual, 1990-91; Forecast, 1992-97 1 Organization of the Shanghai Port Authority 2 Typinal Organizatlon of District in Shanghai Port NM 1. Shanghai Port Project (IBRD 24093) 2. Shanghai Port Project - Luojing Coal Terminal (IBRD 24101) 3. Shanghai Port Project - Waigaoqiao Terminal (IBRD 24102) I. THE TRANSPOD.?ROJECT A. o r 1.1 The transport system In Chin is characterized by intensive freight traffic in relatlon to economic output, heavily suppressed demand, high utilization of assets, a strong emphasis on railways, and distortions in tariffs and costs. Freight traffic Intensity in China, measured in ton-km per dollar of GNP, is even higher than ln dhe (former) Soviet Union, and is much higher than ln India, Brazil or the United States. The major reascns behind China's high freight traffic intensity are a relatively large heavy Industry sector, rellance on coal as the major source of energy, and a large volume of other bulk products. In addition, energy officiency ln China is relatively low, and there is still little preprocessing of raw materials before shipping. On the other hand, the density of China's transport network, measured both on the basis of geographic area and population, is among the lowest in the world. B. IaC*= 1.2 MUM lxa=. The economic reforms introduced since 1979 have provided the impetus for a large upsurge in both freight and passenger traffic, severely taxing the transport system. Freight traffic from 1980 to 1990 grew at about 8 percent per annu; I rt traffic at about 9 percent per annum; and intercity highway freight traffli at about 16 percent per annum-- consLstently higher than the growth of gross domestic production (Table 1.1). These rates would have been even higher were it not for the capacity constraints whlch are evident in all modes. Many power plants and factorLes have fallen short of their productLon goals because the transport system has not been able to deliver the needed raw materLals in tlme. Coal production in Shanxi province, the largest coal producer, continues to be hampered by inadequate rail capacity. Rural ares throughout the country are short of transport services, both for crops and for local light industry. The capacity of navigable waterways bas declined due to lack of investment in upgrading and maintaining navigation channels. At the ports, lack of modern facllities lidits the bandling in bulk of commodities such as fertilizers, cement, and grain. 1.3 rmma g ZsLCif. The transport system is further taxed by the marked growth in the demand for passenger travel in the last decade. Since the economic reforms of 1979, passenger traffic bas grown at nearly 12 percent per annum, illustrating the positive relationship between growth in income and growth in demand for travel (Table 1.2). Nonetheless, passenger travel per capita in China remains very low, In part because of severe capacity constraints. Civil aviation traffli, despite growing much faster than any other mode, is still very lidited, and moat long-distance journeys are made by rail. - 2 - 1.4 TrM_t Dand and Modal Split _ renda. Although the railway's share of traffic has declined over the last 10-20 years and the trend is likely to continue as the sbare of road traffic grows, unlike in most other countries, rail transport still dominates freight and passenger traffic in China. In 1990, 58 percent of freight and 46 percent of passenger traffic were moved by rail, and the rest was moved by road, inland waterway, coastal shipping, pipeline, and civil aviation. The continued pro eminence of the railway is in part due to the structure of the Chinese economy, wherein heavy industry Is prominent and coal is the dominant energy source. Coal and the large quantities of other bulk inputs associated with heavy industry are well- suited for railway transport and constitute the majority of railway traffic in China. In the case of passenger transport, it is due partly to the virtual absence of private automobiles, and partly to the poorly developed road network. Civil aviation's share was only 3.1 percent for passenger traffic and 0.04 percent for freight traffic. 1.5 As a result of the slowdown in economic activities in 1989/1990, transport demand, particularly of passengers, dropped significantly, and temporarily alleviated the congestion in transport facilities. Preliminary figures indicate that resumption of high economic growth in 1991 has resulted in a corresponding surge in transport demand. C. In"snt 1.6 The Government of China has repeatedly described transport bottlenecks to be one of the most severe constraints to economic growth. However, transport investment levels have not kept pace with the increased demands. Thus, while annual investments in the transport sector measured in current prices surged approximately three times during the period of the fifth, sixth and seventh five-year plans (1976-90), the share of total public inestment dedicated to transport remnined quite steady over this period, averaging about 13 percent (Table 1.3). Further, investments in transport infrastructure represented only about 1.4 percent of GNP during 1980-90, compared to 2-3 percent for countries such as the Republic of Korea and Brazil. Transport investments as a percentage of GNP have declined from a high of 2.4 percent during the Fourth Five-Year Plan (1971-75), to 1.3 percent during the Seventh Five-Year Plan (1986-90) (7FYP), despite the absolute increase in transport investments during the period (Table 1.4). In the future, a substantial expansion of Investments will be needed if the transport-related constraints to economic growth are to be removed. D. TrAnsort Issues and Objectives 1.7 The key lssues in the transport sector are: (a) ehronic shortages in the supply of transport services due to underinvestment, resulting in severe economic losses due to unmet deand; (b) excess demnds generated by underpricing of transport services and transport-intensive commodities (particularly coal); - 3 - (c) uneven development of modes (i.e., excessive reliance on rail, relative neglect of other modes, and the absence of modern, irtegrated intermodal services); (d) lack of modern technology within each mode (obsolete vehicles, infrastructure, and operating systems), resulting in high operating costs and poor services; (e) shortages of human resource skills in specific key areas, particularly in multimodal planning and policy analysis, economic analysis, and user-oriented logistics management; and (f) structural weaknesses in highway construction capabilities related to project and entity management, quality control and procurement procedures. 1.8 Achieving a better balance between demand and supply is vital because chronic shortages of transport services have been increasingly constraining the growth of the Chinese economy. The effects bave been seen in the past in electric power shortages due to lack of coal transport capacity, but transport constraints pose economic problem well beyond their effects on the energy sector. The poor quality of transport services resulting from shortages of often outmoded equipment and substandard, often congested infrastructure. imposes high costs and impedes the integration of markets, which is one of the major sources of economic efficiency in modern societies. The ability of China to compete in world export markets is also reduced, particularly for light vanufacturing and high-value agricultural exports, which require efficient, flexible, fast door-to-door services. 1.9 Despite recent adjustments, pricing distortions are still a major problem. Cost analysas conducted during a recent study in Guangdong Province ° sugest that, despite substantial tariff increases, nationwide long-distance coal transport, for example, is underpriced by as much as 40 percent relative to long-run incremental costs, thus generating uneconomic excess demands wbich clog the transport system. Distortions In the opposite direction occur in highways and aviation, where tariffs may exceed long-run incremental costs, thus distorting the choice of modes. So far, enterprises bave lacked appropriate incentives to set tariffs to reflect costs as they bave had only limited financial autonomy and responsibility, and competition among transport modes has been minimal due to regulatory restrictions and the congested condition of the system, reflecting an excoss of demand over the supply of transport services. 1.10 China has so far failed to acquire the full spectrum of modern transport technology. It still relies on the railway to handle much traffic that could be better served by modern highway vehicles amd by the airplane. Both these modes are modernizing and are steadily increasing their share of total traffic, in highways for both freight and passengers, and in aviation especially for the movemnt of people. There is also some railway traffic °f Guangdong Province Comprehensive Transport Study, Transportation Divi- sion, Country Department III, Asia Regional Office, World Bank, July 7, 1991. - -4- which culd be more economically aerved by coastal shipping. The Ministry of Railways In recent years has significantly increased tariffs for short -haul commodities, so as to encourage diversion of this traffic to other more suitable modes and to concentrate on long-haul bulk commndities, where its comparative advantage lies. 1.11 Over the long run, China's choice of which modes to oxpand and by how much should be based on an understanding of the differences in costs and service characteristics of the different modes, on the one hand, and prospective changes in the structure and level of transport demand, on the other. At the present time, there is a need for China to train planners and policy analysts in the analytical tools necessary to evaluate those choices and to identify the instruments required to effect the necessary changes. 1.12 3XTranor& Sector R aform. The Government has already taken steps to respond to some of these challenges. Notably, it has: (a) made major adjustments in transport tariffs and is conducting costing studies that will provide the basis for further adjustments. In addition, it has allowed local authorities more autonomy to plan, finance, and implement projects which will expand transport capacity; (b) allowed private individuals and commercially oriented collective and township enterprises to provide passenger and freight transport services on roads and inland waterways and has encouraged provincial authorities to develop local railway systems; (c) carrled out major structural reforms in the organization and management of civil aviation and in the ports, leading to increased financial autonomy and accountability, less central government controls and paving the way for introduction of competitive services; (d) reduced operating and capital subsidies for major infrastructure services, through higher cost recovery and creation of user-funded capital construction funds; and (a) encouraged introduction of more modern technology in the transport system primarily by improving rolling stock technology in the railway subsector; enhancing container and bulk handling capacity in the port subsector; improving road pavement design and geometric standards for the expansion of motorization in the highway subsector; and increasing the use of computerized data proces3ing and planning techniques in operations in all modes. E. An& Ox= PaticDtlon In Trnsort Sector 1.13 The Bank Group has supported the initiatives of the Government in the transport sector through projects, sector studies, technical assistance, and training. Through June 1992, the Bank Group had loaned about $2.9 billion to China under 23 projsects for the transport sector and is presently preparing several new transport projects. 1.14 The railwjy sl ubcto has received $1.385 billion in Bank Group funding under six projects (Loan 2394-CHA; Loan 2540-CHA; Loan 2678-CM/Credit 1680-CHA; Loan 2968-CHA; Loan 3060-CM/Credit 2014-CHA and Loan 3406-CHA). These projects have assisted with the expansion of capacity on key routes and the manufacture of electric locomotives, passenger coaches, and signaling equipment; one project is a"si8ting construction of a line in Inner Mongolia. The most recent project is assisting with rail technology modernization; development of system-wide plans, planning tools and costing studies; and adding capacity where it is urgently needed. The audit of the first Railway Project noted that physical components were well executed and that macro- policy adjustments, especially in the area of tariff reforms and investment prioritizatlon, were likely to have the highest impact; these conclusions have been considered in designing the railway project currently under preparation (PPAR No. 9735 dated June 24, 1991). 1.15 The highway subsector has received $788 million in Bank Group financing under seven projects (Loan 2539-CM/Credit 1594-CHA; Loan 2811-CMA/ Credit 1792-CHA; Loan 2951-CHA/Credit 1917-CHA; Loan 2952-CHA; Credit 1984- CGA; Loan 3073-CHA/Credit 2025-CHA; Loan 3316-CHA/Credit 2226-CHA). These projects provide for the construction of high-quality national and provincial roads totaling about 1,276 km, and the expansion and improvement of some 3,250 km of rural (lower class provincial, county, village) roads and major bridges. When completed, some of these roads will help to provide vital missing links in the national highway network; others will help to ease severe congestion in parts of the network or provide access to remote areas. The projects are also designed to provide foreign technical assistance and training of Chinese personnel in areas such as supervision and quality control of road construction, design, and planning. Finally, the projects support studies on key issues of highway development such as road safe.y, pavement management, user charges, and methods :f financing the expansion, improvement, and rehabilitation of the road network. The first Highway Project (Loan 2539- CIA, Credit 1594-CHA), completed in 1991, successfully achieved its physical and institutional objectives (PPAR No. 10749 dated June 29, 1992). 1.16 The gort aubsector has receive4 $509 million of Bank Group financing under seven projects (Loans 2207-CHA, 2689-CHA, 2907-CHA, 2877-CHA, 3006-CHA, 3007-CHM, and Credits 2391-CHA, 1875-CMA, and 1845-CHA). Most of the loan/credit funds are being used in Shanghai, Tianjin, Dalian, Huangpu, Ningbo, and Xiamen for construction of terminals, jetties, and berths for handling bulk counodities, general cargo, and containers, as well as the dredging of navigation channels and the procurement of cargo handling equipment. Funds have also been used for training, tsehnical assistance, and various studies in such areas as port planning, operations management, and containerization. The audit report (PPAR No. 9695 dated June 19, 1991) of the first Port Project found the project successfully completed, on time and below cost, but recommended developing long-term strategic port investment planning and improving prequalification procedures for purposes of procurement; recommndations on the former point have been incorporated in the preparation of the proposed project in Shanghai and in the undertaking of a study of strategic issues in ports and shipping (para. 2.22), and recommendations on the latter have been taken into account in the discussion of procurement procedures in transport projects under propa.ation. The most recent project, the Ship Waste Disposal Project (Cr. 2391-CHA and GEF 10398-CHA), co-financed by IDA and the Global Environment Facility (GEF), will reduce pollution of 6- international and Chinese territorial waters caused by the discharge of ships' wastes. ".17 The first urban transport nubsector project (Credit 2296-CHA, $60 million), apprvevd in September 1991, is intended to be the first stage of a long-term program to upgrade and develop urban infrastructure In Shanghai. The project will finance capacity increases on key urban links and will assist the Shanghai Municipal Government (SNG) to improve planning, programming, financing, and management of its urban transport system. 1.18 One nltimodal project was approved in 1991 (Loan 3316-CHA/Credit 2226-CHA, $154 million) to improve provincial transport in Jiangsu. While the main focus of the project is on rehabilitating the provincial road network, this project also includes the first loan to the inland waterwav suasector, to be used to r3habilitate a section of the Grand Canal and expand an Important ship lock. 1.19 The dialogue between the Government and the Bank Group on transport sector operations and strategy has been strengthened both through the project preparation activities and project-financed studies mentioned above and through other studies carried out in collaboration with Chinese authorities. A provincial transport study has been conducted in Guangdong Province (para. 1.9) to support the design of a new multimodal transport plan in the province. The Bank Group also conducted a survey of the national water transport system, which has re-affirmed the need to further exploit the large potential of China's waterways. In preparation for future highway lending, the Bank assisted in the screening of national highway improvement proposals, aimed at better identifying highway construction priorities. 1.20 The Chinese authorities and the Bank Group are currently preparing or undertaking studies which will focus on long-term strategies for the country's transport system. These studies include a multi-port optimization study to evaluate msdium to long-term options for developing the deep-water seaport at Ningbo; a study of strategic issues and the role of ports and shipping in southern China; a multimodal transport study to examine strategic options in developing the transport system for the Yangtze Economic Zone (ShAnghai Municipality together with the provinces of Jiangsu, Zhejiang and Anhui); a coal transport study to evaluate strategies for alleviating coal delivery shortages through the year 2005; a railway investment study to optimize railway investments within a system-wide approach, and a railway costing study that will allow the enterprise to establish cost-based tariffs. In the highways subsector, the Bank and MOC are discussing preparation of a number of studies that will cover finance, management and other policy issues in infrastructure and in road transport services. 1.21 While the above projects and studies are helping to spur the growth and modernization of the transport system, much more needs to be done to bring about the changes required to effectively deal with the emerging issues. In order to significantly alleviate the transport bottlenecks and rationalize the transport system, the Goveriument would need, by the year 2000, to take the following measures: -7 (a) increase the total level of transport Investment in relation to GNP, to expand capacity to meet the now traffic demands and to alleviate the congestion caused by past underilvestment; (b) realize the most economic balance of investments among the major freight transport modes of railway, highway, and water; (c) realign further the prices of freight transport services and those of the major commodities, especially coal, to bring them closer to their true costs; (d) lncrease further the productivity of existing transport assets througp technological modernization and management reforms; and (e) improve multimodal investment decisions, both across and within modes, through the use of analysis and planning tools that more reliably determine the optimu economic prioritles of transport lmestments under budget constraints. 1.22 In the past, the Bank has supported the Government In lmplementing the above measures mainly by focusing on expanding traffic capacity and iproving operational efficiency. While such support will remain, the Bank has broadened its strategy and is currently asslsting the Government in design and implementation of instltutional and sectozal reforms in a number of areas, includLng investment planning, pricing and financing, services' deregulation, operational management, and transfer of advanced transport-related technology through training and provision of up-to-date equipment. -8- II. THE_lDRT UBSECTOR 2.1 There are over 460 sea ports along China's 18,400-km coastline. Sixteen are classified as major ports and seven of these (Shanghai, Dalian, Qingdao, Qinhuangdao, Guangzhou, Ningbo and Tianj in) handle over 87 percent of the total traffic. With some 140 berths, Shanghai is one of the ten largest ports in the world. In 1991, It handled over 146 million tons of cargo and more than 6 million passengers. There are also some 2,000 river ports along China's 110,000 km of navigable waterways. A. ort traffiL 2.2 Compared to many other developing countries, China's port traffic is low in relation to the size of its economy. However, it has been growing rapidly since the economy was opened to foreign trade: between 1980 and 1989 traffic at the 16 major ports more than doubled from 217.3 million tons to 442.1 million tons. The volume of cargo handled at these ports declined slightly to 432.3 million tons in 1990 as a result of the Government's moves to cut inflation, but growth in port traffic resumed in 1991 (to about 450 million tons). Tonnages of both domestic and foreign cargoes are increasing, with foreign traffic growing at a faster rate. Foreign trade is expected to continue growing about 7-8 percent a year in step with the economy as a whole. About one-third of total traffic is coal which mainly moves from northern coal loading ports for distribution through ports on the south and east coasts. Bottlenecks in coal transport are seen as a major constraint to continued rapid economic growth. Other bulk and semi-bulk cargoes also feature prominently in waterborne traffic. These include ores, grain, fertilizer, construction materials and steel. General cargo usually makes up only 10- 20 percent of the traffic at the major ports. 2.3 Cargo unitization has only just been introduced in China and the potential for growth in unitized cargo movements using containers and pallets is very large. Starting with 72,000 TEUs (twenty-foot equivalent units) in 1980, by 1989 total port container traffic had grown to 620,000 THUs, or 8.3 million tons of containerized cargo. This represented a 21 percent increase over 1988. There are now 30 ports which handle containers and 13 specialized container berths with a total throughput capacity of over 1 million TEUs. B. Reforms in Port Subsector Kanagement 2.4 One of the most important challenges facing the management of China's ports is how to adapt the ports to the changing circumstances brought about by the economic reforms. While the reforms were initiated in 1979, the port subsector was not affected by them until 1984, when the Ministry of Communications (HOC) started the process of port decentralization. The main features of the reform in the port subsector are self-financing of port operations; inmestments to be funded by internal cash generation; and opening up of competition among ports for cargo. Before the reforms, NOC set tariffs, allocated cargo, provided grant financing for major investments, covered any operating deficits, and received most of the surpluses (if any) generated by the ports. Now only a portion of the total cargo is allocated by NOC -9- (although this is a rather a high 80 percent), tariffs for unallocated cargo are allowed to be set competitively within a specified range, and profits are retained by the ports and are subject to taxes. The tax arrangements, however, tend to be ad hoc (usually fixed, lump-sum payments), and are apparently based on the fintncing needs of individual ports. The Government plans to progressively reduce the proportion of cargo allocated, reform tariffs and taxation policies, and phase out grant financing of investments. 2.5 The first port to be decentralized was Tianjin under a "Pilot System Reform* introduced in 1984. Under this arrangement the primary leadership of the port was transferred from NOC to the local government. The port received considerable autonomy in management, Investment planning and control over its finances. As part of the decentralization arrangement, Tianjin port also was exempted from paying any profits tax up to the year 1990. In 1986, the ports of Shanghai and Dalian were also decentralized with somewhat different provisions regarding taxes and grant financing of investments. They were required to pay a fixed lump sum tax, needed MOC approval of l.arge investments, and received some grant financing through 1990. Huangpu port was asmilarly decentralized, though speciflc provisions were again slightly different. Nost of the remaining ports under HOC control were decentralized by the end of 1988. The arrangements under which the ports were decentralized were extended to 1992 pending the determination of a new set of provisions. 2.6 The main objectives of this program of decentralization were to develop the c*pability and initiative of the ports' local managements, and to increase coordination between port development and the development plans of the region served by a port. Further, it was expected that the need to be financially self-sufficient and to compete for cargo would encourage efficiency in the ports subsector. The experience of port decentralization is generally viewed as successful in China. The Bank is encouraging NOC to undertake a systematic review of the experience. The current port management arrangements are transitional in nature. MOC direct control has been removed. Ports are expected to operate as commercial entities accountable to local Municipal Administrations. Prerequisites for this change to be successful are proper policies with respect to taxation, pricing, accounts and audits, and corporate management. Key elements of the new policy relate to taxation, tariffs and the financing of investments and, in order to develop appropriate policies in these areas, there is a need to improve the information available on port operations, costs and finances. In support of the Government's initiatives in this area, the Bank under the Ningbo and Shanghai Ports Project (Ln.3006-CHA) is assisting MOC in conducting a port costing and management information system (PCKIS) study. C. Opsrations and Maintenance 2.7 All major ports in China operate around the clock with a three-shift system, but operations are hampered by congestion inside the port areas. Factors contributing to congestion are over-aged and outmoded equipment, excessive reliance on break-bulk cargo bandling methods which have been replaced in most major ports of the world by various forms of cargo unitization (containers, pallets, etc.) and a lack of adequate hinterland transport capacity at most of China's major ports. In addition, the tariff structure falls to provide incentives for efficient utilization of existing - 10 - facilities. In particular, it does not encourage efficLent use of often limited port storage facilitLes and the us. of more effLeLent unitized cargo handling techniques. 2.8 Port congestion peaked in 1985 when average ship delays for forelgn trade vessels were as high as 11 days. Thls improved somewhat in 1986 as a result of Government restrictions on imports, but port congestion is beginning to increase again with average waiting times in excess of 4-5 days in many of the major ports. These expensive ship delays can also be traced to a number of deficiencies in addltion to the lack of an adequate number of berths. Poor documentation procedures and inadequate information systems in the ports often lead to delays caused by documents not being available in. time, and/or the port not having the right equipment available when a ship is ready to start loading/discharging cargo. 2.9 !Aere is also a need to rationalize cargo movements. In many of the southern and eastern ports, a large proportion of the traffic involves ship- to-ship or ship-to-barge transfers, some of which could be avoided by direct movemens between smaller ports through the use of modern sea-going barges capable of operating on both coastal routes and inland waterways. MOC has begun efforts to rationalize traffic flows and, as part of the Ningbo- Shanghai Ports Project, a study of cargo and ship movements in the mid-eastern region (the Port Development Optimization Study) is being completed (see para. 2.22). ?..10 Efforts are under way to improve productivity. In the recent past, consultants had been engaged to provide the ports of Shanghai and Dalian with recommendations to improve their performance. Under the Ningbo-Shanghai Ports Project and the Xiamen Port Project (Ln.3007-CHA), the Bank has mounted major reviews of operatlons and maintenance, and action plans to achieve specified performance targets within a specified time-frame are being implemented in these ports. The problems with productivity in China's ports, however, have less to do with poor operational practices, and are more relaten to the lack of adequate specialized facilities. As a result, bulk cargoes are often belng handled inefficiently at break-bulk faeilities. Container handling capacity is well below the potential for contalnerizing cargo, and little attention has been given to achieving productivity improvements through cargo unitization. There is a clear need to improve the availability of specialized bulk handling facilities and to increase the level of cargo unitization for break-bulk cargo. 2.11 Excessive reliance on break-bulk handling has resulted in berth productivity levels for general cargo often being as low as 50 percent of that achievable with unitized cargo handling. Whereas in foreign trade some progress has been made through containerization, in the domestic trade little has been achieved to date. Palletization of break-bulk cargo and through movement of pallets are feaslble and cost-effective means for increaslng unitization of domestLc break-bulk cargo, and savings would result both from Improved productivity and from reductions in cargo damage and loss. The problems to be overcome, however, are both technological and instltutional, with the latter being perhaps the more critical. MOC bas initiated efforts to introduce through-pallet concepts with a pilot scheme to be implemented between Guangdong Province and Hainma Island. Lessons learned there, epeciLally concerning the organization of through transport movements, will ^ 11 - benefit not only the introduction of through pallets in the domestic trades, but also the through movement of containers in foreign trade. It must, however, be emphasized that many of the initiatives needed are beyond the power of the ports: for instance, tariff reform and coordination of other entities, such as freight forwarders, involved in the through movement of cargo. 2.12 Inadequate rail and road links in a number of the ports continue to binder the smooth flow of cargo through the ports, cause congestion in port storage facilities, and increase costs to shlppers. The proper interfacing of different transportation modes is an aspect of port development which continues to receive the attention of HOC; however, only road connections are within MO¢'s own jurisdiction, while railways are the responsibility of the Ministry of Railways (NOR). Since NOR itself is facing a serious shortage of capacity, coordination of its own priority projects with demands for rail projects arising from MOC's non-rail projects is important. 2.13 Each major port has its own maintenance facilities and port equipment is kept serviceable, although much of the equipment suffers frequent breakdowns because of age. The most serious maintenance problem is siltation at the estuarine ports and this requires considerable routine dredging. Some of the dredging may be excessive and could be reduced through hydrographic work to provide a better understanding of estuarine flows. D. Maritiv Enviroment 2.14 Appropriate legislation for the maritime sector has been passed to improve and preserve the environment. The "Maritime Environmental Protection Law" (March 1, 1983) regulates discharges from ships, and provides for protection of marine waters. In addition, the *Regulations for Environmental Protection Facilities of Capital Construction Projects' (GHZ-002, 1987), and the 'Managerial Measures for Environmental Protection in Capital Construction Projects* (GHZ-003, 1986) apply to the construction of facilities in the maritime sector. China is a signatory to the International Convention for the Prevention of Marine Pollution (known as the NARPOL 73/78 Convention) which regulates the discharges of ship wastes at sea and requires ports to provide adequate reception and treatment facilities. Also, China is a signatory to the "London Dumping Convention* regulating the dumping of wastes and dredged sediment at sea. Under current Chinese law, an environmental impact assessment (EIA) is required to be prepared in accordance with the Government's guidelines during the feasibility study stage of any project to assess the environmental impact of a project and to ensure the inclusion of mitigative environmental protection measures in the engineering plans. The port's environment (water, air and dredged material) are regularly monitored by the Municipal as well as the Port's Environmental Protection Bureau to ensure adherence to Chinese environmental laws. S. Invjstment Priorities and Technologj 2.15 Towards the end of the 5th FYP (1975-80), the need for port development was apparent as foreign trade began to increase rapidly after the oconomic reform policies of 1979 were introduced. Fifty-four deep water berths were completed during the 6th FTP (1981-85), increasing annual cargo - 12 - handling capacity from 200 million tons in 1978 to 350 million tons in 1985. Under the 7th FYP (1985-90) port expansion and improvement continued to be considerable and, by 1990, ninety-six deep water berths and ninety berths for medium size vessels were constructed, which together with other improvements increased total annual cargo handling capacity to 550 million tons, more than 50 percent above that in 1985. The Government's objectives in the 8th FYP (1991-95) are to: (a) expand the capacity of major ports, (b) support and stimulate economic development in the hinterlands, and (c) improve the financial viability and efficiency of the ports. Over this period, port traffic is expected to reach 650 million tons. In addition to improving port facilities, the Government will continue to invest in roads, railways and inland waterways that link ports to their hipterlands to correct the past uneven development of modes and achieve a better balance between demand and supply. F. Port Costing and Tariff Rsstructuring 2.16 The structure and level of port tariffs are determined jointly by MOC, the Ministry of Finance (MOF) and the State Price BureauY The present tariff structure was set up in 1978 (and was revised in 1985 for foreign trade vessels) on the basis of a somewhat arbitrary allocation of costs to the different port services. To some extent, the structure also reflects the distortions inherent in the prevailing prices of the different factor inputs. SPA does not have a comprehensive port costing system which could assist it in establishing a cost-based tariff structure. Rates for vessels, particularly for foreign vessels, szem to be set on the basis of what the market will bear. The profitability by each cost/revenue center is currently not assessable. SPA initiates its proposals for tariff adjustment on the basis of system averages rather than detailed cost analyses (para 2.20). 2.17 There are two tariffs in China's ports, one for foreign trade and another, lower one, for domestic trade. In foreign trade, it is understood that foreign ships pay the published harbor dues and charges while Chinese ships pay lower rates. About 80 percent of all Chinese cargo is carried in vessels owned or operated by the China Ocean Shipping Company (COSCO), which is controlled directly by HOC. In national terms, port tariffs paid by COSCO were little more than a transfer payment between two parts of MOC. Tariff rates could be set for efficiency objectives, but instead they seem to reflect the relative financial strengths of COSCO and the ports and their different investment requirements. 2.18 There are no shipping conference rates for Chinese ports and the ports only rarely pay demurrage charges for ship waiting. Charter contracts usually include an allowance for ship wa£ting time, but these charges are paid AV SPA submits its proposal for tariff adjustments to MOC which after its review, if acceptable, requests the State Price Bureau to approve. Following its review and discussions with cargo owners and shipping companies, the State Price Bureau either approves or disapproves the proposal and notifies SPA, through HOC, of its decision. If proposed tariffs are approved, SPA notifies the stevedoring companies generally two weeks prior to enforceaent of new tariffs. - 13 - by the cargo owner, not by the port. Recently, however, ports have been signing despatch agreemqnts with ship operators guaranteeing a certain turn around time, with demurrage charges payable by the port if the time is exceeded or premiums payable by the ship if it is handled faster. Usually the premiums far exceed the demurrage charges. 2.19 The Government has recently taken positLve steps in increasing tariffs. In loading and unloading operations the State Price Bureau has approved a tariff increase of 44 percent in foreign trade effective April 1, 1992 and of 50 percent for domestic trade to be effective January 1, 1994. For barges the tariff was increased by 25 percent effective Nay 1, 1992. 2.20 Pricing reforms are necessary for tariffs to reflect the appropriate economic cost of port operations, to ensure financial viability of the port, and to promote incentives for selective investment planning and efficient utilization of port assets. It is essential to assist the Government and the ports with effective management tools for costing port operations, and managing financial viability through accurate and timely statistical, financial and operational information. In rrder to achieve these, MOC obtained a grant of Y 116 million from the Japanese Government in 1988 to help the ports establish a computer based port costing and management information system (PCNIS). The Bank is acting as the Administrator of grant funds under the Japanese Grant Fund Agreement related to the Ningbo and Shanghai Ports Project (Loan No. 3006-CHA). Under Phases I and II relating to the diagnosis of the existing system in the ports, evaluation of alternative systems has already been carried out. Phases III and IV relating to designing, developing and implementing of PCMIS as well as the training of port staff are now under way. This exercise is expected to be completed by December 1993. The new PCKIS will be tried on a pilot basis in the four selected ports of Shanghai, Ningbo, Dalian and Xiamen. SPA, being the biggest port authority in China, will take a lead in PGHIS. The benefit of this system will be that ports will be able to estabitsh a sound, cost-based pricing policy providing incentives for efficient management of investment and port assets to maintain long term financial viability and to attain higher productivity at economic cost. C. The Role of the Bank 2.21 The Bank has supported, and will continue to support, the Government's objective of expanding capacity and improving productivity in the ports. The Bank has further expanded its role and is helping the Government in introducing institutional, managerial and financial reforms. The first lending operation in the subsector (Three Ports Project, Lu. 2207-CHA) financed additional container handling capacity in Shanghai, Huangpu and Tianjin and a coal terminal at Huangpu. The second (Tianjin Port Project, Lu. 2689-CHA) is financing the construction of eleven additional berths at Tianjin for timber, construction materials and general cargo. The third (Ruangpu Port Project, Lu. 2877-CHA/Cr. 1845-CHA) is financing the construction of five additional berths in the Xinsha area of Huangpu port for coal, iron ore, bulk fertilizer and general cargo. The fourth (Dalian Port Project, Ln. 2907- CHA/Cr. 1875-CHA) is financing construction of a new terminal at Dayao Bay for container and break-bulk cargo. The fifth (Ningbo- Shanghai Ports Project, Ln.3006-CHA) is financing the development of container and multipurpose berths in Ningbo and the procurement of cargo handling equipment for Shanghai. The -14 - sixth (Xiamen Port Project, Ln.3007-CHA) is financing the development of container and multipurpose berths in Xiamen. The seventh (Ship Waste Disposal Project, Cr.2391-CHA and GEF 10398-CHA) is financing ship waste reception and disposal facilities at air major ports. 2.22 A number of studies in the port and shipping subsectors have been undertaken both under Bank projects and as part of sector work. These included a containerization study which was completed by the Comprehensive Transport Research Institute in 1985. Recent investments in container facilities have benefitted from the insights provided by this effort. Studies currently under way include an "Intermodal Cargo Distribution Study" as part of the Huangpu Port Project (in the south), a similar intermodal transport study for containerized cargo in the Dalian Port Project (in north China), a study of the Master Plan for Ningbo port and port development optimization in the central part of the east coast, and a study of strategic Issues in ports and shipping (financed by the Japanese Trust Fund). This last study, expected to be completed in January 1993, aims at defining the strategic objectives as well as dealing with bottlenecks in ports and shipping in ports in southern China. The Bank was also instrumental in establishing an international panel of exports undoer the Ningbo-Shanghai Ports Project, to review SPA's long-term development plan; the proposed project follows the lines recommended in the panel's final report (para 3.36). Earlier Bank projects have also supported -anagement system improvements with components addressing computer development and training. The work of Bank missions has also been instrumental in developing Chinese expertise in the economic evaluation of investment projects and in updating various aspects of port operations. Through the proposed project the Bank is supporting decentralization of ports and sectoral reforms comprising pricing policy, modern technology, deregulation and pollution control. H. Exuerience in Past Lending to Ports 2.23 Construction of the Three Ports Project (Ln.2207-CHA) is complete, one year later than envisaged at appraisal. There has been a considerable foreign exchange cost saving under the project as a result of bids being lower than expected, and $55 million of the original loan of $124 million was canceled. The project was problem-free. The project performance audit (Report No.9695) concluded, however, that more benefits could have accrued to the project if the Bank had taken a more consistent position with regard to the qualifications of contractors. A need to develop long-term strategic port investment planning was also identified. The long-term development for Shanghai port was a precondition to the appraisal of the proposed project. These lessons have been taken into account in subsequent port projects through detailed discussions with the borrower on procurement procedures during project preparation and supervision and through the commissioning of studies and technical assistance that address long term port development needs and strategies (pars. 2.22). The Tianjin Port Project (Ln.2689-CHA, $130 million) was approved in April 1986; Implementation is satisfactory, although slightly behind schedule. Implementation of the remaining projects is on schedule. * 15 * III. TH= PORT OF SHANGHAI A. Lnoation and Facilities 3.1 The Port of Shanghai is the largest port in mainland China and the primary gateway to eastern and central China. Because of its location at the confluence of the Huangpu and Yangtze rivers, it allows sheltered water access to the network of inland waterways in -,Ie region, a major factor in its attractiveness as a transportation hub. 3.2 The port is situated on,the banks of the lower Huangpu river, which flows into the Yangtze river at Wusong, about 90 km from the mouth of the Yangtze. The entrance to the Huangpu river from the Yangtze is protected by the Wusong groin to keep sediment away from the entrance. The Yangtze entrance channel Is subject to heavy siltation and is maintained to a controlling depth of 7 a below MLW by dredging. The volume of annual mairtenance dredging (carried out by the Shanghai Dredging Corporation on behalf of SPA) in of the order of 20 million en. The disposal of the dredged material was reviewed by two environmental experts hired by the Bank in 1987 and 1988, who considered the Corporation's practices satisfactory from an environmental point of view. The tides are semi-diurnal with an average range of about 2.7 m. These conditions limit entry to the port to vessels with a maximum draft of 9.5 m. Vessels with a greater draft have to be lightened at the Luhashan anchorage at the Yangtze estuary entrance. Lightening takes place by means of an anchored 100,000 dwt bulk carrier equipped with ship unloaders/loaders. 3.3 The Shanghai Port Authority (SPA) at present owns 143 berths, 68 of which have depths alongside of 8 to 10.5 m. The berths, totalling over 14 km in length, are located along both banks of the Huangpu river in the Shanghai urban area. The city of Shanghai surrounds the port on both sides of the river, thus severely constraining any expansion of facilities at the present location. The berths are operated by 14 "handling companies" (stevedoring districts) and a passenger terminal company. In addition, SPA operates a large number of mooring buoys in the Huangpu river, many of which are used for uld-stream lightering operations. 3.4 With the exception of District 7, which specializes in bulk coal handling, the districts handle a variety of cargo types. Of the 143 berths, 20 are specially equipped for dry bulk handling and five are equipped to handle containers. The remaining berths are used for semi-dry bulk, break- bulk general cargo and passenger operations. Twenty of the berths date back to the 1920-40 period and are in poor condition. Some 30 berths would need major upgrading to be operationally adequate. 3.5 The port employs a great variety of equipment from very old to quite modern ones and of many different makes. Modern, high capacity ship unloaders, fast conveyors and stacker-reclaimers may service one berth, while the neighboring berth may have small cranes, short, sectional conveyors, and a very small storage area equipped with outdated machinery. The port is planning gradually to phase out older, inefficient equipment but is hampered in this effort by antiquated depreciation policies for equipment, shortage of funds and a general reluctance to write off obsolete equipment. - 16 - 3.6 The port has about 1,400,000 m2 of storage space, of which some 370,000 e is covered. Much of this space is in poor condition. The average available storage area of 14,000 ma per berth is inadequate for efficient cargo operations. Unfortunately, the port's location in the built-up urban area of Shanghai precludes enlargement of existing storage areas. B. int ranl 3.7 Geographically the hinterland of the port includes the provinces of Anhui, Hubei, Hunan, Jiangsu, Jiangxi, Zhejiang and the municipality of Shanghai. This area accounts for some 38 percent of China's industrial and agricultural output, 25 percent of its population, but only 10 percent of its land area. However, a small area within 200 km from the port accounts for over 90 percent of the port's traffic and the Shanghai Municipality alone for 70 percent. This is the port's real economic hinterland. 3.8 Some 70 percent of cargo moving to and from the hinterland uses water transport, either the inland canals or the Yangtze. The major transport corridors to the larger hinterland are the Yangtze, the Shanghai-Hangzhou cottidor in Zhejiaig province, and the Shanghai-Changphou corridor in Jiangsu province. The latter two corridors are served by road and rail as wcll as by barge. 3.9 Both the railway and highway in these corridors are, however, congested and their connections with the port are inadequate. Of the 14 port districts, only three, on the west bank, have rail connection. Access by road is also poor because most port traffic must traverse city streets and, while over half the port's cargo is handled on the east bank of the Huangpu river, cross river traffic is restricted to one single tunnel, one bridge and some ferry crossings. Truck traffic, particularly to ard from berths on the east bank, is subject to substantial delays. Construction of an additional bridge now under way will alleviate the truck delay problem somewhat. However, road and rail access can only become efficient as the port gradually moves out of the city, as envisioned in SPA's master plan. C. nexAatigns 3.10 Operations at the port of Shanghai are characterized by the predominance of bulk operations, with coal accounting for almost 40 percent of all cargo handled. Other operational characteristics of the port are the limitation on vessel size (maximum draft 9.5 m) and the large proportion of cargo (70 percent) moving to and from the hinterland by water transport. Port operations are hampered by insufficient ship berthing and cargo storage capacity, inadequate rail and road connections and obsolete cargo handling equipment at many terminals. In spite of these conditions, the port has achieved very high rates of throughput per berth, albeit at the cost of excessive vessel and cargo delays and, at times, significant traffic diversion. Berth occupancy factors are 80 to 90 percent and ship time in port averages 1.5 days per vessel overall and 4.3 days for foreign trade vessels. 3.11 In 1987, the Bank and SPA conducted a joint review of the operations of SPA which resulted in a number of recommendations for improving the flow of cargo through the port (para. 3.34). While some of C%ese measures have been - 17 - implemented, many are procedural and operational ln character and require joint action by SPA and port-related government and other agencies and enterprises; as a result, they will take time to design and imploment. Annex 2 lists the recomended measures and shows the current status in the implementation thereof. With a view to rationalizing the long-term development of Shanghai Port, the Bank and SPA established a panel of international experts to review and coment on the port's master plan (para. 3.34). Longer-term measures were identified as part of the review: in essence these were that SPA should move its activities gradually away from the urban area. For this, SPA has prepared a restructuring action plan (Annex 7) which visualizes the freezing of expsansion of terminals and activity on the Huangpu river, initiating development of terminals outside the Huangpu river, and gradual transfer of operations away from the city center terminals. 3.12 One of the key problems identified was the relatively small amount of general cargo handled as unitized cargo in the port. SPA has agreed to carry out a cargo unitization study to Identify measures to encourage unitization of general cargo in order to improve the efficiency in the port. At negotiations, agreement was reached that SPA will carry out, by October 31, 1994, the unitization study according to terms of reference agreed with the Bank (Annex 3). To assist it in improving container handling operations, SPA has also been exploring the possibility of securing the assistance and participation of overseas container terminal operators in managing and operating its container facilities. It intends to enter into a joint venture with a private sector operator from Hong Kong to own, manage, operate and maintain its container handling facilities. D. Environment in the Shamgbai Area 3.13 The port and city of Shanghai have developed together along the banks of the Huangpu river. Today, the Municipality of Shanghai covers some 6,100 kmz and has a total population of 12 million. The "built-up" area of the city covers some 350 k and has a population of over 7 million. Port facilities are located in the city on both banks of the Huangpu river, up to its confluence with the Yangtze river and occupy 14 km of waterfront. A review of the environmental protection program of SPA by Bank consultants in October 1987 and March 1988 showed that the port administration was sensitive to the need to minimize the adverse environmental impact of its operations and bad an adequate program in place (see also para. 3.2), although the port's contribution to the environmental problems of Shanghai is very small in relation to those of industry, power stations and households in the area. The Huangpu river, which serves as the main source of drinking water for Shanghai, is heavily polluted since it serves also as a sewer for a substantial part of the city's industrial and human waste: it receives about two million cubic metors of waste-water daily from the 12 million residents and 9,000 factories in the city. Major improvements in waste-water disposal are under way as part of a Bank-financed sewerage project (Ln. 2794/Cr. 1779-CHA). 3.14 The port contributes marginally to this pollution, mainly through accidental oil spills and spillage of coal and other bulk cargo (fertilizer); these are most likely to occur during mid-stream cargo operations. Port management is conscious of pollution and safety requirements and has taken a number of steps to safeguard the environment in the course of its activities. * 18 - These measures are summarized in the environmental impact assessment (EIA) carried out for the proposed project (Annex 4). 3.15 The ZIA recommended several studies to be conducted, namely: (a) a study of the West Shanghai Outfall to mitigate its polluting effects on the near shore water environment; (b) a study c.r the receiving capability of the Huangpu river; (c) a study on source disposal outlets south of Waigaoqiao terminal; and (d) a study on the effects of disposal of the Huangpu river maintenance dredging by pipeline to the Yangtze in the Waigaoqiao area, on the Waigaoqiao marginal wharf area and on the Yangtze. SMG has started monitoring the West Shanghai Outfall area and the necessary mitigating measures will be implemented. The Municipal Environmental Protection Bureau (MEPB) monitoring of the Huangpu river showed that its lower reaches had reached the maximum pollution capacity and hence SPA has decided to freeze or reduce cargo handling throughput at the Huangpu river terminals. At the same time MEPB is monitoring the effluent volume from factories and placing limits on these effluents. A report prepared by SPA on the effects of the source disposal outlet of Waigaoqiao showed that it would have no effect on the proposed project facilities. The Shanghai Dredging Corporation has studied the effects of disposal of the Huangpu river dredged material on the Waigaoqiao area; these studies show that the impact is insignificant. 3.16 Ship waste reception and disposal will be handled through the Ship Waste Disposal Project (Cr. 2391-CHA, GE) 10398-CHA). The noise at the grain terminal, District No. 2, is being addressed under the current Ningbo-Shanghai Ports Project (Ln. 3006-CHA). Measures are also being taken to overcome or minimize: (a) dust from coal and iron ore handling at Districts No. 7 and 8, respectively; (b) air pollution from boiler chimneys; and (c) hazards from the handling of dangerous cargo. Sprinklers and water collection, purification and recycling facilities have already been installed at the stacking yards of Districts No. 7 and 8. The dust resulting from the grab unloaders will be countered by renewing the grab teeth and providing sprinklers on the unloading bin. This would address the dust issue until the grab unloaders could be replaced by covered continuous ones. SPA is addressing the problem of air pollution from boiler chimneys by providing the necessary filters. This will be completed by December 1995 with SPA's own funds. A study is being carried out under German Goverrment funding for improving the handling of dangerous cargo. The scope of the study is in Annex 5 and the report, when completed, would be sent to the Bank. E. SPA Management and Organization 3.17 The port of Shanghai has a two-tier organizational structure: SPA which incorporates all central functions organized as departments, and a group of port-owned operating units organized as corporations or companies (Charts 1 and 2). Since 1988, SPA, which is administratively responsible for the operation and development of the port, has been under the dual jurisdiction of SNG and MOC. Prior to 1986, it was a local unit of MOC. SPA is charged with implementing a policy of financial self-sufficiency and must support both its operations and investments from internal cash generation. It employs a total of some 55,000 staff, of whom about 1,600 are engineers and technicians, 14,600 stevedores and equipment operators 4nd around 900 managers and administrative staff. SPA needs to expand its level of computerization to - 19 - cover financial and operating information which are still prepared manually ln many areas. (a) SAW5AI Portl Ulhgri 3.18 SPA is responsible for the management and operation of port-related facilities, and for the planning, design and construction of port facilities subject to approval by HOC and SPC. It manages all common user wharves and docks, buoys, anchorages and other facilities engaged in serving the transportation of passengers and goods. It is charged with the collection of various harbor, construction, service, and transportation fees, and enforcement of laws and regulations affecting the port, i.e., those that are not under the control of the Harbor Superintendency. SPA is responsible for coordinating its development planning with the Waster Plan of the SMG and the Central Government's five-year and annual operating plans. (b) Port Districts and Cornorations 3.19 The individual enterprises, which make up the second tier of the port organization, replicate most of the organizational activities of SPA and are usually organized into four departments and supporting divisions. The relationship between the enterprises and SPA is defined in contracts which determine, inter alia, allocations of cargo, productivity targets and distribution of district level profits. (c) Shanghai Hrbor. S="erpenudui 3.20 The Shanghai Harbor Superintendency (SHS), a department of MOC, is responsible for ship movements, ship safety and channel maintenance, and is organized along these principal functions. SHS has a total staff of 3,000, of whom 1,700 are assigned to channel maintenance, and the remainder are engaged in ship movements and harbor traffic control. On average, there are some 6,000 vessels in the harbor on any day. Movements of vessels are controlled by five control stations linked by telephone, while communications with ships are by radio telephone. SHS has jurisdiction over ship movements along the East China coast (23'N to 35'N) and maintains all navigational aids in this area. (d) OUEl;g trol Q=isglan 3.21 A quality control commission has been set up under SPA, charged with setting performance standards and targets. The work of the commission is divided into six categories: operational decision making; production- dispatching; technical assurance; capital construction development; training and services; and personnel motivation. After setting targets, the commission bas to obtain approval from the staff and workers' congress, an elected body, before submitting the targets to the Port Director. During the year, information on performance is fed back and targets are revised every siX months. - 20 - (a) Four Ports Commsion 3.22 The four majs.r regional ports--Shanghai, Ningbo, Nantong and Zhangjiagang--have established a commission which meets periodically to coordinate cargo allocation and future port development. The commission is organized under the auspices of the Shanghai Economic Zone Planning Office. F. Planning. Budgeting. Accounting and Audit 3.23 The long-term development plan of the port of Shanghai is prepared by SPA and submitted to SHG, MOC and SPC for approval. SMG's main objectives are two-fold: (a) to ensure that the port's development fits into the city's Master Plan and (b) to support the port's development, for example, through the provision of access roads. 3.24 SPA's financial year is January to December. SPA prepares the annual budgets during September and October. The budget package has three main components: - Operating budget = Capital Expenditure budget, and = Replacement budget Based on the information provided by the Planning Department (on traffic forecast by cargo type and by domestic and foreign trade), the Technical Department prepares all sections of the budget. The capital expenditure budget is prepared five yearly and then broken down annually. The operating and replacement budgets are approved by the Director of SPA, and the five-year capital expenditure budget and that portion of the replacement budget where a single equipment costs more tLan Y300,000 are approved by MOC. Financial planning and budgeting are confined to the control of expenditures rather than to the monitoring of performance. The annual budget is mainly used as a control tool. 3.25 SPA uses double entry accounting and accrual-based accounting systems. The accounting guidelines and procedures are issued by MOF. The financial statement and the classification of accounts are prescribed by MOC. The accounting system was basically designed to ensure compliance with set rules. It does not facilitate decision-making for improving productivity and efficiency under market oriented operations. SPA's financial statements comprise an income statement and a balance sheet. At the request of the Bank, however, SPA prepared the cash flow statement so that its financial condition could be nonitored. 3.26 SPA needs to modernize its accounting system and adopt commercially oriented, internationally accepted accounting standards and practices. It needs to strengthen computerized long term financial planning and forecasting, internal auditing and control, evaluation, and control of financial performance. To achieve this goal, technical assistance would be required by SPA and this will be provided under the project (para. 4.4(c)). 3.27 Until recently the State Audit Administration (SAA) was carrying out the external audit of SPA. Since the decentralization of ports, the Auditing 21 - Bureau of Shanghai Municipality (AB8H) has started auditing under the guidance of SMA. The Bank has accepted this arrangement. During negotiations agreament was reached that (a) SPA will submit to the Bank not later than six months after the end of each fiscal yew. audlted financial statements Including enterprises that operate under SPA; and (b) GOC will submit to the Bank audited accounts of the project expenditures including the Special Account and Statements of Expenditure (SOBs), with a separate opinion on the S0Bs. C. Traffic--Past and Future Past Laffic 3.28 Despite the sbarp decrease in national economic activities starting from the second half of 1989, traffic at the port of Shanghai has, since the open door policy of the early 1980s, reached 146.8 million tons (mt) of cargo in 1991, of which, about 67 percent (98.4 mt) was handled by SPA. Of this, 76 percent of traffic is domestic cargo and 24 percent foreign trade cargo. Within the domestic trade, waterways (including coastal, Yangtze river, inland waterways) handled 63.8 percent of incoming cargo and 46.2 percent of outgoing cargo. This traffic composition reflects the economic base of the hinterland, in particular the high level of water-to-water transhipmuent traffic of the port and Shanghai's status as the major traditional cargo transhipment and distribution center for the region. The actual average traffic growth per annuxm for SPA by major groups during 1981-91 is summarized as follows: AVELGE TRAFFIC GROWTH PER ANNUM (1981-91) (percent) Dry bulk of which: Coal 4.7 Fertilizer (foreign Imports) 4.7 Others 4.2 Container ZI_1 General cargo of which: Construction materials 2.3 Conventional break bulk 1.0 Total traffic bandled bv the port I. 3.29 Details by commodity are given in Table 3.1. The modal split for distribution of traffic to and from the port is shown ir Table 3.2. Traffic origin/destination analysis and cargo owners' survey for major commodities handled by SPA are given in Annex 6. - 22 Futue Traffic 3.30 Total port traffic handled by SPA is expected to increase by about 40 percent over the next 14 years from 98.4 mt in 1991 to 135.4 mt in the year 2005 (2.3 percent per annum) and is expected to reach 174 mt by the year 2020 (1.7 percent per annum). This forecast is based on the assumption that part of the traffic which would normally have come to Shanghai would divert to other ports to take advantage of cost savings, particularly for domestic dry bulk and foreign-going container traffic which either needs to be rerouted to other surrounding domestic feeder ports or to the nearby deep water port of Ningbo. The estimated average annual traffic growth rate of each commodity type up to 2005 is summarized as follows: AVERAGE TRAPFIC GROWTH PER ANNUM (1991-2005) (percent) Dry bulk of which: Coal 2.2 Fertilizer (foreign imports) 0.7 Others -2.9 Container 5. General cargo 4.0 of which: Construction materials 5.4 Conventional break bulk 3.4 Total traffic handled by the port 3.31 In 1991, the domestic transhipment of coal and bulk fertilizer formed the major portion of the total dry bulk cargo (over 70 percent), and the total dry bulk comprised almost two-thirds of total traffic handled by SPA. Foreign-going container traffic is expected to have the fastest growth rate. General cargo is also expected to grow faster than in the past due to the open-door policy adopted by the Government, in particular for foreign trade. The average annual growth rate for total foreign cargo, between 1991- 2005, is expected to be 3.0 percent compared with 2.1 percent for total domestic cargo. Construction materials (mainly sand, stone, brick and tile), in particular, are expected to grow fast to meet the demands of port construction itself, the construction activities of the city of Shanghai and the ongoing long-term development plan of the region. Given the factors stated above, the traffic forecast of the port may well be on the conservative side. H. Future Development of Shanghai Port 3.32 In order to meet the needs of the projected growth in traffic, SPA had, in 1988, prepared a general layout plan for the future development of the port over the next 30 years. The plan was based on four strategic - 23 - considerations: (a) the need to move cargo handling operations away from the city center and the consequent need to find new sites for future expansion outside the Huangpu River area; (b) the depth limitation in the approach channels to the Yangtze River that limits the size of ships which could serve Shanghai port; (c) the diversion of a large part of the transhipment cargo to other regional ports such as Ningbo; and (d) the development of the Pudong area on the east bank of the Huangpu River included in the Shanghai Metro Area Master Plan which would require the provision of port facilities that would be easily accessible to industries and businesses in the new area. Based on the above factors, the plan visualized the f.uture development of Shanghai port facilities at three new sites: two on the Yangtze - Waigaoqiao on the Pudong side and Luojing - and one at Jinshanzui in Hangzhou Bay on the East China Sea. 3.33 The selection of the three new sites followed a comprehensive screening of several potential locations and has been approved by MOC and by SMG. They have subsequently been incorporated in the Metro Master Plan and approved by the State Council of the People's Republic of China. Taking into account the water depths, geographical locations, inland distribution links and land availability, different functions have been assigned to these three new sites. 3.34 In 1988, SPA and the Bank jointly set up an International Panel of Experts to review the Master Plan (para. 3.11). The panel agreed with the broad direction of development outlined in SPA's plan and suggested that detailed pre-feasibility and engineering studies could proceed, with Waigaoq.ao terminal development being given first priority as proposed by SPA. At the same time it expressed some reservations on the adequacy of the engineering investigations carried out in the preparation of the plan. Since then, SPA commissioned the Nanjing Hydraulic Institute to undertake physical model tests of the proposed terminals, and results indicate that SPA's plans are soundly conceived. As can be seen, future port development in Shanghai has to be outside the Huangpu river, involving the gradual phasing down of operations at existing facilities in the city center terminals. 3.35 A major constraint to development of port facilities at new sites away from the city center has been the high cost of new facilities which until now could not be offset by the sale, lease or alternative use of city center land that may be released by such a move, as technically all city land belongs to the SMG which had to authorize other uses. Recently, SMG has started to give a major portion of the proceeds of the auction/lease of such land for alternative uses to the entity affected (up to 70 percent). This is expected to help SPA to plan for moving several city center port operations to other locations more speedily than it would otherwise have. It must be borne in mind, however, that SPA's city center berths are very large in size and serve a number of customers in their proximity. Their abandonment will have to be planned very carefully and implemented over a considerable period of time, allowing both SPA adequate planning, preparation and implementation time and customers opportunity to make the necessary adjustments. 3.36 S8G, with the assistance of the Bank, is formulating a Shanghai Economic Reform Action Plan (SERAP), focusing on the following areas: state-owned enterprises, financial sector, municipal finances, social security, housing, infrastructure and land management. Detailed action plans - 24 . for each of these are being worked out by SIG with the assistance of consultants. Future Bank projects in Shanghai would be designed to support these reforms. In the area of municipal reforms, the key objectives are: autonomy and strengthening of public utilities and municipal services, pricing of municipal services and laproving the medium-term and annual planning, progra_ming and budgeting process for infrastructure investments and operations. The proposed project would support SEO's reform efforts in such areas as: enterprise reform (SPA), re-orientation of urban growth away from the city center, pollution control etc. - 25 - IV. THE MM A. Prolect Qbiectives and Scope 4.1 The main objectives of the project are to assist SPA in (a) the long term development of the port and the use of its facilities by gradually shifting port operations away from the congested city center and by promoting terminal specialization; (b) providing needed additional capacity in a rational, optimal and environmentally sound way; and (c) increasing efficiency by introducing modern methods of operational and financial management. The project would also provide a basis for the Bank to continue the dialogue (a) with 5OC on the development of the most appropriate strategy for the future development of ports in China and (b) with SPA on the long term planning, development and operation of terminal facilities in Shanghai port. B. Details of the Project 4.2 The proposed project constitutes the first major steps being taken by SPA in the implementation of an action plan for restructuring the existing port facilities on the Huangpu river to rationalize their use and gradually move cargo operations away from the city center. It includes: (a) the provision of new and replacement cargo handling equipment (for existing terminals) to improve cargo handling efficiency and promote terminal specialization; (b) measures to improve SPA's financial condition through tariff restructuring, computerization of accounting, auditing and budgetary control; (c) the construction of new terminals (first stage) at Waigaoqiao and Luojing, and the procurement and installation of the necessary cargo handling equipment for operating the terminals; and (d) technical assistance and training. 4.3 This project will initiate a long-term process of restructuring in accordance with the Naster Plan of Shanghai Port. Key project elements will initiate development of port facilities on the Yangtze river at Waigaoqiao and Luojing thus diverting some of the existing and future traffic away from the city center; help create specialized terminals at Luojing for coal and at districts No. 9 and 10 for containers through provision of the required equipment; initiate planning of relocation of tht fertilizer terminal; and expedite the process of compensating commercial enterprises for high-value land vacated on the Huangpu river. 4.4 Specifically, the loan proceeds would assist SPA finance (a) the provision of equipment for four berths in the first phase of the planned new container/break-bulk general cargo terminal at Waigaoqiao; (b) the construction of, and the provision of equipment for, coal berths at Luojing; (c) the purchase of equipment both for replacement and for addition to the existing fleet in the present port areas including the Guangang and Baoshan terminals constructed under the ongoing Ningbo-Shanghai Ports Project (Ln 3006-CHA); and (d) technical assistance and training in the areas of financial management, tariff restructuring and operations management. - 26 - 4.5 Details of the project are described in the following paragraphs: (a) CkLil .orka (i) Waisaqiao. Four deep water berths with a total length of 900 a and a 300 m long berth for barges will be built to a designed annual capacity of 2.4 million tons. Of the deep water berths, two are multi-purpose berths of which one will be fitted at the outset to handle containers, one for handling steel products and one for handling timber and construction materials. All are capable of being converted for the handling of containers as and when necessary. A container freight station, a 100,000 v2 container yard, a general cargo transit shed, warehouses, open storage areas, workshops, and other ancillary buildings will also be constructed inside the terminal area. The terminal will be served by a network of roads, rail and inland waterways. The planning of the necessary roads is wall advanced; planning of rail and inland waterway connections is under way and they will be provided later when needed. (ii) Iui±ni. The proposed development at Luojing is the first stage In the development of a major coal terminal at that location and comprises (a) two unloading berths, 469 m long and 28 m wide, capable of accommodating vessels up to 35,000 DWT with a depth alongside berth of 10 m and (b) five loading berths for sea-going vessels and river barges of varying sizes with a total quay length of 465 m and a width of 18 m. The terminal has an area of approximately 50 hectares, with the berths extending 1224 m from the shore line. Part of the back- up area has been reclaimed largely using fly ash generated by the nearby Shidongkou Power Station. The terminal will be fitted with equipment to provide an annual throughput capacity of 12.5-15.0 million tons. Two access roads to the terminal will be constructed to link the terminal to the area road network. To serve the torminal with an inland waterway, the Lianqi river will later be extended connecting the terminal to the Huangpu river. There is also a plan to eventually serve the terminal by rail through a link which will connect it to the planned railroad leading to north Jiangsu Province. The hinterland connections to the city and the nearby provinces are under construction. - 27 - (b) 3AidaLaUi Vaigaoqiao will be provided with cargo handling equipment which will enable the torminal to handle containers, timber, steel, construction materials and general cargo. Luojlng will be fitted with two 1,250 tons per hour capacity bucket chain ship unloaders, one 1,250 tons per hour capacity grab unloader, and two ship loaders each with a capacity of 1,500 tons per hour. Coal will be stacked at the yard using three 3,000 tons per hour stackers and four 1,500 tons per hour reclaimers. Transfer from berth to stack yard will be by conveyors. Equipment for the existing terminals are essentially to replace those that are obsolete or found to be beyond economic repair as well as a few pieces of now equipment to facilitate terminal specialization and increase productivity. Equipment to be procured using the proceeds of the loan are listed in Tables 4.2, 4.4, and 4.5. (c) Technical Assistance and Training (i) Support for SPA Restructuring Plan. An Action Plan for 'restructuring existing terminals, in accordance with the policy agreed with the Bank, for the relocation of cargo handling activities away from the city center and for terminal specialization, had been prepared by SPA and was reviewed by the Bank at the time of appraisal (Annex 7). The plan takes into account the recomuendations of the Bank's October 1987 mission and the recommendations of the international panel of experts which reviewed SPA's general layout plan. The proposed project marks the first phase in the implementation of this plan. (ii) Insitutinatut l Deelgm=n. SPA will be assisted in introducing measures to improve its accounting systems, to revalue fixed assets, to computerize its accounts, to restructure tariffs on the basis of costs (para 2.20), and to introduce corporate planning (para. 6.18). Technical assistance will also be provided to assist SPA in carrying out a cargo unitization study and a vessel traffic management study and in corporate planning and the development of a management information system that includes port operations and financial management. Overseas training in port operations, environmental enhancement, financial management, port engineering and computer applications, will be provided to SPA*a managers. Training in equipment maintenance will be undertaken by suppliers as part of the contract for the procuremnt of cargo handling equipment. The terms of reference were agreed during negotiations. Technical assistance in container terminal operations is being provided by German experts under bilateral financing. - 28 - C. Cost Estimates 4.6 The total project cost is estimated at Y2439.36 million or $424.28. million with a direct and indirect foreign exchange component of Yl,129.43 or $195.77 mdllion. The cost of civil works is based on work quantities calculated from preliminary engineering designs computed on the basis of NOC's standard manuals for labor and equipment productivity and current market prices of materials and checked against prices of similar works. The cost of equipment is based on prices quoted by manufacturers and suppliers in recent bids for the procurement of similar or equivalent equipment executed with Bank financing. The cost of consultlng services is estimated on the basis of recent fees charged by foreign consultants for services similar in nature and scope. Detailed cost estimates are found in Tables 4.1-4.4 and are summarized below. The project is exempt from duties and taxes. 8AN OF I T MT X !TB8 Juma 1992 Ptices) Lcal. potela Total Local Tor.1u Total lori.± (Yuan md111a) --- (08$d m(8ion) --- (2) civil worl 889.06 136.91 1025.97 163.13 25.13 188.25 132 Ugut 108.56 698.96 807.52 19.91 128.25 148.16 871 T.A./traftis: 0.62 6.99 9.81 0.15 1.65 1.80 921 8ub total 918.44 t44.86 184.3J 183.19 1U.,2 998.l1 i Ibysical oont4u*anoyLs 99.77 63.59 183.36 16.31 15.36 33.67 46S Price .ontIngmaeys 211.72 200.98 412.70 27.01 25.39 52.40 491 Total project eoat 1309.93 1129.43 2439.36 228.51 195.77 424.28 46X - inminin J. 1O1 o¢ civil work and *qydpsent costs. Us5x 4nntwrantienal ual. escalation factors of 2.61 in 1992. 3.9S In 1993. 3.9X in 1994. 3.61 ln 1995 and thereafter. Price escalation factor for Yuan - 6.61 In 1992 and 5.02 thereafter. D. FinaniLng Plan 4.7 Financing for the project will be provided as follows: Component Total Cost Bank Loan SPA * ''-.......--(S million) - Civil Works 236.36 8.83 227.53 Equipment 186.12 139.52 46.60 Technical Assistance and Trainlng 1.80 1.65 _ 0.15 Total " 2 150.00 2z7zi * 29 - 4.8 The Bank loan of $150 million, representing about 36 percent of the total project cost or about 77 percent of the foreign exchange cost, will be made to COC and will be used to finance the foreign exchange cost of civil works for the marine structure at the Luojing terminal, the procurement of equipment under the project and the provision of technical assistance and overseas training. The remaining foreign costs and all local costs will be financed by SPA. Reforms in government lending policies have been introduced and steps taken to convert customary grants into interest-bearing loans in COG dealings with public utilities. GOC has also gradually increased the on- lending rate. For the Three Ports Project in 1983, the interest rate was about 3.6 percent; for the Tianjin Port Project in 1987, it was 4 percent; for the Huangpu Port Project in 1988, it was 5 percent, and for the Ningbo and Shanghai Ports Project in 1988 it was increased to about 6.2 percent. For the proposed project, during negotiations it was agreed that GOC will onlend the proceeds of the Bank loan through SMG to SPA at an interest rate of about 90 percent of the Bank's variable interest rate for 20 years, including a grace period of five years; SPA will bear the commitment fee (0.75 percent on the unwithdrawn balance) and the foreign exchange risk. Approval of the Loan Agreement by China's State Council and the conclusion of Subsidiary Loan Agreements between the Government and SMG and between SMG and SPA satisfactory to the Bank, are conditions of loan effectiveness. In future projects, GOC intends to raise the interest rate on onlending to a rate equal to or greater than the Bank lending rate. E. Status of Prenaration 4.9 Civil works for the four berths at Waigaoqiao are under way. Preliminary design for the Luojing terminal was completed in May 1992; detailed engineering is expected to be completed in June 1993, after the soil test program results are finalized. Specifications for cargo handling equipment and bidding documents for their procurement are being prepared by SPA, and will be completed before June 30, 1993, except for Luojing terminal which would be completed by the end of 1993. 4.10 An Action Plan for the restructuring of terminals to eventually shift cargo handling activities from the city center ha! been prepared by SPA and reviewed by the Bank. The plan, summarized in Annex 7, will be implemented by SPA in the context of its long-term development plan. The Port Costing and Management Information System study, which will provide the necessary inputs for improving SPA's financial performance including tariff restructuring, asset re-valuation and computerization of accounts, is in progress and its design and development is expected to be completed by December 1993. F. Project Implementation 4.11 Implementation of the project, as with previous projects, will be the responsibility of SPA, with NOC providing general supervision and guidance. SPA is assisted by consultants (the Third Harbor Engineering Investigation and Design Institute) in the design of the terminals at Luojing and Waigaoqlao. Construction supervision will be undertaken by the Capital * 30 - Construction Department of SPA. Implementation of previous Bank-assisted projects by SPA has been satlsfactory, and this experience should benefit implementation of the proposed project. 4.12 hxternal consultants will be engaged to assist SPA in vtdertaking a cargo unitization study (para. 3.12), the development of a Management Information System (MIS) and the computerization of accounts, and in tariff restructuring (para. 6.19). Training in oquipment operation and maintenance will be provided by suppliers; overseas training for senior staff and managers will be undertaken at major international ports in agreement with the Bank. 4.13 The project is scheduled to be completed at the end of 1998 with a loan closing date of June 30, 1999. The implementation schedule is shown in Table 4.6(a). G. ,Procumnt 4.14 Procurement under the project will be carried out as shown below. The figures in parentheses represent the amounts to be financed by the Bank. All figures include estimated physical and price contingencies and are rounded. Procurement Method NBF Total project ICB LC OtherLA cost ------------------ ($ million) -------- Civil Works 26.04 - 210.32 236.36 (8.83) - (8.83) Equipment 180.12 3.00 3.00 186.62 (133.52) , (3.00) (3.00) (139.52) 'eebhnical assistance and training - - 1.80 1.80 (1.65) (1.65) Total 206.16 3.00 4.80 21O. 424.28 (142.35) (3.00) (4.65) (-) (150.00) 1A International and local shopping. Includes consultant services. NBF - Not Bank-Financed 4.15 Procurement arrangements for the project take into account the experience gained from previous Bank Group-financed port projects. Documentation for the procurement of works and goods has recently been standardized for China and the model documents will be used for procurement under the project. - 31 - 4.16 Civil wvorks for the marine structure at the Luojing terminal estimated to cost $26.04 million and major items of cargo handling equipment with an estimated aggregate cost of $180.62 million will be procured follow.ig international competitive bidding (ICB) procedures. However, a few items of standardized equipment of basic technology estimated to cost not more than $300,000 r-r contract, in an aggregate amount not exceeding $3.0 million, where foreign bidders are not expected to be interested, may be procured by Local Competitive Biddings (LCB). A list of these items is given in Table 4.7. Further, items or groups of items covering minor maintenance equipment and equipment for workshops, research and environmental protection purposes, estilmted to cost less than $200,000 per contract, in an aggregate amount not exceeding $3.0 million, may be procured following international and local shopping procedures on the basis of a comparison of price quotations solicited from at least three eligible suppliers in accordance with the Bank Guidelines for Procurement. Planned procurement packaging is shown in Table 4.8. Civil wvorks not financed by the Bank amounting to $210.32 million are being procured by SPA following local procedures. 4.17 Prequalification of contractors for the civil works contract for the marine structure at Luojing and suppliers for the cargo handling system and equipment for the Luojing terminal will be undertaken in advance of bidding to ensure that invitations to bid are extended only to qualified bidders. All contracts exceeding $300,000 for the procurement of works and goods financed from the proceeds of the loan will be subject to prior review by the Bank. This would represent about 60 percent of the estimated amount of all contracts under the project. Under ICB, qualifying domestic contractors and manufacturers will be eligible for a margin of preference in the comparison of bids of 7.5 percent for civil works and 15 percent (or the prevailing rate of customs duties, whichever is lower) for goods. All consultants financed from the proceeds of the loan will be selected and employed under terms and conditions acceptable to the Bank in accordance with the Bank Guidelines on the Use of Consultants. H. Disbursgenot 4.18 Disbursements from the loan would cover: (a) 34 percent of total expenditures in respect of civil works for the marine structure at the Luojing terminal; (b) 100 percent of foreign expenditures for directly imported equipment or 100 percent of local expenditures (ex-factory) for locally manufactured equipment, and 75 percent of local expenditures for other items procured locally; and (c) 100 percent of expenditures for consulting services and training. 4.19 To facilitate disbursement, a Special Account will be opened with an authorized allocation of $5.0 million, the estimated average expenditure for a four-month period, in a bank acceptable to the Bank. Applications for replenishment of the Special Account will be submitted monthly or when the account is drawn down by 50 percent, whichever occurs first. A schedule of 32 - estimated disbursements, which takes into consideration the disbursement profile for transport projects in China, is given in Table 4.9. Retroactive financing up to $15.0 million is provided to enable SPA to proceed with tle payment for some items of equipment (under way for LCB items, see para. 4.15) for Waigaoqiao pending loan approval, in order that the first berth, expected to be completed by early 1993, can become operational as soon as it is completed. Retroactive financing would apply to payments made after June 30, 1992. 4.20 Disbursements will be made against full documentation except for small contracts for equipment worth less than $300,000 each and for costs incurred for training which may be made on the basis of statements of expenditure (SOEs). Documentation supporting SOEs will be retained by SPA and will be made available for review by Bank supervision missions. I. Proljct Monitogrin 4.21 The project will be supervised regularly in conjunction with other ongoing port projects. In addition to field supervision, the progress of project elements will also be monitored through biannual progress reports submitted to the Bank. An outline of the report is presented in Annex 9. Giver. that SPA has been involved in two earlier Bank projects and the advanced stage of project preparation, no unusual supervision costs are anticipated. The focus of Bank supervision efforts in the first year would be on procurement of equipment, and improvements in SPA's operational and financial maiagement. Table 4.6(b) summarizes project launch actions, which were confirmed during negotiations. During project implementation the Bank's supervision efforts would focus on: technical specifications of equipment; procurement process; tariff restructuring; port operating improvements; financial management; and corporate planning. Supervision of this project will be combined with the supervision of two other ongoing projects - the Ningbo-Shanghai Ports Project and the Ship Waste Disposal Project - and the mission composition will be in accordance with the coubinted needs of these three projects. Upon completion of the project, GOC and SPA will prepare a project completion report not later than six months after the loan closing date. J. project Impact on Ecology and Environment 4.22 Most of SPA's existing facilities are located along the Huangpu river surrounded by high density residential and commercial neighborhoods. This has generated amplaints from the local population about dust, noise and vehicular traffic. The quality of the water of the Huangpu river, particularly in the lower reaches, is poor and the underlying sediment is contaminated due to a combination of untreated sanitary sewage, storm water drainage and industrial effluents from small enterprises being dumped into the river. Projected quantities of waste-waters from the port facilities and shipping are small in comparison with the approximately 1.3 million tons of Industrial effluents and 610 million tons of sanitary sewage discharged annually into the river system in Shanghai. The Bank is addressing these problems through the Shanghai Sewerage Project (Ln.2794/Cr.1779-CHA) and the Ship Waste Disposal Project. - 33 - 4.23 Conditions in the port have been exacerbated during the past decade as extensive economic development has led to significant increases in the port's traffic. The consequences are particularly acuts in the case of coal handling for which Shanghai is a major transhipment center. District No. 7, designed to handle 22 million tons per year, handled over 42 million tons in 1990. Further, coal handling is projected to increase to 68 million tons a year by 1995. To alleviate the situation, new terminals will be developed on the Yangtze river away from the city center and various measures will be taken for the amelioration of conditions, including additional or new dust control devices, now offloading equipment to reduce noise, and new effluent and waste management facilities at several of the terminals to ensure that they meet current and proposed effluent and emissiou standards. 4.24 Bulk fertilizer handling at District 8 also contributes to pollution. SPA is carrying out a study on the possibility of shifting fertilizer handling away from the city center facilities. During negotiations, agreement was reached that SPA will complete the study by December 31, 1994, and agree with the Bank by December 31, 1995, on an action plan and thereafter implement it. 4.25 As required by current national laws, SPA undertook environmental impact assessments (EIA) of the proposed developments at Luojing and Waigaoqiao through the Shanghai Environmental Protection Sciences Research Institute (SEPSRI). Completed in 1989, the reports have been reviewed and approved by S1IW. A review of the ZIA and the envirormental protection measures proposed to be taken in the existing terminals sniowed that a thorough and detailed impact assessment was undertaken. (A sumary of the EIA is presented in Amnex 4.) Care will be taken to ensure that the engineering designs of the new terminals and the technical specifications of the equipment to be procured will incorporate the necessary mitigating measures prescribed in the EIA. These measures include (a) secondary treatment of sewage from both ships and port facilities, (b) solid waste management with maximum recovery and recycling of such wastes as compost and metal containers, (c) planting and intenance of extensive greenbelt areas to contain dust and noise and, where necessary, bemrs or walls as noise barriers, and (d) an extensive dust suppression system at taojing employing water sprays and enclosed conveyor distribution systeas. The provision of treatment facilities for oily and other contaminated wastes from ships and port facilities is already being attended to in the Ship Waste Disposal Project. A technical note on the use of fly ash as fill material is given in Annex 8. During negotiations, SPA agreed (a) to carry out all measures necessary to mitigate any negative environmental impact of the project and (b) operate appropriate environmental protection facilities and monitor compliance with GOC and SIG environmental laws and regulations. 4.26 Investments proposed under the project to upgrade facilities and equipment in the existing terminals will have a beneficial impact on the environment. The proposed developments at Luoj ing and Waigaoqiao will have only insignificant impact which can be further mitigated through a comprehensive environntal protection and management plan supported by a monitoring progrm by the Port Enviromental Protection Bureau. SPA has sufficient expertise to monitor the waste streams and ensure that current criteria are met. To further safeguard the environment against the impact of future delopments In their vicinity, SEQ'a Environmental Protection Bureau has started to monitor: - 34 - (a) the impact of the West Shanghai Outfall on the near shore water environment; and (b) the effluent volume from factories on the Huangpu river with a view to placing limitations on these effluents. Further studies are planned to determine the assimilative capacity of the receiving environment in the Baoshan area vis-a-vis future industrial expansion and to determine the influence of the Zhuyuan Outfall to be commissioned in the Vaigaoqiao area. 4.27 The impact of the proposed developments at Luojing and Walgaoqiao on the hydrological regime is minimal. Most of the area required, for the landside facilities at Luojing terminal, will be constructed in an area currently bermed for coal ash water disposal while Waigaoqiao is an agricultural area. Wharves are to be constructed of the open-pile-structure a type for miniml effects on the currents and the littoral zone, and for 0 minimal or no maintenance dredging In the future. The state of the marshlands and littoral zone was found to be relatively weak as early as 1982 due to the impact attributed to heavy industry and effluents having been dumped in the area for several decades, and it has not been rated as a significant wetland resource. It was, therefore, concluded that the zone defined for the proposed port development could not be rated as valuable wetlands. 4.28 For the Luojing terminal stacking yard, SPA would consider in the design provision of either an impervious layer below the coal stack or a well point system to draw out any leaching from the coal stack into the ground water, or both. 4.29 Three hundred and seventy families at the site of the Waigaoqiao terminal have already been resettled in new housing constructed by SPA. Resettled families were given financial compensation in addition to new housing. Discussions with members of resettled families selected on a random basis revealed that the resettlement terms were generous and satisfactory. - 35 - V. EN1 1 A. ntaroductgn 5.1 The port of Shanghai is the most important port in China and one of the largest in the world. It i8 located on the Huangpu river, about 30 km upstream of its confluence with the Yangtze river and close to the East China Sea. The coastal location, the Yangtze river, the Huangpu river and the inland waterway system surrounding the whole area connecting it to many other smaller feeder ports, help Shanghai port serve not only the city of Shanghai, the largest industrial city in China, but also a vast hinterland. The economic influence of the port extends not only to the inland river ports along the Yangtze river but also to all other major coastal conurbations in China. Port Operations and Ex1a0AULn Pla 5.2 As detailed in Chapter III, SPA has a total of 143 berths spread over 15 districts, each district operated by a separate business enterprise. Only one district (Saoshan, 8 berths, deslgned annual handling capac'ty 2.9 at) is not along the HuaD8u river. The congested state of operations along the Huangpu river and the expected steady increase in the port's traffic have caused the port to seek alternative locations to provide facilities to meet the future traffic demand in the long term. Some of the proposals being pursued are summarized, briefly, as follows: (a) To divert some of the traffic to other feeder ports on the basis of the most economic routing of the cargo. (b) To build new terminals outside the Huangpu river to accommodate the increasing port traffic as visualized in SPA's Kaster Plan. (c) To limit the role of the existing districts by reducing the scale of their operation. (d) To maximize the throughput capacity by the replacement of obsolete equipment with more efficient ones and the relocation of some of the activities to new terminals outside the Huangpu river. (e) To improve operational technology and handling efficiency of the port. 5.3 SpecLfically, under the Eighth Five-Year Plan (1991-95), the port's capacity is to be upgraded through: (a) Construction of two new terminals (first stage) outside the Huangpu river which includes: (i) four berths at Waigaoqiao including two multi-purpose berths, one container berth and one construction materials berth, with a total annual designed throughput capacity of 2.4 mt-- as already stated, this is the first phase of a long-term development planned at this location, and - 36 - (li) cool handling facilitles with a total annual designed throughput capacity of 12.5-15.0 at at a new coal terminal in Luoj ing; (b) Renovation of 11 existing berths on the Huangpu river; and (c) Renovation of, and additions to, the port's equipment fleet for five different types of cargo (fertilizer, coal, construction materials, containers, and break-bulk general cargo). B. Costs and Benefits of the Proposed Project Operational Parameter-s 5.4 Operational parameters used in the economic evaluation for the analysis of the costs and benefits of the proposed project are given in Table 5.1. These were reviewed with SPA and were considered realistic. Protect Costs 5.5 For the economic evaluation of the project, all costs necessary to the completion of the facilities planned under the project have been taken Into account. Only certain costs being incurred at Luojing to facilitate the construction of the next phase of coal facilLties for reasons of economy and convenience (amounting to less than one- fifth of the terminal costs) have been Ignored. All lnputs and outputs have been evaluated in cons tant 1992 economic costs. Financial costs have been converted to economic costs by shadow pricing each berth's input categories. Conversion factors for each input category are based on estimates determined in completed Bank studies. All price contingencies, taxes and duties are excluded. For traded goods, c.i.f. prices of iLports and f.o.b. prices of exports are used in estimating the cost of materials and equipment, with adjustments for the cost of inland transport. The official exchange rate in July 1992 is used to convert foreign costs to yuan (Table 5.2). 5.6 The overall conversion factors are 1.22 for break-bulk berths, 1.20 for coal berths, 1.27 for construction materials berths, 1.21 for container berths, and 1.05 for bulk fertilizer berths. The factors derived for the various cost items (Table 5.3) have been applied to the annual project expenditures to obtain the stream of project economic costs. Pro1ect Benefits 5.7 Using the congestion currently being experienced in Shanghai port's facilities along the Huangpu river and the forecast increase in future traffic as the basis, the economic analysis primarily focussed on the benefits derived from relleving congestion in the port. Details of the traffic forecasts are shown in Table 5.4. The proposed project will yield quantifiable benefits in the form of savings in cargo handling costs, ship time (both waiting time and operating time), and cargo time (Table 5.5). In the case of coal handling and other equipment for the rehabilitated berths, there will be large benefits from reduced environmental pollution but, unfortunately, these are not yet quantifiable in monetary ter"m. * 37 - 5.8 Savings in Cartp Handlig Coat. Some savings in the direct coat of cargo handling are expected from handling the cargo over the new berths and/or the new facilities compared with the present facilities, but these will be relatively small. However, without the project, the only way to handle traffic In excess of available berth capacity would be through more costly lightering. SPA estimates lightering costs to be 3 to 4 times normal handling costs. Detailed estimates of handling cost savings are shown in Table 5.6. Lightering has been assumed for cargo tonnage in excess of berth capacity at 95 percent occupancy, at a cost three times that of normal handling. Substantial savings in the cost of handling coal at the existing berths after renovation and at the proposed now berths are expected. Savings in handling costs have been converted to economic benefits by shadow pricing the main cost components of normal handling and of lighter!ng. Conversion factors of 1.05 for berth handling and 1.1 for lightering are used; these factors were estimated In a previous Bank study. 5.9 Savings 1 ShL p Tim. These include both reductions in ship time waiting for berth and working at berth due to improved cargo handling. Estimates of savings in ship waiting time resulting from the project are shown In Table 5.7. Ship costs used for the economic evaluation are the low end of the ship costs given in the ship cost model developed by the Bank. The annualized ship resale value plus operating costs have been used to calculate project benefits. The annual resale value of ships has been assumed to reflect the present state of the shipping industry; it gives a slightly lower return than the annualized replacement value of ships. 5.10 Savings in Cargo Tism. Savings in ship time apply also to cargo: the benefit is interest saved on the value of cargo. For domestic cargo, the marginal source of working capital would be loans from the People's Construction Bank of China at 7-8 percent interest. For foreign cargo, the higher foreign exchange working capital needed would require more foreign borrowing, and it is assumed that this would be at China's marginal cost of capital of around 12 percent. Roughly 80 percent of all cargo passing through Shanghai is in donestic trade. Interest savings have, therefore, been calculated assuming an average rate of interest of 9.0 percent per annum. 5.11 Total project benefits for the items discussed above are presented by year in Table 5.7. The major part of project benefLts would be in ship time savings. These would accrue first to ship owners and could be passed on t) cargo owners. Coal and construction materials are in domestic trade and ship and cargo owners are 100 percent Chinese. As for the other traffic, the vast majority of ships calling at Shanghba are either Chinese-owned (COSCO) or Chinese-operated: it is expected that 90 percent of the project benefits for such traffic will also accrue to China directly. C. Economic Return and SensitiVity Analysis Overa Ecnoi EvalO and Sensitivt Analysis 5.12 Table 5.8 (a,b and c) sets out the economic rate of return (ERR), not present value (NPV) and sensitivity calculations for the various project compents as well as the entire project. The overall ERR, for the project as a whole, is 36.7 percent, with ERRs ranging from 17.5 percent for coal - 38 - terminals to 52.5 percent for bulk fertilizer berths, 49.9 percent for the container berths, 36.8 percent for break-bulk berths, and 27.6 percent for construction materials berths. The sensitivity of the ERR and the NPV of the project to variations in costs and benefits is'sumnarized as follows: NPV (@12X ERR (X) discount rate) (Y million) Bass case 36.7 2,598.7 15X increase in cost 32.7 2,396.4 151 reduction in benefits 32.1 2,006.6 151 increase in cost combined w/ 15X reduction in benefits 28.4 1,804.3 1-year project delay 29.5 2,124.1 This shows that even for large variations in the major parameters which are unlikely in the Chinese context, where project planning is very conservative, the ERRs would be very satisfactory. If ship costs in the mid-range of the ship cost model were used, the ERRs would be 5 to 7 percentage points higher. 5.13 An evaluation was also carried out to assess the economic viability of the three major parts of the project: (a) the rehabilitation of existing terminals, (b) the construction of the Waigaoqiao marginal berths, and (c) the construction of the Luojing coal facilities, along with the purchase and installation of the associated equipment. The results indicate that the ERR would be a very high 69.2 percent on the renovation of existing terminals (for reasons somewhat similar to those applying to the bulk fertilizer facilities, where a relatively small investment in equipment produces large improvements in productivity), 33.1 percent on the Waigaoqiao terminal and 14.2 percent on the Luojing terminal. The ERR for Luojing does not include benefits derived from (a) reducing pollution in the city by moving part of the coal handling from city terminals to a location away from the city and (b) by using covered continuous unloaders at the new location, as-these benefits cannot be quantified in monetary terms at present. A sonsitivity analysis indicates that the ERR for Luojing could decline to 8.4 percent in the worst combination of circumstances, but this is highly improbable, and this part of the project is the most attractive from the point of view of its environmental impact. Using ship costs in the mid-range would yield an ERR of 13.0 percent even in this situation. ZLitSik 5.14 The majority of the components to be financed under the project show very robust economic returns. The viability of the investments in the facilities for bulk fertilizer is unlikely to be affected by any foreseeable factor, for the returns are ostimated to be quite high as large improvements In throughput efficiency will result from modest marginal investments. The ERRs for coal and constructlon materials are subject to a low degree of uncertainty due to (a) the severe traffic bottlenecks in coal transport - 39 - throughout China and (b) the growing demand for construction materials expected for the greater metropolitan area and the port. The ERRs for break- bulk berths and container berths are dependent on two factors: (a) the degree of diversion of long-distance ocean-going container traffic from Shanghai to other nearby deeper water ports and (b) changes in the container penetration ratio of general cargo traffic. The former has been taken into account in the planning stage, resulting in a relatively low container growth rate in the traffic forecast of the port. The latter has been taken into account by providing for the possibility in the original design of the conversion of the proposed two multi-purpose general cargo berths (at Waigaoqiao) to container operation in the future. The ERR for the new coal facilities at Luojing could decline to as low as 8.4 percent in the worst combination of circumstances, but this is highly improbable, and this part of the project would still be the most attractive from the environmental point of view. (Even in this case, using the mid-range of the ship costs would yield a return of 13 percent.) 5.15 The only remaining tangible risk in the physical parts of the project is that there may be prolonged delay in the course of implementation. On the basis of preparations already made by SPA and its past record, this risk is not considered to be a serious one. 5.16 There is, however, some risk that the implementation of the institutional and financial reform measures included in the project may be slower than planned or may even falter. However, given the level of commitment displayed so far at all levels in GOC to carrying out these changes, although the pace of reform may be slower, the risk of major failure is not considered serious. A slowdown may affect SPA's finances adversely for a short while, but this would be a temporary phenomenon, with which SPA should be able to cope. . 40 - VI. n= AnS A. ntduction 6.1 In recent years, the Government and the port authorities in China have made considerable progress in improving institutional and financial policies. Steps are gradually being taken in recognizing the benefits of ma.ket-oriented economies. The ports are now decentralized and the central, provincial and municipal level of governmonts have started giving greater freedom and responsibilities to port authorities in the areas of tariff adjustments, investment planning, and financial and operational practices based on commercial principles. The process of decentralization of ports in China was started in 1984 by MOC, and the port authorities today enjoy considerable freedom of action, with an incentive to manage their business in the most efficient manner, with the priemay objective of attaining financial viability. This evolving process should promote higher productivity and efficient operations. The Bank bas been actively promoting efficiency improvement measures and the design and implementation of institutional and sectoral reforms consisting of pricing policy changes reflecting the true cost of operations, deregulation of services, investment planning, and introducing modern tochnology. Despite the above positive steps taken by the Government, pricing distortions are still a major concern. 6.2 As indicated in Chapter II, SPA's present tariff structure, as that of the other ports in China, is not cost-based and reflects distortions in the prices of various inputs. Ports are insufficiently aware of the cost of providing specific services, funds needed to cover future financial obligations and the adequacy of depreciation reserves. The structure and level of tariffs are decided by HOC and the State Price Bureau (SPB) on the basis of arbitrary cost allocation to various port services without a comprehensive and systematic cost analysis. In many instances, the present tariff structure is inefficient on both counts. For instance, the relative charges for handling break-bulk cargo, palletized cargo and container cargo do not reflect costs and actually discourage shippers from the introduction of more efficient unitized cargo handling technology. Currently, a large portion of total cargo (about 80 percent) is allocated to ports by MOC, and tariffs for unallocated cargo are allowed to be set competitively within a specified band, and the ports are allowed to retain a part of the profits. Tariffs for storage facilities are low, causing congestion in yards and warehouses. In order to avoid such congestion, the long period of storing should be discouraged by reducing the free storage period, introducing an escalating system of charges to promote speedy clearance and, after a reasonable period, moving the cargo to other locations at cargo owners' expense. The PCMIS study (para. 2.20) will make recomendations for improvements in all aspects of port charges and for introducing cost-based tariffs for all port activities including the storage operations. Agrement was reached during negotiations that SPA will: (a) based on the results of the PCHIS study, install by December 31, 1994, a computer-based costing system in Shanghai port using the latest operating and financial data, and (b) by June 30, 1995, restructure tariffs and appropriately adjust tariff levels, in consultation with the Bank. - 41 - B. SPA'.a Past and Iregent Financial ftrfoFmanc 6.3 The financial performance of SPA for 1986 to 1991 is shown in Table 6.1 and is summarized in the following: 1986 1987 1988 1989 1990 1991 -.-.-------- (Y million) ------------- Net sales after tax 602 618 730 873 965 1,163 Working cost 219 243 316 474 524 669 DeprociatLon cost 33 39 47 44 65 108 Operating cost 252 282 363 S18 589 777 Net operational profit before tax 350 336 367 355 376 387 Net non-operational profit/(loss) (23) (37) (44) (54) (63) (71) Total profit before tax 327 299 323 301 313 315 Transfers to GOC: Tax and othr. 73 73 73 73 89 89 Net profit 254 226 250 228 224 226 Working ratio (X) 36 39 43 54 54 58 operating ratio (X) 42 46 50 59 61 67 Return on net fixed assets (X) 43 36 35 29 22 1S Even though the operating ratio continuously deteriorated from 42 percent in 1986 to 67 percent in 1991, it is still very satisfactory. It shows, however, that revenues increased by only 93 percent from Y602 million in 1986 to Y ,163 million in 1991, while the costs increased by 307 percent from Y252 million to Y777 million in the same period. This indicates that tariff increases were considerably lagging behind cost increases. Losses on nonoperating activities also inuceased by 92 percent, from Y37 million in 1987 to Y 71 million in 1991. 6.4 Up to 1985, SPA transferred 70 percent of profits to the state for taxes, keeping 30 percent for itself. Between 1986 and 1989 MOF decided to levy a tax of only a fixed amount of RMB 51.55 million annually. Effective fiscal 1992, it is expected SPA would be exempted from taxes in order to enable it to generate adequate funds to cover its future investments and debt service obligations. The financial forecast, therefore, assumes no income tax payments (Table 6.1). 6.5 The financial rate of return on net fixed assets declined in the last five years from 43 percent in 1986 to 15 percent in 1991. This was mainly due to additions to the fixed assets after 1990. The balance sheet in Table 6.3 indicates that the debt/equity ratio remains satisfactory at 22/78 in 1990 and 20/80 in 1991. - 42 - 6.6 Although the financial condltion of SPA appears to be satisfactory, it should be noted that the operating costs of SPA are understated. The depreciation charges, for example, are calculated only on book value and not on revalued fixed assets. SPA also receives price subsidies from the Government on items like fuel and energy for the handling of annual tonnage quotas assigned by the Government. SPA in return provides its services to the Government at tariffs lower than those charged to other customers. The tariffs are, therefore, distorted; such distortions should be eliminated (paras. 2.16-2.20). C. Long-Term Financial Objective 6.7 The main objective of the decentralization of ports in China is to strengthen the ports' own capabilities in management, development planning and coordination between the port authorities and the respective regional governments. The central government would like ports to become financially self-sufficient and meet all obligations with their own internally-generated funds, in order to eliminate government subsidies. The long-term objective of SPA should, therefore, be to function on commercial principles, to improve its operational efficiency and to achieve and sustain long-term financial viability by introducing cost-based tariffs. This should enable the port management to generate sufficient funds to cover operating cost and debt service charges, to contribute toward future investments for renewal and expansion of port facilities, and to meet all other financial obligations on a regular basis. D. SPA's-Financial Ref-orms and Intitutional DeveloRen 6.8 In addition to the measures described in para. 6.1, the Government and SPA have recently taken a series of commendable actions in introducing policy reforms. SNG and SPA have taken major steps in carrying out the revaluation of the port's fixed assets. The cargo handling machinery and equipment, which form a major part of the port's assets, were revalued in 1991 and the results (reflecting some 60 percent increase in value) incorporated in the balance sheet. This is the first port in China where the revaluation concept has been introduced and KOF has agreed to it in principle. The next logical step would be to carry out a revaluation of all the assets and on aperiodic basis. However, since revaluation is a countrywide issue, the Bank will pursue its dialogue with the Chinese authorities as part of the reform of overall pricing policy. GOC and SPA have also taken a positive step in increasing tariff levels, and the State Pricing Bureau has already approved substantial tariff increases (para. 2.19). SPA would like to restructure its tariffs as soon as the costing study is completed (para. 2.20). MOF has been regularly increasing the onlending rates for the proceeds of foreign loans to SPA--from 3.6 percent in 1983 for Loan 2207-CHA to approximately 7 percent for the proposed project. KOF plans to eliminate all forms of subsidies in interest rates and material prices. 6.9 The Bank has also suggested and agreed with SPA on additional steps to be taken for further improvements. In order to further increase SPA's overall officiency and productivity, control operating costs, help in the introduction of cost-based tariffs, and promote commercially based accounting - 43 - and management practices, a technical assistance and training program has been agreed with SPA and is included in the project. This program includes training in accounting and finance, MIS, corporate planning and internal audit and control. Details are discussed in paras. 6.16 to 6.19. E. Future Finanial Performanue 6.10 Financial forecasts for the Shanghai port operations were prepared by SPA for 1992-97. The forecast is based on the proposed investment plan, foreseeing growth in SPA's traffic, assumed inflation and tariff adjustments. Major assumptions of this forecast are given in Annex 10. 6.11 Details of forecast income statement are given in Table 6.1 and are summarized in the following: 1992 1993 1994 1995 1996 1997 -----.------- (Y million) ------------- Net sales after tax 1,314 1,435 1,721 2,055 2,401 2,804 work4ng cost 780 870 1,037 1,232 1,419 1,650 Depreciation 131 155 178 201 224 248 Operating cost 911 1,025 1,215 1,433 1,643 1,898 Total operating profit 402 410 509 622 757 905 Net nonoperating profit (loss) (82) (83) (97) (114) (133) (155) Profit before tax 320 327 412 508 624 750 Transfers to government 18 19 20 21 22 23 Working ratio (X) 59 61 60 60 59 59 Operating ratio (X) 69 71 71 70 69 68 Return on n.f. assets (X) 12 10 11 13 14 15 The above figures indicate that SPA would be able to arrest the gradual deterioration in the financial performance of the past five years (1987-91). Although the working and operating ratios deteriorate to 61. and 71, respectively, in 1993 they start improving gradually and reach 59 percent and 68 percent, respectively, in 1997. The financial rate of return on the average net fixed assets shows gradual recovery from 10 in 1993 to 15X in 1997. Operating revenues are expected to increase faster than expenses (by RMB 1,546 million between 1992 and 1997, as against cost increases of RMB 987 for the same period). - 44.v 6.12 The fund flow statement (Table 6.2) indicates that the total financial obligations of Y5,660 million, including investments of Y4,242 million for the forecast period, will be covered by: Internal cash generation Y 3,953 m 70X Loasa Foreign Y 1,080 a 191 Local Y 627 a 11l Tor&l 5,660 m The annual cash position is expected to remain satisfactory at Y330 million on the average, representing three mnths' working expenses. 6.13 The balance sheet (Table 6.3) also shows acceptable results during the forecast period. The ratio analysis produces the following satisfactory indicators: 1992 1993 1994 1995 1996 1997 Debt/Equity Ratio La 23/77 27/73 31/69 33/67 31/69 28/72 Current Ratio &b 2.2 2.2 2.3 2.3 2.3 2.4 Liquid Ratio I£ 1.8 1.7 1.8 1.9 1.9 2.0 La Relationship between long-term debt and total equity (i.e., the sum of equity and long term debt). Lb Relationship between total current assets and total liabilities. i; Relationship between current assets (excluding inventory) and current liabilities. 6.14 From these forecast results, SPA would be able to achieve its long- term financial objective (para. 6.7). It should be able to generate sufficient revenues to cover operating costs, contribute about 602 of the capital expenditures during the forecast period and meet the debt obligations including possible losses caused by depreciation of the Chinese currency. Based on the financial forecast the annual self-financing ratios have been calculated indicating SPA's capacity to contribute to future investments. The self-financing ratios are determined by paying off SPA's anual debt service charges and other obligations from the sum of internal cash generation and borrowings and then using the remaining funds as contributions for investments. In order to achieve these objectives, it was agreed during negotiations that SPA will: (a) take all steps, including controlling costs, adjusting tariffs and improving productivity, to ensure that sufficient funds - 45 - will be generated to cover operating costs, debt service charges and other financial obligations to achieve a self-financing ratio of not less than 20 percent for 1993 and 45 percent thereafter; (b) incur additional debt only if the internal cash generation would provide a minimum debt service ratio of 1.4 during 1993, and 2.5 thereafter; and (c) maintain an annual working ratio of 61 percent or better starting fiscal year 1993. F. §emityiLj, Ana ,ia 6.15 A sensitivity analysis was carried out to test the impact of no tariff increase. If the assumed tariff increases included in the forecast from 1993 onwards do not materialize, the financial results of SPA will be as follows: Wor1~king ato 1993 1994 1995 1296 1227 ----(Z)----------------- Base forecast 61 60 60 59 59 No tariff increase 63 64 68 72 90 The working ratio will deteriorate from 63 in 1993 to 90 in 1997. This indicates that tariff increases will play an important role in meeting cash flow requirements. If the tariffs are not increased as assumed in the forecast, SPA would have serious financial difficulties in covering debt service charges. Indications so far are, however, that GOC intends to permit the port authorities to revise their tariffs to be able to meet their obligations under the new set-up. G. ana1gement Reforms and Training Program 6.16 Although SPA staff has fairly good knowledge of some of the accounting, corporate planning, long term financial planning and other related subjects, and it attempts to apply them in practice, it does not seem to achieve full benefits from these techniques. The main reason for such deficiency is that there is lack of coordination among the functions and the fact that Shanghai port, as other similar enterprises in China, is going through a transition stage with respect to administration arrangements. The Chinese authorities are, however, keen to introduce policy reforms and to modernize management techniques and are willing to develop productive and market oriented operations (para. 6.1). SPA's organization should respond to the changing environment by assuming responsibility and establishing measures for accountability. 6.17 In order to modernize SPA's management and introduce techniques for obtaining higher efficiency and maximization of profits, a training program was prepared comprising: (a) foreign visits of SPA staff to overseas ports to familiarize themselves with market oriented operations and modern scientific management techniques and (b) employment of foreign experts to train local staff. Under this program, SPA's financial staff will be trained in long-term financial planning and forecasting, updating the accounting system to a commercial and fully integrated accounting system of international standards, computerization, management information system, cost-based tariff system and - 46 * strengthening corporate planning. Details of the proposed training and associated costs are discussed in Annex 11. 6.18 One of the important aspects of management reforms in SPA will be corporate planning activities. Although SPA currently uses several planning tools In Its work, it would be much more beneficial If it further sharpens monitoring and control techniques. SPA needs to restructure its organization to respond to requirements of marketing principles. It should develop and modernize management techniques to plan, to organize, to coordinate and to efficiently monitor port operation to achieve full financial viability. Corporate planning will ensure that the port management will have capability for (a) preparing long-term strategic plans, including manpower, financial and investment plans, (b) setting pricing policies, (c) monitoring financial and operational targets and controlling capital and recurrent costs. Through corporate planning SPA should be able to define Its long and short term goals and plan strategies to achieve such goals. SPA should prepare such strategies by setting annual operational and financial targets, improving cost control, establishing cost-based tariffs, developing manpower plans, and carrying out tochnical, economic and financial feasibility studies for selecting the best investment alternatives. 6.19 An outline Corporate Action Plan was prepared during appraisal (Arnex 12). Financial and operating performance targets have beer developed in accordance with this plan and taking into account the investments under the proposed project (Annex 13). To ensure satisfactory implementation of the corporate action plan, agreement was reached with SPA during negotiations that it will (a) carry out the action plan and achieve the financial and operating targets; (b) send selected managers to foreign ports to familiarize themselves with corporate planning techniques; and (c) with the help of a consultant prepare and send to the Bank a proposal for a corporate planning system by June 30, 1994, and, taking into account the Bank's comments, implement it by June 30, 1995. - 47 - VII. . LM.AND 7.1 During negotiations, agreement was reached vith SPA that it will: (a) complete by October 31, 1994, a cargo unitization study according to terms of reference agreed with the Bank (para. 3.12); (b) submit to the Bank not later than six months after the end of each fiscal year its audited financial statements (para 3.27); (c) complete, by December 31, 1994, a feasibility study for shifting the bulk fertilizer handling operations away from the city center facilities, agree with the Bank on an action plan by December 31, 1995, and thereafter implement it (para. 4.24); (d) carry out all measures necessary to mitigate any negative environmental ispact of the project, operate appropriate environmental protection facilities and monitor compliance with GOC and SMG environmental laws and regulations (para. 4.25). (e) (i) based on the results of the PCMIS, install by December 31, 1994, a computer-based costing system in Shanghai port using the latest operating and financial data; and (ii) by June 30, 1995, restructure tariffs and appropriately adjust tariff levels In consultation with the Bank (para. 6.2); (f) (i) take all steps, including controlling cost, adjusting tariffs and improving productivity, to ensure that sufficient funds will be generated to cover operating costs, debt service charges and other financial obligations to achieve a self- fLnancLng ratio of not less than 20 percent for 1993 and 45 percent thereafter; (ii) lncur additional debt only if the Internal cash generation would provide a minimum debt service ratio of 1.4 during 1993, and 2.5 thereafter; and (iii) malntain an annual working ratio of 61 percent or better startlng fiscal year 1993 (para. 6.14); (g) (i) carry out the agreed corporate action plan and achieve the agreed financial and operating targets; (ii) send selected managers to foreign ports to familiarize themselves with corporate planming techniques; and (LiL) with the help of a consultant prepare and send to the Bank a proposal for a corporate planning system by June 30, 1994, and, taking into account the Bank's comments, implement it by June 30, 1995. (para. 6.19); and (h) carry out a training program satisfactory to the Bank (para 6.19). 7.2 Agreement was also reached with the Borrower that it will: (a) onlend the proceeds of the Bank loan to SPA through Shanghal Municipality on terms and conditions satisfactory to the Bank (para. 4.8); and (b) submit to the Bank not later than 8iX months after the end of each fiscal year the - 48 - audited accounts of the project expenditures including the Special Account and Statements of Expenditure (SOEs), with a separate opinion on the SOEs (para. 3.27). 7.3 Approval of the Loan Agreement by China's State Council and the co. dsion of Subsidiary Loan Agreements between the Borrower and Shanghai Municipality and between Shanghai Municipality and SPA, satisfactory to the Bank, are conditions of loan effectiveness (para. 4.8). 7.4 On the basis of the above, the proposed project provides a suitable basis for a Bank loan of $150.0 million equivalent to the People's Republic of China for 20 years including five years of grace, at the standard variable interest rate. 49 - CHINA ~ ~ ~ ~ Ane SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT List of Documents in Prolect File 1. SAR No. 7257-CHA, November 16, 1988, vNingbo and Shanghai Ports Project - Shanghai Port. 2. SAR No. 9852-CHA, May 15, 1992, "Ship Waste Disposal Project." 3. "Model Tests into the Effect of the Proposed Excavated Basins on the Marginal Wharf of Waigaoqiao New Harbor Area of Shanghai Port", Nanjing Hydraulic Research Institute, May 1992. 4. 'Research Report on Siltation Model Tests for Waigaoqiao Excavated Basins of Shanghai Port", Nanjing Hydraulic Institute, May 1992. 5. "Projected Scenario for Restructuring Handling Facilities in Huangpu River", SPA, April 1992. 6. "Shanghai Port III Project Resettlement Action Plan Summary for Waigaoqiao Terminal - Phase 1I, SPA, April 1992. 7. "Shanghai Port, Issues Identified by the October 1987 World Bank Mission', SPA, April 1992. 8. "Preliminary Design for Luojing Coal Terminal (Phase I), Shanghai", SPA, May 1992. 9. "Shanghai Port III Project - Environmental Assessment Review', SPA, March 1992. UNMI MSIRMIM ADi Ma 8311! I!ORt RESTRJUJRUB hIlD DVISONUTPREIT us su PORTn CRcoIRIIlDT orS in OFOER 198J7 WOUD mu1 MIC. looms saA 3c _endtions Igopnb1i5l StttuslPt oaress to Data b re _ 1." = 111 A. TM older port SPA As part of a long temM Impluntsti of th distriLts often develo_ment restturing plan, restructruzn pla to foms* occupy valuable SPA Vll gradually shft esee part of the fo_th tmis d on locations, handng activities aw ftn Sanghal port betlruci ed wbhLcb l addition to the urban center. m Develo et Project. not bein the mat teminls will be deeWlop Appropriate ma of Loj tag to handle coal .d ia searc utban lead, Va4eoqia to handle Ptolne also affect the traffti sad transhient ctmp. city's enviremnt end poea cnluierable risk to adjacen trsidentil an commrclal area". A. Dieterland "DC, NOR, SW hinterland connections are Ptogress bein montored. o consections to the beisn iproved through doubling Port of Shangbha are the railway lines and the I inadqute in the construction of e*aproem_ys to cas of road and rall "sing aNd Hagabou. NrO trasport, eNd inand-ater aviatIo aa obsolete in the caea chael, formed in the Toadm of Inland water tiver and Taipu Canal, a ttraporr, and future recently opend. Vlthin the incresae. in traffic Sbanghl mettopolitan ares an will requre etensie road netmork i being substantlal pleaned and developed. iwmprov mets in hinterlnd access to the port. C. Based on the "DC Planin coordination i To be monitored. differing traffic eerctsed by HOC. To improe forecasts proilded by coordinatiuo a yeasgt"e Delta ports serving the Econedic Zone Study bhs be"e Shanhi eonmc eqleted. for Shanghai port Zone, it appers that traffic, there Is so differenc Increased in the forecasts between OCO coordination of aNW SPA (e.g. a foreast of 197 plauni betweea m tons for 2000 b"h bee I! adoptd by both WIC Ad sPr). SUA ! F? n An I I CT Up leooms MAn la" Remiltn.ndtVo statuAle a to Dat t t R D. Sttong directional HOC As hnterlnd co_mect1ams are To be monitord. imbolances elist tat improved (se 3), adljutmnts indvidal trawport I3 the dlt t wiU mode sevin th be factiUtated. Also, c tbe Port of Sh am.a economy is refoed, market this old pre t forces sill inreay decide sabottl bw caro to sad frm the part opportuities for will be carried. ratienalisi transport aquireets. B. The port should seek SPA Usrs with toneale Ho fuSthet action to ruin d to avoid raceivn icreasinly hadle tbhlr cargo xcept to monltor situatio. cargo sch as col directly at thelr teinals. (for puier plunts) In 1987, total tng badled A Iron ore, whhb at owners' tenmials wa 28.39 can be delvered m tons. Thi inreasd to 4A drectly to the uqer. 48.31 m toes In 11. A. 1 pr"snt cotrcts S Contracts betwoe SPA ad the To be montored. betwee S ad etewrpriss in the operating indivdual port districts are being revieed entrprise reatrit MAn negotiated. mm contracte the officiant uAe of to reflc"t changing post facities, and circmtansee brought dbot by shoul be reviewed. econic refom a ctd to he in pl w 1993. I" D. Pl_and icrteae In SPA the total r of employes Situatio to be monitored. the staffing of the in 1967 aem 54,454. th 1101bt port from 54,000 in 11 wa 54.986. Th employees (in 1987) intentio of SPa to to r_d to 63,000 a_plope staff "am terminals are by the year 1990, Is d l . probably unncesay mi ansou be e- U Bfl&30& Moi? 3KIUCIRMIU An0 DIWIIum3I w J STID 3T3 On 3EXHMM"TIOhS Of 733 OCNI3 1901 MM. UK1 MISSION KUw lessee end ecemiatime tour m toDot C. =.pterlmettem SPA lbptuoto efrstoeU fvutheri t IcU s 1 egSu efort. I the po.t ceettalisod. The - s fume I ¢ t ceatuallood eosto r center fuma"_tatie of repot" dtiety to the lot staff Iesenuo, Ditetor. uncesrudinted software devel.pmsstt ad * prollfecetis of co_iter break, etonfdaudizati... difflfcat.. D. statistical date Noe - ft stotletical dotas ao malt. am lialeef tthe: collectin at present efl et the mods of with MC. To dee n e nIo to ptd_:lly designed operetioatl _masent * i eo that it -.- f to servo the data that eae eahItted to HC$, " gell s opeptiml "ePotlng consideration is bheig given to reqiemet (to the ptopoed rynlm_te of OC, ame h tbey ca be improved. projectl. Mm s Mt vott nfel to menmS at. 'A 3. Carso delore a" 133 Hot _eometo are proeesed Ibe c eqited eetaoic ,m delays are often the -memnall huvr, tecl dt e he reonlt of For aetinted of s oInte to * sr sfoumtle1aed ties Is pl_a-e. a _ g of decwoet fl betwee _omptlaed at e cof etcow the powt, the *hp'. monitoring eoteine trattfflc 1t fl rgm . agent, the freight enwealy bein t"ted. fonetem. 1. Operatiol plai I t of efo, C to nied end peufoimen sgaulydcnrlse targtsbmuld h centel e th ot ed h Instituted by the b to *1 l pefot_ port is order to taret dIrectly with the provide hettor oraotie steuprLes. Maw servic to n. cntract. betwen SPA MA the opratisa etrpuise ar omoeted to cetas such peufom_ torgte. _*~~~ I SUAomt PM_IuciUU me ID us= stn=i s'a uauyiion c UK gm=su ;IgI OMi B "mum msc lbn l* and f e_tinAM 1%shlr ttatuiprocree to Aionl M11. ,UM = A. lb* singl. mt SPA mall tim of contaiers St"oragp dbargs are ohvin.al important lea. ben reduced trvm 14.20 days In atl1 UV ad do not Inim affectin operaomal tin7 to 11.06 days in 1"1. cOW to WI_e out of the port effilaccy is the Ow qrs, avra *tangs area. 1b proposed term port is cong_tio in pored. for coal MAn geeal r.trntnring (in thn projet) the orts staorge Carg have lcreaed fra 12.22 aboul giv* particul facilrtle., aed ths day. and 10.79 day. to 22.43 attenti to I *te a riat to a direct result of day. and 1S.27 day., tarff attVctar for atere of 13OOSeivOly lon reopectivoly, deap e an carp In pot. cargo 41l tine Is inr ee in storage r"t fot the port. coal fram 10.03 ln 1#67 to 10.10 in 1991. Cureat storage charge. To 0.10 pat day fot coal MA 10.25 and 10.10 for genral carp at vaehao_se Nd ope ntorp yb*a. D. Presently, each SPA ;.letea have bee take to' To he lmntoted. etevedorlg dlttict have apecalid termnal. for handle, a Wide cootarse, grain. fertilisr., varitty of hulk and iron are and coal. Further, tbrak-hulk cargo; carp hanlin facilite at this lack Of Dltriets 3 and S are betn epecialu tion converted to hadlo more roalt In lo p"engr., turning the" two opeati nl districta into predominantly efficiey nd the p"aenr teminal. ?ropoa. port eeea develpmet of the coal substantial ecemosu temial at luoing will of cale aN a rZealt. further add to terminal speci*ltsation. C. Ibeh oupany rate SA Barth occiae_ rate fll frm To a mtonted. in th ort are 7.62 i 1961 to 62.942 ia atrsely bibo, a 1991. Kedamile, arag .p- th lUS" to star In paot for foreigs exefodley to Vesls1 rado fm 7.2S ships ad ireae in day to 4.27 day in the oeM e.at to ebigpera. p"rtd. oztenaive~~~~~~ ~ ~ ~ ~ ~~ dea.t e! a eue rn72 SUAUGUI NOT t? hiUiCTUiU AM nuiti.oiiW UURJET mmnS uuvon Z1 uiNmN"INS Oto iw ocroC 1981 ViM.SAK aniSUIII lan laMe, . _d lellemotlen IaauballUit stntuclpreae.to "to Ast D. s operatium SPA SPA a peufox_eme of the b t m to be e n s h s pert cAn probably be inr"oe podeuctivity throug project to furtthe piete doubld for etn bulk tominal speciattliatin, csgo utttsatias. operatle, an for rplacemet of obeolete bllk break-blkepeatan b"tianlg ""uPoemn and impTOv'd Sayrermente of operatioul M_nsammnt around 25be proceue. d monitoring. A feasible in am teat gn an thece district.g bmmir, tracki of the _ n of the inatrodstla of container to undeny. car uttltias for a larger prortie of break-bulk oe"ratio eseld enable productiLvitila to more toa double frgm present lenle. X. While the port does SPA SPA agree with the conclio so furtber action is rque. not suffer fm a ad be taue macue to hill of cargo introdce better eupment ed lose ed demg* such procaura". * loesse can bh reducd through introdutio of bettor aquipnt and procedue. P. For general cargo, SPA SPt agre. with the conclue_s So further actiont n required. equpmet utiize and to taktig action to replace rat" are lowr , obeesolete equipmnt nd tbere are too _n introduc equipment Peces of qet tla er of diveraa possible. hich rnder. proe meintenence difficult. 4A - C "~~~~~~~~~~ mrs"Angl8m IIMSASUR1 STAIBS IqPR CE UCTIOU 01U I OCIUBI 1§8 ii 3*11 NKSS8 RvI tse and lle ct lb_daclllt Statuelrezs to Datebtw c A. For historical PS h a r.*trsituvtri plan to no Saylematiom of the reasons, tb ejrt'e gradu all move carp operation restmuctorog, pla Mi * existing facitles away (rum the city center. dse Ofe o ths project. are cloaely lnter- teminle al re being built maY mingld wit hewavily frm the city in Luoj ng (36 populated urba ink) sad Vaigao"iso (73 in). A arean, *ad Ia the few 9boagpu River teminal future aloe plans w1U contiuse to handle cars. call for building aem s tbey ses users within the port facilities la vicinity of the terminal. The close proxmity to vouse handled, hemever. will urban developments. be liited. 3. Serious water SPA The port ha 14 operating To be mo*ntored. polluilos problms districts all of which bhwe oil affect the Hu anaj -a8° dioposal systems, balf RLver which Is e bave dmesetic sago disposl main source of facillties and the other balf, drinking water for whicb do not bave scb the city, and the facilitles am thelt own, will poct mat make a be serwed by the city systae. special effort to All aem teridls will bhe a reduce water full rca of wate disposl pollution stemng facilities. futtber, uneti fta its operatons. CEFiDA fe diag, a ship wast ecetie ad tatmen f clty mwill be developed to set sbnhi p ort. C. Coal tetrials sn Measue are being take by SPA To be monatored. generally leck to *ve the bhndling of coal adequate du t way ftm the city, us _uprsson elod shp naloedevr Sd equi ment, and la bolt coowneyor system _ ad portialae r smal Install watrr sptryig syste older tominal at sack yards. located on the Vest leak of the bawn ' Uvor in the beart of th city ar *a _ .5 SHAPOSi FMS RKSTUCIIR!I MRD DVKNEEK mOJ STADS A REOS OR RSOOSUOTIO Of in O flu 187? Mm USK MSS Rev lomasa and Eeamaendatin.a 3>g@gj~jJ1j~ *Statlu8PLonres to Date si*iiant sorce of air pollaie. D. TM hlh desity of SPA Mew teIala willl be developed A VW study he. bee IWldd vessl traffIc os the mfy tun the sive. a In thbis poject. 0uispe River, Ad "°jor iact of the the Saudeoate reructurIg plan will be a traffic ceatrel reduction of vessel traffic an steaf co ntr are the .awpa River. A VOel a major safety hbaard Traffic _eneeusat System both to vesels N (VIM) is wder conasideration to the clty. by mDC. S. _eres deftlelsacle. SPA txeprts from Hambrg Port an T ad a repert an the cmtem were identIfid la helpag SPA Improve the of the technical asseitance the da_gerota. geedo procedures for handling fo us re to 1 I torae facnlitiS,O degeos. "Caro. fngdieed to the "aoh for tA . to"lp te¢llltleet caro woddtot W tl the overall rI prcedure for goee ta_ed to be reviewd end streamlinend. *t. A. At thls time, the C SPA A Fort Costin and Hemagmet lopl tat of te r Ite port basa Info tilo Syatem stwdy of to s a _ot et ti Inufficint . prJect. Of "t financial health, aW a teowusg revIe of the poet' liabilti" and assets is necoesar. 5. Tbe existing NW, WC A am cftract Is begTo he ateged. agreemen withb NI ti n eIpect to regading the profit he ppal fro 1993. ta, a fLst no 51.55 to n pa., I 1due ad theela _ 536U1 10?3SI3CUIOD DIKOU IEcT 31A81 RIP1 go 3UCCIMTCS in E0c03 1w917 wUO BAK 31810 3eb IeO asd lAecieadattions StstualPb tnese to Dat r 4 e rd futur ta tretet of roftts. C. The criteria ot NOC, SPA Data ger atod f i the IGE lb be moaitored. invastuente eae wi ll sealot menassmat is ea" * t _ tdeclisi Mki e o Xn datot () by the letmets. 1w opportunity coat of capiltal perceved by mt e () by th the tea ttt of retained etiis D. Te contracts enter SPA Wm ceotracte between1 SPAd To he montoed. ito betwee SPA and the operating eaterpre l an indiwidual Por the dietricts wilU e entered dietrctat do got Into upon the conelbao of the ref lot the econmoic contract beteea SPA ad 0W. reform ewniramen the port feces. 3. Theoe to reaon to IIC, SA t riff adjusrmmts bh bee Tariff retracuig in a believ that the ude. The crealts of C3SaoS_t of thin project. current price wil pride a better structuen APrice iAdiation " to bh the trff leves do not prmits shoU be rstrutur. efficency is the us of port faciltel". _Sme ports of the SPA Port etmt Plau ar To e m tore. pr_posed Investment reiewd aswully to e_ns pln my be at odds that tbey met re_irmato. withthe recins-tso of ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t * *h" eport *and _ O N~~~~~~~~~~ Page 1 of 2 PROPOSED SENNA ETRU T~No AND DRmONN rOJECT scoge of Uork 1. The Port of Shanghai, one of the ten largest ports in the world, is the largest port in China, and the primary gateway to Eastern and Central China. The SPA owns 143 berths, 68 of which have a depth alongside of 8 to 10.5 m. The berths totalling over 14 kke in length, are located along both banks of the Huangpu River and the Yangtze River, all in the Shanghai urban area. 2. With the exception of District No. 7, which specializes in bulk coal handling, the other 13 Districts handle a variety of cargo types and may be considered multipurpose terminals. Containers are handled at Districts 9 and 10 as well as Baoshan District. The remaining berths are used for semi- dry bulk, break-bulk general cargo and passenger operations. Break-bulk cargo constitutes about 121 of the total port throughput. SPA realized that unitization of this break-bulk cargo will enhance the efficiency of its operations and reduce the cost of cargo handling. Scgge of Work 3. The study's scope of work covers the break-bulk general cargo handling, more specifically It should include: (i) various methods of cargo unitization, including: containers, pallets, slings, boxes, etc.; (ii) the cost of general cargo handling in the port, on ships using un-unitized cargo, versus unitized cargo; (1ii) the time taken to load and unload the break-bulk general cargo off/on the ships; (iv) the various types of ships carrying break-bulk general cargo and their sultabillty for handling unitized cargo; (v) the cost of unitizlng the general cargo to the shipper, port and consignees; (vi) methods of encouraging or promoting the use of unitized cargo among shippers, source ports and consignees; (vii) devise an action plan to Lnwrease the unitization of cargo in the port; and - 59 - 3 Page 2 of 2 (viii) carry out a feasibility study for the required actions including study of the use of the tariff system to encourage the various parties to use unitized cargo. - 60 - 4 Page 1 of 27 SMHNGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT £VUBIMNN IM MG ASSIWEMS I. I2B3DWCIN 1. Under current Chinese law, an Environmental Impact Assessment (EIA) is required to be undertaken during the feasibility stage of a project to assess the impact of the proposed project, and to provide for inclusion of mitigative environmental protection measures in the engineering plans. The ETA should also follow the State Environmental regulations prescribed under the: "Managerial Measures for Environmental Protection in Capital Construction Projects (GHZ-003, March 26, 1986)" and the "Regulation for Environmental Protection Facilities of Capital Construction Projects (GHZ-002, 1987). Moreover, in the marine sector, the "Maritime Environmental Protection law (March 1, 1983)" regulates diacharge from ships and provides for protection of marine waters. In addition, China is a signatory to the MARPOL Convention (MARPOL 73/78) regulating the discharges of ship wastes at sea and requlring ports to provide adequate reception and treatment facilities, and the London Dumping Convention' regulating the dumping of wastes and dredged sediment at sea. Under the auspices of the above regulations the EIA for the proposed project was prepared by the "Shanghai Environmental Protection Science Research Institute* (SEPSRI). 2. SPA has a well developel organization to undertake tasks related to environmental management and proteccion in the port, within its overall management structure. The Environmental Division (ED) of SPA reports to the Port Director through a Deputy Director. The administrative structure of the ED is well established with the flow of information designed to ensure that all activities of SPA meet current national and unicipal environmental protection guidelines and criteria. 3. Most of SPA facilities are located on either shore of the Huangpu river and are thus surrounded by high density residential and commercial neighborhoods. Projected quantities of wastewaters from the port facilities and shipping are low in comparison to the approximately 1.3 million tons of industrial effluents and 0.61 billion tons of sanitary sewage discharged annually into the river system in Shanghai. The Bank is partially addressing these problems through the Shanghai Sewerage Project and the Ship Waste Disposal Project. - 61 - Anex 4 Page 2 of 27 II. EXISTING C0N2IZINSi A. Huanu River Terminals 2.1 Increased demand for cargo handling facilities has placed considerable strain on environmental protection measures or led to the use of facilities for which protection measures are inadequate or inappropriate. Besides problems related to increased demand, there are four other key port problem which have environmental impacts: (a) Several of the Huangpu river terminals are old (pre-1940), have been heavily used and require extensive upgrading/replacement; (b) Kost of the terminals are surrounded by high density urban development, resulting in limitations on expansion and cargo distribution via roadways; (c) Those terminals handling ore cargoes have generated dust and noise problems in adjacent neighborhoods; and (d) Concentrated shipping traffic has added to degrading of water quality in the Huangpu due to release of such ship wastes as oily waters or sanitary sewage in combination with inadequately treated effluents from the older terminal facilities. 2.2 A brief summary of the environmental issues related to each of the major Huangpu river terminals follows: - Terminal #2 mostly handles bulk grain. The pneumatic offloading system generates considerable low frequency noise which leads to complaints from adjacent residential neighborhoods. The terminal also requires upgraded effluent treatment systems and dust monitoring devices. * Terminals #3 were constructed pre-1940. The berth faces and top and #5 structure require replacement due to heavier operational equipment using the facilities. Warehouses are badly dated, often difficult to access by modern equipment, and often leak during storms. * Terminal #4 mostly handles timber and logs, but a decrease in traffic has led the terminal to handle other cargoes, such as iron ore. Facilities at the terminal are outdated and there is a need to upgrade the effluent and sewage handling/treatment system. - 62 - Annex 4 Page 3 of 27 * Terminal #7 is devoted to the handling of coal. The south berths have been modernized with extensive water spray equipment to constrain coal dust during unloading/ handling; the middle and north berths are older, using portal cranes and clamshell unloaders resulting in extensive dust problem and related complaints from adjacent residential neighborhoods. The water spray system is not sufficient for the volume of coal being handled. * Terminal #8 primarily handles iron ore and bulk chemical fertilizers (e.g., urea). The fertilizer handling system is modern with material transferred to the bagging facility with little dust generation except for the offloading of the last 15 percent, during which some dust is dispersed. The ironore facility is very dated, using portal cranes/clamshell scoops to offload material onto open horizontal conveyors with storage in open piles on the wharf. This has resulted in extensive iron ore dust problems in the adjacent residential neighborhood. The terminal also lacks sanitary sewage and other effluent treatment systems. - Terminals #9 are relatively modern, handling much of the and #10 containerized cargo through the port. Terminal #10 also handles much of the dangerous cargoes for the port, with such cargoes discharged before a vessel moves to the terminal for discharge of the remaining cargo. Both terminals wash containers which contained various chemical cargoes, generating a need for treatment of chemically-contaminated waters. Although they have established small multi-contaminant treatment systems, projected future traffic and cargo type have identified the need for more extensive and complex systems. The Dangerous Cargoes Area of Terminal #10 is relatively dated, there is insufficient hazard monitoring equipment and little or no safety equipment for the workers. Emergency response for hazardous material spills or fires is very limited. B. Lul2 LUg Terminal 2.3 The proposed development will be located on the south bank of the southern branch of the Yangtze river about 10 km upriver from the Wusong Kou (entrance to the Huangpu and the main facilities of the Port of Shanghai). Located in the Baoshan District of the Shanghai Municipality, the original project was designed to occupy about 4.7 km' (4.7 km long by 1 km wide). When the first EIA was undertaken in 1982, the port area was mostly marshland to the seaward side of the shore protection berm. Nineteen hectares (ha) of interior lands (to be excavated as part of the inland waterway system) were predominntly used for farming (e.g., rice and cotton). Within a 10 km radius of the facility are several villages. - 63- Anex 4 Page 4 of 27 2.4 The area surrounding the proposed Luojing terminal site includes industrial development including several small township enterprises, the first component of the Beaoshan Steel Works, and the Yuelong Chemical Works. In addition, the West Shanghai Outfall (industrial and sanitary sevage) discharges about 300 m dovnriver of the eastern boundary of the proposed facility. Since 1982, the Baoshan Steel Works has been considerably enlarged, as has the Yuelong Chemical Works and the Shidongkou Power Plant (coal) has been built and expanded. Much of the Baoshan District has been slated for development to accommodate industrial and urban expansion of Shanghai. C. Waigacaia2 Terminal 2.5 The proposed project will be located in the northeast corner of the Pudong New Area, about 2.5 km north of the Town of GaoqiAo, in Chuansha County of Shanghai. The present population is about 20,000. it this location, the Yangtze is about 7 km wide facing Changxing and Hengsha Islands. Nain chamnel depth is 15 m; the channel near the proposed development is about 10 m. III. BA'SZLI ENVIRONSENT CONDITIONS A. Huangpu River Terminals 3.1 XgteC: Oualit. The water quality in the Huangpu below Guanggang, is heavily impacted and classified as Class V (Attachment 2). The "Bulletin of Current Environmental Situation in the City of Shanghai - 1989" describes the quality in the Wujing Channel section as being mostly Class III and IV, while the lower reaches are mostly in Class IV or V (data are provided in Table 1; criteria, in Table 2). The Bulletin further described the lower reaches as *black and smelly' for 138 days (38 percent) in 1989. Pollution was attributed mostly to organic pollution, such as biochemical oxygen demand (BOD), ammonia-nitrogen, chemical oxygen demand (COD), petroleum hydrocarbons, and volatile phenols. These are related to inputs of either sanitary sewage or industrial effluents. However, data collected by the Port Envirormental Protection Bureau indicate that several of the older terminals (e.g., #2 Grain and 44 Timber) do not meet current effluent criteria (Table 3) for select pollutants. 3.2 The water quality of the tributaries (e.g., Suzhou Creek) and inland waterways connected to the Ruangpu is often worse than the mainstream, with waterways in the center of the City beLag the worst (Annex 1). "The Bulletin of Current Environmental Situation in the City of Shanghai - 1989" indicates that 94 percent of the inland waterways have poorer than Class III water quality, with sections of Suzhou Creek classified as Class V. The degradation is attributed to a combination of uncontrolled city sanitary sewage, stormwater drainage, industrial effluents from small enterprises, and a history of pollution leading to contaminated underlying sediments. The flow of these waters into the Huangpu degrades the mainstream water quality in the mixing zones of the water asses. The impacts are somewhat mitigated by the strong currents in the Huangpu which promote and accelerate mixing and dispersion processes, thus minimizing the mixing zones. - 64- _3mex4 Page 5 of 27 3.3 Studies undertaken as part of the environmental assessment of the proposed W.igaoqiao Port Facility suggest that the pollutant loadings from the Huangpu degrade the water quality of the Yangtze for up to 4 km downriver from the Wusongkou, mostly in the waters adjacent to the south shore. The impact has resulted in a diminished and degraded aquatic biological community in that section of the Yangtze. Sediment Ouality 3.4 Dredging of the Huangpu river is undertaken by the Shanghai Dredgilg Corporation (SDC) on behalf of SPA. Sediments from the lower sections of the Huangpu are often dumped at an open-water site to the north of Chongxing Dao in the Yangtze, provided that the sediment characteristics meet current open- water disposal regulations. Sediment surveys in 1991 indicated that current standards were being met (Attachments 5 and 6). 3.5 Sediments in the middle reaches of the port area are pumped to unconfined shoreline areas on the Yangtze. Current sediment assessment suggests that the sediments are more contaminated than open-water disposal guidelines, but not as contaminated as in other major harbors in the world. Sediments in the Wujing Channel were assessed by SDC in 1989/90. Although concentrations of metals were somewhat elevated, the levels were still within North American or European sediment quality objectives. In all studies to date, only limited assessment of trace organic contaminant distributions has been undertaken. 3.6 A detailed study of Suzhou Creek, under the direction of the Shanghai Municipal Science and Technology Commission (1987-89), showed that the aquatic contamination was reflected in highly contaminated waterway sediments (Attachment 6). The Suzhou Creek study was undertaken as the basis for a multi-year remediation program to clean up. the contamination and limit the flow of pollutants into the Huangpu. The first two stages of the remediation are a river control structure to limit Suzhou Creek discharge into the Huangpu and redirection of effluents to a treatment system with subsequent discharge at the Bank-financed, Zhuyun Outfall on the Yangtze. An extension of the Suzhou Creek study will be initiated in 1992 to characterize the sediments of other tributaries and inland waterways. ALLfOuliz, 3.7 Much of the air pollution in Shanghai is due to total settleable particulates (TSP), SO., and NO1, resulting from coal and charcoal burning with minimal air pollution control. Poorly regulated vehicular exhaust alno contributes to degraded air quality (air qualLty criteria are provided in Attachment 4). Alr quality was poorest in the center of the City (average S02 in City center: 0.10 mg/i3; In suburban areas: 0.02 mg/in; Class II criterion: 0.15 mg/i; average TSP in City center: 0.37 mgJm3; in suburban areas: 0.17 mg/i'; Class II criterion: 0.30 mg/ms ). Coal burning also contributed to acidlficatlon of pH with an average value of 4.72 reported in 1989. 3.8 Port activities contributing to air quality degradation are primarily dust generated from the Coal (#7) and Iron Ore (#8) Terminals, with more limited contributions from boiler stacks in the terminal facilities, - 65 - AImex 4 Page 6 of 27 truck traffic to and from the terminals and ships exhaust. Dust from the ore terminals has generated considerable complaints from adjacent residential neighborhoods and SPA has been fined several times by the Municipal Environmental Protection Bureau. Augtlc Elnvironment 3.9 As much of the port facilities along the Huangpu river are surrounded by high-density residential and commercial neighborhoods, numerous complaints are reglstered with the Municipality as to operational noise, nolse from truck traffic and, in partlcular, noise generated by the ore conveyor systems of the Coal (#7) and Iron-Ore (#8) Terminals and the low-frequency pnsumatic offloading equipment at Grain (#2) Terminal. In an operational area, natlonal occupational health and safety limits are 85 decibels (dB) exposure over an 8 hour work shift. Municipal environmental standards require a maximum of 65 dB daytime/55 dB nighttime noise levels at the facillty boundary and within a fixed distance of major roadways. Property boundary noise levels are often exceeded at Terminals #2, #7 and #8. B. Luojln; Terminal AuuatLc Enviror ent 3.10 Since 1980, numerous studies of water quality of the Yangtze have been undertaken. Since 1984 a routine monitoring program has been undertaken by the Yangtze Water Research Institute with sampling three times per year, assessing a variety of general water quality parameters (e.g., pH, dissolved oxygen) and trace metals and once per year for sediment quality parameters and trace metal content. 3.11 These studies have shown that the waters of this section of the Yangtze river meet National Water Quality Group #2, except in the near-shore waters where pollution from the West Shanghai Outfall (300 m downstream of the proposed facility) degrades the water to Group #3/#4. Table 2 provides a listing of criteria for the National Water classification. The EIA for the Shidongkou Power Plant noted that the Outfall created a pollution zone of 1.66 km wide by 12.4 km long (total zone coverlng flood and ebb tides). Surveys undertaken for this ZIA showed that for transects from the high water mark to the end of the designed marine structures (approximately the 10 m contour), there were distinct improvements in water quality proceeding towards the center of the river, away from the more heavily impacted near-shore zone. The Western Shanghai Outfall consists of about 70 percent Industrial sewage and 30 percent sanitary sewage with a flow of approxlmately 600,000 tons/day. It is projected that this will increase by the mid-1090s to 2-4 million tons/day, allowing for stormwater drainage. 3.12 Currents In this section of the Yangtze are strong ensurlng good water mass mixing and dispersion, except in the near-shore zone. There, shoreline configuration and the placement of the West Shanghai Outfall (untreated sanitary sewage) creates eddy zones, permitting the accumulation of vastewaters and associated contaminants. In general, river currents are sufficiently strong to limit sedLusut deposition, however, at sites where quiescent hydraulic regimes can occur (e.g., at the mouth of the Baoshan Steel -66 - Ane 4 Page 7 of 27 Works Marine Terminal), silt deposition does occur. Problems of sediment deposition in the area of the marginal wharves has been considered, with most of the berth and connecting conveyor link consisting of an open-pile structure. Very limited maintenance dredging is projected. Air Oualiev 3.13 Much of the existing air quality is a function of dispersion of air pollutants (SO2, NO., and particulate) from the Baoshan Steel Works (5 km from the proposed port facility), the Yuelong Chemical Works (3 km), the Shidongkou Power Plant (coal) and township industrial enterprises (e.g., at Shenqiao, Luojing and Yuepu). Surveys In 1984 and 1988 showed that in general the local air quality met Grade 2 national air quality standards. Exceedances for particulate were recorded 20-30 percent of the time; there were also occasional exceedances of 802 and NOx, typically in the morning and under certain atmospheric conditions. Trends in air quality since 1979 suggest long-term degradation due to surrounding industrial development. Proposed expansions of the Baoshan Steel Works and the Shidongkou Power Plant are projected to further degrade the air quality, particularly for particulate related to coal combustion and ash disposal. The areas closest to the proposed port facility are primarily agricultural. This combined with good atmospheric circulation associated with the river provides for adequate dispersion of pollutants in the proposed port area. Acoustic EnviXonent 3.14 Noise monitoring was urdertaken at several sites along the existing seawall (i.e., the nominal boundary of the main section of the proposed port facility) for the full length of the proposed project (4.7 km of shoreline). As much of the adjacent area is farmland, the existing acoustic onvironment is relatively quiet with an average value of 51 decibels (dB). Major industrial sources of noise, such as the Baoshan Steel Works or the Shidongkou Power Plant, are several kilometers away. C. Waiggggiao Terminal water BUlhtY 3.15 The study zone was taken to be 4 km of shoreline and extending out to Yangtze center. Within the projected impact zone, a series of seven uonitoring stations were designated, based on the standard pattern of a single point source with exponential dispersion and dilution of pollutants away from the source. At each station a group of samples were collected over two aspects of a tidal cycle: beginning with low slack water, through a rising tide to high slack water; and beginning with a high slack water, through a falling tide to low slack water. Three inland waterway sites were monitored. 3.16 Although the Yangtze drains a large area of central China, much of the lower reches of the river were found to meet National Water Quality Class II status. Waters adjacent to the shoreline mostly met Class III type. This suggested sme Impact due to dilution/dispersion of waters from the Huangpu River which enter the Yangtze 7 km upriver from the study area. Some impact due to ammonia-nitrogen, copper and hydrocarbons was also projected to occur - 67 - AMM° Page 8 of 27 as a result of dilution/dispersion of water from the Zhuyun outfall of the ShanghaL Combined Sewage Dlscharge, entering the Yangt:e about 5 km downriver from the study area. 3.17 Water quality in the inland waterways was found to be generally poor (Class IV or V), reflecting a comblnation of excess nutrients, mostly sanitary sewage in orlgin, and oxygen-demand materials (mostly as chemical oxygen demand--COD) from industrial effluents. Aquatic EnviXromen 3.18 Due to time and seasonality limitatlons, the existlng benthic and pelagic biological and flsheries environments were described using 1987 and 1988 detailed studies and fish landing statistics. The lower Yangtze has very strong river currents and is the uixing zone for rlver waters of the Yangtze and Huangpu and the East China Sea waters. Because of these complex physical conditions the study zone was taken to extend from the Wusong Kou to 20 km downriver. 3.19 Six major cash fish are harvested in the South Channel of the Yangtze river: Tial and Dao Anchovy, White Bait, Shrimp and Crab. Review of fLsh landings, in terms of quantity and age class, showed a decline in the landings of all fish types, with a very sharp decline in White Bait occurring In the early 1970s. The decline has been partially attributed to pollution, particularly for the White Bait. Fish harvesting has gradually been switched to other types, such as eel and dao anchovy. However, the flshing effort has had to increase greatly aver the past five years to maintainlng the catch landings, suggesting a declining stock. This could be due to both pollution and over-fishing. Air nlnU 3.20 Using the extensive wind speed and direction data base, it was determined that the predominant was northwest/southeast with some northeast component. In January, predominant dlrection was In the northwest direction; in April, direction was in both the northeast and southeast directions; in July, predominantly, southeast; and, in October, mostly to the northeast and sotheast. Uslng thls wlnd rose, a pollutlon coefficLent rose was constructed on the basls of sulphur oxides (SO.), nitrogen oxides (NO.), carbon monoxlde (CO), bydrocarbons (HC), total suspended particulate (TSP) and lead (Pb). On the basis of the pollution coefficient rose, an eight station ormpling program was undertaken ln December 1989. 3.21 The current air quality status of the project area is good and meets Class 2 atmospheric quality (Table 4) as expressed by the daily averages for So*, No., CO and TSP. Although there is no current Chinese criterion for hydrocarbons, daily averages ranged from 0.029 to 0.72 mg/m3, bracketlng US criterLa. - 68 - Ane 4 Page 9 of 27 Acsoustic Enviroment 3.22 To assess the existing acoustic environment, the 6 km2 area was divided into a series of 9 grids with two monitoring instruments placed within each grid; one adjacent to a roadway and one in a field away from short-term noises. To obtain a complete definition of the acoustic environment, measurements were made over specific intervals at different times of the day and night using GS-3222-82 method (Environmental Noise Measuring Method for Urban Areas). The acoustic environment for the area of the proposed new port area was found to be good (Class 2). Socioecnmic Amecta 3.23 The Vaigaoqiao port orea will be located in the Township of Gaoqiao, County of Chuansha, Municipality of Shanghai. The area contains about 20,000 people of whom about 80 percent derive their income from agriculture, 18 percent from nonagriculture activities (e.g., village industries and commerce) and about 2 percent miscellaneous. Of the approximately 12.6 km2 of landmass, about 48 percent is currently devoted to agriculture. The new port area will occupy about 66.7 ha, primarily of agricultural lands or about 11 percent of the farmed area. Agricultural products consist mostly of rice, wheat, vegetable oils, vegetables, and pigs with a total 1988 estimated value of Y 9.91 million. Financial benefits derived from an operational port would greatly exceed the 11 percent of the agricultural value which would be lost as a result of the port development. 3.24 Presently much of the Pudong area is agricultural, with urban centers concentrated along the shore of the Huangpu River. Future development will increase the population by approximately 50 percent, with large areas designated for industrial and commercial parks, under the Special Economic Zone policy. The Pudong development will provide considerable environmental benefits to the Municipality of Shanghai through redistribution of population, development of new industrial and commercial facilities to replace obsolete and polluting facilities within the main section of the City and provide for new port facilities to replace older facilities currently operating at over- capacity and creating pollution, noise and traffic impacts to the urban core. IV. INVIROUIAL W= A. Ihangmu RyieraLrminalu A4g4icEniomt 4.1 Sources of aquatic iWpacts from port activities include: (a) sanitary sewage, stormwater drainage and operational effluents from the terminals; (b) sanitary sewage discharged from the ships at the berths; (c) oily waters discharged from the ships at the berths; - 69 - Page 10 of 27 (4) chemically-contaminated waters from ships; (e) chemically-contaminated waters from such sources as the battery recharge areas; and (f) dredging and dredged material disposal. All the above aspects are addressed In the Ship Waste Disposal Project (Cr 2391-CHA, GEF 10398-CHA). Air Ousaity Imacts 4.2 Sources of air quality impacts from port activities include: (a) stack emissions from boiler and heater facilities; (b) emissions from ships moving within the port and at berth; (c) emissions from vehicles and operational equipment within the port; (d) emissions from vehicles transporting to and from port terminals; and (e) dust from ore loading facilities. 4.3 Bailer Stack Emissions. Each terminal may have one or more boiler plants for water purification and production of heat. Reduction in air quality within the Municipality, particularly in the central urban area, has led the Municipal Environmental Protection Bureau to recommend that all industries and other sources of edissions undertake a program of emission reduction. 4.4 The program proposed under the 8th Five Year Plan will have a positive effect with a reduction in both particulate (TSP) and other gaseous emissions (e.g., S0). 4.5 Shin Stack Emissions. In comparison to other sources of emissions, ship stacks are a relatively minor contributor to air quality problems in the City. Proposed investments will not increase ship traffic on the Huangpu River; investments in the proposed port facilities at Luojing and Waigaoqiao will have the benefit of diverting the projected increase in ship traffic through the Port of Shanghai. At this time, no programs are proposed to reduce emissions from ship stacks. This activity can be considered no impact/no interaction. 4.6 r Vehicle EMissions. As part of a city-wide program, SPA is proposing to upgrade emission controls on port vehicles and operational equipment; older vehicles and equipment will be replaced with new equipment with appropriate emissions control, particularly those items purchased from foreign sources. This activity will have a positive effect on air quality. 4.7 r&tiMu..ka LrAfi Emis4ions. Most of the vehicles transporting goods to and from the port terminals are not under the operational control of SPA. However, the Sunicipality of Shanghai has embarked on a program to reduce vehicular emissions through upgrading of existing equipment and -70 - Page 11 of 27 promotion of purchase of equipment/vehicles with appropriate emission controls. Presently, PRC still permits the sale of leaded vehicle fuels. While presently not a major factor in urban air pollution, increased vehicular transportation may load to future problems. The proposed port project will not include any investments to alter truck traffic patterns or provide for roadways to port facilities separate from urban roads. 4.8 kmut. Dust generated during coal and ore loading/unloading, particularly at Terminals #7 and #8, have created significant impacts on adjacent residential areas. 22186 Impact 4.9 Noise impacts from port activities include: (a) offloading equipment at Terminal #2; (b) vehicle and operational equipment within the port areas; (c) vehicle traffic to and from the port terminals; and (d) ship traffic. 4.10 Offloading Eauiiment at Terminal 42. The current pneumatic offloading system at Terminal #2 (grain) creates both an operational dust problem with the port facilities and a significant low-frequency noise impact en the adjacent residential neighborhoods. Investments under the Shanghai- Ningbo Port Project will replace this equipment, thereby both reducing dust problems and the noise problem. 4.11 Vehicle TXaffic. Noise resulting from vehicle traffic, both within the port and to and from the port facilities will not be addressed in this project. Noise monitoring programs have indicated that operational equipment is the prime source of noise problems. This source will be somewhat addressed through investments proposed to purchase new equipment to replace outmoded or obsolete equipment. This will provide some positive effect. However, noise generated by vehicle traffic at the terminals within the City center is difficult to address as the residential neighborhoods are in very close proximity. 4.12 ShIn Trffi. The proposed investments will not address noise from ship traffic, but this is not expected to worsen. B. LuojLng Terminal NAIM1a Enyir4xen 4.13 Kuch of the proposed facility is to be built to the seaward side of the existing seawall in an area that was mostly intertidal marshland. The proposed construction will totally destroy the marsh as the area is infilled. Hovevr, the marshland area is already severely impacted due to raw sewage from the West Shanghai Outfall and effluents from adjacent township industries. These effluents have degraded the local water quality, reduced the diversity of the plants, and Impacted associated animal species. In - 71 - 71 ~~~~~~Annex 4 Page 12 of 27 addition, the eastern portion of the proposed port area has been bermed and is currently used as a coal ash wasto holding area for the Baoshan Steel Works and Shidongkou Power Plant. 4.14 Up to 430 ha of land to the inside of the seawall will be consumed when the project is fully developed. Most of these lands are currently used as a dump site for the fly-ash generated by the nearby power plant. water Qgalitv 4.15 Waste waters from the port facility will consist of ship wastes and facilities wastes. The impact of the ship waste is addressed through the Ship Waste Disposal Project. The facility wastes, including sanitary sewage, storm water drainage, oily water from machine and repair shops and drainage from the coal storage yard, would be treated and/or recycled to the required level before disposal in the river. Aquatic Envirornmet 4.16 The current aquatic environment has been severely impacted by other discharges, principally the Western Shanghai Outfall into the Yangtze river. While this would provide a short-term improvement to the near-shore environment, a long-term solution would still be needed. The impact of the proposed port facilities is very small. Air Oua£litZ 4.17 To evaluate the impacts of the proposed port facilities, studies were undertaken of air quality at comparable facilities elsewhere in the port. These studies also evaluated the number of ships projected to use the berths and possible missions from boilers, stacks and vehicular traffic in or proceeding to and from the facility. Dust derived from the coal storage area at full capacity, without dust suppression and under average atmospheric conditions, could create particulate of 0.7-1.0 mg/u9 at up to 3 km distant; with reduced wind dispersion, concentrations could increase to 2-3 mg/m3 or up to 20 times national standards. Therefore, mitigative measures must be installed so as to constrain the dust generated by the coal handling at the berths, by coal handling in the storage yard and from the coal in the storage yard. This particulate will also be deposited in the Yangtze, degrading river water quality. 4.18 Atmospheric assimilative capacity is good, therefore, adequate to permit construction of the facility. Wind dispersion at the site is good, with only limited conditions creating problems which could create exceedances of air pollutants. Emissions of S0, and NOx from the ships and port facility stacks will be minor contributors to local air quality, with a projected increase at the port site from 0.01 to 0.02 mg/mu for So, and 0.02 to 0.04 mg/bP for NOx, both within national criteria. For comparison, current Canadian standards are: S02, 0.055, and 10,: 0.200 ms/u'. Emissions from truck traffic, while relatively low, could create problems related to lead deposition on agricultural lands/crops and further additions to S0k and NC;. The EIA studies noted the potential of impact to air quality at the terminal arising from expansion of operations at the Baoshan Steel Works and the Shidongkou Power Plant. -72 - Annex 4 Page 13 of 27 4.19 Noise could be generated by three sources within the port facility: coal handling equipment, transportatLon vehieles and auxiliary equipment. Based on measurements at existing terminals. It is projected that the handling equipment will generate 85-90 dB at berth, with a reduction to 46-55 dB at the facility boundary. This meets both the 'Hygiene Standard of Noise of Industrial Enterprises" and 'Environmental Noise Criteria in the Urban Area of Shanghai." Noise from vehicular and rail traffic is projected to marginally exceed urban standards at 74 dB during the day (allowable is 70 dB) and 61 at nlght (allowable 55 dB). The projected noise impact is not considered significant within the study boundary. ImJant of Solid Wastes 4.20 There will be some solid wastes produced during construction and that resulting from the normal operation of a terminal facility. As the proposed development area is rural in nature, a solid wasto handling and treatment management plan will be required so as to avoid pollution, particularly diseases resulting from foodstuffs and other wastes from foreign shipping. Solid wastes can be divided into two types: facility wastes (foodstuffs and waste materials) and ships solid wastes (foodstuffs, other operational garbage and cargo residues). 4.21 Facility wastes will consist of foodstuffs from the cafeteria/dining room and normal garbage associated with facility offices. There will also be some scrap steel and wood wastes resulting from facility carpentry and metal shops and repair facilities. To suppress and control dust, water sprays will be used. The spray water and other run-off will be collected in a treatment facility, with the resultant precipitated solids recovered. 4.22 The Elk estimated about 1,200 tons of solid wastes from the ships and about 1,470 tons from the port facilities. The impact of the facility on the municipal solid waste volume will be insignificant. The facility, as with other terminals and ship wastes throughout the port, will undertake a complete solid waste management plan. Fill Material 4.23 In the first engineering design, the marshlands seaward of the existing seawall were to be lnfilled mostly with sand dredged from the Yangtze and other Inland waterways/canals. Subsequently, a storage/deposition area was created in the easterrmost part of the proposed port area for coal ash wastes from the Baoshan Steel Works. It is now proposed that the existing ash wastes be consolLdated and additlonal materials added to serve as the infill materials for the port facility. 4.24 Extensive testing has been undertaken of the geotechnical and geochemical properties of the ash materials. The results suggest that, if mlxed with soils, the ash could be used as a fill base (See Annex 9). - 73 - - 73 - ~~~~~Annex 4 Page 14 of 27 8cioecoOnomic AJpects 4.25 The actual port facilities (wharves, loading/unloading equipment and storage yard) are to be built to the seaward side of the shoreline seawall occupying some existing marshlands and intertidal areas designated for ash waste disposal from the baoshan Works and the Shidongkou Power Plant. Construction of the inland portion of the development will include linkage to inland waterways/canals. further backup lands for the port facilities and requirements for rosidential facilities for the port staff. It was determined that approximately 50 hectares would be required for Phase I size. 4.26 Projected earnings from the port facilities, increased commrcial activity in the adjacent towns/villages which will result from the port construction and new jobs available at higher wages to existing farm laborers, provide a positive economic impact to the Baoshan District. The resident population of the lands requisitioned for the project will increase from 2,900 (60 percent agricultural) to 40,000-50,000 based on about 13,500 port staff, their families and associated employees (e.g., school teachers). 4.27 Most of the new population will be located in Yuepu Township about 8 km from the port facility. New public transportation, roads, schools, public recreational and cultural facilities will be constructed. These new facillties should be beneficial to current inhabitants and provide for better transportation linkages to central Shanghai. Therefore, it can be concluded that the project will provide a positive socioeconomic Impact. C. WaijaggLao Terminal Definition of Imnact Zon Boundarv 4.28 To define the impact zone, the land component was described as an area 4 km long by 3 km wide centered at the terminal for a total of 12 kui. The water component was defined as 4 km upstream and downstream centered on the terminal and to the center of the Yangtze (approximately 2 km) for a total area of 32 Imn. The air and noise quality zones were taken to be the same as the land component with an upper boundary of 20 m for air quality, based on the maximum height of any incinerator or ship stack. 4.29 As the project is a new development at the slte, much of the assessment of impacts was based on measurements of pollution tt*ken at other existing port facilities and extrapolated to the proposed facility, based on size, type of cargo, and type of shipping. Where necessary, computer models were employed for assessment of air and water dispersion of pollutants. 4.30 Existing sources of pollution in the study area were small and limited to various village enterprises (e.g., ballpoint pens, shoes, bottles, hardware). Most existing heavy industry is located at least 5 km (direct line) away from the proposed developmant; *.g., Gaoqiao industrial area with an oil refinery, coal gasification works, and coal-fired power station. 4.31 The impatm of the development must also be consLdered in terms of other nearby developments, including the Waigaoqiao Coal-Fired Generating station, to be built adjacent to and south east of the port development; the Zhuyun Combined Sewage Outfall serving mostly the Suzhou Creek area of 74 - AnZex Page 15 of 27 Shanghai, being built about 4 km to the south east, and other industrial developments planned to the south in the Pudong Development Zone. Natura fntwromment 4.32 Nuch of the port area used was agricultural lands; the remainder was open unoccupied space, partially forested. The shoreline consists of a seawall and berm to limit flooding of the lands; much of the land is about 4 m above Wusong Kou datum. The project will entail construction of four marginal wharves to the seaward side of the berm with access via a ramp to the laydowv areas. Due to the relatively low level of the lands and high water table, it is proposed to backfill and raise the level of the laydown areas. During construction, existing roadways will be used, but it is proposed to link the port facilities to central Shanghai via two new road systems: the ring road and a direct road to the new Huangpu river bridges. 4.33 Construction of the port facilities will significantly alter the existing terrestrial environment, however, it is now neither pristine nor unaltered. As the wharves will be pile structures with little dredging required for navigational access, there will be minimal impact on the existing aquatic environment. aLr- 4uaity 4.34 To assess the impact of the proposed development on the water quality, two aspects had to be considered: (a) The estuarine waters of the Yangtze in front of the proposed development. These waters reflect a mixing of Yangtze (freshwater), the oceanic waters of the East China Sea, and the fresh waters of the Huangpu river. (b) The inland waterways of Gaoshangang, Gaoxing and Gaoqiaogang which would ultimately be linked via new canals with the Waigaoqiao Development. 4.35 Within the study zone, four effluents have the potential for significant impact on the aquatic environment: the Huangpu --4 million cu i/day; the South Sewage Outfall--230,000 cu m/day; the proposed Zhuyun Outfall--1.7 million cu m/day; and the Waigaoqiao development--567 cu m/day or 0.001 percent of the total input of the other three sources. On this basis, it was concluded that the Waigaoqiao development would have little or no discernible effect on the aquatic environment. 4.36 In contrast, the Zhuyun Outfall, 5 km downriver will discharge 1.7 million m3/day or about 3,000 times the effluent from Waigaoqiao. To test the effect of this discharge and its dispersion, particularly during the period of low Yangtze flow and spring tide conditions, hydraulic models of dilution and dispersion were tested assuming only the effluents from the Waigaoqiao development and then both the port development and the Zhuyun outfall. -75 - AMLA Pags 16 of 27 4.37 The model results showed that under certain conditions of tide and river flow, inadequate dispersion of the Zhuyun Outfall will occur in the Waigaoqiao area with a potential decrease from Class II to Class III quality, using COD as the test parameter. Current flows are such that convective flow and vertical diffusion predominate, with only weak transverse flows. so that impacts from the Waigaoqiao effluents and the Zhuyun Outfall will primarily impact the south shore of the Yangtze, with little or no impact of the north shore (Changxing Island). 4.38 It was concluded that if the Waigaoqiao terminal project was the only contributor of effluents, the water in the evaluation area would meet the current Class II status (i.e., there was sufficient aquatic assimilative capacity. As a result of the current discharges from the Zhuyun Outfall and other proposed projects in the Waigaoqiao area, waters adjacent to the south coast will likely degrade to Class III status; waters in the middle and north sides of the river will remain at Class II status. A recommendation was made in the EIA that monitoring be conducted after initiation of the Zhuyun Outfall to ground-truth the dilution/ dispersion model. Air Quality_ 4.39 To determine impact on air quality, a model was developed based on existing meteorological conditions at Waigaoqiao and utilizing data from measurements made in existing port facilities, taking into consideration ship traffic, vehicular traffic, and incinerator/ship stacks. Also taken into consideration was the ore off-loading facilities with possible contributions to TSP. 4.40 The model predicted that SO2, NO, and CO could meet Class 2 air quality criteria under general meteorological conditions; i.e., there is currently sufficient atmospheric assimilative capacity except under certain conditions. Class 2 concentrations of NO could be exceeded under poor wind conditions (<2.8 m/sec), with a maximum daily average concentration 1.1 times higher than criterion limit. The model also predicted that the TSP will exceed the criterion limit by up to five times the maxmum concentration. However, this was primarily attributed to the ore loading facility and not to the other operations. Present plans no longer include the ore handling facility and, therefore, the dust problem will not be significant. Nogise 4.41 To derive an estimate of noise (a) from routine terminal operations within those areas; (b) in the storage/stock areas; and (c) at the boundaries of the facility, noise monitoring was undertaken at similar existing facilities within the Port of Shanghai (mineral berth, timber berth, and steel/multipurpose berth). Measurements were made using the same protocol as for the ambient noise tests. 4.42 The highest noise levels (82-87 decibels (dB)) were predicted to be in the operations area, with an average value of 74-76 dB. 'While the results are poor (Class 4), they are generally within the 85 dB average for 8 hours permitted under the National Hygiene Standard of Noise in Industrial Enterprises. Storage areas were projected to have an average value of about 70 dB which is within the National Standard. Because the existing acoustic - 76 - Anx A Page 17 of 27 environment was Class 2, property boundary noise had to meet the municipal standard- -Environmental Noise Criteria for Urban Areas of Shanghai--75 dB daytime; 55 dB nighttime. Projected property boundary noise was 51-65 dB, which conformed with the municipal standard. Roadway traffic was projected to be in the 64-72 dB daytime and 41-50 dB nighttimo which also met municipal standards. 4.43 It was concluded that the noise within the facility will meet the 'Hygiene Standard of Noise for an Industrial Enterprise," while the noise levels at the boundary of the property and on the roadways are projected to readily meet "Environmental Noise Criteria in Urban Areas of Shanghai" and, therefore, will not create an environmental impact. Pill MateriAls 4.44 To protect the lands along the south side of the Yangtze, a seawall and berm were constructed a number of years ago. Part of the conceptual design of the marginal wharves project ls to backfill and raise the level of the interior lands of the project. As some dredging would have to be undertaken during port facility construction, the EIA reviewed the option of using dredged river sediments from the Yangtze as backfill material or alternatively dumping the sediments in open water further downriver. Subsequently, the Municipality requested that the Shanghai Port Authority Investigate the use of fly and bottom ash from the Baoshan Coal-Fired Electric Power Plant and other power plants to relieve problem of ash disposal. Two studies were undertaken to assess the geotechnical properties of the ash and to determine if chemical contaminants within the ash could be leached out, thereby affecting ground and river waters (see Annex 9). 4.45 River Sediments. Five sampling sites were designated within an area containing suitable sediments on the basis of earlier geotechnical investigations. Samples were taken and analyzed for trace metal contaminants (cadmium, copper, chromium, lead, mercury and zinc). The sediment quality was first reviewed in terms of current Chinese marine sediment quality criteria (Annex 5). As the sediments could also be disposed of on land as fill, results were also compared to standards set for pollution in agricultural soils. 4.46 The Chinese marine quality criteria are stricter than either Canadian or Amerlian criteria. The survey results indicated that much of the study area sediments were contaminated with zinc in comparison to marine sediment criteria and to a lesser extent with lead and copper. However, all of the sediments met criteria for disposal on land and thus could be used as fill material. 4.47 Fly and Bottom Ash Materials. Use of fly and bottom ash as fill material has the advantage of utilizing a material which would otherwise require a storage/disposal facility. Such materials are extensively used in other countries as fill materials, providing an excellent scientific and engineering base to compare the results using ash material from several sources In Shanghai. Geotechnical tests showed that the material could be placed and capped in such a fashion as to prove acceptable as fill material. Care would have to be taken to limit intrusion of ground and surface waters to limit the subsequent water content. Leaching tests (methodology not - 77 - Page 18 of 27 specified) to determine contaminant 1088 indicated some loss of lead, chromium and arsenic depending on the source of the ash (i.e., coal). Generally the studies found the leach concentrations to meet irrigation water quality standards. V. ANALYSIS OF ALTERNATIVES A. HuangpU River Terminals 5.1 Three alternatives to the present plans were considered: (a) Increased investments with a shorter time schedule for project implementation; (b) Diversion of ship traffic and cargo to alternate port facilities; and (c) Diversion of ship traffic and cargo to alternate ports. 5.2 Alternatlve 1. The major impediment to enhanced environmental protection has been the lack of available funds, particularly foreign exchange, to purchase appropriate technologies. For example, while the 8th Five-Year Plan has budgoted significant funds for upgrading of environmental protection measures, iuvestments and funding through a GEF project will enhance reduction in wastes discharges from ships, thus benefitting both the port and the adjacent coastal/international waters. 5.3 'While some increase in funds would be beneficial, very large increases would create significant stress on available institutional and operational frameworks. In many cases, the implementation of the project is timed to coincide with manpower training programs. Advancing project schedules will have an undesirable 'ripple" effect which will not be beneficial. 5.4 Significantly increased funding atd shorter project timing is not considered a viable alternative. 5.5 AltenatLUt_.Z. The operational and environmental problems attributed to design capacity, actual activities and projected traffic demands on the Huangpu terminals is well understood by SPA. The proposed project includes investments in Luoj ng and Waigaoqiao which will reduce some of the cargo traffic currently using the Huangpu terminals. However, the proposed implementation schedule for the new port facilities will barely meet the projected traffic demands over the next decade. That is, problems of current over-demand will not be adequately addressed. 5.6 The alternative of diverting traffic rather than making the proposed investments in Shanghai port is not a viable alternative. A significant portion of the proposed investments is intended to reduce current environmental impacts atd such investments would be required even if cargo demand was only to design capacity. Very large investments would be required in alternate facilities to meet current over-demand, &s well as projected demand increases. - 78- Annex" Page 19 of 27 5.7 The proposed Shanghai port project will include both investments to enhance environmental protection and provide alternative terminal facilities within the port area (e.g., new facilities at Luojing and Waigaoqiao). The proposed strategy is the best approach and Alternative 2 is not considered viable. 5.8 Aternative 3. Shanghai holds a unique place in marine commerce in China because of the scope and extent of its port facilities and because of its location, both central to the Pacific coast and as the gateway to central China through the Yangtze and smaller inland waterways. In particular, the Port of Shanghai serves as an important transhipment point for coal from the north being shipped to customers in the south and central areas of China. The other nearest major deep-water port is Ningbo, to the south. There are two drawbacks to this alternative: (a) nearest alternate ports, such as Ningbo, typically lack sufficient or adequate specialized facilities to handle sufficient diverted cargoes to provide significant relief; and (b) other ports lack the sophisticated links and transportation infrastructure enjoyed by Shanghai, making transhipment more difficult and expensive. While GOC has included significant expansion of other ports within the 8th Five-Year Plan, such expansion typically will serve to handle over-demand and projected traffic increases in those ports and would be inadequate to handle large volumes portions of cargo diverted from Shanghai. In any event, investments to provide alternate port facilities will be very large and will require considerable tim. for planning and implementation. Twhe beneficial effects on the Shanghai port environment would be well outside of the timeframe of the investments proposed in this project. Alternative 3, therefore, is not considered viable. VI. MITIGATION PLANS A. Au Terminals 6.1 Within its 8th Five-Year Plan, SPA has identified the need for upgraded effluent treatment facilities at the older terminals, reception facilities for ship wastes, both domestic and foreign, and expanded systems for chemical-contaminated waters generated at the container terminals. In addition, water spray systems for dust control at Terminals #7 and #8 are proposed to be upgraded, including additional treatment before discharge back to the Huangpu river. While SPA has a good management plan for wastes, the major impediment is limited funds. 6.2 At Terminals #2,1#3, #4, and #5, new effluent treatment systems will be constructed providing secondary treatment of sanitary sewage, upgraded treatment of storm drainage waters and treatment of condensed fumes from the battery recharging facilities. Oily waters associated with the machine shops and other facility activities will be treated through the use of advanced oil- water separators. 6.3 The lack of reception and treatment facilities for ship wastes is addressed by the Ship Waste Disposal Project (Cr. 2391-CHA, GEF). The mitigative measures include: (a) a new 300,000 ton/year land-based facility - 79 - nex 4 Page 20 of 27 to treat oil-contaminated waters; (b) conversion of another tanker to replace the BONUTA facility; (c) installation of connections and piping to permit ships to discharge sanitary sewage; (d) purchase of oil containment booms; -(e) participation in a national oil spill contingency plan; and (f) purchase of equipment to upgrade the monitoring capabilities of the Port Environmental Protection Bureau and the HSA. 6.4 At Terminal #7, additional water spray equipment is proposed to be installed at the middle and north of the terminal. Waters from the spraying will be collected and treated using a physical separator system augmented by the addition of flocculating agents. Water will then be reused for spraying or discharged into the Huangpu. 6.5 Proposed effluent controls and modifications will have a significant positive effect with site specific reduction in the input of contaminants and low quality waters to the Huangpu river. No negative environmental impacts will result from the proposed investments. Alr OualL£X 6.6 To counteract the dust problem at Terminal #7 (coal), SPA has proposed: (a) inwtallation of water spray and collection facilities; (b) installation of new offloading equipment which will generate less dust; (c) purchase of properties and the creation of more extensive green belts as buffer zones; and (d) shifting of coal handling to the proposed Luojing facility on the Yangtze(north and east of City center). Kitigative measures, not including the Luojing development, have been estimated at Y 266 million (approximately $50.3 million). To counteract the problem at terminal #8 (Iron Ore), SPA has proposed: (a) installation of new offloading equipment; (b) installation of enclosed conveyor transport systems; (c) installation of water spray facilities for the ore piles; and (d) eventual shifting of ore handling to Luojing. 6.7 The dust problem at Terminal #7, mostly from the middle and north sections of the facility, can be partially mitigated through the installation of the proposed water spray equipment. However, a significant factor in dust generation is over-demand. The terminal was designed to handle 22 million tons, but in 1990 handled 42 million tons; projected 1995 demand is 65 million tons. If Phase I of Luojing is on stream by 1995, it will be capable of handling about 9 million tons, still leaving a handling, capacity shortfall of 12 million tons in addition to the current over-demand of 20 million tons. This over-demand places significant stress on environmental controls, creates bad relations with the residential neighborhoods, and contributes to the overall air quality problem in the City center. Constructlon of the new Huangpu bridges near the terminal will only serve to further public complaints with respect to the terminal. 6.8 Measures which are proposed to be undertaken during the 8th Five- Year Plan (199196) will include: (a) installation of exhaust controls for diesel and gasoline fuelled vehicles; (b) inAstallation of air pollution controls on boiler stacks; and (c) installation of gas-fired stoves in the cafeterias, replacing charcoal stoves. - 80 - Anme 4 Page 21 of 27 6.9 Proposed emission controls and modifications will have a significant positive effect with site specific reduction in the input of contaminants and particulate to the airshed comprising Shanghai. No negative environmental impacts will result from the proposed investments. Noise 6.10 SPA is procuring a new grain offloading equipment for Terminal #2, which would greatly reduce the noise compared to the existing pneumatic system (Shanghai-Ningbo Ports Project, Loan 3007-CHA. Operational noise at the various terminals is proposed to be reduced through more sound insulation and control, as, for example, in machine shop buildings. However, the layout of many of the terminals and their location with respect to residential neighborhoods, makes it very difficult to significantly reduce much of the noise. SPA is planning to purchase property and relocate neighborhoods adjacent to Termina- #7, as well as increase tree planting and other natural noise barriers, to reduce complaints. However, these measures are expensive and provide only limited effectiveness. Alternate measures being considered include shifting much of the ore-loading activities to the proposed Luojing facility, which is both more isolated from residential areas and will be built to include a broad buffer zone. Noise associated with truck traffic will be very difficult to reduce, unless special roadways are constructed, funds for this are not currently available. 6.11 Proposed noise controls and modifications will have a positive, but limited, effect with site specific reductions. No negative environmental impacts will result from the proposed investments. olid Wastes 6.12 Within its 8th Five-Year Plan, SPA has identified the need for upgraded reception facilities for ship wastes, both domestic and foreign. While SPA has a good management plan for solid wastes, maximizing recycling and recovery, the major impediment is the allocation of limited fiunds, with such issues as dust and noise control and clean-up of effluents seen as more important than solid wastes. (the Ship Waste Disposal Project is addressing these issues). 6.13 Proposed solid waste management programs and modifications will not only have a positive effect the port, but also ensure a significant reduction in dumping of solid wastes in the coastal and adjacent international waters. To reduce negative environmental impacts associated with the incinerator operations, strict emission controls and monitoring will be implemented. B. dLytlgLITerminal 6.14 Mitigation of the port development impact will include both extenslve greenbelt areas within the port facility and a greenbelt area to serve as a buffer zons between the facility and adjacent lands. This buffer zone will also serve to further control and constrain dust arising from the coal and iron ore storage piles. Approximately 15 (7 hectares) of the total -81 - Annex 4 Page 22 of 27 surface area. is to be devoted to greenbelt and other parklands/gardens within the port facilities. Noise 6.15 Noise from the coal handling equipment can be reduced through careful muffling and placement of noise absorption barriers. These barriers are proposed to include extensive greenbelts along the existing seawall and wall noise barriers. Buffer zones of greenbelts and berms are proposed along the rail lines and along the new entrance roadway. Enclosure of the conveyor system to constrain dust pollution should also assist in noise control. The Environmental Monitoring Centre for the Terminal will undertake routine noise monitoring, particularly of the coal handling areas as part of worker safety and protection measures. ALF Ouality 6.16 The most serious impact on air quality will be created by coal handling and storage. To reduce this, the port will: (a) install enclosed ship offloading equipment; (b) install enclosed conveyor systems from the berths to the storage yard; (c) utilize water spray equipment for the storage yard; (d) utilize water spray equipment to reduce and capture dust on roadways; (e) load trucks and rail cars within enclosed sheds; and (f) utilize water sprays to clean trucks and railcars before departure from the port facilities. All water would be collected in a central treatment system to separate out particulate. The Terminal Environmental Monitoring Centre will regulate ambient air monitoring (particularly, SO, and NO.). 6.17 Boilers and stacks in the facility will be equipped with air pollution control devices to reduce particulate and gaseous emissions to meet national standards. Switching truck fuel to unleaded varieties, combined with improved emission controls, will significantly reduce air quality impacts. However, such alterations are beyond the control of the Port Authority and are recommendations to the Municipality, as part of the implementation of air environmental management strategies for nearby industrial enterprises. C. Waigao Terminal Pseility and ShI2 Effluents 6.18 The aquatic Impacts of the proposed port development include: (a) sanitary sewage from the operations areas; (b) sanitary sewage discharged from the ships at the berths; (c) oily waters discharged from the ships at the berths; and (d) chemically-contaminated waters from such sources as forklift battery recharge area. To reduce the impacts of these effluents, the following mitigative measures will be taken: (a) sanitary sewage from the operations areas will be piped to a secondary sewage treatment plant before discharge to the river; (b) sanitary sewage from the ships will be collected by barge and transported to the sewage plant for treatment before discharge; - 82 - Annex Page 23 of 27 (c) all oil-contaminated waters (from both ships and shore equipment) will be treated to meet current standards of 10 mg oil/L before discharge into the sanitary sewage outfall; and (d) chemically-contaminated waters are projected only to be acidic or alkaline and not contain other substances. Treatment will consist of neutralization before discharge to the sanitary sewage outfall. 6.19 To ensure that national water quality criteria are met, the terminal Environmental Monitoring Bureau will have on-site laboratory capability. 6.20 Residential garbage will be sorted into materials that can be composted, materials requiring icineration, and materials which can be recycled. Foodstuffs from domestic shipping and facility dining areas will be given to farmers for compost; foodstuffs from foreign shipping will be incinerated at the Port of Shanghai solid waste disposal station, presently located on the Pudong side of the Huangpu River. Aluminum cans, bottles and plastic containers will be recycled where possible. Cargo hold clean-out wastes will be collected and sorted by the Terminal Environmental Protection Bureau for recycling or use as fuel; e.g., wood and timber wastes recovered for possible fuel; waste metals for recycling; and coal wastes for fuel. 6.21 It was concluded that the facility could operate without creating a solid waste environmental impact through careful management and recycling of the solid wastes. Socioeconomic Aspects 6.22 To alleviate the social and economic disruption related to the port development, farmers have been compensated by the Shanghai Port Authority in the form of cash for the lands acquired, new housing to replace old housing, and offers of employment in the port for displaced workers. 6.23 To alleviate the impact of increased t:ruck traffic, the Municipality of Shanghai is constructing two major roadways which will be accssed from the port facilities through a designated, limited-access road constructed by the Port Authority. The first major roadway will form part of a new Shanghai Ring Road encircling much of the urbanized core of the municipality; the second major roadway will provide direct access through Pudong to the new Nanpu Bridge. These roadways will limit truck and associated port traffic from use of local residential and collector roads and facilitate easy cargo ingress and egress from the port facilities. 6.24 It was concluded that minimal socioeconomic impact would occur as a result of the proposed port development. - 83 - Ahmix 4 Page 24 of 27 VII. ENVIRONNENTALMANAGEHU Ln XRUANa Orr nizatfgn 7.1 The Shanghai Port Authority has a well *.eveloped organization to undertake tasks related to environmental management and protection in the port. Monitoring within the port is divided into two operational levels: (a) Port Environmental Protection Bureau and Monitoring Centre (PEPB); and (b) Environmen- tal Protection and Monitoring Centres for each terminal (TEPB), both reporting to SPA management through a deputy director. The PEPB provides overal supervision and audit of the TEPB activities, back-up technical support (e.g., capability to analyze select chemical substances) and liaison with the Municipal Environmental Protection Bureau. It also undertaken monitoring programs either separately or in conjunction with the Municipal Environmental Protection Bureau, of general river conditions. The TEPBS undertake site specific monitoring activities (e.g., monitoring of specific substances in air emissions or aquatic effluents from the terminal) and operate appropriate treatment facilities. Data are reported to the PEPB and through to the Municipal Environmental Protection Bureau. The Municipal Bureau also conducts its own monitoring, but with a focus on systemwide assessment with more limited site specific audit and compliance activities. 7.2 Currently, about half of the terminals operate their own Environmental Protection Bureau; the Port Bureau undertakes monitoring for the other terminals. Under the 8th Five-Year Plan, Environmental Protection Centres will be implemented at many of the remaining terminals to undertake their own monitoring, thus permitting the Port Bureau to assume more of an audit and supervisory role. 7.3 To operate appropriate anvironmental protection facilities and monitor compliance with national and municipal regulations, both the Luojing and Waigaoqiao terminals will establish their own TEPB with a laboratory on the grounds of the terminal. The TEPB will require hiring of staff, purchase of equipment and some staff training, and provision has been made for these. During the phase-in of the TEPB, monitoring activities will be undertaken by the PEPB. Facilities and Equinmeat 7.4 Although located in older premises within Terminal #3, the Port Environmental Monitoring Centre is equipped to undertake the necessary sampling and analyses with a wvll trained staff. Limitations on monitoring are related to the number of pieces of sampling or laboratory equipment available. Each TEPB maintains a laboratory capable of undertaking analyses for select chemical substances (designated as indicator species; e.g., chromium for trace metals) and appropriate sampling equipment. While the laboratory and monitoring equipment are typically sufficient for the tasks ldentified, certain limitations on sampling are imposed as a result of the limited amount of equipment available. 7.5 New TEPB laboratories will be constructed and equipped during construction of Phase I of each of the Luojing and Waigaoqiao terminals. A component of the funding for the project will be allocated to provide appropriate monitoring equipment (noise, air, and water quality) and laboratory testing support. The laboratories will be housed in their own ficilities, thereby permitting rapid turnaround of results. The TEPBS will be sup?orted by the PEPB. The proposed facilities and nonitoring programs are similar to those already in - 84 - Annex 4 Page 25 of 27 place at many of the other port terminals and, therefore, will not be an onerous or unusual task for SPA. St&t 7.6 Staff within the PUPB are well trained and several have undertaken work/training programs in other countries. At a typical TEPB, there are six to ten staff meibers with a lower level of training than the PEPB, but adequate for the tasks to be undertaken. Aasesgn= 7.7 Additional staff wvll be have to be hired to staff the new TEPB's established during the 8th Five-Year Plan. The local universities and technical institutes are capable of supplying the necessary manpower. No additional training would be required to undertake the proposed investments. The proposed environmental monitoring investments would have a positive effect in that the overall level of monitoring would be extended and additional sampling programs undertaken. VIII. EIIVMuNPALMQN.UQELAN Cumrent ActLLtLe 8.1 SPA has an extensive moniloring program now in place throughout the port area, including water, effluent and air quality assessments. Each terminal is required to sonitor its own air emissions, liquid effluents, solid wastes, noise and occupatLonal health/safety requirements to comply with national and municipal quality criteria and guidelines. The intensity of sampling varies from weekly to quarterly, depending on the parameter and matrix being regulated. Where a terminal does not currently have an Environmental Protection and Monitoring Centre or where the TEPB cannot undertake all of the necessary monitoring, the PEPB fulfills these tasks. The PEPB also performs necessary audit and data review of the TEPB. 8.2 The Municipal Environmental Protection Bureau monitors the Huangpu three times per year for water quality and once per year for sediment quality. These data serve to provide a baseline assessment of receiving envlronment quality. The monitoring undertaken by the TEPB, the PUB and the Municipal Environmental Protection Bureau provide a comprehensive review of impacts related to port activities as they relate to national and municipal environmental criteria. 8.3 Monitoring of the Yangtze from Lusoukou down to the river mouth is undertaken by the Yangtze River Centre (local unit based in Shanghai) and the Shanghai Municipal Environmental Protection Bureau. These monitoring programs provide detailed information on air, water and sediment quality. _th Five-Year Plan PZposed ActiitLes for Huangn_ Termina 8.4 Under the 8th Five-Year Plan, Environmental Protection Bureaus will be established for those terminals and Port Industrial Enterprises which currently do not have such facilities. Subsequently, the PUPB will assume primarily the -85 - Am" 4 Page 26 of 27 role of providing technical assistance and supervisory auditing se the terminal Environmental Protection Centres. The information and data gathered by the TEPB will be used by the PEPB to assess the environmental impacts of activities and thus make recommendations for addition or upgrading of environmental protection measures. ProDosed Activities for Luoiing and Waigaogiao TeMinals 8.5 As with the existing Huangpu Terminals, an extensive monitoring program will be established for both the terminals. This plan includes monitoring of air emissions, liquid effluents, solid wastes, noise and occupational health/safety requirements to comply with national and municipal quality criteria and guidelines. The intensity of sampling varies from weekly to quarterly, depending on the parameter and matrix being regulated. The proposed progran of monitoring will be supervised/audited by the PEPB with results subsequently reviewed and approved by the MEPB. Auaa-sen 8.6 Based on the monitoring programs being currently undertaken at the other terminals, it can be concluded that the proposed program will fully meet International standards. IX. CONCLUSIONS =LhDJ UDATIONS 9.1 Specific conclusions and recommendations are as follows: (a) As all effluents will be treated before discharge to the Yangtze, no significant impact on the aquatic environment is predicted to occur. The water quality will continue in current Class 2 to 3 status. Present aquatic assimilative capacity will be sufficient to receive and assimilate the discharges. However, the capacity may be lnsufficient when the Zhuyun Outfall is commissioned. SPG will study this aspect in the future at the appropriate time. (b) Under normal atmospherLc conditions, air quality will remain in Class 2; possible N4 exceedance could occur under limited special atmospheric conditions. There could also be limited exceedance of total suspended particulate during offloading of ore cargoes. If the ore discharging is not included ln the operational plan, problems related to TSP will not occur. While the current atmospheric assimilative capacity will not be exceeded, the operation of the adjacent Waigaoqiao Coal-Fired Generating Power Plant may cause future problems, related to NO., TSP and s02. The Municipal Power Administration has studied this issue and more stringent guidelines will be applied. (c) The project site noise will meet current industrial enterprise occupational health guidelines. Noise at the property boundary and the new roadways will meet Shanghai urban area environmental criteria. - 86 - AU= 4 Page 27 of 27 (4) Any solid wastes generated will be managed, with maximum recycling of materials. Only foodstuffs from foreign ships will be incinerated for quarantine reasons. (e) The scope of the ZI was llmited to the construction and operation of the four marginal wharves at daigaoqiao. The ZIA did not include the planned interior basins, linkage to the inland waterways or associated infrastructure. This is to be the subject of a future EIA. 9.2 On the badsi of the detailed study undertaken on behalf of the Shanghai Port Authority, it was concluded that the proposed port development can be undertaken in an environmentally acceptable manner with minimal residual impacts. - 87 - SHANMN I PORT AND DPVRWPNENT FROJECT DNGEOUS CARGO BAR=IE STUDY 1. The study will cover the following points: (i) review the traffic and determine the historical amounts of cargo passing through the port and the forecast of its volumes in the future; (ii) review the methods of handling dangerous cargo at present; (ii) review the laws and regulations pertaining to handling of dangerous cargo; (iv) identify the risks in the various steps of handling dangerous cargo at present and their effect on the environment; (v) devise a plan to handle dangerous cargo with all the required safety measures; (vi) identify the mitigating measures considered in the plan; (Vii) prepare a cost estimate for Implementing the plan; and (viii) carry out a feasibility study for the proposed plan. - 88 - Page 1 of 2 * ~~~~~~~CHIN SHNUGAN = 0r RUTIUCTURING NmD DEVELOPMENT PROJECT Txaffic Orid n/DestiWation Analysis and Carao Owners' Survey for Ialor Comnmdities Commodities Origination/Destination Major Cargo Owners Coal Qinhuangdao port (north)/ 1. Local users: City of Sbanghai and (a) Electric power company Jiangsu and Zhejiang (b) Coal Company (for gas and Provinces factory heating system) 2. Transhipment: Planned by the local coal companies. Using the smller ships (60-100 ton) and the inland waterway system to transport sand and stone and coal in and out of the city. Petroleum Dalian port (north)/ 1. Gouqiao oil refinery (capacity. production City of Shanghai 4.0-4.5 ut p.a.) 2. Jinshan petrochemistry (capacity: 2.0 mt p.a. Traffic is expected to be handled totally by the cargo owners' berths. Metallic ores Australia and Brazil/ 1. Local users: City of Shanghai (a) Baoshen Steel Co. (capacity: 6.0 mt p.a.) (b) Shanghai First Steel Co. (capacity: 1.0 at p.a.) Hubei and Anhui Province 2. Transhipment: (a) Wuhan Steel Co. (Hubei) (b) Haanshen Steel Co. (Anhui) Ocean ships (100,000-150,000 tonnage) to Beilung district of Ningbo port, coastal ships (20,000-50,000 tonnage) to Shanghai port and river ships (2,000-5,000 tonnage) to the Steel Co. via Yangtze River. Iron and Dalian port and Japan/ For five locil steel factories. steel City of Shanghai - 89 - ANNE 6 Page 2 of 2 CH SHANGHA POR RESTRUCTUIN AMD DEVELOPMENT PROJECT Traffig Orifin/Destination Analysis and Cargo Ownera' Survey fox Major Commodities Commodities Origination/Destination Major Cargo Owners Construction Shandong, Zhej .ug, FJuian Construction Materials Bureau of materials provinces & Yangtze River/ Shanghai. 75X of incoming traffic is City of Shanghai sand and the volume is heavily depend on the city's development plan. cement Anhui province/ Construction Materials Bureau of City of Shanghai and Shanghai.. The city can produce South East Asia countries sufficient cement for its own use. IMort/export of cement only account for a small portion of the market. Timber South East Asia countries 1. Local: Shanghai Log and Dalian Port/ Supply Co. City of Shanghai and 2. Transhipment: Shandong, Jiangsu, Anhui, East China Log Supply Zhejiang, Jiangxi, and Co. The company in NJuian provinces charge of the log distribution for the six provinces. Nonmstallic Inland provinces along the 1. Shanghai Metal and ores Yangtxe River/ Ores Import and City of Shanghai, Japan Export Co. and Europe 2. Shanghai Metallurgic Bureau. Chemical Japan, Philippines/ 1. Shanghai Agriculture Fertilizer Jiangsu, Zhejiang, Anhui Production provinces and Tianjin port Information Company. (north) Salt Yangtze River 1. Shanghai Salt Company. Mostly for industrial use. Grain Canada, USA/ 1. Shanghai Grain Bureau Nearby provinces - 90 - Annex 7 Page 1 of 3 _L_fMEM ESn___AD _XuPEN SPA's Lon-torm Restructuring Action Plan District District Present No. ~Name Activity Future glan Dongohang General cargo Part to be converted to Financial and Trade Center by 1996-2000. Rest to undergo equipment rehabilitation. 2 Ninsheng Grain Grain handling to be improved and new machinery will be adapted after 1994 to control dust and noise. 3 Huishan General cargo Cargo handling to be downsized and passenger from 4.65m tons in 1990 to 3.20m tons; demolition of old warehouses underway; increase passenger handling from 0.97 million in 1990 to 1.8 million; construct a high-rise multi-function passenger and service building - all to be completed between 1992 -1996. 4 Nuchai Lumber & small No change since lumber is amount of serving small industries building around the asea. material 5 Gaoyian General cargo Downsize cargo handling from and passenger 2.8m tons in 1990 to 2.3m tons and increase passenger traffic from 23,000 in 1990 to 150,000 by 1997; demolition of old warehouses and renovate berths and provide passenger facilities. 6 Kaiping General cargo Unchanged - serving and lumber 'surrounding industries. 7 Coal Co. Coal Shifting of coal activities will start in 1996 to Luojing, according to attached plan. - 91 - Page 2 of 3 District District Present No.. Name Activity E&WuLlan 8 Xinhua minerals, Will be shifted to Luojing by Fertilizer the end of 2000; the district then will be converted to general cargo. In the meantime fertilizer handling will be improved by using screw unloaders. This activity may eventually be shifted to Waigaoqiao. SPA is to study feasibility of this subject. 9 Zhanghuabang Containers, Increase container berths and general cargo containerization of all general cargo. 10 Jugonglu Containers, Increase container berths and general cargo convert Berths 1-5 to container berths. 11 Gongqing Building To be converted to port materials handling service vessel berths. Building materials will be handled as needed (small quantities) at other districts. 12 Fuzing Coal and Traffic reduced to minimum general cargo (3.5m tons in 1990 to 1.5m tons in 1991). Briquets needed for area inhabitants. Factories will not move until gas is supplied. As soon as gas reaches area, berths will handle only general cargo. 13 Baoshan Containers, No change. general cargo 14 Gaungang General cargo No change. - 92 - Ane7 Page 3 of 3 Note: SPA has agreed to: (i) study the feasibility of moving fortilixer handling from District No. a (Xinhua) to Waigaoqiao to reduce dust pollution in the city, and (il) launch a feasibility study for general cargo unitization. - 93 - Aranex 8 Page 1 of 5 CHIN SHANGHAI PORT RESTRUCTUR1NG AND DEVELOPMENT PROJECT TECICALNOTE: FLY ASH 1. Coal fired power stations produce ash. About 80X of the ash is in the form of fine powder, known as fly ash (FA), all over the world, except in the UK where it is called pulverized fly ash (PFA). The remaining agglomerated ash is much coarser and is called furnace bottom ash (FBA). The properties of the FA are such that it has been used as fill material, in grouting fissures, voids and cavities, in concrete, in blocks, bricks and ceramics and light weight aggregates. The use of the fly ash in coastal and port work has been quite limited, mainly due to the high transport costs required for its use. This technical note examines the possible use of fly esh in marine structures, the environmental effects and the precautions needed to put the properties of fly ash into advantageous use by its recycling instead of wasting it by mere dumping in specially prepared pits. Proiw rties of PA 2. Chemical Prooerties. The three main elements in PA are silicon, aluminum and iron, the combined oxides of which account for 75 to 95X of the material. Conventional chemical analysis is presented in Table (1). A small proportion of FA is soluble in water. The solution is usually alkaline in reaction and contains many calcium and sulphate ions. Magnesium, sodium, and potassium are usually present as well but in much smaller amounts. 3. Three types of FA are available: (i) conditioned ash - FA taken directly from the silos to which water has been added to assist with delivery and subsequent compaction on site; (ii) stockpiled ash - previously conditioned ash which has been placed temporarily on a stockpile before delivery to site; and (iii) lagoon ash - FA which has been taken from the ash silos, pumped into storage lagoons and allowed to settle and drain prior to re-excavation and delivery to site. 4. Typical grain size distribution for conditioned and lagoon FA and its comparison with samples of FA from Shanghai Baoshan Iron and Steel and Shanghr Shidongkou Power Plant FA are presented in Figure 1. Segregation occurs in lagoon FA with the finer particles remaining on top and moving with water, which explains the larger particle size. Samples from two sources of FA in Shanghai, but from the same coal mine, show similarity and fall between the two standard curves of lagoon and conditioned PA but show more 4niformity of partiele size. 5. Under field conditions, the degree of coupaction of FA will depend on the source of the ash, the compaction plant used and the level of site control Table 1 presents a comparison of maximum dry densities and optimum moisture content of the FA compared with other soil material (BSS 1377, test 12 used). Tests over several years by the Central Electricity Generating - 94 - Page 2 of 5 Board, UK has shown that the compaction characteristics of conditioned FA from a single source varies very little. Some stockpile and lagoon FA, however, exhibited lower dry densities because of either segregation or a content of coarser material. 6. hear 5 . The shear strength of FA, in general, increased with time. The cohesion and angle of shearing resistance are greater with conditioned FA tan in stock piled and lagoon material. The rate of strength increase with time is, however, adequate for most purposes. 7. Perability and Drainage. Laboratory measurement of the permeability of conditioned FA gives values of 0.05 x 10-' to 8 x 10-7 m/sec. The drainage characteristics, therefore, range from practically impervious to poor, despite the air void ratios of 8-20X. FA can, consequently, absorb large quantities of water in the upper layers before reaching saturation. The lower permeability of PA prevents leaching of soluble material from the mass of compacted FA. As a consequence, there have ben no reported cases of concrete structure adjacent to FA fill suffering from sulphate attack, despite continuous exposure over many years. It is normal, however, to have a layer of tar bitumen or polytene sheet between concrete and PA. FA, however, can be eroded by surface water so that the normal precautions of using intercepting drains and covering side slopes are essential. 8. Caoillarity and Frost Heave. Water will rise by capillary action in FA even after compaction. In fills shallower than 0.6 m thick, this could cause saturation and instability. A drainage layer of coarse m&terial placed before the FA if laid will eliminate capillary action. The capillary action makes FA frost susceptible. Lagoon and stockpile FA mixed with coarser material are only slightly if at all, frost susceptible. FA susceptible to frost attack should be kept at least 0.45 m below the finished surface. 9. LeadhLDg. Tests performed as part of a study in Israel confirmed results obtained by others, that concentration of leachable salts of heavy trace metals in fly ash leachate are in general lower in fly ash than in sea water. At eh same time, analysis of leachate content in fly ash from Shanghai power plant shows that it is highly improbable that any percolate through the fill, from rain, surface water or sprinkler water for coal stack, will reach the surrounding water at all due to: (i) the fly ash will be compacted to such an extent, that its permeability will become impermeable or at least very poor and (ii) if some leachate would reach the surrounding water, quantities will be so minimal that the dilution in the water will be infinite, and will have no ecological influence. - 95 - ~a8 Page 3 of 5 CHENIGAL ANALYSIS OF FLY ASH (Percentage by Weight) ELEMENT TYPICAL CHINA A/ U.K.h/ LOCAL _________ _________SOIL Baoshan LuoJ ing Baoshan Silicon (SiO2) 48.00 54.00 51.50 50.00 61.50 Aluminum (A1203) 27.00 32.40 32.20 28.00 16.20 Iron (Fe2O0) 9.00 5.50 5.90 10.50 7.30 Calcium (CaO) 3.30 2.50 2.80 2.30 7.30 Magnesium (NO) 2.00 0.80 0.80 1.60 3.30 Potassium (R20) 3.80 0 O.50 3.60 3.20 Sodium (Na2O) 1.20 0.20 1.20 0.80 Titanium (TiO2) 0.90 .. 1.00 Sulphur (S0O) . 0.20 0.40 0.70 .... (Water Soluble) 0.60 . . . Chloride (C1) 0.08 0 . O.08 . Unaccounted 4.12 4.60 5.70 1.02 0.40 100.00 100.00 100.00 100.00 100.00 / Source: Shanghai Port Authority, 1992 g Source: PFA Bulletin, U.K., National Power, U.K. - 96 - Page 4 of 5 COMPARISON OF FLY ASH COMPACTION IG OTHOM SOIL type of Soil Maxim=w Dry Density Optimm moisture Kg/m3 Content X Gravel 2070 9 Sand 1940 11 Sandy Clay 1840 14 Silty Clay 1670 21 Heavy Clay 1550 28 FA 1380 18 HEAVY METAL COCTENT Soil FA (Kg/Kg) FA Water State Requirement Criteria Zlment Waigao.qiao Baoshan Soll Wats Watgaigiao 1/ Soil Water FA Water for Indus- Whgaouiaa Luoajung Luojing trial Vat. cu 18.20 47.800 0.010 O.009 0.0120 0.0010 1.00 Pb 23.50 82.900 0.002 0.015 0.0009 0.0020 1.00 Zn 67.50 56.100 0.030 0.030 0.0300 0.0300 5.00 Cd 0.04 0.100 0.004 0.008 0.0016 0.0004 0.10 Cr 72.20 38.400 0.010 0.010 0.0100 0.0100 0.50 Ni 37.30 34.100 0.003 0.003 0.0030 0.0030 Fe 3.5 x 10^ 4.4 x 104 0.030 0.130 0.0800 0.0300 ---- Mn 70.20 53.100 0.050 0.740 0.3100 0.0500 ---- Hg 0.01 0.005 0.5 x 10-4 0.5 x 10-4 0.5 x 10-4 0.5 x 10- 0.02 As 3.31 9.980 0.047 0.045 0.0240 0.0400 0.50 U .... 8.900 0.6 x 10-3 _ ._ Th .... 0.290 0.2 x 10-5 _. Ph 7.700 7.700 8.8400 9.0800 6.00-9.00 1/ aF water is treated by acids to reduce the alkalinity and get rid of the extra trace metals. 0 - 98 - Annex 9 Page 1 of 3 SHANGHA PORT RESTRUCTURING AN DKEPKTPROJECT Outline of Semi-Annual Proaress Reports 1. The purpose of these reports is to provide information on significant events which occurred during the reporting period, together with an evaluation of progress achieved and the prospects of future progress. To this end, the information contained in the reports should cover at least the following aspects of the project: (a) physical work accomplished during the reporting period; (b) a comparison of the actual progress of construction at the end of the reporting period with the original forecast of progress at that date; (c) actual or contemplated material deviations from the original plans or schedules, except that any such changes which would require prior consultation with the Bank should be reported immediately and subsequently included in the next report; (d) other changes, events or conditions which would materially delay the construction of the project or increase its cost; and (e) the expected dates of completion of the principal physical elements of the project. Civil Works 2. Construction progress should be reported on all the main items of this component of the project as follows: A. Preparatory work B. Main items of works - wharf and causeways - reclamation - pavement - utilities - power supply - telecommunications - roadways C. Supervision of construction D. Consultant's activities and effectiveness. _ 99 _ Anex 9 Page 2 of 3 3. Progress on procurement of the port and cargo handling equipment should be mentioned with particular reference to the: - bidding process - manufacturing/supply; and - testing and operatioxi. Technical Assistance 4. Information contained in the reports relating to the cargo unitization study, the study for shifting fertilizer handling to the new Waigaoqiao terminal, the preparation of the corporate plan, the development of th.e MIS, the vessel traffic management study, the computerization of the accounts and tariff/restructuring should cover: - the selection of consultants; - the work of the consultants their effectiveness. - the current status of the study. Traffic 5. Particulars of port traffic that is actually handled during the reportinL period, desegregated by commodity so that the appraisal estimates and forecasts can be checked and updated, should be included in the report. Text of the Report 6. The text of the report should describe the work performed on each major item during the reporting period1, following the headings given above. Where appropriate, the text shou' d inAlude explanations of and comments on the following: (a) Actual or expected material deviations from the original (or amended) plan/design or implementation schedule. (b) Actual or expected difficulties or delays, any weasures taken or planned to correct them, and the probable effects on the implementation schedule. (c) Expected changes in the completion date of any major part of the project or the project as a whole. (d) Actual or expected delays in delivery of major items of equipment. Reasons for such delays should be given, and their possible effects on the implementation schedule should be estimated. (e) Numbers in the work force including the Construction Management Bureau, consultants and contractors. - 100- Page 3 of 3 (f) Any actual or expected event or condition which may effect the cost of the project. (g) Any unusual occurrences affecting the progress of the project. (h) Project expenditures and disbursements and a comparison of actuals with estimates and reasons for the deviation, If any. 7. Drawings showing the plan and sections of the wharf and causeways should be included. Construction progress should be indicated on the drawings by color or other markings. S. A bar chart should show separately scheduled and actual progress on principal activities of each project component. Simplified CPK or PERT diagrams, which may present a more comprehensive picture of the schedule and progress than the chart, may be used if necessary. - 101 - Amex Ql Page 1 of 5 SUAN=N PORT ERUTRIADDEEOMNPOJT Ngtes and Major Assumptions Underlying SPA's Financial Forecast for 1992-1997 A. G*Qar1 1. The forecast is prepared in current prices. 2. The projections are based on the traffic forecast and investment plan lncluded in this report. 3. No operating subsidy or equity contrLbution from the goverment is assumed. B. ncme Statemen 1. 0peratbg Reven - Revenues are projected by using the estimated traffic, the current port charges with estimated future tariff increases as follows: Item Tariff Increases Foreian Trade Domestic Trade (a) Loading/UnlngaMt: 1992 44XL. - 1993 - 1994 - 501 Za 1995 15X - 1996 - 301 1997 25X - ./ Approved by the Price Bureau effective April 1, 1992, for foreign trade and January 1, 1994, for domestic trade. (b) Storagg: No storage tariff increase was actually stipulated in the forecast but SPA agroed in principle to increases (based on the results of PC MIS study [para 2.201) to discourage cargo owners from unnecessary, prolonged use of storage areas. The charges will be increased annually as the storage capacity is expanded. - 102 - AnnxhI 10 Page 2 of 5 (c) Obaz: _ Bargm- p sg_ss 1992 25X /A 1993 to 1997 9.62 (annually) LS Approved by the Price Bureau effective May 1, 1992. k A 152 tariff Increase was approved on March 16, 1991 to Y 0.067 per ton. (d) Serv9Lce tg Pasaseges: An additional charge will be made for providing now services such as delivering tickets to passengers at their homes. (e) Taon: Operating revenue taxes are paid to the government as follows: 3.21X of gross revenue for loading/unloading, 5.352 of gross revenue for storage, 3.21 to 10.72 of gross revenue for others, and 3.21 to 5.35X of gross revenue for marketing. 2. OgeratLrg Z&2gn=: (a) Salary and wage increase is assumed at 6X annually and material price increase at 62 to 162 annually during the forecast period. Cost reduction due to expected improvement in efficiency and productivity was taken into ¢onsideration at 22 after 1996 when the project will be fully implemented. Staff costs are calculated based on labor required for different levels of cargo throughput and incentives for higher performance. The gross payroll and bonus payment were, therefore, closely linked with both throughput and operating revenues. Employee bonus is paid from profits, not from operating costs, as per specific agreement between SPA and the Shanghai Smunicipality. The generation of higher profits is, therefore, an incentive scheme to labor to earn higher bonus. Staff health and welfare cost are included in the working cost at 112 of gross payroll. (b) Fuel and consumable items are expected to rise at an average rate of 162 per year due to inflation and pricing reform. - 103 - Annex 10 Page 3 of 5 (c) Applylng straight-line depreciation method, the following depreciation rates were used: Vehi¢les 8.04X Machinery 6.84X Communication devices 7.561 Buildtngs, warehouses and sheds 4.20X Other operational facillities 6.0X Accessories 6.48X micro computers 17.201 Mini computers 14.901 Medium and large computers 11.90X 3. Terms and Conditions for Borrowings (a) Foreign Mans: (i) IBRD Loans - MOF borrows all forelgn loans and then on lends them to SPA. The terms for such lending are as follows: ongoing Proigt (199l 1 Proposed Pro"ect Amount (3006-CM) $46.46 million $150.00 million Duration 20 years 20 years Grace Period 5 years 5 years Interest Rate 6.21 71 (i) ADB Loans - (1991) Amount $20.00 million Duration 10 years Grace Period 3 years Interest Rat Variable Rato (currently 8.25X) - 104 - Am"e 10 Page 4 of 5 (b) aastic Loins (from local banks and governments) Auount MB 625 million (during 1992 to 1997) Duration and } Government's past loans at 3.61 Interest Rate - Construction Bank loans at variable rates, e,g.: - at 7.20X for 3 years - at 8.64X for 3 to 5 years - at 9.12X for 6 or more years The total amount of future loans from local banks is estimated at RKB 625.0 million; the annual loan amounts will be determined periodically at the going interest rate. 4. Income Tax Up to 1985, the government levied a tax of 701 on annual net profits and gave capital contributions. Between 1986 and 1991, it levied a fixed tax of RNB 51.55 million each year. From 1992, SPA expects to be exempted from any paymonts towards income taxes in order to enable SPA to contribute to future investments and meet its debt obligations. SPA will also be bearing the foreign exchange risk of foreign loans. C. ALanM ghost 1. Accounts receivable were estimated at 6.81 of operating revenue. 2. The inventory and the cash were estimated to increase by RNB 10.0 million annually. 3. At the request of SPA, the Accounting Bureau of Shanghai Municipality carried out the revaluation of the cargo handling equipment in 1991. The results show that the current value of the machinery is about 160X of the book value. The Government agrees in principle with the merits of revaluatLon and formal approval is under consideration. 4. Current liability has been estimated to increase by RMB 5.0 million annually. - 105 - Anmex 1,0 Page 5 of 5 D. Cash Flow StaMent 1. Capital expnditures for each year reflect t'he investment plan which includes the proposed project for civil works, SPA's own imestment program, housing for SPA staff and others. 2. The Special Fund Expenditures rspresent investments on teebnical upgrading of existing equipment of the Project and SPA's own investment outside the proposed Project (not icluded in item 1 above and financed through ADB and ID for W facilities). - 106 - ADmex u1 Page 1 of 2 SHANGHAI YO RESTRUCTIJRINC ASD DEVELOPENST PROJECT Outline for the Tralning Program for SPA's Financial Staff 1. While the theory of accounting and finance, profitability, management techniques, corporate planning, long term forecasting is understood fairly well by SPA staff, there are missing links, inconsistencies and incompleteness in their practical application. The accounting procedures applied in China are used basically to monitor compliance with given methodology and rules. It does not however guide management for making sound decisions and does not provide some critical information for sound judgement and actions. For example SPA has been customarily preparing income statements and balance sheets but not the cash flow statement which is sn important link to vital information and a valuable guide for judgement and decision. SPA works on its long term strategies, prepares manpower, financial and investment plans, sets its tariffs through the State Price Bureau (SPB) and prepares economic ani financial forecasts. But these activities are not properly linked and -coordinated as is normally done in the corporate planning in the wester-n commercial world. Therefore while the existing practices are reasonably good, SPA should explore modern techniques and commercial principles to achieve higher and effective management efficiency and labor productivity. In order to achieve these objectives and especially to strengthen key relevant management activities, a technical assistance and training program was prepared and agreed with SPA. This program is outlined in the following: The training program for SPA staff will be carried out in two steps: (a) Foreign visits of SPA staff to overseas ports (b) Professional experts to be engaged to come to China for helping SPA staff in training 2. The areas of training to SPA's financial staff will be: (a) Long term financial planilng and forecasting model, flexible budgetary control, internal audit control and management control, improving existing accounting system to commercial accounting of international standards, computerized accounting, cost accounting and full integration of cost and financial accounting and preparation of financia istatements and development of comprehensive management accounting; (b) Financial feasibility studies of investment, financial port evaluation of projects, financing plan and cash flow forecasting; - 107 - Amex 11 Page 2 of 2 (c) Asset management, fixed asset revaluation techniques and depreciation methodology; (d) Strengthen corporate planning and preparatlon of annual action plan and targets, evaluation and control of the financial performance and improve management efficiency and effectiveness; (e) Develop cost based tariff system following the FcIlS study (para 2.20) and expand its role to a complete management information system (NIS) by including all operating and financial data ensuring that financial cost and management accounting are suitably linked; and (f) Structure and functions of shareholding corporations' evaluation of joint venture eligibility. The total cost of the training is estimated to be $400,000, with the following details: A. ForeiMn visits of SPA staft: - Boarding and lodging 80 weeks x 7 - 560 days @ $80/day 44,8" 0 - Air travel - approximately 3 groups with 5 persons in each group needing 15 return tickets. Cost of air travel 15 x 2500 37,500 - Fees to foreign ports - 120 days (4 months) @ $10,000/month 40 000 Sub Total (A) 122_300 B. Foreign sinerts in China - Fees - 5 experts for 3 months each - 15 vm * $12,000 am 180,000 - Air travel 5 x $2500 12,500 - Boarding and lodging $130/day x (5 x 90) 58.500 Sub Total (B)2000 Subtotal (A + B) 373,300 contingency 26700 Total cost estimate S4. - 108 - Page 1 of 6 Gororte Financial Atign Plan A. Itrodun 1. In 1986 the Port of Shanghai was decentralized and placed under the primary jurisdiction of the Shanghai Municipal People's owernment. Three features of this reform step encompass: self-financlng of port operations; inestments funded by internal cash generation; and increasing competition among ports for cargo. Before the reforms, HOC set tariffs, allocated cargo, provided grant financing for major investments, covered any deficits, and received most of the surpluses generated by the ports. Now only a portion of the total cargo is allocated, tariffs for unallocated cargo are allowed to be set competitively within a specified range, financing for major investment is lent to the ports at negotiated interest rates and profits area retained by the ports and are subject to taxes. 2. The next logical step is for the port to move towards fully comercializing its operations. To schieve this, it should use corporate planning, set strategies for the future, and implement a market-oriented organization which can respond to market forces and improve the efficiency of Its operations. This action plan is designed to assist the port in formulatig and implementing these new targets and will be an integral part of the project. B. Corgorate Planning and Strategias 3. The elemnts of a corporate plan are the following: (i) objectives, (ii) strategies, (iii) operational plan, (iv) financial plan, and (v) manpower plan Soem of the elements of corporate plaming are being carried out at present by SPA on an ad-hoc basis without concrete linkage between the various elements. In the following paragraphs the work carried out now and the required action plan to bring them together into a corporate plan are outlined. C. 4. The port has prepared a short/long term restructuring plan to: - iclrease termnal specialization; and - to preserve the environmt of the city. - 109 - Anix 12 Page 2 of 6 5. The port is a party to the PCNIS (Port Costing and Management Information System) study being carried out by MOC to determine the cost of different operations at the various ports and to modernize the port accounting systems to a commercial basis. The study is planned to be completed by 1993, and imple_meted starting January 1, 1994. 6. The port has, in 1991, set up a port users' management information system. The system allows port users to get all information about their shipment, thus facilitating paper work requirements, customs clearance, etc. This is a first step in the through bill of landing required for multimodal transport. 7. The port Is currently preparing a long-term investment program, traffic forecasts and financial statements and allocated targets of cargo throughput to each of its 14 districts. D. Corporate Planning Action Plan S. The port will recruit consultants to assist in: - formulating the port's activities, - setting out the required strategies, - preparing the operational plan, financial plan and manpower plan, - reviewing and upgrading the organizational structure of the port, - setting up the port's MIS, - setting up the port targets and the monitoring sequence for control and addressing the weak links as identified, - setting up the port marketing function. 9. Outline terms of reference for the consultant(s) were agreed during regotiations and a copy is attached. - 110 - Page 3 of 6 CHINA SHANGHAI PORT AUTHORITY DEVELPMENT OF CORPORATE PLANNING OUTLINE TERMS OF REFERENCE Introduction 1. In recent years, the Government of the People's Republic of China and the port authorities in China have achieved substantial progress in improving institutional and financial policies. Steps are now being taken to introduce market oriented operations. The Shanghai Port Authority (SPA) is now decentralized and the central, provincial municipal governments have started giving greater freedom and responsibilities to SPA in the areas of tariff adjustments, investments, institutional development and commercial practices. The World Bank is currently considering a loan to ht.Ap SPA strengthen its management, increase its efficiency and capacity and improve the environment in the city center. It is, therefore, important that, with increased authority and responsibility, SPA strengthens its management capabilities and introduce modern techniques of management. 2. SPA desires to upgrade its management capabilities, both by improving financial management and information systems, and by initiating a more formal corporate planning process. This will enable SPA to better anticipate future needs, to coordinate efforts to meet those needs, to build consensus on goals and objectives, to monitor progress towards achieving these goals, and to prov'.de a context for other planning and implementation efforts (including financial and investment plans, human resource [staffing, training, etc.], plans of individual units, and organization structure). Okbjectivs 3. The major objective is to establish a corporate planning process in order to assist the senior management and other key individuals within SPA to introduce plans and strategies for: - develop efficient and reliable port organization and improve the corporate image of SPA; - promote the increased use of SPA facilities by shipping, cargo and other interest"; and - maintain and develop controls through management policies and objectives and through monitoring of investments. 4. With the agreement of the Bank, SPA will engage a Corporate Planning Expert to assist in developing corporate planning in SPA. Scope of Work 5. The development of a corporate plan is expected to take place in two steps. First, creation of a sound data base and the diagnosis of the - 111 - Page 4 of 6 current planning prnctices. SPA and the Corporate Planning Expert (to be employed by SPA) should review inter alia, the following documents: (a) The 1989 report on the Port of Shanghai (based on the findings of a mission led by Mr. van der Meer); (b) The 1988-89 report on the genera'. layout plan of Shanghai Port; (c) The long term management development strategy currently being prepared by SPA covering scope and layout of the port and its operations; and (d) Available corporate plans of other ports to be provided by the Corporate Planning Expert. Second, working toward the development of a suitable corporate plan for SPA, the following steps will be taken: (e) SPA will send a team of Chinese experts comprising 7 to 8 members from Finance, Operations, Planning and other departments of SPA to three selected foreign ports for a total period of about three months. The Corporate Planning Expert will also be a part of the team. (f) Upon return to China, the Corporate Planning Expert and SPA will prepare a draft corporate plan to be introduced in SPA and send it to the Bank for review and comments. 6. In the development of the data base, the consultant is expected to assist SPA in the following areas: A. Ahaissment of Capabilities. An early step in this project is to assess the status and quality of SPA's planning actii'ties to date. This is intended both to identify particular areas of focus in development of the corporate plan and to guide the design of the ongoing planning process. The consultant will also work with SPA managers and staff to develop an assessment of SPA's capabilities and resources in operations, maintenance, marketing, information technology, finance and administration, and management as part of the planning data base. B. Projection of Reguirements. The other element of the exercise will be an external assessment of the future requirements and opportunities for the Port of Shanghai. This will include projection of volume requirements (inbound and outbound, by major comodity and traffic type), customers' service and quality requirements, new traffic opportunities (e.g., intercoastal, transshipment) and constraints or objectives Imposed by municipal, regional, and national considerations. The external assessment should also include a review of threats and opportunities created - 112 - Anne12 Page 5 of 6 by likely technology developments (both in transportation and in cargo handling). C. Conetitile Assessment. The external assessment should also include familiarization with other port operations. This portion of the work has two purposes. One is to establish benchmarks for key operational and service measures of performance (e.g., equipment, etc.), as well as for overhead levels and effectiveness. The consultant will help identify and develop appropriate standards measure. The second purpose is to determine how Shanghai compares with other Chinese ports, especially from the customers' perspective, and to assess their relative strengths and weaknesses. In carrying out this task, the consultant is expected to direct and train SPA staff in the process of gathering, analyzing, and presenting competitive intelligence. 7. Responsibility for the corporate plan resides with the management of SPA. The role of the consultant is to facilitate SPA's planning process and to guide management's use of appropriate procedures and techniques. A. Process facilitation. To this end, the consultant is expected to advise SPA management on the structure of meetings, task forces, analyses, etc. that will facilitate SPA in: - Identification of issues; - Development of alternative courses of action; and - Evaluation of those alternatives (including financlal modelling). In particular, the consultant will assist SPA management prepare a formal evaluation report for review with authorities and finance providers. B. PI= RrgR#U&l . The consultant will assist SPA management in turning the results of the preceding deliberations into a coherent formal plan. This plan is to include a statement of mission and purpose; goals and objectives for SPA; detailed financial, investment, and manpower plans; guidelines and performance measures for both operational and functional units. The plan should also include steps to gain approval and support of other decision-makers (e.g., Ministry of Commerce, Shanghai municipal authorities, and finance providers). 8. The final produce of this project is the design of an ongoing set of procedures including reports for corporate planning at SPA. It is expected that the experience of preparing the initial corporate plan will be used to decide what steps to include in the ongoing process and who should have responsibility for each step. The consultant will also make recommendations - 113 - Anne 12 Page 6 of 6 to SPA on requirements for systems, procedures, capabilities, and organization needed to support the ongoing planning process. Level of Effort 9. The consultant should be prepared to direct a joint term of SPA staff and its own professionals. OPA management and staff are expected to participate in all aspects of the ptoject. The consultant is expected to provide the bulk of the effort in the creation of the data base, particularly in the external assessment of future needs, the understanding of customer requirements, and competitive benchmarks. He will share responsibility with SPA in the analysis of the data base and identification of issues. Equivalent weight in the consultant's effort should be given to development of the plan, design of the ongoing process, and training of SPA management staff. ?.0. It is expected that the initial corporate plan will be developed before the end of 1993. Detailed implementation plans and the design of an ongoing planning process are to be completed in 1994. 11. Much of the work on this project will be performed on site in Shanghai. The consultant is expected to work full tim for most of the project. The intenswive phase of preparing the initial corporate plan is anticipated to last 6-8 months and will require an estimated 25 man-months of effort. - 114 - AmEa la Page 1 of 3 ;IIAOEA POR RURUCTRNG MR aD LoMT PROJECT Financlal and Operatlng Perfgrm^nee Tarmts 1. Z1nanci.al 1993 1994 1995 1996 1997 1. Working ratio (X) 61 60 60 59 59 2. Operating ratio (Z) 71 71 70 69 68 3. Self-financing ratio (X) 20 45 45 45 45 4. Return on net fixed 10 11 13 14 15 assets (1) 5. Debt/equity ratio 27/73 31/69 33/67 31/69 28/72 2. OaorationaJ (i) To Reduce Dwell Time of Cargo in Port as Follows: (No. of Days) 1993 1994 1995 1996 1997 (a) Coal 20 18 16 14 10 (b) Containers (loaded) 10 9 8 7 5 (c) General cargo 14 12 10 8 7 (d) Others 14 12 10 8 7 Action to be taken to achieve these targets: - Increase store rent to exceed storage charges outside port terminals; - Restructure tariff to provide incentive for cargo delivery after normal working time; - To work port terminals at least two shifts for cargo delivery. - 115 - Page 2 of 3 (Ui) To Reduce Ship Stay In Port as Follows: (No. of Days) 1993 1994 1995 1996 1997 (a) Foreign Vessels 3.5 3.3 3.0 2.7 2.5 (b) Chinese/Foreign 4.5 4.2 4.0 3.8 3.5 Going Vessels (c) Domestic Trade 1.8 1.5 1.2 1.0 1.0 Vessels Action required: - Increase productivity - Optimize berth utilization Improve documentation flow MiOi) To Achieve Berth Utilization Of At Least 751 (Berth Occupancy Ratio defined as: Total hours berths occugied) 365 x 24 hours Action required: - Efficient berth allocation. and - Efficient equipment and gang allocation. (1v) To Reduce Non-productive Time at Berth as Follows: (X time vessel not working while alongside) 1993 1994 1995 1996 1997 (a) Bulk cargo vessel 151 14X 132 12X 11X (b) Containers 251 25X 231 21X 201 (c) General cargo 302 301 281 281 26Z - 116 - Page 3 of 3 Action required: - Restructure tariff to charge berth occupancy according to time; and - Pre-plan berth operation, vessel stowage, cargo avallability. (v) To Achieve Following Equipment Utilization Rates: TIeM Kui=nent Us"d Time Available for Use 1993 1994 1995 1996 1997 (a) Berth Handling 85 86X 871 88X 891 Equipment (b) Container Quay 751 75X 77Z 79X 80X Cranes (c) Portal Cranes 701 70X 72X 721 74X (d) Mobile Cranes 701 702 701 701 701 (e) Rubber-tired 701 701 701 701 701 Gantry Cranes (f) Tractors 702 702 752 751 752 (g) Others 601 601 602 602 60X Action requlred: - Proper maintenance of equipment, - Correct use/operation of equipment, and - Efficient inventory control of spares. (vi) To increase output through reducing number of employees engaged in cargo handling at the terminals. Currently, approximate total number of employees at the districts 55,000. As new terminals come into operation, as many existing staff as possible should be transformed to the new terminael. Target should be to reduce staff by 32 - 51 each year. am 11M1 t WEUCIIIM M EwILr Pin0C cips. Fredit tragic (isn blim of t_ i) Tow Na l _W _twwwL. MpgU,.. eIVItl alntli§ Total O_m usbIrW 1952 *0.2 1. 11.8 -.Ota2 73. 2.a ult IIt(I) 12.0 2.0 16.6 100.0 - 19 45.9 25.1 102.1 3.T 0.076 6229 174.1 Nodmt 1 pit M1 73.4 4.6 16A 6.2 - 100.0 197m 559.9 74.5 139.3 47. 0.12S 1A 317.1 1900 51.7 76.4 152.1 49.1 O.141 9A .33.2 1961 571.2 78.0 150.7 49.9 0.170 450.0 3"4 1962 612.0 4.9 17M8 10.1 0.19 916. 376.9 19SS 444.7 15|.4 181.1 53.4 0.22' 1,007.A 3W.? 1906 724.8 153.6 196.1 57.2 0.r . 1.13.0 437.4 1I5 12.6 1L3 237.1 W603 0. .15 1271.? 532.9 1996 87L. 211.0 270.0 61.2 O.481 1.40.0 504.6 19"S 9W7.1 266.0 28.9 42.5 0.6SO 1.56.2 W7.6 19tt 987a 322.0 310.4 t.0 o.no 1.p 5.9 6A6 199 19.4 37.S 349.S A.9 0.600 1,790 3 746.6 1990 1,062.2 335.8 345.1 42.7 0.m 1,806.6 614.1 NEt o t Z() 56.6 18.6 19.1 3.5 - 100.0 - O ra rae() p.cI t952-rt &64 12.1 9.0 I 1S. 6.9 16.0 1"amI 9.0 41.7 8.3 .1 358 12.3 10.0 19618 12.1 10.2 20.9 5.4 .4 13.0 2V. 196/86 7.9 5.1 13.9 1.5 15.9 11.0 11.6 "*/ 81 5.6 7.0 2.1 35.1 10.2 10A Wis C.S 21.1 7.4 4.0 12.3 7.7 5.9 19/9 5.2 4.8 12.7 3.2) (.5) 6.2 10.3 1969/90 2.2 (0.5) (1.3) (0.3) 18.8 0.9 5.9 196800 6.4 16.0 6.S 2.S 19.3 7.6 8.7 xetludos ocem-goir tr.npott. ScreottatIstical tcwbook of Chir, 1991. - 118 - Table 1.2 SHANGHAI PORT RIStRUCTMURNG AND DEVELOmE PROJECT China: Passangr Traffic (billion passenger-km) civil YTo r 1l ROMd Waterw"" /a £viation To6W1 1952 20.1 2.2 2.5 0.0 24.9 "Mdal *pllt (X) 80.9 9.1 9.9 0.1 100.0 1977 102.3 44.8 9.7 1.8 158.6 modal split tS) 64.5 26.2 6.1 1.2 100.0 1979 11.6 60.3 11.4 3.4 196.7 1980 138.3 73.0 12.9 3.9 228.1 1961 147.3 83.9 13.6 5.0 250.0 1962 157.5 96.4 14.5 5.9 274.3 1993 177.7 110.6 15.4 5.8 309.5 1964 204.6 133.7 15.4 8.3 362.0 1965 241.6 172.5 17.9 11.6 443.6 1986 258.7 198.2 18.2 14.6 489.7 I987 264.3 219.0 19.6 18.7 541.6 1966 336.0 252.8 20.4 21.4 620.6 1969 303.7 266.2 16.6 18.6 607.2 1990 261.3 262.0 16.5 23.0 562.6 Nodal oput (C) 46.4 46.6 2.9 4.1 100.0 owth rate (2) p.o 1952-7 6.7 12.7 5.7 18.9 7.7 1983/64 15.1 20.9 0.0 43.1 17.0 19"//5 16.1 29.0 16.2 39.8 22.5 195/66 7.1 14.9 1.7 25.9 10.4 198/87 9.9 10.5 7.7 28.1 10.6 1967/66 14.7 15.4 4.1 14.4 14.6 1968/69 (r.8i 5.3 (7.8) (13.1) (2.1) 1989/90 (14.0) (1.6) (12.2) 23.7 (7.3) 1960-90 6.6 13.6 2.5 19.4 9.5 I* Roslade ooaft-ouln traMsport Eburo: 8toatical Yeazbook ot Chle -- 1991. gm 8m:i PORT ass t svaaeuwT PRoJECT Chira: tnt n th Tr t Sctoi fneludin Posts and Telec_muicatIos (in bitlions of Twan) lest P 2and mP SrdYfP 4th Fm Sth FVP 6thYP 7th mP 1953S7 195763 196S-6S 196S-70 1971.7S 1976-80 1961 1962 1903 1964 1915 19 17 198 1989 1990 Trasport: RaIltwy 5.916 10.416 3.39 11.250 17.30B 4.047 1.4S 2.637 4.221 5.852 7.7 8.5 8.7 10.2 5.4 9.3 11fe - - - 0.799 0.87 o.m22 1.196 2.3 2.7 3.3 4.2 4.3 6.8 Materw-y - - - 1.25 1.545 1.9P7 2.629 3.7 3.7 3.9 3.2 3.6 S3 Aviation * - - - * 0.070 0.145 0.299 0.263 2.1 1.3 1.4 1.3 1.0 1.A Pipline - - * 0.018 0.017 0.006 0.010 0.1 0.S 0.1 0.1 0.1 03 St6tota - - - - * 3.627 5.231 7.115 9.950 15.9 16.7 17.4 19.0 14.4 23.1 Post md tete - - - * - - O.U 0.490 0.619 0.8M 1.2 13 1.6 l1 2.3 2.7 Total 9.015 16.330 5.387 16.001 31.759 30.24S 4.067 5.721 7.804 10.046 17.1 U.0 19.0 20.6 16.7 8.8 Totat capita hwost*nt 58.047 120.609 42.189 97.0 176.395 234.217 4.291 55.553 59.413 74.325 107.4 117.6 134.3 1S2.6 155.2 170A Towuport sa of tota irwest 15.3X 13.51 12.1X 16.4X 18.01 12.96 8.2X 9.41 12.1t 1.4x 14. 14.2 13.01 12.51 9.3 13.6SX IS lmestawt of Ft, before 1960, Inludes Post ad Tecomuleatlon (out 4 o total). source: 3elstleal Towbook of Chinf, 1991. I4 - 120 - ZAU2I-ikL SHANGHAI PORT iNTUCTURING AnD DKVKI.PIMNT ROJE ahina: Transert Investment v, Econeosm Outpt (in billions of Yuan) GNP Transport Transport (current investment Year investuent prices) as I of GNP 00.0 JA 0,000.0 0.0 1966-70 3FmP 15.0 935.0 1.6 1971-75 4FYP 31.8 Ja 1,323.0 2.4 1976-80 SFYP 30.2 IA 1,758.0 1.7 1981-85 6FYP 41.9 3,130.0 1.3 1986-90 7FTP 85.5 6,861.7 1.2 1980 5.9 447.0 1.3 1981 3.6 477.3 0.8 1982 5.2 519.3 1.0 1983 7.2 580.9 1.2 1984 10.0 696.2 1.4 1985 15.9 855.8 1.9 1986 16.7 969.6 1.7 1987 17.4 1,130.1 1.5 1988 19.0 1,401.8 1.4 1989 14.4 1,591.6 0.9 1990 18.0 1,768.6 1.0 1980-90 average 1.3 La Investment of FYPs includes Post and Telecoumunications (about 4 percent of total). 8ourc: Statistical Yearbook of China, 1991. j, ~ ~ ~ ~ ~ ~ ~ ~ rEIlI ;"j 1 i1 Jr f Ii li IfSig l 6k hr Iij 16ffI i I.Ing II. IL . i 1 1 If *1 11f11I . Iki I.li 1 ".. In. lie 11. lao. Im 1 16k. 1. Ii. I IN Ii II3 1 1 I laU *X I't lVi I 19. IM lK 1oir,t I.- Im IL 1R III Ica 1 2 li I I FrI1. I1 I5 s 1 1 11m la . I 16i lrui,3 1i 6 11- lai lid I.. ! Iff ir Jr* Ii, i11 B I ri 166 I1l. 1gio J 1f. Is= I. lirr i 16i I;. l I WI Ulf I31:c31sR ik IaI".1 51 j 11.61IV, lffI lii1la 61r.,j L I I* Fs if ;i 1i l .1 11 1;1 lig Im 11. 1131 1t6 1131 lii liIi X 1. 1.. l 1% II; 1Jr 1 N I 1 t11 11 IE1 k1§1 S1 1 1 i IiXSir1 4 t~t66166~, A 11 1661 1 6, III1 1. Is 3 ii I 1 . la 111 1I I ,1i rit. . C1.75 1 1. IN lfi1b 1U3 l IL ltlik l I1...i | 19 I§ r. I 1 i % a 1141 A 1111N 1m 1bi liL ki- lr i lar. l fiL Im1- 11 La 'M 1:;i I II ig lE at | 1 Ik 1G 1i 1 1 - la IrA.6 r 1. 1t l1 tih lo 1; t la |;I lu-W 1 Ira pl ff fi Il imr Iid I W I 1-NdI 1-GLIAi IidI. 1 ll I 1% r lr 116 1 111 1B 1m l1-i.II 6 lmu. I. Ir,, 1tI& 1. 1 16 IN lt- 1% IS I N 1 1 H; lih irs 1 1 Im I lt- 1I 1 111 lg 11W I. lau la VA 1 w 1N aB 1% I=gjW IIIu . lw ivtImi 19. Iraii l id 13 I' 0 138 1] 1G 1 1; 3~ ~ 4 11 J N|E E ri IFS.1 1 1. 1J1 t 1Z " 1N E 3 | " 1 tE 1."I& Im n 11t I-M lm 1. | | ig 13 Ig lir igN1N. ; II V* 1£-1 x;111 1- Igg 1r Jr 1r- J I is I3 1 I i9r 1 161 I 71' I tPi 1 GIOiiiI& IW 1ii I ib WI IM I G . IW" I RI I I"M ii - 122 - Table 3.2 cain UHAOHAIM PM?f5RCIRK N DSVSI0NUUN 99022 Pnrt trafflO by Hg (11) -o --- - ------- - --------------- - -----Wateays------- Tant inland Subtotal ftoeign Coastal River wateays Highay Railway SaItbr Others (Omestic) Total A. Out Gtings Coal 5 2.881 3.918 8.442 1.769 g08 8,861 *20 21,60S 21.610 PetroleupmrodUcta 12 * 2 3 9 0 2 0 21 33 Metallc oes 59 S0 4,.50 23 444 215 703 0 5.995 6.044 Iroa a" ate 964 216 138 369 1.10l 4 1.070 0 2.965 3.929 Construction materiala 106 60 4 199 5.265 0 449 0 a 5.97 6.083 cement 637 1 0 13 s3 12 0 0 186 823 Simber 13 9 36 1.080 85 0 291 164 1.665 1,678 Nonmeallic eae 504 125 46 423 401 1 120 0 1,116 1.620 Chemical fertiiser 5 65 350 1.358 12 66 422 1 2,174 2.179 Salt 0 40 142 50 13 59 709 0 1.513 1.513 aGri 324 770 291 1.3 6 98 38 901 0 3.464 3.7S0 Others 4.333 65 626 1.773 3.912 388 418 11 6. 76 11.119 Total 6. 963 5,03 10.103 15,S01 12.169 1.691 13.946 996 59.459 66_421 in 4 10.54 7.64 15.20 23.34 10.38 2.5s 21.04 1.54 89.5S 100.08 4 for Watewys 46.2t B. In Oomitg: Coal 23 24.064 1.103 29 1i 0 232 0 27,438 27.461 petrole Preduot 1S 2 4 0 4 0 5 0 1S 30 Mertalici ores 4.719 1.475 16 2 75 0 4 0 1.572 6.291 Irn aei steel 1.24 73 93 197 980 81 102 0 3.031 4.055 Construction materias a 12S4 5.887 1.145 2 29 0 0.416 8,418 cenwit 12 12 36 196 544 271 2 0 1.061 1,073 Timber 1.S31 174 0 3 9 0 6 0 192 1,723 Nonmetallic ores 12S 230 760 38 4S1 1 21 0 1.501 1.626 Chemial ferlizers 1998 162 1 2 2 16 18 10 219 2.217 salt 0 1,406 2S 6 1 0 0 0 1.51 1.518 Grain 2.209 760 136 268 108 0 194 0 1.466 3.675 Others 4.S38 796 339 279 4.499 19 2) 993 7.160 11. 69 Total 16.196 33.146 9.239 2.165 6.790 390 848 1,011 53.5$9 69,7$5 in 4 23.24 47.54 13.24 3.14 9.74 0.6 1.24 1.44 76.84 100.04 * for Watery 6.8 C. tOtal Coal 28 20.943 S.021 *.471 1.707 908 9.093 820 55.043 SS,071 Petroleum prodts 27 7 6 3 13 0 7 0 36 63 etanlli ores 4.778 1.S25 4.S46 25 519 21S 707 0 7.S57 12.33S Iron and steel 1. 98 1,015 1.070 S66 2,088 05 1,172 0 s.m" 7.984 Construotion materials 108 1.314 5.891 1.344 5.364 2 4" 0 14.393 14,501 Cent 649 120 36 209 597 283 2 0 1.247 1.896 Timber 1,544 13 36 1.083 94 0 297 164 1857 3,401 Nonmtaie ores 429 35S 806 461 852 2 141 0 2.617 3.246 Chmical fertiliers 2.003 227 351 1.260 14 82 440 19 2.393 4.396 "at 0 1. S26 167 554 14 S 709 0 3.031 3,031 Grain 3.533 1.130 427 1.634 206 38 1.095 0 4.932 7.465 Others 0.671 1.454 945 M0 7.411 407 653 1,004 13.946 22.017 Total 23S158 38.19 19342 17.666 1,959 2.081 14.794 2,007 113,048 136,06 in 4 17.0e 236.0 14.20 13.08 13.94 1.4S 1098 1. S 83.00 100.08 4 for laterys 55.20 Soures ShanhaiL Port Authority. Ju-S2 -123 - T abl 4.1 U165 .... ~.. ....u...................................... Itry of Project Cost Ea"tiste (Jww 199 Pr ) Last forein Total Lal forn tootl Fligi A. CMvi1 vurk Lwjlns 543.21 71.04 614.8 ".4 13.0 11.72 1M.A b. VoigloWie 345.5 6.6 411.72 63.45 12.00 75.53 14.0 $ubtotal 0.06 136.91 1,025.97 165.13 28.12 JL3. 1.3 ........ ...... .......... ....... ............ ...... ..... ......... ......... ...... a. LusJi In 58.42 197.54 25.96 10.71 3625 44.9 .3S b. Wlsuoqmi 16.35 163.50 119.5 3.00 30.00 33.00 90.91 . xistin tena"ls 33.79 3.90 371.69 6.10 65.00 4620 . ". Eabtotal 106.54 96.96 007.32 19." 1211625 14161 SL64 _................... ............ ......... ...... ......... ...... ............ c. T.0.7 . 300n055 6 ............. O. Iffnrel 0.27 2.n3 3.00 0.0% 0.50 G." "03 b. Iuntiatoun study 0.05 0.26 0. 0.01 0.05 0.06 $6.7 5. Oversees traInin 0.05 0.55 O4 0.01 0.10 0.11 91.91 d. Corpate plutirg 0.05 O.5 040 0.01 0.10 0.11 91.9M a. MIS 0.11 1.09 1.20 0.02 0.20 0.m 90."9 f. Vlll 0.06 0.27 0.33 0.01 0.00 0.06 6.X Sultotat 0.59 5.47 6.06 0.11 1.00 1.11 90.1 ...... ........ ...... ......... ...... ...... . .. ............... ......... ........ as Cot 9".21 651.34 1,3.55 16.15 154.37 33. 52 45.71 ...... ...... ...... ...... .... Phyical ceitewy /1 99.77 83.59 16.34 18.31 15.36 3.67 4541 Tott 1,0.." 924.93 2.0.1 201.46 149.7 3n.19 45.n ...... ...... ...... .... Price mtn1_m _2 2l."6 204.50 416.45 2." 2.04 53.09 49.01 ...... ...... ..... . . . . . .. ...... Tott Pwe.t eost 1.309. 1,1219.43 2,49.34 22.51 196.77 424.26 4.12 mam. - umm -- 1.S 101 of civIl wk Ow uPWmmt cos. /-as using interatioat ¬ escation facto 2.8f 1.i9nI, 3.91 fn 19", S.= to 1904. 3.8in 11995 ad therefter. pree scaetion fc torfo 1u * 6.01 in 1"9 ed 5.01 eaft tw. 1 3 xcx ret.: 1 U 5.45 Yu n at llt he f igAre ar r_Ld. hp2 - 124 - Male 4.2 SHANGHAN PORT RESTRUCTURIEG AND DEVELQPMENT PROJECT Project Cost Estimates Luojing (Y million) (US$ million) A. Civil Works (i) Channel works 1.345 0.247 (ii) Reclamation, earthworks 51.191 9.393 (iLL) Marine structures 113.522 20.830 (iv) Stackyard, shore works 27.042 4.962 (v) Utilities 243.355 44.652 (vi) Communication and control 37.639 6.906 (vii) Temporary and Other Works 140.156 614.250 25.710 112.700 B. KUWiM. (i) Bucket chain ship unloaders (2) and grab unloader (1) (1250 hp each) 68.670 12.600 (ii) Belt conveyor (5617 a) 27.577 5.060 (iii) Stacker (3,000 tph) - 3 Nos 16.350 3.000 (iv) Reclaimer (1,500 tph) - 4 Nos 28.340 5.200 (v) Bulldozer - 6 Nos 2.616 0.480 (vi) Shovel Loader - 4 Nos 3.270 0.600 (vii) Weighing/Calibrating equipment 4.360 0.800 (viii) Tug (1 X 3200 hp; 1 X 2000 hp) 28.340 5.200 (ix) Spares 16.398 3.000 (x) Erection and other local costs 58.424 10.720 (xi) Training 1.635 255.980 0.300 46.960 Total Note: Excluding Physical and Price Contingencies. July 1992. - 125 - Table 4.3 CHIN SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT Project Cost Estimates Waigaag$ao (Y million) (US$ million) A. Civil Works Mi) Marine Structures 82.616 15.159 (ii) Shore Works 132.375 24.289 (iii) Others 196.734 411725 36.098 75.546 B. Ig3buanLm Ja Mi) Container berth 61.640 11.310 (ii) General cargo berth 8.709 1.598 (iii) Steel berth 10.246 1.880 (iv) Timber/construction material 27.228 4.996 berth (V) Supporting equipment 6.540 1.200 (vi) Other equipment 25.343 4.650 (vii) Spares 22.160 4.066 (viii) Erection and other local costs 16.350 3.000 (lx) Training 1.635 179.851 0.300 33.000 Total S91.576 108.546 La See Table 4.5 for details. Note: Excluding Physical and Price Contingencies. July 1992. - 126 - abe 4.4 Page 1 of 2 CHlIM SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT PROJECT COST ESTIMATES Reglacement and Additional Equipment for Existing Terminals Total Unit Unit Cost Category Commodity Handled (Nos) $s £USSU1 Portal Crane (1) 16 Ton Timber/Gen. Cargo 1 .550 .550 (it) 10 Ton General Cargo 6 .450 7.200 (iLL) 25 Ton , General Cargo 3 1.600 4.800 Mobile Crane (i) 25 Ton General Cargo 2 .220 4.840 (tU) 40 Ton General Cargo 1 .300 .300 (iii) 80 Ton General Cargo 1 .500 .500 Fork Lift Trucks (i) 16 Ton General Cargo (1); 20 .200 4.000 Container (8); Coal (1) (ii) 25 Ton Container 2 .250 .500 (iii) 40 Ton Container 8 .450 3.600 (iv) 10 Ton General Cargo 4 .080 .320 Wheel Loader (i) 3.1 m9 Coal 21 .160 3.360 (ii) 3.5 m9 Coal (23); General Cargo 35 .180 6.300 (7); Ore (1) Bulldozer Coal 15 .080 1.200 Rubber Tyred Gantry Container 2 1.200 2.400 Crane Ship Unloader (500 Fertilizer 1 4.000 4.000 tph) Stacker/Reclaimer Coal 2 .500 1.000 Container Mobile Container 1 4.500 4.500 Crane Container Prime Mover Container 54 .050 2.700 Container Quay Crane Container 1 6.000 6.000 - 127 - Table 64. Page 2 of 2 Relacemoent and Additional Equipmeat for Existing Terminals Total Unit Unit Cost Category Commodity Handled (Nos) CUSSm) Communication System .500 Maintenance Equipment 1.000 Spares 2.130 Training .300 Contingency 8.000 TOTAL 70.000 Note: Excluding Physical and Price Contingencies. July 1992. - 128 Mik 4A. Page 1 of 2 SHANGIAX PORT RESTUCTURNOG AND I DEELOPMENT PROJECT BuGM=ent for Waigagoiao (to be procured with Bank loan) No. of Unit Total Category units cost cost ($ m) A. Container Berth (i) Container shore crane 1 6.000 6.000 (ii) Rubber-tyred gantry crane 2 1.350 2.700 (iii) Forklift truck: (a) 40 ton 2 .410 .820 (b) 2.5 ton 5 .020 .100 (c) 25 ton 1 .250 .250 (iv) Container prime mover 6 .070 .420 (v) Container chassis (40') 9 .020 .180 (vi) Weighing scale (60 ton) 2 .070 .140 (vii) Computer 1 .700 .700 Subtotal 11Q310 B. General Cargo Berth (i) Portal Crane (10 ton) 2 .450 .900 (ii) Forklift truck (5 ton) 8 .034 .272 (11i) Electric mobile crane (16 ton) 5 .038 .190 (iv) Towing tractor (5 ton) 4 .044 .176 (v) Platform trailer (3 ton) 20 .003 .060 Subtotal 1 598 C. Steel Berth (i) Portal crane (16 ton) 1 .550 .550 (ii) Forklift truck (10 ton) 2 .080 .160 (iii) Diesel mobile crane (16 ton) 7 .042 .294 (iv) Towing tractor (5 ton) 4 .044 .616 (v) Platform trailer (a) 10 ton 25 .008 .200 (b) 3 ton 20 .003 .060 Subtotal 1.880 - 129 - able 4.5 Page 2 of 2 No. of Unit Total Category units cost cost ($ mI) D. ~~~~~~~~~~~~~~~~~~~~~~~~~~ D. Timber/Contruction MfterXLj Agrth (ij Portal crane (16 ton) 2 .550 1.100 (ii) Electric mobile crane (16 ton) 2 .038 .076 (ili) Diesel mobile crane (25-30 ton) 3 .240 .720 (iv) Towing tractor (5 ton) 10 .044 .440 (v) Platform trailer (25 ton) 15 .010 .150 (vi) Tipper truck (8-15 ton) 11 .050 .550 (vii) Shovel loader 6 .080 .480 (viii) Timber loader 4 .300 1.200 (ix) Bulldozer 3 .070 .210 (X) Weighing scale (60 ton) 1 .070 .070 Subtotal i92i S. 8u=ortng Ecuigsment (i) Control & commmnication equipment 1 set .500 .500 (ii) Commodity inspection equipment 1 set .700 .700 Subtotal 1.200 P. Other Terminal EquLmMent (i) Tugboat (3,200 bp) 1 3.200 3.200 (ii) Shuttle boat 1 .450 1.450 Subtotal 4,650 . ares 4066 H. Trainisg Total 30.000 Note: Excluding Physical and Price Contingencies. July 1992. 3*INM N? FMUMflER3X ANDIUn 3? 1m 19931 19 199S 1994 1997 19 1 2 3 4 1 2 3 4 1 2 3 4 1 2 9 4 1 2 s 4 1 a 3 4 1 2 a 4 A. G 2. Lujlu (1) Dredgiun h_il _ (it) b_ _ matl____ till) Haa a_________ __ _______.__ ___________ … Uv Ubaz. wo*s---------- ----------~- ----- ---- Cv) CadieatIos axv_e_ {W) Aczt o -, __________ ______s___ (Vi) Mo... zo.s. spe* ---- ------- ------ D. 4IUM& (1I) LoWi- -------…-___ ---- CIII) Rixtlas t.maxdal. -- - - - … ------- C. o tl) D.sI l of ZAiO S TexI ------ ------ (CI) Ca. iUset ----- (AIl) Ciput.ls"t4m of and bodStaz2 cantsi (IV) tariff Nt Suu ------- ___________ (v) Czp Pl_A_ng- ------ _ _----- (W) levlqmat of l.s I - 131 - TAle 4.6t RRAI&IM PORT RETU IJIOADDVLPETPROJECT Project Launch Action Timetable ACTION 2SPOISIBILITT TARGET START DATE 1. Nih±gS.QiM Civil Works SPA Construction Dept. already started Equipment Procurement Dept. September 1992 2. IxuJiWn S a mrk: channel SPA Construction Dept. July 1, 1993 Reclamation SPA Construction Dept. July 1, 1993 Marine Structures SPA Construction Dept. January 1, 1994 Shore Works SPA Construction Dept. April 1, 1994 Communications SPA Construction Dept. January 1, 1996 Access road, etc. SPA Construction Dept. July 1, 1994 Utilities SPA Construction Dept. July 1, 1994 Zouiaepm,: Procurement Dept. September 1, 1993 3. Existin _erminals Equipment Procurement Dept. January 1, 1993 4. Fort Costing SPA Costing Division Within one year of completion of PCMIS 5. XaiZLEafs18a&UiacLzu g SPA Tariff Dept. Within 6 months of Installation of port cost,.ng (item 4 above) 6. Consultant Services Design Luojing Terminal Third Design Institute Started Cargo Unitization Science and Tech. Dept. June 1, 1993 Computerization of SPA Finance Dept. June 1, 1994 accounts, financial manlagement, etc. Corporate Planning SPA Management June 30, 1994 Development of MIS SPA Management January 1, 1996 - 132 - Table 4.7 SHANGHA PORT RESTRUCTURING AND DEVEIOPMENT PROJECT Eauimuent to be Procurped under Local Comnetitive Bidding Procedure (LCB) Estimated No. of units contract value ($ million) WaigagXao Diesel Mobile Crane± 7 0.294 Container chassis 9 0.180 Platform trailers (3 ton) 40 0.120 Platform trailers (10 ton) 25 0.200 Platform trailers (25 ton) 15 0.150 Fork Lift Truck (10 ton) 2 0.160 Fork Lift Truck (5 ton) 8 0.272 Fork Lift Truck (2.5 ton) 5 0.100 Weighing Scale (60 ton) 3 0.210 Electric Nobile Crane (16 ton) 7 0.266 Subtotal 1.252 Existin Terminals Fork Lift Truck 4 0.3Q0 Total 2.252 ±1 Already under procurement. Note: Excluding Physical and Price Contingencies. July 1992 - 133 - Tabl.e 4 Page 1 of 3 CHZA SHANGHAI PORT RESTRUCTURING AND DEVELOPNMNT PROJkCT PROOURESN PACKAING I. Replacement and Additional Eauipment for Existing Terminals Bid Package Estimated Number Category Unit (Nos,)I Value IUSUm) 1 (a) Portal Crane 10 ton 16 7.200 16 ton .1 0.550 25 ton 3 4.800 2 (b) Mobile Crane 25 ton 22 4.840 40 ton 1 0.300 80 ton 1 0.500 3 (c) Fork Lift Truck 10 ton 4 0.300 16 ton 20 4.000 25 ton 2 0.500 40 ton 8 3.600 4 (d) Wheel Loader 3.1 cu a 21 3.600 3.5 cu m 35 6.300 5 (e) Bulldozer 15 3.600 6 (f) Rubber tyred Gantry Crane 2 2.400 7 (g) Ship Unloader 1 4.000 8 (h) Stacker/Reclaimer 2 1.000 9 (i) Container Quay Crane 1 6.000 10 (j) Container Nobile Crane 1 4.500 11 (k) Container Prime Mover 54 2.700 12 (1) Communicatlon Equipment 1 set .500 13 (a) Maintenance Equip. 1 set 1.000 - 134 - Table 4.8 Page 2 of 3 II. Equiment for Waigaioq Bid Package Estimated __Number Categor Unit (Nos.) Value LUSSmf 1 (a) Container Quay Crane 1 6.000 2 (b) Rubber-tyrod Gantry Crane 2 2.700 3 (c) Portal Cranes 5 2.550 4 (d) Fork Lift Truck (i) 40-ton 2 .820 (Li) 25-ton 1 .250 (iii) 10-ton 2 .150 (iv) 5-ton 8 .272 (v) 2.5-ton 5 .100 5 (e) Mobile Crane (i) Electric(16-ton) 7 .350 (ii) Diesel(16-ton) 7 .378 (ifi) Diesel(25-ton) 3 .720 6 (f) Towing Tractor 28 1.230 7 (g) Platform Trailer 80 .470 8 (h) Container Prime Rover 6 .420 9 (i) Container Chassis 9 .180 10 (j) Shovel Loader (4 a 3 capacity) 6 .480 11 (k) Timber Loader 4 1.200 12 (1) Tipper Truck 11 .550 13 (a) Weighing Scale(60 t) 3 .210 14 (n) Bulldozer 3 .210 15 (o) Computer 1 .700 16 (p) Tugboat 1 3.200 (q) Shuttle Boat 1 1.450 17 (r) Commuication Equipment 1 set .500 18 Cs) Commodity Inspec- tion Equipment 1 set .700 - 135 - Table 4. 8 Page 3 of 3 III. Kgutument for Luojing Bld Package Estimated Number Categorv Ynit (Non.) valuea_ Coal unloading system consisting of: (i) Bucket Chain unloader 2 8.40 (ii) Grab unloader 1 4.20 (iii) Reclaimer (1500 tph) 4 5.20 (iv) Stacker (3000 tph) 3 3.00 (v) Conveyor Belt 5617 m 5.06 (vi) Weighing/Cali- brating system and equipment .80 (vi) Spare Parts 2.77 2 Bulldozer 6 .48 3 Shovel loader 4 .60 4 Harbour tug (i) 3200 HP 1 2.70 (ii) 2600 HP 1 2.50 - 136 - Table 4.9 SAMII PUT UTRESU IJ2 SD OMLN PROJECT Cumltative S van M A~~~M Ab tr p = *Or ~~Fiacl yawr ud qiatec US NILon) ttSNI ion) psonV PqVen lot hatf Ird hatf 4. tl ; 12K: lothtf half yew 4t }3 S ~~~~~~~~90 90. ":8 . 60-8 ist hiltf @.8 r.864} i S:00 119:S lot haltf 3 . 129.5 83.0 70.5 1 375 2.00 4.0 814.0 95.g . 1213inS 4~~~.0 140.0 680.W lot half 1/99 2.0 1t9.5 99.7 73.0 0.5 150.0 100.0 100.0 Th stwnwd dflkrsmmt protile for Chfna trarsportatfon projects. - 137 - T5bl1 3.1 saaz mmu am mnUmm - R_Ums p._.es od berabsew-bo WM" te 2 nb eipf~e Sonba tba3k 26 11 9 a 4 3 3 li Aw.eq.at pwaftvT VW bM ("Mt 40 33 43 3s w3 63 400286 eOEW~bmsPo= (11100) 13 is 17 11 it lbwyWss aipeoMy timidey) LISS 43 I.8" low2 so!".7 .d ." t3s pa . ' I Sa z t als emmA. ,07 pot bsh "(amla? UAW Obip uwtwla ~oee(tooumebe"S I= Coig vai. (Ta.Im) 2060 *002.000 3.0 300 0 2 tol f* peSt (1M.I5") 13.0 .5 M S1 AS e (Inw sawlem 1-3 * 40 id5 3.78 3.76 n s IM, 1.05 -.4..) beSabs.. Suib vent38aa ~ - m. be ne VW _ (WM) S" a0 $O a7 al Avovas. eeW~ Smr pet *4. _bmw.) XS at 33 33 U - oep.eta~ pee beauS (smidey) 13.00 13.750 35.30* 744 1350 lenS eye#81t36 dole .y yea' (d 30 320 a-" . 330 ~~ emiL tamet* SeMe"S(03Sm .1 4.746o S45 IMp eetwab( m . Catt Vai. (Ieat" 18040 180n MOM10 0 pgrO -. be IonS. (unSeitVo) 7a6 7 601 CeW,g pet beauS ( ~1ou) 0.86I4 10 J10 Thrg"s to 01.7 ow" u Seats(imeloy) 288"pwbeb 446m 336 ($S4ewS8 dp oeya doeS Il 320 236"t V allma l VW Pam benk .. 3m) 4.0 74.a 40 .0 iMp -W (w mSedulbO asesa6 US.4.Lai SOMM"" '~~~~~~~~~~~~~~~~~~a Om Om:| S. to MA o_ , l (IamIdv SW.3 (lt ta te t. .3 _ £s myq uM Sm. ,o __. (SW easi am'). tapest pot Seflbe sbesto =-.). bai - be- b ,,,. ..g,m Omt auq@tnN I *. Vow Itbows emla. _bmbu apee~ to sabo i 0 1oe) beS aM o30-7 _2. l" ba g ta ab se.em ibesb o eswlm~~~~~~~~ dwwm~~~~~~~ **W. sid s.mmpe,U.I aaw-arnm-w s U US - - ~- erie r " frnt 0' M'St dt ie- trnt 0* SUW to "ff Usei SP*SM nS W'tU rU4 .Sl tW Wi t4 "- - "' ns t 4 t S dt t - - - - - - - ~~~~~~~~~~~~~~~a, :1' n~~~~Fwvl VVS "Ie" rn-"I*n r r 11'Ilos Ar "ee*Us S'S wten 99 .*e sutes 'M I e am "O U-C tt I "I$ it t 1tt4 Sol 0t1 JIM eras sni wee erie ISLS 9 *-Sr erie M'9 e' S*C ' "R soi s "S W see qua gesm tin'e I t"I IS WL wrot es n-n re son m a u wla v- 3 t** * ti Wst tOOV tY 0- - -o - - t * t -lm - -e - -t Wu ore *351 t g 59.3 a Us. I t 'sCt sr" t W Os, "ttI R- W- U'U US I US * -X- o- -*l* t- a-- Mn X tW-l "- "cl: -.! we'U weS . so," :Fl $ree SSrL 29.1n 04'U? SI'S' 131O Wms e ae w'.e'? ~ S ira: U', we'e sse uasqisiSiS "IM ;w es c D a" Vw ._ We asosraor g & Ora l"4 t At Xit tlZ DO ~t tla bt l _ w Wu "_9 91 aeWs we Wss ,ge or al** 9.'e it'. " e emama As stm rs s sbt w wt w_ ilt we we t X era- Srw - - - a.'ema'w U':Ci U'U Css rse "6, n:U p,Ca ers es Isie Se'? U', te':, Om. a's e It Doe as's se's wwwae wiw - 0-I - : - Sol- -- - - dt35LVImie ei wee ",?a w e 'S'a," ' w et we wla U"" ro o$ ' g a to,1 SPISO Is'" Ara* WM' as' USS S.C 55' OraS LIsr 5 Lsr VS .C W Ws so.* '. are en w et11P u' , s as""i's e WU*' "as i' 006 gms. Oms "eA "St' Coll 9s'1 IS'e amaaon". - - - - - - - - - -~~~~.P0 v-- wee.U'S U'* se'.: 'ss is's eaes nstoo""es writ a's 'S 1.3 is sis:ame ie rs qsm nss' eras U' USS iS eV AnSn"~ S9'UM do9 59's.m im wuW e *a'e s'~ ge: s's: Ut: ?**?ss.evt K., us.,$"I K a "-l lll w -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~soi 9 w~~~~~me - ..Ai - -~ - @em - mm mm.. @- noes tre i siv trUe g g wig. g* ie isis ww. *iii. I.l WO 0o 4i ,1n we e* q gl B @ 8t @Is "Ill *O Nof "I zi nl 4 t1 *gg U1 £ ,,, . ,' "o:f [ a's I I "OI .ulm ~~~~~....ne e.. .e..SIW.n..fe " . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~e ...., i _~~~~~~~~~~~~~~o "Oi "I _* I - mm~~~~~~~~~~ - m--------- n*u " a*u un sets. es*1P "on m' fi WN 1- Ei- WM 1 .2, - 1Igoeo m"el. .me... "IeNS -"0 i. "~~~~~~~~~ " Of: "It I "OM 11: X:: 1 l 11 1 f | 0 1 of set X tog is., sees urn scsi irs., sg*ws io "08 e geus swws : n l:. *e t ns: U., U,, no sn aim 66 £- i6 - isi ii 16 6651 f +lo z grw nsa sei ,usQt U..tsq ~~~~1 I$! I 1 "t |": st-i go.P 1" d"IF got WOR9000 1",$1to-" * '. a.. no~~~~ -e* £5 tow it's no1 it's Wog u* w",Or W a' 4 '.:. ii., ii,~~~~~~". oO"u "Is' "Il "s. i t-' st WO "Ill "Is Ill Wo "I "I "I @s 0 :O W- - ~ ~ ~ j ~~~j no ne~0I WV *I :: j:, ,,., no0 Is* so ... so' I .,S _ ~~~~~~~~~~~~~~~~~~~~~~u....._ $1mf14. we W.m u' woe 1 e ss i so- go - .9,*' st- W- at,£jN u:: :1::H ig. I#:: r i1 Ie* i.*.. WO 4i,' £* :1::'lItl so' It 0 ee...e.M_Ip --- * ---- --- -. u -n sms%s.ssa----- v----.---xsms vo2s------. "ete in"' usol 'Res a o t"em Isw seastp I sols OloA ~ se u l eg" a loses low .s.ga .tus. es' semiStee .e..ee..e... ..........e... --- *.e. .*e. e.... .........e....... e..e W.e. ............cea... oefoe e.....e..e..e .......... *.*.... .l.e........- .- -s--:. ... a- -| amvuu us nsa intErnA Wme 12 coma ...........*....... .................................. tummy of rt trallic ..................... 4 (p0 *at) 19 119" 99 19 1 1961 1999 26 2me11S fOr tutth; Coal 40.223 47.056424650 SO,OOO SI.O3S 51.091 S.9 5M S4.2 S.406 s5. ShAk fwtlIzaer (forWign In) 2.02 1.69 I.9 1.900 1,93 3.91? 2.01? 2, 2alms 2.210 othr 14.33 141 61.252 13.050 12.160 12.492 12.222 11.1T l1,t10 f2al10s ht4aI " U4 6548 62J71 "6.9O 5 5,Nl741 "60 67.406 66.26 6,20 r1.90 ......... ............ ....... .... ........ .... ........ . ..... ;..... ...... ;..... ...... ;..... ...... ........ ...... Liqaid bib 12 13 43 O 0 0 6 0 0 .... .... .... .... ...... ......... ........... ...... ....i ... ...... ......... ...... Cemtolrlued awp Elouh 2.M 3.,5 4.06 6.210 6,634 ?.0o r.4" ?,0sr ,310 162m ...... ...... ...... ...... ...... ...... ...... ...... ...... O... Cmmemtqstas isrml 1.to .32r 0.65? '12.414 1S.=5 13.1101 14.411 ISO11 I5.9051.6 of tAleh, two beth r26 1.496 2.16 2.2 2.316 2.454 2.516 2. 2.5 .221 Iml berth ,ais 626 6.5 6*06 O.103 10.19 30.00 11.249 11,1 12,411 U4051 0ldstrom _o las 339 3n? 341 50U 529 56& 4 6 2 6rabetWi 2I.491 21.02m 22".0" 29,356 3,65 9 .6 32.699" 33.5" 5.214S l00 le: lrp bert qatloa 16.603 14.M1 14.04, 20.S56 21.099 E1lm 22m 22n,0 2n3i 24. 1i brth opeato 3,2 3.44 4.413 40, 4.9 S.6 S,21J S S5S0 s,m * Stroo n 3.656 2,U1 2,09 4.061 4,116 4.226 4.343 4,42 4.5S5 4*,11 IsAtatet 36.116 29.353 .123 41,M0 43.212 4".6f 6.2 47.09 49,4" S3.24S ......* ... .. ...... ...... ...... .... . ..... istat ,rofk , u di by VA 14.106 06.414 96.35 I30 IIS0,5U7 11G.26 fallen 2.M f2al0" us3.o eSIMISsosme"oesa, "e sasesam seessaw amseesasw,ass amassesaesaw ssMO aIseIs. Tot sattel sr tntrll 4 1t0 )354.0 6.0 51s.0 MA.4 10.3 02.3 M1.1 942.3 M9.2 1.124.6 Cost traffic( ar_olwdit In) l$ 31.1 30,662121 34.,60 1,449 36.09 36,6 37,310 1 ,9*0, 4100 $Oxs _ l Ptt herity ad a* taff. oss: isv: 6O? . - ZIP 6U'1 U91i *nt otw: £OVI ;WC- sLi sOdt amTo"& o @ @ ~0 0 90 0 0 0 "V.P SPSa~.qftT dTqs. nO't gv Uth ca OOt "m 1t n n taWitt i4a *ti- t1 I', ov t tI.tU tC':t act', mot : Utt Ut's 9T tt'tt pw t *ro 9O o so in- Co1 tt- O1 O, CO (t'O' o - e t t- i> qs *q 016? 06 IS? 06'? 0f0?0 -t t tt et a" p,ns ea" q dm' qv C Ot9T' 09tO1 L19? £551 66' Gt6't L9?'t 5£O? we'l LUe VW P qu.q Op T W *tn on W ,t D"t Lt I ti tO OttI ol Oitl "TT"t t *A*%o eg vIt Coo'? 09t 5tCt. 0"II? ilt £69'?t Ot#5 m't 5t691 "04 faun tttd Sh1L 'tI 9 9 9 C 9 9 11 11 1? (a s m) ItU, ODs'afI~ sw aq -Sw.3m rs WmRut~oS~ ft5 9$0MI $OI9 09t99 1&69'S 69?'? mot, SW;l ::vS :"'s *VP gagd d' insa O t - 0O'O So0 0 0 0 0 0S0 0 .AtOOOo s-osq qt *g G"m o n sit 11t St to 0 0 ? sL9 p & dt IT oS,*l onc t mov OK "o"t Ott* ot- gt'- oft-t O t'o Cawv. n 9?0 to0* C0 lo "IS CO lo t* t 000 00*0 Co lo noS own _fws *t To so 9S to 0e 51 it to t9 et Ca) Om1 5.63dm. qsa.t * Is**e Mot' M4' ml*e mlv9 "tot 06v9 09v5: SW 909'49 P5WO Lpqucd'~m "&O'tt ztt'tt 96631? 0t GUtIST 999'tO 9ZWOt 000'0t ttt £WSi "rot ( 0 £IT It IT. St of -I*t1 WtWDM Aqn -q4. - tt- SU16 uw~a.q ~s~ -sqs,e s r sz ht.e L9£01 109'S? 0S'CI 0cu 9 0 0'?t 6t O't K'tt *5£L WL Osv 7ON, sLp sa.d d3qu71 016't 99 "I 0? 0n 0 00 0 *Op Ota.s Os Om MIst 9t1? 69c11 O? 9 1 0tt9c ittoS tS 't £1 L p t qT. iiW '9 nt'tt tLtt Mot5 tO'tt 0'S gOgOt MOS t' *11't C LM ftgeg SLip 53.4 *R6 lno "~~~~tl §s" *Z t61 goos co" its's 6Vt " s1tt soot &V os td Om" nc U 9 0 0 0 0 0 0 aoi owp-%q9 odOm - u^Ct uM UL6t 19t' tn't C't 900 to n9 tot SLp S*5*5 dWu *t C-C 9t'5 9S 9 l * 09t 9t "t S 1'£ UT t"tot MU'T "-P 4$s £1*1 £1? 1? t WS0 St0 OVO tol TO'S 110C .5a M t aI ,tnt (go; tt-tg 1no Io go orot- tt eto tl-4 **a "*Mm rumt 0t9tc KtSt'S ox96'S Sit'S OCPt Ot'SC 90'§C OtfC uPCg OtLt'? pT9"33 sLip I.q q I S 100'S *5C "ot'S 99g 5t*t ge5 TOteC i t t£ Gi'S (t-t00.) *5-5* t IT T~~~~~ ~~~~~-i tl T T i ti t taqm oqPt 3t1 t.1t *nnI t z t O t-* =t ;'- TU 1 t *t t n ) Sq?- -vc't -tt -t O- - - OOO _St dm - TIV,t 10 619'?? O:' 0"*I :tWO it Ct aS "l. 'nsp ,i .e n9£-t Ot l-O t t-0 0 0 000 0 COslo * PA* t6£) (O J0' O le St 99 toS S n n t Om . '9 0' Ott,O e tn OCtt'C Ott' OCT,* T Ott'# at's MOtt' mott ' 6"t * 19'0 9' Ut'C 0£*O SIY'S tC'S nt O 000 OS £0.0 L1* 3Iap '6 *uc18' "96) (Se PSc) "£6 16I KCC Stl91ICTC194 A sq. "fCee t 01' ST ggO Ot OWN 1e *.tgt 10 19t c5n (2n 9C9t L qaset 't 9t _t _t nt n09 Os n t n L a *t 0900'0? 619'S? 1960'? IWITS 060'i £SP'1t c t L£?VST £g1'1 £1?'?? 96 (nu " 00.) 39138 gsu- ,t: "C $0 91 ft M tet cottot 9 966 ftestm)SI Il F I F Il 043"a~ ~ ~ ~ poodf *lV OR t; LV ...~~~~~~~~~~39 .,aon S.s - ~~~~~~~~~~~1W0 t-t A C'_b 1 -~~~ -8 -sua seuu O1tt~m ';g Tqj - 142 Table 5.5 a 1PC9 ao aa j3 19,4 1997 I19 3, a1eo a 1.~~~~~~~~~~~~~~~~~~ ~~ ~~ ~~ ~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~ .ak .una)9 8 3.aum W h 4 aG atE a: 3,z ".42 2*t't stgo 4. Amau"s bati d,a. avaiablAe R.O 3980 2,880 3.W 3.W 3.8 *.-Batik aetepaMy rate (1) 71 76 8s 83 ° 4 O4 4.VlSe ie MtU6E,, 0.0 0.0* 0.02 0.04 0.01 0.07 GSA4 r2e a U ,2 U 3.57 2.308 13" 2.43 1 . b. Ship ii d 44 45 65 94 131 17M7 a.skiplio twng4 0 a 0 0 0 * eTOU4 akp van day 3.311 3.301 S.et7 3.414 2.146 I.4"3 SAW biesiug Steak seal Serthe. With Samnaftl 1, seethe (t I) s s s * s s 5 ; ;OO; t At7 } >~~~~~~~~~~~~~~~~~~ siXt s1 3$4 t +S* i 4. hma ekipbafth 4.w 1.00131 .17 1. 1.413 bonk 1-m7 80 I 16400 1,14500 3.0 1.400 5. seta *e_0e rte- t 81 so4a a8 Os *.~ G a _ 0.10 0.11 0.3 0.18 0.23 0.0 O.S9 b kp Usng da,. 133 11l 167 23 110 411 857 a. Sip Oihern Oar O O O O 0 oa k Pwo d 1.50 1.393 1.49 1447 1.447 1r79 3.S09 _-=-~~ -=- - * Prpagd Wined see Sank. 1. seethe (I al"n ) 1 2 2 3. 1 2 3. als. ('0000 tea.) "49 a06 9 1,014 I,08 t.111 31674 2 batk . e a4"0 470 8 491 SS S19 * bak da avaiable 40 see 40 600 40 "G 40 3. eak besaipemy rate n1) 77 as 54 87 91 4. Waitingie yaU t69lete 0.01 0.02 0.03 0.04 0.0 0.07 0.18 7. ,M o.o o. o o o.oaoot &o.u 7. £L C4 d *tI460 470 46t 49a s0 S1 14 -- aS *w- 14t O is O6 O O O fetal .hlp pen day. 47 479 0S SU s30 5s 43 Tatl oui pa n y _ _ r a.s 9,20 74,3 131S 9,537 90 9.97. 10.*194 10.4 #10.759 1t,38 al sipba " Y. 49 43 4 46" 44 S81 11 ,017 1 .45 3.342 .. MO iauaringda4ye 0 a 0 0 0 0 0 0 0 0 fetal ohur pect day 9.700 1.2 7.159 9.94) 10.193 10411I 11.005 11,531 13.311 14.631 IV) * t- - - - - - - - - Sete.. (I) amal .hl bank days sehA != ralAhsati.al daily ea b (11 aina .hl ba-i da.mial * _ er albai. akihWvea (lii) bank eenpemay gate * ernl sipz tem de. wgqet. for ofM as d4o ao" I) alb"n time j ettn teaser atfie Item let Iwe3g. USi 9. a6 wbtmhWt. -lot"l 198. too"l hi walig day. *t toel hi baNk -aIlnMYtneea".u eauein thaP wau gw a U_b *s. wi _daa.g I sae. - lt lsaiye6 ahaaf - 143 - Table 5.5 b - iot m,su, a euuu im A. TM"c Daom (I'Mo TMN) IL 2.400 1.490 2.110 2.334 2.316 3.434 235711 2.708 28145 3.231 S. 11700T0 "A"WT anissi Oaaattuatiom Vautaila Sovth. 1seuth.(.inbst) a a - 2. ai to000 soss) 2.400 1.490 10 3.U*2*24 3.33 1.454 3.17 2.79 3.8$5 S.32 . hp bvs 951 5" 780 US 53 4. *alM ohip b.uth aeavial 440 uu" " 440 44 440 440 40 44* 440 440 440 5.othespa?ve 2 (95) 85 (95) (95) (95) (95) 05)1 (91) (95) (95) 4. W%Meig tim quun at .82 3040 64.8 4.42 4.83 4.82 4.82 4.83 8.83 4.83 7. Arm"l, oa u o ueIas a.A. lsi bt e 0 S4" 408 G08 08s 40 S0" 408 40 40n b. Ship waiting 4e7e ~~4.145 1t0n2 4.145 4.145 4.3143 4.365 4.145 4.145 4,345 4.1us a. Ship li~~~htsuing Eat. 488 0~ 344 *14 44 58u 472 740 8S8 1.144 Total sup Pout days54 1.648 5.117 5.18? 5.449 5.155 5.644 5.741 S.AO4.1 c. 017 80E iaing caassuesies water"" ISo 1. SocU h(Vmeinb) 2 2 a 3 a S. traIt Voc tons) 3.400 1.49 3.110 1.470 1.357 1.371 1.384 1.444 1.751 lo82" . a1 shiam p bh ei5 5" in 541 949 499 t301 59 $S1 429 4. t a shi beuth d*sejoilable 440 440 440 440 440 440 44 440 4444 .S vtsspsrate it) (95) 854 A95) 85 i7 s 79 03 $? (S5) 4.ViA tm usigaSt 4.a 1.0 4.$ 1.34 0.48 0.73 0.77 1.13 1.41 4.44 7. a1 total .hi pets daja_ _.. . *.Mual ship heath deja 4086 5S" 408 41 494 499 S01 5" 3s34 40 b. Ship welting deja ~4.463 1.092 4.345 735 316 344 107 Ste "95 3.814 o.Shiplight.vn04 0 84 0 0 a * 0 * 42 Total shi Pon da.". 1H.46 5.11 1.344 030 :41 0" 1*.17 1.4s3 1.S30 . agad4* *s$ *e * vsz .. ae .e. .e en. ce nan 1. S (.u1 1 1 1 1 .1 1 2. TtaItst (p00 so") 74 779 83 299 1.042 1.094 1.ent S. AMMA SW benb dsps weq ~234 233 234 14 2I" 240 295 3. aSu bet h "a S00S S. Banka shipo brtde"a avaiaa 78 $S 0? CS S. South osewpos r-uat. w2 1.34 0."0 0.73 0.77 111 1.41 44 4. weltin sims q.J e.in asS e;u .us 7A.S ta p pots $.- da_es a. h4tM5 ShiP ROutU d 24 33 314 3i4 2S" 20 ass b: Ship waitingdej 340 Is8 171 1in 28 419 1.330 a. hp lighatenn deja 0 * * * * s0 Total ShiP pos d"Ye 194 290 405 418 528 49 I'd" Uss. I aal ship beath 44pe reuiged t*asuafilshsogesisa dell eapsoity cen bouth. I1u) smma Sh bank 4a,. "MAIlable * bt el howts a beot ortig dap " (ii) b"O ooauao vet. * emel h be a ui" i a a hip bou th ai bleu. t s_ "C *t e . t.ze_dleddwn* (v) waiting tim q*oin feosean are urn . 0011 1970. ad be cbmughpas. =C1D 1961. (WI S ml ship waiti daj * WM" si be*h "is rqed a wailing sims ymuoin tou. I t. l"*s1U4.sp berths opstasie "LI. ml. Tcaffl4 o sag.d gms puessi*al 4paoitr of dhe beethw. Per lbs poaer" of the esoessie vealuatio it has baos aaaaums that 10870 Wil be 944101. e.S.. thus41h Ilehieving. S to sav ghoaaIl th OMg ls potWith waiting ti-me noteaoodngtine. .orogwempeang to 932 beetb oseupese vats. rnuoest Sbaugkat Ports Isthvity and 8mb *taff $%p-Os - 144 - Table 5.5 c 6U30U NULi ViaMas 44 VAM Wutpo.a MUMe (COaL $etar" I$49 1920 1991 1925 192 1"7 199$ It" 200 nos A. ?aT?MC cows1 (p000 3931) 1.1 11.014 100.68 27.331 34.250 SS5.449 14.059 186#79 27.310 37,9S0 404100 S. W(?WW PIOJUc? *. tscu o"sz ¢*he es / .ts^ l *" . 40s *t$.t t$ t *~~~~~~~~~~~~~~~~~~~~y y &t.3tu C4 3.3k 2 2 2 12 1 2. ralfic (.04 3.o) 1.014 10,442 7.a221 314,50 35.4*9 36.059 34.472 17.310 37.9SO 40.20 .5. A .lp sban I te4 2 2314 1944 2. 11 a.554 a.40 3.64t 2.493 .142t 2.203 £ Aa*al ship on 4a .*t kk 210 2.140 2.3140250 2.4 2.2.140 2.0 2 2440 2*340 .Sak...upm fsac 1)4 4. 7 ) (99) (95)) (9 (9) 95 5 0) ( 6. V.131mg m 41. qWIMg idt.t. 0.49 0.44 0.17 1.54 1.S4 1.14 1.14 L.14 1.S4 14461 7. sligtlahp6 dapo 0. 4413*3. hlop uank"re 348 2.314 1.966 2.4* 2.413 2.t 2432 2*3 2 2 .432 2.41 -. S vau 4 .a 1.097 974 343 1.94 1,994 94 1 94 M 14 1.29 ..sbp31gs.et "to~ 0 0 0 164 ass 340 438 530 412 922u ?.ual sup Pon Sq .331 3.148 2.328 4.90O 46.47 4.744 CM5 6.944 7.034 7.148 C. vrv VIOJCr ulats" CoL South. 1 .S a,abta 8 8 8t 1U mbo4 a4 8 4 4 2. Tratff (0s00 3.e) 11.01s 30."6 27.u1 34.0 3S.44 3443 Z*5713 34.972 24.241 3.4391 - *. Anual kp honk 4,- . re d 2.24 2.14 l.ot4 23214 2.311 1.40 1.4 3 1.1S4 1.1S 10474 4. AnnuL SUiP bont 4.,. ava.le 2.1 40 2.1 40 2.410 344 3.140 2.140 S" 2.34 0 240 .So taoaw %o(2) 87 T7 (95) 44 44 64 62 4 OO 4.MlftI rum. qUeun fact 0.42 0". 0.17 1.34 0.S5 0." 0 0.0 0.04 0.01 0.05 7. Cml ""L bhlp pact a. *auAsI ethA dare 2.238 2.314 1.944 42.4 2 2.35 L.680 1.411 *S 1.18 1.11 .74 ". S"L vbttig47 1.097 974 134 1.924 1 .31 10 2 a 444 ..IhplAg t tng*7 0 0 0 144 a0 0 0a a a 0 TOtaL sulp "rea das, 3.133 3.104 2.324 4.S"0 3148 1.781 1.711 t.44 1.145 1.760 1. ) 3 2 2*ec 2 , 2 I 2 2. ?r.Ut* (100@ Eas) 9194 10.947 1Z333 13.709 11.7M 3. O Ohp benk "To ooq.4.4 54 S" S" S" S" 4. Anml .hp bonk d7 a'a Oble 6" 44 6O 44O O4 S. sak tkoaiupiaqaitl)J I 45 45 05 0 8.V.1gu sIn. ueun sftlaV 0.40 0.00 0.00 0.00 0.00 a. s p en del sphon b. S us w,epng - 7' "Ye a. Sk =tip lgung 4a700 toetaL. *hp part dare S" 4"4 S" S" S ft*.., (1) annual ship benk 4.76 requided gw tt*Uiatk..gteiI a!L 41 .ap.y cc honk. (Li) 4anu .hp bank 4aw&LUble ab of becths a bank operatng ae p 7... (11 bert oa.paou rtat vamaL *hl batgk "le requtrd I nnul p bank 4ye _ fC (LVIv alling t1*. qusaIn faggots at. Ema P.t 2D.'.-o. WAC?A 1978. O"d baerk uhmgpt.30 1981. (v) assual. ship wsttling days a as teeth tkrsaghput. 10D 1971. 00. Sew Teets. 948t 33. Dome. stic NW forois iqs am4I. rs. Trouts WOM1d *=ead uka P=aaslaal pa4*Ps .Uy4 " sk i.. bank. for asb piups". set adeaeoinl ew*1uatla s Itha baas seaMMd that We IJ ht o fm.e.g.. * uksaO llxghsai. tof"we the mkaUS Sbrgh sb thet FM h weattin 3*oo san eosa41 aum Geews d s t s: bankh aeowpany geaS. I).8 U a. tanth pir 0?a, ha. &b. prinel£7 so bsamil th oaa ships with Is. almims hankh aonupmy usa" .3 GSh thosuf.,.. thr.eian tokImpW valing "re for gm. peopowed bankh.. $Sam*$sa auShangt Porn Aaa£hvS .4 S"aab staff3. p~shttf - 47 - VII. &guuIS RLAMg ANLuannuuN 7.1 During negotiations, agreement was reached with SPA that it will: (a) complete by October 31, 1994, a cargo unitization study according to terms of reference agreed with the Bank (para. 3.12); (b) submit to the Bank not later than six months after the end of each fiscal year its audited financial statements (para 3.27); (c) complete, by December 31, 1994, a feasibility study for shifting the bulk fertilizer handling operations away from the city center facilities, agree with the Bank on an action plan by December 31, 1995, and thereafter implement it (para. 4.24); (d) carry out all measures necessary to mitigate any negative environmental impact of the project, operate appropriate environmental protection facilities and monitor compliance with GOC and SNG environmental laws and regulations (para. 4.25). (e) (i) based on the results of the PCMIS, install by December 31, 1994, a computer-based costing system in Shanghai port using the latest operating and financial data; and (ii) by June 30, 1995, restructure tariffs and appropriately adjust tariff levels in consultation with the Bank (para. 6.2); (f) (i) take all steps, including controlling cost, adjusting tariffs and improving productivity, to ensure that sufficient funds will be gonerated to cover operating costs, debt service charges and other financial obligations to achieve a self- financing ratio of not less than 20 percent for 1993 and 45 percent thereafter; (ii) incur additional debt only if the internal cash generation would provide a minimum debt service ratio of 1.4 during 1993, and 2.5 thareafter; and (iii) maintain an annual working ratio of 61 percent or better starting fiscal year 1993 (para. 6.14); (g) (1) carry out the agreed corporate action plan and achieve the agreed financial and operating targets; (ii) send selected managers to foreign ports to familiarize themselves with corporate planning techniques; and (iii) with the help of a consultant prepare and send to the Bank a proposal for a corporate planning system by June 30, 1994, and, taking into account the Bank's comments, implement it by June 30, 1995 (para. 6.19); and (h) carry out a training program satisfactory to tie Bank (para 6.19). 7.2 Agreement was also reached with the Borrower that it will: (a) onlend the proceeds of the Bank loan to SPA through Shanghai Municipality on terms and conditions satisfactory to the Bank (para. 4.8); and (b) submit to the Bank not later than six months after the end of each fiscal year the . I 4 4* Ig tE ! 3 iI - e i " ite Z In4'I, " 94 44 ^ .0 ' e -jE:g f g g [e : i"* :! I _4 94e a. 94 9 -¢*@ oE | |~~~~~~4. X - a- ad i|X| |§ |a aaS . a~~* 3 ~an$^ L.' 0' | I3 3 99 .49.49949 9@ 9 "; i44444 -c. * . 1 unowis usma vmiy $S% ldb SooSl oot 48003 puloa, uIlah. lon .rSto. n 31.4IS 2Si 9 11it 2S,603 29.109 31.51 35.4 0,.04 45 3,"0 41.064 40. J 1033 I.s I.ts 2its3 .3 ns Ai 0. Saab aa~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1lo~~~~~~~~~~~~~~~~0S0 osaspass) tat. VOW am),~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ *. ltfba t'Sljoas _ 33.34 33.13 33113 3 .14 3 2 2.143 "011 310 31.304 3,.10 31 4 33,1l 39,34 .5640 .60 1,0 3n I"a' . "5 s 35^~~~~~~~~~~~~~ Lt O in m 131 1:4% : " S 8:011ut2a 2: St I s "4s - 4$-1 *4 Slab ~~~r.paa 35.010sess 35.*3" 21.030 3na0ls 35,030 25.31* 31.0* 18,204 41,04 s5.054 45.4 45.0514 5.6140 S54 3.385 1.334 3.383 1.JO3 1,3S S,A33 a. wiasth fee oac. unto S2,.13J 21300e3 28.413 22,231 3.4 3,4 21 413 2."4 33404 304" S63.30 233.1 32.304 ",10 Sam 3.540 41.5 2.540 3,54 3.450 2,45 111.06141 n15.6 14." 31205 153A 32.01 .4 .5 ,3 .0 .4 .0 2446 S." S." 1 800130 . b. 895th ,#o)ooa. Saab 201.95 38.600 n,m431 33.313 3 s,503 39.10 * 34.448 ff440 #e.osO 3,51 n,2330 s *1~I'll03100 5,U34 3 31 M*.458 *s.n * 0 6,3 s.n4 . .43 L31ti*tb 0.ela: COS 0 0 1 42l 10.a Is 0. 21.41 Was S IX0 010 * 0 0 S 0 0 204 S. 0 S." total 120.3 141.3 3148.41) 9..041 US.103 34.558 14.40 5.0" 31.42 91.12 40A . 8." 4.14 Cal 5.41 5.41 S.#10 3.50 P." S. .oalagalaab Crol sa Item Ifu11111a)a 14r .4 a. U .t Pr.oa. I.uA 918.00 349.10 345.41 840.54 313.03 8.385.0S." 4.S 54.3 3.30 44.10 5.1 65.93 3.0 2.00 2.00 .." 0s, 9.0" 3.0 2.00 5.0 5.Igbtoslq 0.00.06 .0 00 0.00 O.4 3.01 .40.1 30. 396.4.00 81 612.4 31.3 .00 9 .84 O.53 so0 d.4 3.00 64.0 5.0 fast 320.211 343. 341.41 410.54 811.31 140.00 10.S 4s.0 s1.0 1. 0 n 0*.1 0.83ss 04 .1.4 5.00 4.2 S." ~~~~~~~~~~. .lD Xga. e . I.s I.9sI.s .Xsa.nI.XX. 1.F .a a. e . *......u X.. . .1 B. at looeds"guslead"s agmtoa 3S.00 14.30 34.5 134.051 31.20 26.31 44.31 0.n118.34 53.10 34.21 3.00, 31.00 8.14 1.03 3.18 S." S.03 5.30 4.851 lisa. snu_b..__...). - - - - - -_._- -----XU - -GU---- --- A. n d 1 3 .me a 0.4 30.3 04.9 05.8 043.0 t I.3 I324 0 3.n so.s11 9.05 3lj0 s4200 Ill~bm.a osaloat 003.2 102.3 10.1 ^.3 .S 1 1.9 17 0 1 .3 0 .St? 3.II 3.all 3.3 3.31 Slab ao1aot ~~~~~~~~443.4 3003.3 3000.81 34001.8 M00.3I 300". 3005.8 0 324, 3.334 3.324 3.334 9.934 0. ~ ~ ~ ~ ^ notS ban la 4.00 1n3 *00 Sm).a ts12. In aoaaeS aloa a. IllIboas psojowa Saab 50~S1.2 101.2 20111. 101.3 $101. 501.3 $01.3 0 3.01 3.033 .20 9.30 38,13 5.Iobtoateg 351.3 094.0 34.1. 2". 51.56 400.4 n4 a 0 '0 0' 2 .Sa M.4 M.1 6. 4.3 003.3 043.0 00 1324.4 0 .11 2.08l so05 3.30 9.900 9. Stlb psejots 1.b 54.5 16.3 041.1 001.8 042.0 001.3 I8.ts 0e 011 9.3 2.01 3800 2.200 Ugbtatlag 800.0 0.et *.6 .I.0 00.0 0.0 390.5 , 0 0 0 0 S tat"l 103.4 106.02.2 001.3 043.6 $1001.3 1324.4 0 8.0n l3.0? ee5 3,"0 S.300 S. d C.alowlabgm.lemas lmUlln a. Sltbrnaps.j Saabh 330.11 3210.1% t -.1) 311.11 831.33 3-110.3 830.11 0.00 3S.ee got 30.41 30.01 30e.1 Llgbiftos MM 14.1631.01 3210.1 295.43 331.04 334.20 9100.0 0.00 0.00 0.00 0.00 0.00 0.05 fata 534.011 65.11.3400.33 415.39 103.31 1114.01 160.101 0.00 30.40 30.05 30.41 80.0 33.20 W. Slab itonist saab 500.913 234.14 341.19 953.34 211.35 209S.20 330.21 0.00 10.40 10.05 30.4510I."5 20.30 oAptoul "00.10 0.00 .As 0.00 0.00 0.00 820.0 0.00 0.00 0.00 0.00 0.00 01.001 10l1 34.02 334.30 21.10 35.94 11.3 209.21 440.30 0.00 30.4 03.04 30.4 30.05 30.1 a. uae~~adjg1us)~udlos ooaoss 34.1 M2.1041M.44 803.00 395.40 386.04 93.50 0.00 0.00 0.00 0.00 0.00 S."0 l"U - ~~~~~~~~~~~~~~~---~ oa-a - - - _ _ nflnOO aaftladb Ca n% .m a n O O .n a. ~ ~ ~ ~ 6' ="- Wg son at 1!6 IsIos . ootaostesatetog eat aa 53 1 Sab .00oa b9MaJoslg 820 - 148 - Table. 5.7 CHINA INA *IPT RUUTUUIIIN M S SEWLOftIIT PUCT ............................. ...................... leraeOli0 Inft iets utmrY ......................... O1992 pries, mitllion Yuin) 1995 1996 t7 1 1999 2000 20S 8ea"k Bulk .......... Ports: Loading/unloding savings 13.80 14.18 14.57 14.96 17.39 26.7! 46.2 Ships pwut days savings 1U2.31 141.71 173.79 220.06 271.36 280.10 271.78 Cargo Port don savings 10.23 13.74 23.01 35.08 50.79 s1.37 43c.9 Less: 84nsffts accruing to foreiners (102) 15.13 16.96 21.34 27.01 34.35 35.6 3S.9 Total 136.21 152.67 192.03 243.09 309.19 322.40 358.92 ...... ........ ...... ......... ...... ...... . .. ...... .............. ......... ... Ccatrution Mateiats ...................... Pots: Lo*dfngunloadifng savinss 1.54 2.02 2.33 2.66 3.02 3.39 4.15 Ships port days swings 74.77 90.08 90.89 91.95 86.63 70.68 20.56 Cargo pont daes savings 0.54 0.66 0.64 0.65 0.62 0.56 0.16 Totat 76.85 92.74 93.86 95.26 90.2V 82.13 264.7 ... ...... ...... ......... ...... ........ ...... ............ ..... ........... ...s coal Portsx Lofdingntloading savings 0.00 8.75 11.24 13.78 16.37 18.99 27.80 Ships pot days savins 0.00 86.21 115.28 119.64 123.71 12.93 131.53 cargo pot days savingp 0.00 4.40 6.04 6.21 6.39 6.57 6.85 Totat 0.00 99.36 132.56 139.43 146.47 193.49 116.23 ...... ........ ...... ......... ...... ...... . .. ...... .... .........._..... ... ContaIner Ports: Loadingfunloading savings 34.76 131.59 161.44 192.98 226.40 261.56 320.59 shfps port days savings -6.52 149.61 157.87 164.09 166.41 165.89 12.92 Cargo port days savings 0.45 26.27 28.06 29.50 30.36 30.72 26.12 Lm: snef its aoruing to fofoeiners (102) 2.87 30.75 34.74 38.66 42.32 45.82 46.86 Total 25.82 276.72 312.63 347.91 380.85 412.35 421.77 . .... ....... ............ .................. ........ ...... ......... ...... ......... ...... Sulk Portilfie ............... .. Poats: Loadingunloading savings 0.00 0.00 0.00 0.00 0.00 0.00 0.59 ohips pwet days savifgs 0.00 0.00 0.00 0.00 0.00 36.61 41.25 Cargo pott dos savin 0.00 0.00 0.00 0.00 0.00 9.49 10.6 Lass: Omefits eacuino to forelgners (102) 0.00 0.00 0.00 0.00 0.00 4.61 5.25 Total 0.00 0.00 0.00 0.00 0.00 41.49 47.2n ...... ........ ...... ......... ...... ...... . . ...... .... .................. ... Totat Project: Ports: Lodingunloadicn savings 50.10 156.54 189.58 226.38 263.18 310.69 7.34 ships port days saWings 1ff.56 467.61 539.83 m.54 65.11 689.21 5B9.09 Caro pert days avings 11.22 45.05 57.75 71.44 88.16 98.?1 85.69 Lms Snwff to acrufng to foreignefs C(O1) 18.00 47.71 56.06 65.67 76.67 86.5 88.10 Grand Total 238.88 621.49 731.08 825.69 926.78 1012.36 964.02 Notes: 1. Estinsted savings In reductin of loss and dmage. 2. ppwterity cost of capit tf or cargo is assuamd to be 9.0X. Soures: Shnga Port Authority aid lank staff. Sow"9 CHINk SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT --------------------------------------------------- Economic Rate of Return Summary (in %) Construc Conta Bulk Break -tion -iner ferti- bulk Coal materials lizer Total The existing districts 72.8 32.4 12.8 107.1 52.5 69.2 Waigaoqiao district 32.0 -- 29.1 37.5 -- 33.1 Luojing coal terminal -- 14.2 -- -- -- 14.2 Total 36.8 17.5 27.6 49.9 52.5 36.7 Sep-92 I CHINA SNAIGHAI PORT ESTRUCTURtINR AD DAVELOPIENT PROJECT ................................................... Ecenmaic Rate of Return (ERR) and Sensitivity nalysis ...................................................... ( 1992 prices, illion Yuen ) ................................................................. ............................................................................................................ ...................................._ 8ase Case - Sensfitivity -.-.-.Sase Case - -Sensitivity . ------ --.. -f--l-------- -- ------enefits Bene . * -.-.--. ---. ----------.--..enef its Sonew .----- Costs- .---. lotal Net Bene- (-15) fits -.--- Costs .- -- Total met Sene- (-15X) fits Capital Naint- Bene- Cash Costs fits Costs (Oetay Capital Naint- Senw- Cosh Costs fits Costs (Delay Tear invest. enance Total fits Flom (.151) (-15) (+IS%) 1 year) Invest. enance Total fits flow (*151) (-151) (151) 1 year) ----------------------Total Project-.............................. ----.----------------------Break Bulk----------------------------- 1991 140.18 140.18 (140.18)(161.21)C140.2)(161.2)(140.18) 59.13 59.13 (59.13)(68.00) (59.13)(68.00)(59.13) 1992 186.83 186.83 (186.83)(214.SS)(186.8)(214.9)(186.83) 78.80 78.80 (78.80) (90.6) (78.8) (90.6) (78.8) 1993 95.30 95.30 (95.30)(109.59) (95.3)(109.6) (95.30) 35.51 35.51 (35.51) (40.8) (35.5) (40.8) (35.5) 1994 184.64 184.64 (184.64)(212.34)(184.6)(212.3)(184.64) 56.99 56.99 (56.99) (65.5) (57.0) (65.5) (57.T) b 1995 293.69 13.03 306.72 238.88 (67.84)(113.85)(103.7)(149.7)(306.72) 60.82 10.90 71.72 136.21 64.49 53.13 44.06 33.30 (71.72) 1996 35S.40 18.97 374.37 621.49 247.12 190.96 153.90 97.74 (135.49) 68.87 10.90 79.77 152.67 72.90 60.93 SO.00 38.03 56.44 1997 428.44 36.12 464.56 731.08 266.52 196.84 156.86 87.18 156.93 104.46 11.48 115.94 192.03 76.09 58.70 47.29 29.90 36.13 1998 282.07 36.12 318.19 825.69 507.50 459.77 383.7 335.9 412.9 32.72 11.48 44.20 243.09 198.89 192.26 162.43 155.80 147.83 1999 209.57 36.12 245.69 926.8 681.09 644.24 S42.1 505.2 580.0 24.3t 11.48 35.79 309.19 273.40 268.03 227.02 221.65 207.30 2000 36.12 36.12 1012.4 976.24 970.82 824.39 818.97 890.66 11.48 11.48 322.40 310.92 309.20 262.56 260.84 297.71 2001 36.12 36.12 1006.6 970.50 965.08 819.51 814.09 976.24 11.48 11.48 322.70 311.22 309.50 262.82 261.10 310.92 2002 36.12 36.12 1000.9 964.80 9S9.38 814.66 809.24 970.50 11.48 11.48 323.01 311.53 309.81 263.08 261.36 311.22 2003 36.12 36.12 995.25 959.13 953.71 809.84 804.42 964.80 11.48 11.48 323.31 311.83 310.11 263.34 261.62 311.53 2004 41.97 41.97 989.62 947.65 941.35 7¶9.21 792.91 953.28 16.93 16.93 323.62 306.69 304.15 258.14 255.60 306.38 2005 43.59 43.59 984.02 940.43 933.89 792.83 786.29 946.03 16.93 16.93 323.92 306.99 304.45 258.40 255.86 306.69 2006 47.11 47.11 984.02 936.91 929.84 789.31 782.24 936.91 17.22 17.22 323.92 306.70 304.12 258.11 255.53 306.70 2007 50.64 50.64 964.02 933.38 925.78 785.78 778.18 933.38 17.22 17.22 323.92 306.70 304.12 258.11 255.53 306.70 2008 43.62 43.62 964.02 940.40 933.86 M92.80 786.26 940.40 11.48 11.48 323.92 312.44 310.72 263.85 262.13 312.44 2009 36.12 36.12 984.02 947.90 942.48 800.30 794.8 U947.90 11.48 11.48 323.92 312.U 310.72 263.85 262.13 312.44 2010 36.12 36.12 984.02 947.90 942.48 800.30 794.88 947.90 11.48 11.48 323.92 312.4 310.72 263.85 262.13 312.44 2011 36.12 36.12 984.02 947.90 942.48 800.30 794.88 947.90 11.48 11.48 323.92 312.44 310.72 263.85 262.13 312.44 2012 36.12 36.12 984.02 947.90 942.48 800.30 794.88 947.90 11.48 11.48 323.92 312.44 310.72 263.85 262.13 312.44 2013 36.12 36.12 984.02 947.90 942.48 800.30 794.88 947.90 11.48 11.48 323.92 312.4 310.72 263.85 262.13 312.44 2014 36.12 36.12 964.02 947.90 942.4 800 .30 794.88 947.90 11.48 11.48 323.92 312.44 310.72 263.85 262.13 312.4 2015 36.12 36.12 984.02 947.90 942.48 800.30 794.88 94T.90 11.48 11.48 323.92 312.44 310.72 263.85 262.13 312.4 Total 2176.1 764.61 2940.7 19.113 16232.2 15791.0 13,356 12,91S 15248.2 S21.61 262.30 783.91 6211.35 S42T.U 5309.9 4495.73 4378.2 S103.S Q ERR a 36.7X 32.7X 32.1X 28.41 29.5% 36.82 33.31 32.7X 29.41 30.31 0 WPV (121) a 2S98.7 2396.4 2006.6 1804.3 2124.1 890.4 834.2 700.7 644.S 737.9 u Wa Centoed Sep-92 CRIMA SUOM301I POT RESTUJCTWIINB AND EVELOPIENT PROJECT ,................................................... Econoamic Rate of Return (ERR) and Sensitivity Analysis ...................................................... 1992 prices, million Tuan ) ................................................................. ............................................................................................................. .............................................. Base Casue -S.nsitivity----y- Base Case ........Sensitivity--------- --- --------- --- - --- Benefits Bene.- ---------------*-------------.-- - Benefits Bone- ..------Costs- ---- Total Vet Bone- (-1S%) fits --------Costs- -- Total Not Bene- (-152) fits Capital Naint- Bone- Cash Costs fits Costs (Delay Capital taint- Bone- Cash Costs fits Costs (Delay Xear Invest. enance total fits Flow (*152) (-1S2) (0152) 1 year) invest. enance Total fits flow (+152) (-15) (+1*S) 1 year) -- -------------- -- - --Coal-st --------------- ............................. Container. .-------. ---.-- 1991 0.00 0.00 0.00 0.00 0.00 0.00 0.00 45.01 45.01 (4S.01)(51.76) (45.01)(51.76)(4U.01) 1992 0.00 0.00 0.00 0.00 0.00 0.00 0.00 59.94 59.94 (59.94)(68.93) (59.94)(68.93)(59.94) 1993 15.30 15.30 (1S.30) (17.60) (15.3) (17.6) (15.30) 23.40 23.40 (23.40) (26.9) (23.40) (26.9)(23.40) 1994 64.48 64.48 (64.48) (74.15) (64.5) (74.2) (64.48) 30.53 30.53 (30.53) (35.1) (30.53) (35.1) (30.5) 1995 155.19 155.19 (ISS.19)(178.47)CISS.2)C178.s)(155.19) 54.45 1.34 55.79 25.82 (29.97)c38.34) (33.84)(42.21)(S55.79) 1996 194.21 4.03 198.24 99.36 (98.88)(128.62)(113.8)(143.5)(198.24) 60.64 1.34 61.98 276.72 214.74 205.44 173.23 163.93 (36.16) 1997 182.28 5.89 188.17 132.56 (55.61) (83.84)(7S.49)(103.7) (88.81) 85.27 13.00 98.27 312.63 214.36 199.62 167.47 1S2. 178.45 A 1998 206.16 5.89 212.05 139.43 (f2.62)(104.43)(93.53)(12S.3) (79.49) 31.46 13.00 44.46 347.91 303.4S 296.78 251.26 244.59 268.17 1999 153.17 5.89 159.06 146.47 (12.59) (36.45)(34.56)(58.42) (19.63) 23.38 13.00 36.38 380.8S 344.47 339.01 287.34 281.88 311.53 2000 5.89 5.89 153.49 147.60 146.72 124.58 123.70 140.58 13.00 13.00 412.35 399.35 397.40 337.50 335.55 367.85 2001 5.89 S.89 156.04 150.15 149.27 126.74 12s.86 147.60 13.00 13.00 414.22 401.22 399.27 339.09 337.14 399.35 2002 5.89 5.89 158.59 152.70 151.82 128.91 128.03 150.15 13.00 13.00 416.10 403.10 401.15 340.69 338.74 401.22 2003 5.89 5.89 161.13 155.24 154.36 131.07 130.19 152.70 13.00 13.00 417.90 404.98 403.03 342.28 340.33 403.10 2004 S.89 5.B9 163.68 157.79 156.91 133.24 132.36 155.24 13.00 13.00 419.87 406.87 404.92 343.B9 341.94 404.98 2005 5.89 5.89 166.23 160.34 159.46 135.41 134.53 157.79 13.67 13.67 421.77 408.10 406.05 344.83 342.78 406.20 2006 8.40 8.40 166.23 1S7.83 156.57 132.90 131.64 157.83 13.67 13.67 421.77 408.10 406.05 344.83 342.78 408.10 2007 8.84 8.84 166.23 157.39 156.06 132.46 131.13 157.39 18.83 18.83 421.77 402.94 400.12 339.67 336.85 402.94 2008 7.56 7.56 166.23 158.67 157.54 133.74 132.61 158.67 18.83 18.83 421.77 402.94 400.12 339.67 336.85 402.94 2009 5.89 S.89 166.23 160.34 159.46 135.41 134.53 160.34 13.00 13.00 421.77 408.77 406.82 345.50 343.55 408.77 2010 5.89 5.89 166.23 160.34 159.46 135.41 134.53 160.34 13.00 13.00 421.77 408.77 406.82 345.50 343.55 4087n 2011 5.89 5.89 166.23 160.34 1S9.46 13S.41 134.53 160.34 13.00 13.00 421.7? 408.77 406.82 34s.50 343.SS 408.77 2012 s.s9 s.89 166.23 160.34 159.46 13S.41 134.53 160.34 13.00 13.00 421.77 408.77 406.82 345.50 343.55 408.77 2013 5.89 5.89 166.23 160.34 159.46 135.41 134.53 160.34 13.00 13.00 421.77 408.77 406.82 34S.SO 343.s5 408.77 2014 5.89 5.89 166.23 160.34 159.46 135.41 134.53 160.34 13.00 13.00 421.77 408.77 406.82 345.50 343.S5 408.77 201S S.89 S.89 166.23 160.34 1s9.46 13S.41 134.53 160.34 13.00 13.00 421.77 40s.7 406.82 345.50 343.55 408.77 Total 970.79 123.07 1093.9 3139.3 204S.4 1814 1574.6 1410.5 1879.2 414.08 262.68 676.76 8063.9 7387.2 7286 6177.5 6,076 6965 ERR a 17.52 14.41 13.92 11.22 14.32 49.9X 46.02 4S.32 41.6X 40.62 NPY (122) a 159.S 78.2 S4.3 (27.1) 74.S 1,329.8 1285.2 1,085.7 1041.1 1133.3 I 1I Contgd Ut Sep-2 9 we. cam SUAUUIAI PMnt RESUUCiURIU0 AID DEVELCPNERT POOJECT ................................................... Economic Rate of feturn (ON) ud Snitivity Aalaysis ........................*.............................. C 1992 Pries, mithien uan ................................................................. ............................................................................................................. ................................. ease CaSe ...-.e.s _ iti.vi ty----.... Bose Ca"e -.......sensitivity- ...--. ...... ~ ................. *of ts saw ...................................8 new its sawe ....--*Costs- .... Total not Sam. (-.IS) fits ......... Total Mt Be- (-151) fits Capital Nnlat- Oene- Cash Costs fits Costs (DeVay Capital balot- Sene- Cash Costs fits Costs (Belay tear Inewst. aneine total fits flow (1S) (-1S%) O(11) 1 year) Invest. nencs Total fi ts flow (151) (-1S%) ('151) 1 year) ..................Construction Naterilts......................... .......................Bulk ferttlizer..-........................ 1991 36.04 36.04 (36.04) (41.05)(36.04)(1.45) (36.04) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1992 48.09 48.09 (48.09) (SS.30)(48.09)(SS.30) (48.09) 0.00 0.00 0.Q0 0.00 0.00 0.00 0.00 1993 21.08 21.08 (21.08) (24.24)(21.08)(24.24) (21.08) 0.01 0.01 (0.01) (0.01) (0.01) (0.01) (0.01) 1994 32.63 32.63 (32.63) (37.52)(32.63)(37.52) (32.63) 0.01 0.01 (0.01) (0.01) (0.01) (0.01) (0.01) 1995 20.17 0.79 20.96 76.85 ss.89 (24.10)(20.96)(24.10) (20.96) 3.06 3.06 (3.06) (3.52) (3.06) (3.52) (3.06) 1996 25.23 2.70 27.93 92.74 64.81 60.62 SO.90 46.71 (27.93) 6A5 0.00 6.45 0.00 (6.4S) (7.42) (6.45) (7.42) S6.4) 19"7 s5.90 2.70 S4.60 93.86 39.26 31.07 25.18 16.99 38.14 4.53 3.05 7.58 0.00 (7.58) (8.72) (7.58) (8.72) (7.S1) 1998 6.60 2.70 9.30 95.26 85.96 84.56 71.6? 70.27 84.56 5.13 3.OS 8.18 0.00 (8.18) (9.41) (8.18) (9.41) (8.18) 1999 4.90 2.70 7.60 90.27 82.67 81.53 69.13 67.99 87.66 3.81 3.05 6.86 0.00 (6.86) (7.09) (6.86) (7.89) (6.86) 2000 2.70 2.70 82.63 79.93 79.2 67.54 67.13 87.57 LOS 3.05 41.49 38.4 37.98 32.22 31.76 (3.os) 2001 2.70 2.70 71.08 68.38 67.97 S7.72 S7.31 79.93 3.S 3.0 42.58 39.53 39.07 33.14 32.68 38.44 2002 2.70 2.70 59.53 56.83 S6.42 47.90 47.49 68.38 3.05 3.05 43.70 40.65 40.19 34.10 33.64 39.53 2003 2.70 2.70 47.97 45.27 44.86 38.0Q 37.67 S6.83 3.05 3.05 44.85 41.80 41.34 3S.07 34.61 40.6S 2004 3.10 3.10 '6.42 33.32 32.85 27.86 27.39 44.87 3.05 3.05 4.03 42.98 42.52 36.08 35.62 41.80 2005 4.05 4.f 4.87 20.82 20.21 17.09 16.4u 32.37 3.05 3.05 47.23 4.18 43u.2 37.10 36.64 4298 2006 3.27 3. 4.87 21.60 21.11 17.87 17.38 21.60 4.5S 4.SS 47.23 42.68 42.00 35.60 34.92 42.68 2007 2.70 2.70 24.87 22.17 NJ6 18.44 18.03 22.17 3.05 3.OS 47.23 4.18 43.72 37.10 36.64 44.18 2008 2.70 2.70 24.87 22.17 21.76 18.44 18.03 22.1? 3.05 3.05 47.23 44.18 43.72 37.10 36.64 44.18 2009 2.70 2.70 24.87 22.17 21.76 18.44 18.03 22.17 3.05 3.05 47.23 .1l 43.72 37.10 36.6 44.18 2010 2.70 2.70 24.87 22.17 21.76 18.4 18.03 22.17 3.0S 3.5 47.23 4.1l 43.72 37.10 6.6 4.18 2011 2.70 2.70 24.87 22.17 21.76 18.44 18.03 22.17 3.05 3.OS 47.23 44.16 43.72 37.10 36.6 44.18 2012 2.70 2.70 24.87 22.17 21.76 1s.4 18.03 22.17 3.05 3.05 47.23 u.18 43.72 3.10 36.64 44.18 2013 2.70 2.70 24.87 22.17 21.76 18.44 1L.03 22.17 .S 3.S0 47.23 4.18 43.n 37.10 36.64 4.l8 2014 2.70 2.70 24.87 22.17 21.76 8.44 18.03 22.17 3.05 3.0S 47.23 44.10 43.72 37.10 36.64 44.18 2015 2.70 2.70 24.87 22.17 21.76 18.44 18.03 22.17 3.05 3.0S 47.23 44.8 43.72 37.10 36.6 44.1l Total 246.64 57.11 303.75 1020.2 716.43 593.95 98.10 452.4? 614.71 23.00 59.45 82.45 738.2 65.? 643.3 S54.1 S32.65 608.5 ElB a 27.61 18.81 18.31 IS.3X 18.1X S2.51 4.31 47.71 43.71 42.2n '1Z SPV (12K) a 144.3 75.1 60.0 34.4 70.4 115.1 110.9 93.7 S9.5 96.7 Iep92 SlSNItAIM POMT RESTUCTURINO AID OEVELIMEIIT P60JECT ................................................... Economic late of Ratumn (ER) and Sensitivity Analysis ............................................................................................ By Districts C N1111cn Vumn) asue ..........CSnsit ts........e Co" .......... ........................- - v*--s.-........... .........................swt ---- Gboastits-eo - --**-----------_fits ----..-Costs--..... Total t t (-1S) Bese fits ----Costs "------ Total Not (-15I) Benefits Capital Raint- Bero- Cash Costs lBnaf its Cost6 (belay Capital Nalnt- Ben- Cash Costs Benef its costs (Delay Toow Invest. onamn Total fits Fltm (1S1I) (-151) 0> I Vwer) Invest. ance Total f its fl.o (OIS) (-151 (*151) 1 year) sunau clotal projectuuVuu-ue .anasminu The Existing District 1991 140.18 140.18 (148.18)(161.21)(140.2)(161.2)(140.18) 0.00 0.00 0.00 0.0 0.0 0.0 0.0 1992 186.63 186.83 (186.63)(214.85)(166.6)(214.9)86.83) 0.00 0.00 0.00 0.0 0.0 0.0 0.0 1 1993 95.30 ff.30 (95.30)(109.59) (95.3)(189.6) (95.30) 14.86 14.86 (14.86) (17.1) (14.9) (17.1) (14.9) 1994 164.64 14.64 (184.64)(212.34)(184.6)(212.3)(184.64) 52.08 52.08 (52.08) (59.9) (S2.1) (59.9) (52. 1)n 199 293.69 13.03 306.72 238.Bs S67.84)(113.85)(103.7)149.7)306.72) 90.54 10.10 100.64 50.77 (49.87) (6S.0) (57.5) (72.6)(100.6) 1996 355.40 18.97 374.37 621.49 247.12 190.96 1S3.90 97.74 (135.49) 107.41 16.04 123.45 35.06 (86.39)(106.9) (93.65)(12.2K72.66) 1997 428.44 36.12 44.56 731.08 266.52 196.84 156.86 87.18 156.93 75.59 32.96 1O0.SS 235.42 1U6.67 110.59 91.S6 75.28 (73.9) 1998 282.0? 36.12 318.19 25.69 507.50 4S9. 363.65 335.92 412.69 85.49 32.96 118.45 3S0.37 231.92 214.15 179.36 161.59 116.97 1999 209.57 36.12 24S.69 926.80 681.11 644.26 5S42.09 505.24 560.00 63.52 32.96 96.48 S05.23 400.75 394.28 332.97 3u8.so 253.69 2000 36.12 36.12 1012.4 976.28 970.86 824.42 819.00 890.66 32.96 32.96 542.51 S09.SS S04.61 428.1? 423.23 472.27 2001 36.12 36.12 1006.6 970.48 965.06 819.49 814.07 976.28 32.96 32.96 548.14 515.18 510.24 432.96 426.02 509.55 2002 36.12 36.12 1000.9 964.78 959.36 814.6S 609.23 s70.4 32.96 32.96 553.65 S20.89 1.5 43u7.61 432.87 S15.18 2003 36.12 36.12 995.3 959.18 953.76 609.80604.46 964.78 32.96 32.96 559.67 S26.71 S21.77 42.76 4.82 520.89 2004 41.97 41.97 90.6 947.63 941.33 799.19 M9.89 9S3.33 38.01 38.01 s6s.37 527.36 521.66 42.SS 436.65 S21.66 2005 43.9 4.5 9614.0 940.41 93.87 7.81 786.27 946.01 38.96 38.96 S71.18 532.22 S26.38 6.S4 440.70 S26.41 2006 47.11 47.11 94.0 936.89 929.82 r.2 782.22 936.69 43.17 43.17 ST7.A S28.02 s21.s4 42.34 435.66 s28.02 2M07 50.6" 50.6 964.0 933.36 925.76 7M5.76 71.16 933.36 47.37 47.37 571.18 523.61 S16.71 438.14 431.03523.8 2008 43.62 43.62 984.0 940.38 933.84 792.78 786.24 940.38 40.4 40.4 51.18 S30.72 52.6S 44S.04 438.7 S30.72 2009 36.12 36.12 984.0 947.88 942.46 00.28 794.66 947.88 32.96 32.96 s57.16 538.22 533.28 452.54 447.60 S36.22 2010 36.12 36.12 964.0 947.68 942.4 U00.28 794.86 947.68 32.96 32.96 s71.18 s38.22 533.28 452.54 447.60 536.22 2011 36.12 36.12 964.0 947.86 942.46 800.28 794.86 947.88 32.96 32.96 57.1s 53.22 s33.2s 4S2.S4 44r.60 s3822 2012 36.12 36.12 964.0 947.88 942.46 800.28 794.86 947.s8 32.96 32.96 s57.1a s38.22 S33.28 4S2.S4 447.60 538.22 2013 36.12 36.12 984.0 947.88 942.4 600.28 794.86 947.68 32.96 32.96 57L.18 538.22 533.28 452.54 447.60 S36.22 2014 36.12 36.12 964.0 947.88 942.46 800.26 794.86 947.88 32.96 32.96 s71.18 s38.22 5S33.2 4S2.s4 447.60 538.22 20Ms 36.12 36.12 964.0 947.88 942.46 00.2s 794.86 947.88 32.96 32.96 571.18 S36.22 533.28 4M2. 447.60 s36.22 Total 2176.1 764.6 2940.7 19173 16232.0 1S791 133s6 2915 1S248 489.49 69s.s4 1165.03 10229.4 9044.3 8667 7509. 7332.2 6473 EMR a 36.71 32.71 32.11 28.41 29.51 69.2s 61.61 60.41 SS536 49.11 0 WPV 121) a 2596.7 2396.4 2006.6 1604.3 2124.1 1504.3 1446.6 1220.9 1163.2 1271.9 SapL92 CNhUA SX IU t 1 FMrT EStUIWtI 1 ORWELO M PROE CT .......................... .............. ........................................ Eoonomic Rate of Return (ERR) and Sensitivity Analysis ...................................................... By Districts ............ ( iltlion Yuan ) ................................................................. ................................................................................................................................................ Bas Case -.....-Sensitivity ------ Base Case . ........Sensitivity- ...- .. ... gooenefits . .................................... Beefits . CostsT ---- lotal * met (-15) Senefits ----. Costs .T...... Total Not (-ISS) Bee tits Capital "aint- Bone- Cash Costs Benefits Costs (Delay Capital Nint- Bone- Cssb Costs Benefits Costs etslay Year Invest. nac Total fits filo (015X) (-IS%) t151) I year) tnvest. enwnce Total fits Flow (+1S) (-15) (+15) 1 yst)r * _=aauuuuauuuusanu allgaoqio listrict l t u aau-n-==uLuoJIns Coal Teminaluza=-m-=a 1991 140.18 140.18 (140.18) (161.2)(140.2)(161.2) (140.2) 0.00 0.00 0.00 0.00 0.0 0.0 0.00 1992 6 186.83863 (16.83) (214.9)(186.8)(214.9) (186.8) 0.00 0.00 0.00 0.00 0.0 0.0 0.00 1993 68.42 68.42 (68.42) (78.68)(68.42)(78.68) (68.4) 12.02 12.02 (12.02)(13.82) (12.0) (13.8)(12.02) 1994 79.58 79.58 (79.58) (91.52)(79.58)(91.52) (79.6) 52.98 52.98 (52.98) (60.9) (53.0) (60.9) (S3.0) 1995 60.28 2.93 63.21 168.11 124.90 115.42 9S.68 87.20 (63.2) 142.87 142.8? (142.87)(164.3) (142.9)C164.3)(142.9) 1996 65.82 2.93 68.75 463.4S 394.70 384.39 325.18 314.87 119.4 182.17 182.17 (182.17)(86.62) (27.6)(10S.0)(162.2) 199? 179.04 2.93 181.97 364.65 182.68 155.38 127.98 100.68 281.S 173.81 0.23 174.04 131.01 (43.03)(69.14) (62.7) (88.8)(s1.06) 1998 2.93 2.93 358.17 355.24 354.80 301.51 301.07 361.7 196.58 0.23 196.81 I1M17S (79.66)(109.2) (97.2)(126.8)(65.80) 1999 2.93 2.93 346.05 343.L2 342.68 291.21 290.77 355.2 146.05 0.23 146.28 75.52 (70.76)(92.70) (62.1)(104.0)(29.13) 2000 2.93 2.93 377.80 374.87 374.43 318.20 317.76 343.1 0.23 0.23 92.09 91.86 91.83 78.05 78.02 75.29 2001 2.93 2.93 360.88 357.95 3S7.51 303.82 303.38 374.9 0.23 0.23 97.58 97.35 97.32 82.71 82.68 91.86 2002 2.93 2.93 343.98 341.05 340.61 289.45 289.01 3S8.0 0.23 0.23 103.07 102.84 102.81 67.38 87.5 97.35 2003 2.93 2.93 327.07 324.14 M.70 275.08 274.6 341.0 0.23 0.23 18.5 108.33 108.30 92.05 92.02 102.84 2004 3.73 3.73 310.18 306.45 305.89 2s9.92 2s9.36 323.3 0.23 0.23 114.05 113.62 113.79 96.71 96.6 108.33 2005 4.40 4.40 293.27 288.87 28B.21 244.88 244.22 30S.8 0.23 0.23 119.55 119.32 119.29 101.39 101.36 113.82 2006 3.60 3.60 293.27 289.67 289.13 24S.68 245.14 289.7 0.35 0.35 119.55 119.20 119.15 101.28 101.22 119.20 2007 2.93 2.93 293.27 290.34 289.90 246.35 245.91 290.3 0.35 0.35 119.55 119.20 119A1S 101.28 101.22 119.20 2008 2.93 2.93 293.27 290.34 289.90 246.35 245.91 290.3 0.23 0.23 119.55 119.32 119.29 101.39 101.36 119.32 2009 2.93 2.93 293.2? 290.34 289.90 246.35 245.91 290.3 0.23 0.23 119.5S 119.32 119.29 101.39 101.36 119.32 2010 2.93 2.93 293.27 290.34 289.90 246.3S 24S.91 290.3 0.23 0.23 119.55 119.32 119.29 101.39 101.36 119.32 2011 2.93 2.93 293.27 290.34 289.90 246.35 245.91 290.3 0.23 0.23 119.5S 119.32 119.29 101.39 101.36 119.32 2012 2.9 2.93 293.27 290.34 289.90 246.35 245.91 290.3 0.23 0.23 119.55 119.32 119.29 101.39 101.36 119.32 2013 2.93 2.93 293.27 290.34 289.90 246.35 245.91 290.3 0.23 0.23 119.55 119.32 119.29 101.39 101.36 119.32 2014 2.93 2.93 293.27 290.34 289.90 246.35 24s.91 290.3 0.23 0.23 119.SS 119.32 119.29 101.59 101.36 119.32 2015 2.93 2.93 29.27 290.34 289.90 246.35 24.91 290.3 0.23 0.23 119.SS 119.32 119.29 101.39 101.36 119.32 Total 780.15 .47 844.62 6666.3 5821.69 5695.0 4821.7 4695.0 5528.4 906.5 4.60 911.1 2154.1 1243.0 1229.4 1024.S W.8 1246.4 ...... ...... ...... ...... ....... ...... ...... ...... ...... ...... ...... ...... ...... ..... .......... . ...t ERm u 33.11 29.7x 29.21 26.11 27.41 14.21 11.31 10.11 6.41 11.6" W (12X) a 1047.8 967.3 810.2 729.7 862.7 46.6 -17.S -24.S -88.6 -10.5 0.* Sep-92 sI }SS g qI 3pg- - - . -ds 4X O. §l If Uuiaa..et b__" ig! w |aI:Xh i:Si X-. -di t - ISI:bUe t-g - t "*§ S -E" "" - tx" I - SI-. - 58 - Paop of 2 PROPOSED SiANORAX RITRUCTUR3NC AND DEVELOPMENT PROJECT fiaggg gf Work 1. The Port of Shanghai, one of the ten largest ports in the world, is the largest port in China, and the primary gateway to Eastern and Central China. The SPA owns 143 berths, 68 of which have a depth alongside of 8 to 10.5 m. The berths totalling over 14 km in length, are located along both banks of the Huangpu River and the Yangtze River, all In the Shanghai urban area. 2. With the exceptlon of Dlstrict No. 7, which specializes in bulk coal handling, the other 13 Districts handle a variety of cargo types and may be considered multipurpose terminals. Containers are handled at Districts 9 and 10 as well as Baoshan District. The remaining berths are used for semi- dry bulk, break-bulk general cargo and passenger operations. Break-bulk cargo constitutes about 121 of the total port throughput. SPA realized that unitization of this break-bulk cargo will enhance the efficiency of its operations and reduce the cost of cargo handling. Seaga of WrLl 3. The study's scope of work covers the break-bulk general cargo handling, more specifically it should include: (i) various methods of cargo unitization, including: containers, pillets, slings, boxes, etc.; (ii) the cost of general cargo handling in the port, on ships using un-unitized cargo, versus unitized cargo; (iii) the tim taken to load and unload the break-bulk general cargo off/on the ships; (iv) the various types of ships carrying break-bulk general cargo and their suitability for handling unitized cargo; (v) the cost of unitizing the general cargo to the shipper, port and consignees; (Vi) methods of encouraging or promoting the use of unitized cargo among shippers, source ports and consignoes; (vii) devise an action plan to inoas e the unitization of cargo in the port; and CHINA SHIIAI PORT RESTRUCTIN AD DEVELOPNENT PROJECT SPA'S Cash flow Statuent Forecast 1992 - 1997 (No8 Million) I T E N S 1992 1993 1994 1995 1996 1997 TOTAL Sources: Net Profit After Tax 302 308 389 488 602 728 2B17 Depreciation 131 ISS 178 201 224 247 1136 Borrowings: Domestic 292 153 73 95 14 627 Foreign - IBRO SS 220 310 220 110 55 970 Other 83 27 110 Total Sources (A) 863 863 950 1.004 950 1,030 5660 Application: Capital Expenditure 300 400 450 400 300 300 2150 Special Fund Expenditures 285 106 287 368 479 567 2092 Interest Pa)umnts 60 68 83 112 83 88 494 Loan Payments Domestic) 220 253 73 66 29 15 656 Loan Payments IBRO) 10 10 11 12 43 Loan Payents Fore1gn) 7 7 18 18 18 18 86 Change in Uorking Capital (19) 20 20 20 20 20 81 Total Applications 853 854 941 994 940 1,020 5602 Net Cash Flow (A-B) 10 10 10 10 10 10 60 Opening Cash Balance 297 307 317 327 337 347 1932 Closing Cash Balance 307 317 327 337 347 357 1992 Source: SPA and Nission Estimates July 1992 It3 Es CANADA SHANGHAI PORT RESTRUCTURING AND DEVELOPMENT PROJECT SPA's Balance Sheet Actual, 1990-1991i Forecast, 1992-1997 RNB ai ion ITEMS 1990 1991 1992 1993 1994 1995 1996 1997 ASSETS: Gross Fixed Assets ^ 2,310 3,022 3,522 4,022 4,522 5.021 5.522 6,022 Less Depreciation 440 526 $76 627 677 726 777 827 Sub Total 1.870 2.496 2,946 3,395 3.845 4,295 4,745 5,195 Current Assets Inventory 106 II? 123 142 143 138 138 112 Receivables 180 1i9 204 200 214 234 249 291 Cash 185 t97 307 318 328 338 348 357 Sub Total 471 609 634 660 685 710 735 760 Special Fund Assets 270 262 267 272 277 282 287 292 Total Assets 2,611 3,367 3,84U 4,327 4,807 5,287 5,767 6,247 LIABILITY AND EQUITY: bo State's Fund Contribution 1,540 2.129 2,387 2,590 2.778 3,02? 3,431 3,891 Long tenam Loans IBRD 69 105 160 380 680 890 989 1.032 - Other 358 424 542 588 57O 581 548 515 Current Liability- 187 248 292 298 303 308 313 318 Special Funds 457 461 466 471 476 481 486 491 Total Liability and Equity 2,611 3.367 3.847 4,327 4.807 5,287 5,767 6,247 Debt/Equity (%) 22/78 20/80 23/77 27/73 31/69 33/67 31/69 28/72 Current Ratio (X) 2.5 2.5 2.2 2.2 2.3 2.3 2.3 2.4 Liquid Ratio (X) 2.0 2.0 1.8 1.7 1.8 1.9 1.9 2.0 * Includes revaluation on handling equipment allowed by Shanghai Municipality --_--.-----------------------------------_------------------.-__-------------__--------------------_------------_ Source : SPA and NIssion Estimates July 1992 I-, 0 - 159 - s I 2S ; }S III,IIi, 11.11,~~~~~~~~~~~~~~~~S ,3~~~~~~~~~~~~~~~~~~~~~~~~~~~~ . > S , ...... 9~~~~~~~~~~~~~~~~ CHINA Typicat Organiation of Distict In Shanghai Port DWC d [ L y I Dreco of DlWr .t.4 1 He I ke[to _ bbohTeam _ uk Temnrarl _ PMnr*V F_Srk oom~ GwwW Ca_ Semmfkes evie Educa*ba MAP SECTION IBRD 24093 \ \ \ > \ _ \s 31:~~~~~~~~~~~~~-1' \~ \ \ \ \ - zZHJIANGS Ug 0"olo0 ) \ \ \ \ X ---ti;W~~~~~~~~~~---- CoMyoudais &nd.v~~~~~m~~uvau~~~~imiorac~~~w* q*irn1SE Luodi_- ~ \ BaQ~l 121, / 11 ~~~ A\ \nho~~~~~~Bhn Uuu'"''' z zat ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~e,i X~~~~~~~~~~~~~~~~~~~~~~EE O 11 F - S G P~~~~~~~ZuiOmen RJK Ag . ESS~~~~C INA )rFaiE s AA ~~~~~~~SANHI POR PROJEC r~~~~~~~~~~~- g O / J ZVESAD ~ _er_lhf #th Gwnan bniC X_d?&I c tm 0 2 A 6 8 10 SEPMMBER IM°9 IBRD 24101 -31t - NLO A DI~~~~~~~UNOANG J I A N G S U t- ^- . . ~~~~~~~~BERTH 31 11 3 JIANGSU // I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I500Tt HANG flAl //Hi ACCESS10~~~ SrA. " ^ N' -'. S' ' I i; \"'\\\lg~an ZHEJLANG CHIN'.N SHANGHAI PORT 'ROJECT ,,,r,_,, LlJOJINGCOALlERMINAL 0 250 500 T L I I m*snqdpnotGop- ME2 GATT endwomuvcac"*used SE aEn 199 /N ~~~~~~~~CHH~ I-N X < ^ 5 X 6 .~~~WMC, f t PRO; JEa biC 7h<"dshn