R E S T R I C T E D
Report  No. TO-179a
This report was prepared for use within the Bank. In making it
available to others, the Bank assumes no responsibility to them for
the accuracy or completeness of the information contained herein.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
REPORT ON THE PORT OF GUAYAQUIL PROTECT
ECUADOR
September 25, 1958
Department of Technical Operations



CURRENCY EQUIVALENTS
U.S. $1.00      a 15.15 Sucres
I Sucre        . U.S. $.066
100,000 Sucres  . U.S. $6,600
1,000,000 Sucres a U.S. $66,000
UNITS
All tonnages are given in metric
tons of 2,204.5 lbs. One nautical
mile is equal to 1.1516 statute miles.



ECTJADOR
Report on the Port of Guayaquil Project
Page
SunaarJ                                        i
I.  Introduction                                   1
II.  The Existing Port of Guayaquil               1 - 4
III.  The Project                                  5 - 7
IV.  The Proposed New Port Authority              8 - 9
V.  'The Futvre frraffic tlhrough the Port      10 - 12
VI.  The Economic Justification for
the Project                              13- 15
VII.  The Financial Position of the New
Port Autlioritr                           15 - 18
V-III.  Conclusions                                  19
Appendices A to h
iaps 1 to 4



i
EC UADOR
REPORT ON TE PORT OF GUAYAQUIL PROJECT
i.        The Ecuadorian Government has asked the Bank to finance the
foreign exchange cost of a project for the construction of a new port
at Guayaquil, to be completed within about four and one-half years.
The proposals were prepared for the Government by a firm of consulting
engineers.
ii.       The total cost of the project is estimated at S/ 290 million
(US,'c 19 million equivalent), of which US,, 13.0 million equivalent will
be in foreign currency.
iii.      A Decree Law has been issued establishing an autonomous Port
Authority, which Twill take over operation of the existing port and be
responsible for the construction and operation of the new port.  The
loan would 'oe made to the Port Authority.
iv.       The Port Authority should be able to meet its debt service
by an adequate margin with tariffs wh-ich would not place an undue
burden on shipping or trade.  The proposed loan agreement requires
tariffs to be maintained at a level calculated to ensure that debt
service is covered at least 1.5 times.
V,        The project is generally sound. Design and supervision
will be entrusted to a reputadle firrm of consultants experienced in
such work. Construction will mainly be carried out by contracts
awarded after the invitation of international tenders.
vi.       The project is suitable for a loan of US$ 13.0 million
equivalent. A term of 25 years including a four and one-half years'
period of grace Wiould be appropriate.



ECUADOR
REPORT ON THE PORT OF GUAYAQUIL PROJECT
I. INTRODUCTION
1.        The existing Port of Guayaquil is a river port with insufficient
depth of water for ocean shipping and inadequate cargo handling facilities.
It is proposed to build a new port on ar. adjoining tidal estuary, open to
sea-going vessels at all states of the tide and equipped with adequate
wharves, cargo sheds, etc. The cost of the newT port wfill be approximately
S/ 290,000,000 (USSp 19 million equivalent). Preliminary designs have
been prepared by Messrs. Parsons, Brinckerhoff, H4all and i4acdonald, con-
sulting engineers.
2.        The following report is an appraisal of the project.  It is
based on the findings of a Bank mission which visited Ecuador in Iarch,
1958 and on a report prepared by the consulting engineers in June, 1957.
II.  THE EXISTING PORT OF GUAYAQUIL
General
3.        As shomm on NIaps 1 and 2 at the end of this report, Guayaquil
is situated towards the southern end of the Ecuadorian coast, on the
right bank of the River Guayas about 55 nautical miles from the open sea.
It has been used by shipping since the Spanish Conquest and is the only
port of any magnitude in Ecuador. At the present time approximately 90%
of all Ecuadorian imports and 60p of all exports are handled through
Guayaquil.
Existing Facilities
4.        The principal existing installation on the Guayaquil side of
the river is a 600 foot lighterage wharf with warehouses adjoining. These
facilities are inadequate for the tonnage of cargo now being handled and
the congestion is serious. On this bank there are also a petroleum depot,
a modem grain handling wharf, silo and mills, and various jetties for
small craft.  On the opposite bank, at Duran, there is a somewhat larger
petroleum depot together with the terminus of the railway frora Quito.
Bettreen Duran and Guayaquil two small converted landing craft are in use
as road vehicle ferries and a flat barge on to which freight cars can be
run at the Duran side is used to ferry railborne goods.
5.        At GJuayaquil the depth of the River Guayas is between 25 and 30
feet at low water, but only the grain handling wharf has sufficient depth
for ships to come alongside. All ocean-going ships carrying other products
must therefore be handled at anchor in mid-stream. For this there is ample



2.
room, it being possible to accommodate t%relve ships at a time. During the
rainy season, January to June, the current in the Guayas is of the order of
five knots and the river carries a heavy burden of silt and debris.  The
latter is a hazard to small craft, and the strong current makes the anchor-
age of all vessels somewhat insecure.
Port Seaward Approaches
6.        Between Guayaquil and the sea the minimum depth in the channel
of the River Guayas is approximately 19 feet at low water, the rise of
tide being about 10 feet. At the entrance to the river there is a bar
carrying only 15 feet at low water. Accordingly, only ships having a
draft of 231-6" or less can enter the river and proceed to Guayaquil and
most of these must await the tide to cross the bar. It is estimated that
an average of five hours per ship per voyage is lost for the latter reason.
In the past these conditions made shipping companies unmilling to bring
ships into the river, even wihen their draft permitted, so that in order to
protect the position of the city the Government in 1952 issued a decree
compelling all vessels drawing 231-6" or less to proceed to Guayaquil.
7.        Ships of a greater draft than 23t-6" load or discharge at Puna,
seaward of the bar, where a minimum of customs and other facilities have
been provided. Cargo so handled, at present amounting to about 1E, of
the total traffic of the port, must be lightered to and from Guayaquil,
35 nautical miles distant. The channels leading to the port are reason-
ably well marked and lit and navigation is carried on by night as well
as by day.
Port Landward Approaches
8.        As will be observed from Hap 1, Guayaquil is t1he focus of an
extensive road, rail and river communications system. The principal exist-
ing highways radiating from Guayaqucil are those leading to Salinas, to
Portoviejo, to Quevedo, to Babahoyo and to Cochancay. The construction of
the Salinas, Quevedo, Babahoyo and Portoviejo roads was among the projects
in connection with which Loan 94-EC of February 1954 was made. Construction
of the Quevedo road is complete and that of the others in progress. Under
Baak Loan 176-EC of September 1957, the Quevedo road will be extended so as
to provide an all seasons route to Quito via Aloag, and tne Cochancay road
will also be reconstructed. Railway connection with the Sierra region is
provided by the Duran-Simbambe-Quito railway, which has a southward exten-
sion to the important center of Cuenca.  The rivers flowing into the Guayas,
principally the Daule and Babahoyo and their branches, pennit of barge trans-
portation over a substantial area of the provinces of Guayas and Los Rios
up to as far as 100 miles from Guayaquil.
Port Tributary Area
9.        The approximate areas from which exports through the port orig-
inate and to which imports are conveyed are shown on iap 1.  Included are
the whole of the coastal provinces of Guayas and Los Rios and part of the
coastal province of Manabi.  At the present tirie much of the area of the
Sierra provinces, Pichincha, Cotopaxi, Tungurahua, Bolivar, Chimborazo



and Canar is also served by CGuayaquil, as the railway from Duran to Quito
is the principal transportation link between these provinces and the sea.
The inhabitants of this tributary region constitute approximately 60Z of
the population of Ecuador and its area amounts to about 35'/ of that of
the whole country. Guayaquil itself has a population estimated to be some
400,000 and is the main commercial and industrial center of Ecuador.
Existing Organization of Port Activities
10.      lNo Port Authority dealing comprehensively with port operation
has hitherto existed in Guayaquil. At the present time the reception and
movement of shipping, navigational aids, medical inspection, pilotage and
policing are the responsibility of tlhe Port Captaincy, a subdivision of
the itinistry of iiarine.  Revenue arising from these operations is paid
directly into central governmental funds, expenditure being in turn met
from the 11inistry's general budget.
11.       The loading, discharging, and storage of cargo at the Guayaquil
lighterage wharf is undertaken by a subdivision of the Customs Department
known as the "Timpresa de IHuelles"'.  This organization also supplies the
lighters used for all general cargo imports and for the majority of general
cargo exports, the supply of labor for handling to or from the barge hold
being included in the service provided.  The tonnage of cargo dealt wit h
by the Empresa in these various ways amounts to about 307 of the total
traffic of the port, the proportion of the latter passing over the lighter-
age wharf being about 20%. The charges made for such activities are based
on an arbitrary scale, the individual rates of which are not directly re-
lated to actual costs. Being what is described as a "non-autonomous public
undertaking" the Empresa has its own budget. All surplus earned is, how-
ever, ultimately surrendered to the central government and the Emresa has
no funds under its ovm control for the purchase of equipment and like pur-
poses. Furthermore, the procedures which the staff of the Empresa must
follow, being tnose of a government department centralized in the capital,
are quite unsuitable for the operation of an undertaking such as a port.
12.       The remaining 70,O of the total cargo, comprising principally
banana exports, wheat imports and petroleum traffic, is handled in craft
hired or omed by the merchant or other undertaking concerned. However,
except in the cases of bulk grain, bulk petroleum and bananas, the per-
mission of the "Empresall has to be obtained before cargo can be handled
in this way.
Present and Past Traffic Through the Port
13.       The volumes of exports and imports through Guayaquil during the
years 1953-57 are tabulated in Appendix F. The exports consisted entirely
of natural products such as rice, bananas, coffee, cacao, sugar, balsa,
and fish.  As will be seen, while the total rose fairly steadily from
321,200 tons in 1953 to 529,700 tons in 1957, the volume of individual
items fluctuated considerably. Imports, falling under the principal head-
ings of general cargo, petroleum products and wheat, also increased sub-



stantially, in this case from 160,000 tons in 1953 to 362,300 tons in 1957.
With the exception of aviation gasoline the petroleum products listed are
brought into the port by small tankers of the Anglo-Ecuadorian Oil Conpany
and landed at the depots at Guayaquil and Duran already described. The
aviation gasoline is imported under separate arrangements and landed at
a depot adjoining Guayaquil Airport.  Bulk wheat, amounting to about two-
thirds of the wheat inport, is discharged at the grain handling berth; the
remainder is imported in bags and dealt witlh as general cargo. A consider-
able coastal traffic, consisting principally of local products imnard and
transshipment outward also exists. This is handled mainly at sriall lamd-
ing stages on the river front at Guayaquil. Accurate statistics of the
latter traffic are not available, but it is estimated to amount to upwards
of 30,000 tons per annum.
Present and Past Financial Position in Respect of Port Operation
14.       Records in connection wita the charges made for the port func-
tions hitherto performed by the Port Captaincy have not been kept separate-
ly for Guavaquil so that it is not possible to comment on the financial
aspect of this side of present port operations. In the case of the opera-
tions of the "Enpresa de i.uelles" records of revenue and expenditure for
the years 1953-57 are available, these being summarized in Appendix A. It
wllU be observed that during the years 1954-57 the Empresa uas able v3
transfer to the Government amounts averaging S/ 6,45o,ooo (us$ 426,00o
equivalent) annually. These sums cannot, however, be regarded entirely as
profit since during the years concerned the Empresa did not pay any contribu-
tion towards the cost of the premises iw7hich it used and made no allowance
for the depreciation of its equipment.



- 5 -
III. TIM PROJ3CT
General
15.       The disadvantages arising from the present limitation on the
draft of vessels entering the port are great. Not only has about one-sixtl
of the cargo of the port to be lightered 35 nautical miles from Puna, but
also an appreciable proportion of the shipping actually proceeding to Guayaquil
does so not fully laden. Furthermore, modern port facilities are virtually
non-existent. In order to permit ships of the draft now met with on the west-
ern coast of South America to enter the River Guayas it would be necessary to
carry out very extensive dredging and the feasibility of maintaining the re-
quired depths could by no means be guaranteed.  To the west of the river lies
a tidal estuary known as the Estero Salado, the head of which reaches Guayaquil
(see Ilap 2). This estuary is comparatively silt free, being entered by no
rivers.  With the exception of a section where a dredged channel mill be re-
quired, it is of sufficient depth to permit vessels drawing 30 feet to pass
at any state of tide.  In view of the magnitude of the dredging problem in-
volved in improving the River Guayas and the doubt existing as to whether
such improvement could be maintained, it would be unwise to invest capital
in the improvement of any of the facilities of the existing port.  It is
accordingly proposed to carry out the dredging required in the Estero Salado
and to construct newi deep sea wharves near the head of the estuary, six miles
from the center of Guayaquil. This proposal is generally referred to as the
"Puerto Nuevo Project".
16.       The development of the Port of Guayaquil has been the subject of
studies by the Societe de Construction de Batignolles (a large French con-
struction organization), the Ufnited States Corps of Engineers, a technical
expert of the United Nations, the Knappen-Tippetts-Abbett Engineering Co.,
consulting engineers; and iiessrs. Parsons, Brinckerhoff, Hall and liacdonald,
consulting engineers for the present project. These authorities were unani-
mous in recommending that the proper course to be pursued is the construction
of a new port on the 2stero Salado rather thlan any attempt at improvement of
the existing port.
17.       Studies in connection with the future development of the port have
in the past been in the hands of the Aighways Committee of Guayas Province,
an autonomous body which controls highway and inland waterway development in
the area. The Government has now established an autonomous Guayaquil Port
Authority, which will tatke over responsibility for development from the
Highways Committee and the operation of the existing port from the Empresa
de MHuelles and which will in due course become responsible for operating the
new port.  The organization and powers of the proposed Authority are described
in Part IV of this report.
NMew Wharves and Port Area
18.       As showqn on Aaps 2, 3 and 4, the new wharves wTill be situated
40 miles from the sea on the branch of tChe estuary know'n as the Estero del
ili-erto.  A cut will be dredged in the neck of land which separates the



- 6 -
Estero del iviuerto from the Estero Santa Ana at the northern end of the site
and using the spoil from this and other dredging, a port area of approxi-
raately 100 acres will be reclaimed from the surrounding swarps. Anple space
exists for the extension of this area to meet future requirements. The berth-
age provided initially will consist of a reinforced concrete marginal wharf
3,000 feet long capable of accommodating five ships, the wrharf being so sited .
as to permit of extension at a later date to accommodate a further three
ships.  The depth at the berths wfill be 35 feet at low water.  There will be
four transit sheds and the customary ancillary buildings, circulating roads
and services.
The Landward Approaches to the New Port
19.       A four-lane divided highway, tw,,o lanes of which are already being
constructed, will link the port with the toum of Guayaquil (see Maps 2 and 3).
To permit barges from the Guayas River to come alongside ships at the new
wharves or at anchor in the Estero Salado and to allowJ the passage of coastal
craft, a canal 148 feet wide and 12 feet deep at low water will be constructed
connecting the Guayas with the Dstero Salado via the Estero Cobina.  In order
to prevent undue scour in the canal under certain tidal conditions a lock will
be provided at the Guayas entry. Tilis canal is an important feature of the
seleme and it is essential to the success of the new port that it should be
constructed to the full capacity proposed.
The Seaward Approaches to the Nqew Port
20.       Approach to the Estero Salado from the sea will be thlrough the l-iorro
Channel, parallel to the coastline opposite Data (1-iaps 1 and 2). This channel
is navigable by ships of 30 feet draft at all states of the tide. While the
location of the channel is subject to littoral drift, it is the opinion of the
consulting engineers that any serious shoaling is unlikely.  3etween the Horro
Channel and the new port some 1h0 nautical miles distant, ample depth exists ex-
cept between Boca de Sabana Grande and Isla de la Seca. Here over a distance
of some 10 miles the average depth at low water is about 25 feet wtith a minimum
of about 20 feet. Through this reach it is proposed to dredge a channel 400
feet wide with a depth of 31 feet at low water.  Such a channel will be naviga-
ble by ships of 28 feet draft at all states of the tide. Ships drawTing more
than this figure (amounting to only 3.7% of ships calling at the port in 1956),
will need to wait for the tide. The Authority will make suitable arrangements,
in advance of the completion of the project, to ensure the future maintenance
dredging of the channel.
Navigational Aids
21.       The project provides for the marking and lighting of the I4orro and.
dredged channels and other portions of the approach where such is required.



-7-
Port Equipment
22.       The cargo handling equipment held by the Empresa de PLuelles will
become available to use at th<e new wharves.  However, much of it is in bad
condition and the remaining iterms are not wiell selected from. the point of
view of the efficient operation of a modern port.  The project, therefore,
includes for the purchase of such additional cargo handling equipment as may
be necessary. The floating equipment to be transferred to the Port Authority
by the Empresa and the Tiighwwjs Committee appears ample for the initial re-
quirements of the new port.
Estimated Cost of Project
23.       The cost of the project, including the cost of land acquisition,
but excluding the cost of the access road is estimated to be S/289,275,000
(US;19.09 million equivalent), of which foreign currency costs, including
interest during construction, will amount to S/196,950,000 (Mt13.00 mi]lion
equivalent), A breakdown of these figures is given in Appendix G. These
estimates are considered to be realistic. An adequate allowance has been
made for contingencies and unless any appreciable inflation occurs during
the construction period the estimated total cost should not be exceeded.
The access roads, estimated to cost S/ 5 million, are already being con-
structed by the Highways Committee of Guayas Province, using moneys trans-
ferred from the original port development funds as detailed in Appendi,; G.
24.       Although the Decree Lawr creating the Authority provides for the
acouisition of any land it nay require, action in this respect has not yet
been completed. Delay in acquisition mi-ght seriously delay the project rand
it has therefore been agreed with the borrower that with the exception of
amounts required for the payment of engineering costs, no withdrawals wrill
be made from the loan account until the land required for the project has
been acquired.
Construction Program and Procedure
25.       Only preliminary engineering having been done, no detailed con-
struction program has yet been drairn up.  However, it is anticipated that
work during 1958 will be limited to engineering design, the invitation of
tenders and preliminary work at the site.  Completion is expected during
1962. All design work and the supervision of construction will be entrust-
ed to consulting engineers well experienced in carrying out this type of
project. With the exception of the dredging of the Estero Salado - GuWyas
canal, which may be undertaken by the Highways Committee of Guayas Province
using the river dredger Guayas, all wrork will be by contract awarded after
international tender.



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IV. PROPOSED Nl1Ei PORT AUTHORITY
General
26.       In order that the new port may be operated at a maximum level of
efficiency, the Government has established a Port of Guayaquil Authority,
a Decree Law for this purpose having been issued on April 10, 1958.  The
proposed loan will be made to the Port Authority.
Constitution of Authority
27.       The decree establishing the Port Authority is satisfactory to the
Bank. It provides for the direction of the general policy of the Authority
by a Board of seven, all of whom serve on a part-time basis.  The Chairman
of the Board is appointed by the President of the Republic, three of the
members represent goverrment departments and the remaining three, business
and local interests. Executively the Authority's operations will be Ln the
handsof a Geaeral Aanager, who may be a non-Ecluadorian.  The Authority is
autonomous, havinig its own funds, with powrers to fix and collect its charges
and to control such matters as the movement of shipping, pilotage, navigation-
al aids and conservation within the port limits.  It also has powers to
appoint and dis.miss members of its staff and to fix their salaries. -VRon its
formation, the Authority became responsible for all measures to be taken in
connection with the construction of the new port.  It will take over the
activities of the Empresa de iHuelles on January 1, 1959.
Disposition of Surplus Receipts
28.       Under the Decree Law the Autlhority's revenues are to be applied to
operational costs, debt service and a fun,d for the depreciation of equipment
and installation. If after the new port is completed a surplus of revenue
should develop, this surplus will be divided equally between the Government
and a capital reserve fund which the Authority is to establish.
Exemptions from Port Charges
29.       The Decree Law prohibits the granting by the Port Authority of
exemptions from charges which it may impose in future and provides that
current exemptions from existing charges granted for a definite period will
not be renewed. Certain of the current exemptions were however made for an
indefinite period and their cancellation would be a matter of difficulty
and comolication. In order to protect the Authority from undue loss of reve-
nue which might arise from the existence of these latter exemptions the
Government has agreed to reimburse the Authority from any such loss in ex-
cess of S/ 1,000,000 (uS'"66,o0O equivalent) yearly.
Port Limits
30.       In order that the Authority may be able to control the future
operation of the present facilities to the best interest of the port as a
whole, the River Guayas and the eaisting wharves at Guayaquil as well as
the Estero Salado, will be included within the Authorityts jurisdiction.



.. 9-
Port Authority Personnel
31.       As no port operating organization of appreciable size at present
exists in Ecuador, experienced persormel for the operation of the new port
is lacking. To overcome this di.fficulty, the Authority has agreed to em-
ploy a qualified and experienced General IManager satisfactory to the Bank,
and to make adequate provision for the recruitment and training of other
personnel required.
Future Port Dues and Charges
32.       Before the new port is commissioned, the Authority will draw up a
new schedule of charges. It is important for the future wTell-being of the
port that this tariff should be adequate and equitable. The Government and
the Authnority have accordingly agreed that the charges established shall be
calculated to yield sufficient revenue to cover debt service at least
1.5 times and that the Bank will be given an opportunity to comment on the
schedule before it is published.
33.       For use in estimating future revenues, the consultants prepared a
tentative list of charges.  While acceptable for such a purpose, and giving
rates which are compatible with those ruling in other medium sized ports of
a like natuxre, the list in its original form appears unsuitable for use as
an actual tariff. As will be pointed out in Part VII, a somewhat higher
level of charges than that envisaged by the consultants may be required to
produce adequate revenue. The method of application suggested for certain
individual charges might also tend to discourage ships from using the rew
wharves.



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V. FUTURE TRAFFIC TIROUGH THE PORT
General
34.       Ecuadorian exports consist almost entirely of agricultural products
and there is no prospect that this position will change within the foresee-
able future. With the exception of wheat and some petroleum, imports consist
of manufactured capital and consumer goods. While the nature of these will
change as local light industries are set up and the proportion of semi-fin-
ished and capital goods increases, the ratio of imports to exports may be
expected to remain fairly constant,since the development of heavy manufacture
is unlikely. In order to be able to estimate future exports the Bank Staff
made a study of the agricultural potential of the port tributary area. The
forecast of traffic given in Appendix H is based on that study.
Exports Through the Port
35.       These are expected to rise during the period 1957-1962 from about
530,000 tons to about 600,000 tons. Between 1962 and 1967 the increase
should continue, but at a slightly lesser rate, reaching about 620,000 tons
in the latter year. Since it was not found feasible to make a detailed fore-
cast beyond 1967, it has been thought prudent to assume for revenue estimat-
ing purposes that export traffic will thereafter remain at about thle samre
figure. The greater part of the total increase is foreseen to occur in the
principal item of export, viz. bananas; shiDment of other main items such as
cacao and coffee increasing only slightly and that of rice fluctuating.
Petroleum Traffic
36.       In the past Ecuador has had a surplus of crude petroleum produc-
tion, but has been obliged to import motor gasoline because of insufficient
refining capacity. From 1959 onwards nowevrer total requirements will exceed
production from the Ecuadorian fields and it will be necessary to supplement
the latter by importing crude petroleum. These imports will be discharged
at the Anglo-Ecuadorian Oil Company's terminal at La Libertad (see Map 1),
whence products refined from the local and imported crude supplies will be
shipped coastwise to Guayaquil for local consumption or transport to the
Sierra. This coastal traffic is expected to increase by about 5% annually
until 1963, thereafter remaining constant at approximately 375,000 tons
yearly. Aviation gasoline, of which some 7,000 tons per annum are currently
imported through Guayaquil, will continue to be obtained outside the country
and imports rmay be expected to increase slightly.
Wheat Imports
37.       liheat imports in 1957 amounted to 56,ooo tons,of which 38,000 tons
was in bulk and handled at the grain silo wsharf, and 18,000 tons bagged and
discharged by lighter eitlher at P1una or at Guayaquil. Although local produc-
tion of wheat may increase and improve in quality, it is expected that growth
of population and some improvement in the standard of living will increase de-
mand to an equal extent,so tlhat imports will remain at about the current
figure.



General Cargo Imports
38.       Appendix H shows these as increasing steadily from 180,000 tons
in 1958 to about 210,000 tons in 1966 the computation being based on an
approximately constant ratio of the volume of general cargo imports to that
of total exports.
Coastal Traffic
39.       Writh the easier navigation for small craft afforded by the Estero
Salado and for the reasons given in the next paragraph, coastal traffic may
be expected to appreciably increase.
Effect of Development of Other Ports
40.       The other existing or potential ports of Ecuador are, taken from
north to south, San Lorenzo, Esmeraldas, Bahia, 11anta and Puerto Bolivar.
The first named of these is not in use as a port, the remainder possess
only primitive facilities and are used as lighterage ports principally for
exports. Proposals for the 4mprovement of the ports by the provision of
shelter and deep-sea piers, etc. are before the Government, which, however,
has stated that its policy in the matter is to undertake nothing other than
minor improvements for some years to coine. Even were major improvements
made to these ports it is improbable that traffic tlrough Guayaquil would
be appreciably affected. The hinterland of Esmeraldas and Bahia are rela-
tively self-contained and remote from Guayaquil. Improvement of these ports
is therefore unlikely to affect traffic at the latter, except that banana
production now being developed in the south of Pichincha Province, 'wich
initially will be exported through Guayaquil, will probably be sent via
Esmeraldas when the Quevedo-Santo Domingo road is completed.  Similarly
the construction of the Guayaquil-Jipijapa road may take a certain amount
of produce to Aanta instead of to Guayaquil. The construction of a port
at San Lorenzo would not appreciably affect exports from Guayaquil, but
might affect imports through the latter as a certain proportion of the
general cargo imports destined for the Sierra might tend to move via the
San Lorenzo-Quito Railway. Such a development is however unlikely to
occur for many years. Puerto Bolivar is relatively close to Guayaquil,
but production in the part of the Guayaquil tributary area nearest to it
is declining so that the effect of improvement of facilities at Puerto
Bolivar on Guayaquil traffic should be slight. Apart from these particular
possibilities of reduction, which have been allowed for in the estimate of
traffic given in Appendix H, it was concluded that the effect of improve-
ment at the minor ports would be to develop new traffic in their hinterlands
rather than to attract traffic from Guayacuil. Extensive improvements at
the three ports concerned may tend to make coastal transport between
Guayaquil and Puerto Bolivar and Guayaquil and -anta more competitive with
road haulage than at present for certain types of goods so that traffic of
this nature may well increase.  In considering the whole question it must
also be borne in mind that the size and pre-eminence of the city of Guayaquil
as an industrial, commercial and marketing centre will inevitably continue to
attract traffic which might otherwise be expected to go to the minor ports,
irrespective of whether or not facilities at the latter are improved.



- 12 -
Distribution of Traffic in the Mew Port
41.      ;When the new port is completed only bulk wiheat, petroleum and
coastal traffic will be dealt with in the River Guayas. In the newtf port
exports of bananas and rice customarily brought to Guayaquil by river will
be loaded direct from barge to ship lying in the E3stero Salado. All the
remaining e.xports and all general cargo inports will be handled at the new
wharves. A study of the probable future distribution of these various
categories of traffic, the results of which are summarized in Appendix I,
indicates that of t'-he total forecast tonnage in 1963, some 37, would con-
tinue to be handled in the River Guayas, 26% would be handled in stream
in the 3stero Salado, and the remaining 37% at the new- wharves.
42.       As time passes there will be a tendency for the proportion of
traffic handled at the new wh1arves and in the 7stero to increase.  Agri-
cultural developrmient is likely to border new roads rathler than rivers,
and road transport direct to the new wrharves will be competitive when com-
pared with part road-part river transport. Any improvernents in transport
facilities for crossing the River Guayas will have a like effect. As the
city develops westward coastal traffic will tend to be transferred, also
any new activity involving either export or import will inevitably be
located near the new port.



- 13 -
VI.  BCOO1\T(-C JUSTIFICATION FOR TME PROJ73CT
General Benefits from the INew Port
43.       Traffic through Guayaquil could readily increase more rapidly in
the near future than was conservatively assumed in Part V.  Tile port's
tributary area is only partially developed and the road program which the
Bank is assisting wqill open large new areas. Increasing production and
trade might readily emerge on a scale beyond the capacity of the present
port's facilities.  Congestion would ensue involving in turn heavy in-
creases in the cost of cargo handling and the probable imposition of
ocean freight surcharges. The prompt construction of the new port may,
therefore, be regarded as insurance against such serious losses to the
national economy.
44.       Apart from any question of traffic growth', the new port will pro-
duce substantial savings for the benefit of shipowners, e-porters, and im-
porters. It will facilitate faster turnround and fuller loading of the
ships which serve Guayaquil.  It will enable larger vessels to call direct-
ly and thus eliminate the need of costly lightering to and from Puna anchor-
age.  It will replace a large part of the present lighterage betueen the
waterfront and ships in the strean by more economic loading and discharge
directly at a wharf.
45.       The economies accruiing to shipowners, importers, and exporters can
be assessed approximately and are shown below.  Counting the sums saved by
foreign shipowners as wrell as by thie Ecuadorian economy, the total saving
would amount to an annual minimum of the order of S/ 31 million (OJU: 2 million
equivalent). This compares with an estimated construction cost of approxi-
mately S/ 290 million (US$ 19 million equivalent).
46.       There will be other benefits, perhaps more important than the
direct savings, which cannot be measured or waich are now indeterminate.
They include the protection of Ecuador's balance of paymients against the
possibility of 1higher ocean freight rates; a stimulus to production and
trade resulting from wider profit margins for merchants and producers;
improved town-planning made possible by the location of the new port away
from the congested river front areas; and the release for other community
uses of the land and buildings now used by the Tmpresa de iauelles.  There
will also be more adequate capacity than at present to handle occasional
peak traffic.
Savings to Mlerchants in Reduced Cargo iMandling Costs
47.       According to Bank staff estimates importers and exporters would
save about S/ 8.0 million (US$ 0.5 million equivalent) a year in cargo
handling charges on the present traffic volume. This economy represents
the amount by which the handling charges now paid to the Empresa de ITuelles
and private firms exceeds the charges wJhich would have to be paid on the
same cargo under the Niew Port scale recommended by the consultants, with



- l, -
full allowance for extra costs necessitated by lighterage through the
Estero Cobina Canal and truck haulage between the town and the new wharves
where these are involved. The entire reduction in handling costs would
accrue directly to Ecuador in the form of a larger realization of export
proceeds and lower costs of imports.
Savings to Shipowners in Reduced ShipDing Costs
48.       The ships which now serve Guayaquil would save about S/ 23 million
(US&", 1,5 million equivalent) annually, based on present traffic, by the use
of the Estero Salado.  This economr  represents the elimination of certain
costs now paid or incurred by ships amounting to about S/ 27 million per
annum offset to the amount of about S/ 4 ,million by shipping dues which
would be payable to the new Port Authority under the tentative scale recom-
mended by the consultants.
The S/ 27 million of eliminated cost includes:
a) An estimated annual saving of S/ 10 million because Puna
anchorage would no longer need to be used, thus sub-
stantially reducing stevedoring costs and eliminating
the present surcharge on cargo lightered up the river;
b) An estimated annual saving of about S/ 9 million because
ocean sailing distances to the new port will be materially
shorter than at present and also because ships would no
longer have to wait for the tide on entering and leaving
the ports;
c) An estimated anmual saving of about S/ 8 million because
the bar at the mouth of the Rio Guayas would no longer
need to be crossed, thus enabling the larger ships to
enter and leave Guayaquil more heavily laden than at pres-
ent.
49.       Miost of these savings will revert to the shipoeners, largely
foreign enterprises, but part may be recaptured by Ecuador in the form
of lower shipping rates, a larger revenue from the new port, or both.
Moreover, faster turnround, heavier lading, and cheaper stevedoring from
the use of the new port could well avert freight rate increases that
might otherwise be imposed and will provide some bargaining scope for the
new Port Authority to establish higher shipping dues, if necessary, or al-
ternatively to bring about some reduction in freight rates,
Miscellaneous Benefits
50.       The availability of a facility for direct landing at the new port
should encourage sone tourist traffic by passenger ships. The routing of
export and import traffic to the Estero Salado will free the existing light-
erage wharf for more efficient service to coastal freight and up-river
traffic.



-15 -
General Appraisal
51.       The economic benefits from the project seem adequate to justify
the construction cost of S/ 290 million (U.S.$ 19 million equivalent) in
all.  Furthermore as will be shown in Part VII, the new port should be
able to pay for itself.
VII. FINIAICIAL POSITION OF THE IXMJ PORT AUTHORIIY
Initial Finance and Earnings
52.       Substantial assets will accrue to the Authority during its forma-
ti-e phase this year.
First, the Author-ty will take over liquid funds of about S/ 30
million. They inciude S/ 27 million in cash accumulated in recent years
and due to accumulate in 1958 out of customs duties assigned by law to a
special fund, the Puerto Nuevo Fund, for the eventual construction of a
new port and S/ 3 million from tne proceeds, in 1958, of a temporary sur-
charge recently imposed on 'ighterage, cargo handling, and storage charges
in order to raise additional construction funds for the new port.
Second, the Authority will take over operating equipment which
cost about S/ 28 million initially, but is now depreciated to half the
acquisition cost. Tnis is mainly equipment used by the Empresa de IMuelles
to operate the present port, but also includes some equipment, now under
the control of the Highways Committee, which was bought from the proceeds
of the Puerto Nuevo Fund.
Finally, the Authority will become the creditor of the Highways
Committee to the amount of about S/ 25 million.  This represents Puerto
Nuevo Fund moneys which could not be used for port construction pending an
actual project and were applied, with the concurrence of the Government, to
road construction and related works in Guayas Province. The Presidential
Decree creating the Authority provides for the repayment of the debt in
installments through 1967.
53.       The Authority will ass-ume no liabilities in return for the acquired
assets except some short term debts of the Empresa de Muelles due to be re-
paid in 1959. The Government has arranged for the free use by the Authority,
until it no longer requires them, of the land, jetties, and warehouses on the
River Guayas waterfront now used by the Empresa. Title to these properties
will continue to vest in the Government.
Financing of Construction
54.       The construction of the new port rill require an estimated 313
million in foreign exchange for imported equipment, materials, and services
plus an estimated S/ 92 million in local currency expenditure. These costs
include interest during construction. The Government has proposed that the
Authority borrow the entire foreign exchange costs from the Bank and has



- 16 -
assigned to the Authority, or will shortly assign, various revenues out of
which to pay the local currency costs. These assigned moneys comprise: (a)
the liquid funds wiich will be taken over by the Authority at the outset;
(b) the customs duties payable into the Puerto N\uevo Fund from 1959 through
1962; (c) the operating surplus 1959-1962, of the present port as arising
from the present scale of lighterage, cargo handling, and storage charges,
plus the temporary surcharges recently imposed; and (d) the repaymnents
1959-1962, of Puerto Nuevo Fund moneys due from the Highways Conmittee.
(For details, see Appendix E),
55.      These revenues should bring in about S/ 122 million through 1962.
This is about S/ 30 million more than the local currency costs of the pro-
ject.
Construction Funds, 1958-1962                    3/ iiillion
Liquid funds taken over in 1958                      30
Customs duties payable to Puerto
Nuevo Fund, 1959-1962                              31
Repaymients due from Highlways Corenittee,
1959-1962                                          10
Operating surplus from present port,
1959-1962                                       _51 a/
Total                   122
a/  Net after administrative overhead and repayment
of short term debt.
56.       Sufficient construction funds are thus in sight provided the
Bank lends 1`3 million as requested.  Howe-ver, there will be short inter-
vals during the peak of construction expenditure when the liquid assets
might fall below the minimum, say S/ 20 million, which the Authority ought
to have in hand at all times as working capital for the present port and
as a construction reserve for the new port. The Government has accordingly
agreed to assure the provision of any additional funds which the Authority
may need during construction to maintain its liquid assets at a proper
level.
57.       Based on the present tentative construction schedule, the heaviest
pressure on liquid funds is apt to arise toward late 1961 (Appendix E). The
timing of project expenditure compared with construction funds in sight might
well be as followJs:



- 17 -
Liquid funds     Other construction         Project
Year      at start          funds in sight         expenditure
1958         17.0                 17.0                  7.0
1959         27.0                 60.7                66.0
1960         21.7                101.1               106.0
1961         16.8                 89.9                98.0
1962          8.7                 33.1                12.3
1963         29.5              __ _                  _
Total          301.8               289.3
Future Earnings and Finances
58.       When the Authority begins to operate the new port in 1963, it will
have adequate working capital, no funded debt other than the proposed Bank
loan, and a substantial equity (Appendix L)* The net properties would total
S/ 327 million, against which S/ 192 million of funded debt would be out-
standing.
59.       The Bank staff has made estimates of future earning power
(Appendix K), which are lower than the consultants' estimate. They assume
that traffic volume through Guayaquil will develop in accordance with the
conservative forecast of Part V., and that no higher shipping dues and cargo
charges will be levied than the scale recommended by the consultants. Operat-
ing expenses are estimated with allowance for ordinary working expense ashore,
maintenance dredging of the new channel, and 40 year service life depreciation
on the whole of the new port facilities valued at acquisition cost. Finally,
it is taken into account that a growing share of the Guayaquil traffic wrill
be truck hauled to and from new productive areas opened by roads now being
built, whiile a diminishing share will be barge hauled to and from old areas
along the rivers.
6O.       Even if traffic levels off at 1.3 million tons a year from 1963 on,
operating revenue should continue to increase for the next 10 years or longer.
It should increase because, as mentioned above, a growing proportion of the
traffic wlll be truck hauled, thereby enhancing receipts per ton.  Goods
carried to and from the port by truck will have to move across the face of
the wharf, and thus pay higher charges than goods brought by barge to or from
ships anchored in the streair.
61.       The estimates show that net operating revenue will average about
S/ 12 million annually for the first 10 years of the operation of the new
port.  This is income after maintenance and depreciation, but before interest
charges.  It excludes the customs duties whnich under the Decree Law could
continue to be payable and all receipts on account of Highways Committee
debts due to be repaid from 1963 onwards.
62.       The return on the net fixed assets would average about  .5% in the
first 10 years. Interest charges would be earned about 1.2x. Adding depre-
ciation allowances to net operating revenue, the cover of the full debt ser-
vice would be 1.1 - 1.2x, which is too low.



- 18 -
63.       The Authority will also have receipts from non-operating sources.
Some 12.5 million sucres is due to be repaid by the Highways Committee from
1963 onwards.  If, as the Decree Law permits, the assigned customs duties
continue to be paid to the Authority after the new port is completed, this
would bring in about 8.5 million sucres yearly.  However, it is desirable
that the Authority shoulld be in a position to meet its fixed charges by an
adequate margin from operations only, without reliance on capital trans-
actions or on Government subsidies.
64.       A more adequate initial return on the investment, about 6%, and
a safer initial cover of the debt service, about 1.5x, would result if the
scale of shipping dues and cargo charges recommended by the consultants
wzere adjusted in such a manner as to increase revenue by lO%. The large
benefits accruing to slaipowners and merchants, as assessed in Part VI,
show that there is substantial scope for tariffs moderately higher than the
consultants have proposed. The Government and the Authority have according-
ly agreed that shipping dues and cargo charges will at all times be held at
a level ensuring 1*5x cover, or better, of the debt service.
65.       According to Bank staff projections of cash flow (Appendix M),
the Authority will need S/ 93 million in the 10 years starting 1963 to re-
pay the Bank loan and renew plant and eq-ipment retired from service. Under
the tariffs recommended by the consultants, an estimated S/ 99 million in
retained depreciation charges, plus earnings after interest, would become
available from operations.  The margin of only S/ 6 million is too narrc)-,
thus pointing again to the need of slightly higher tariffs than the con-
sultants have recommended.
66.       Pro forma balance sheets are shown in Appendix L.  They reflect,
in addition to retained earnings and depreciation, the recapture of Puerto
Nuevo Fund moneys previously used for road building. They make no allow-
ance for the continued assignment of customs duties after the port is com-
missioned as permitted by the Decree Law.  Should this assignment continue,
surplus receipts might be created, 50 of which, in accordance with the
Decree Law, would be returnable to the Government,
67.       The assigned customs duties are an essential element in the
planned financing of the local currency costs of the project. It is at
present uncertain whether and for how long they may be needed after the
new port is cormissioned. The Government has accordingly agreed that the
Decree Law providing for the assignment of these duties will not be modi-
fied without prior consultation with the Bank.



-19 -
VIII,  CONCLUSIONS
68,       The project is sound and suitable for a loan of $13 million
equivalent. It is well justified as a measure of modernization of
transport facilities which will bring substantial econoric benefits to
Ecuador.
69.       The charter of the Port Authority is generally satisfactory,
and of a nature which will facili.tate effective nanager;ment.  Tariffs
will be maintained at an adequate level and the financial position of
the Authority should be sound.
70. An appropriate term considering the nature of the project Nould be
25 years, with a period of grace of approximately four and one-half years.



EKLSTING PORT OF GUAfYAQUIL            Appendix A.
_LiPR.3SA DE MUEJ&LES
Revenue and Expenditure 1953-57
u.00Sucresj
1953     1954     1955     1956      1957
(1) Revenue
(a) Brought Forward from
Previous Year            3,629      489    3,519    2,332        -
(b) Operating Revenue from
Cargo Ihandling Charges  10,920   21,151   22,471   22,394   23,740
(c) Operating Revenue from
Storage Charges          4,127    5,913    4,592    4,o96    3
Total              18,676   27,553   30,582   28,922   27,387
(2) Expenditure
(a) Cperating and Capital
Expenditure             18,187   16,353   20,250   23,630   22,565
(b) Transferred to
Government                  -      7,681   _8,oo    5,292    4.822
Total              18,187   24,034   28,250   28,922   27D387
(3) Carried Fo;-ward to Following
lear
(a)  SuDpus                        489      _      2,332       -        -
(b)  Deficit                       -        -        ---



OPERITIOF<- OF ESISTING FOrisT OF G%UYAWQUIL      ` ppendix B.
Forecast of Reveiiue and Lpenditlare 1958-62
(1,000 Sucres)
1958     1959      1960     1961      1962
(1) Revenue
(a) Ordinary OPerating
Xe-renue                28,500   28,900   29,200   29,6co   30,000
(b)  Proceeds of Proposed
Additional Charges       3,000    5,500    5,S0o    5,600    5,700
Total              31,500   34,400   34,700   35,200   35,700
(2)  Expenditure
(a) tpera'ving Expenditure    20,000   20,200   20,500   20,700   21,000
(b)  Pa-yment of Outstanding
Debt4s of Emzpresa de
Euelles                  5,675    5,000       -         -        -
(c)  50% of Port Authority
Director's Fees,
Salary of General
iianager a.nd his Staff    -         500      500       500      o00
etc.
Total              25,675   25,700   21,000   21,200   2100
(3)  Surplus to be Transferred
to Govei-rment                              -         -        -
(h) Surplus Availa'Lle for Con-
tribution to Cost of Puerto
Nuevo                            3,000    8,700   13,700   1-4,000   14,200
(itillions U.S.$ Equivalent)     (0.20)   (o.58)   (0.90)   (0.92)   (0.94)



NED PORT OF GUAYAQTJIL               Appendix 0
UE,UR0 I1UMV0 FUND
Revenue and Exienditure 1953-57
(1,000 Sucres)
1953    1954      19O55    1956      1957
(1) Revrenue
Ta(jProceeds of Existing
Decrees                 7,974   7,130    8,372    6,429    7,686
(2) Expenditure
) Expenditure on Tech-
nical studies,
equipr1ent, etc.        2,619   1,8I)4   1,019    2,002    4,098
(3)  Surpliis ofI Revenue Over
Ependiture                     5,355   5,286    7,353    4,427    3,588
(IEll-ion U.S.t- Eqlulivalent)      (0.35)  (0.35)   (0.4L8)   (0.29)   (C. 24)



NEW PORT OF GUAYAQUIL                 Appendix D.
PUERTO N7TEVO FUND---
Forecast of Revenue and Expenditure 1958-1962
(1,000 Sucres)
1958    1959    1960    1961    1962
(1) Revenue
(a)  Proceeds of Existing Decrees  8,000   8,100   8,200   8,300   8,400
(b)  hepayment of S. 20,000,000        -        -    2,500   2,500   2,500
Borrowed by Comite de
Vialidad for Road
Const:ruction
(c)  Mascellaneous Repaymernts      2,000   1,400   1,200      600       -
Total                  10,000   9,500  11,900  11,400  10,900
(2)  Expenditure
(a) Port Authority
Directors' Fees, Salary
of Gene2:al M;anager and
his Staff, etc. (100%
diuring 1958, 50W there-
after).                        500     500      500     500      500
(3) Surplus Available for
Contribution to Cost of
Puerto Nuevo                        9,500   9,000  11,400  10,900  10,400
(I4illion U.S.$ Equivalent)  (0.63)  (0.59)  (0.75)  (0.72)  (0.69)



NEW PORT OF GUAYAQUIL                 Appendix 3,
PUERTO NUEVO PROJECT
Capital Expenditure and Sources of Funds 1958-62
(1,000 Sucres)
1958      1959       1960      1961       1262
(1) Available Funds
(a) Available at Beginning
of year            17,000    27,000    21,700    16,800        8,700
(b) Surplus Available from
Operation of Exist-
ing Port         a/ 3,000      8,700    13,700    14,000    14,200
(c) Surplus Wailable from
Puerto Nuevo Fundjb 9,500      9,000    11,400    10,900    10,400
(d) Disbursement from
?roposed IBRD Loan  4,500    43,000    76,000    65,00o B05OO
Total                 34.000   387700   122.800   106,70    L1, 300
(2) Capital Expenditure
(a) New Port Construction
(Foreign Currency)  4,500    43,000    76,000    65,000       8,00
(b) New Port Construction
(Sucres)            2,500    23,000    30,000    33,000       3,800
Total                  7,000    66. 000   106Q000    98.000    1Z.30
(3) Funds Available at
End of Year             27,000    21.700    16,800      8,700    29.500
(Million US$ Equivalent)  (1.78)    (1.43)    (1.11)    (0.57)    (1.95)
V/  -ee Appendix 1)



EXISTI,G  9ORIT OF GJAYAUQtIL              ApDendi. F.
Cargo Loaded and Discharged 1953-57
(1,000 1Aetric Tons)
:9a      31954      -IM        1956     1957
Loaded
Rice                   42.5      10.2       20.8     13-.6      38.4
Bananas               224.4    274.9       354.8    336.5    408.5
Coffee                 7.3        8.3        7.5       9.0      9.1
Cacao                  21.1      29.4       23.5      28,7      26.2
Mlolasses                -         -          -       27.0      18.3
Balsa                   4.1       3.5        3.7       3.8       5.8
Sugar                    -         -          -         -        9.6
iliscellaneous         21.8      21.0       21.4       5.4      13.8
Total                 321.2    347.3    -431.7    422.0    529.7
Discharged
Oats                    N         N                   6.0        5.2
Asphalt                  o         o          o        6.2       5.3
Fuel Oils                t         t          t      23.6       5.4.1
Gasoline (Including
Aviation Spirit)       A         A          A       97.5     '5.7
Iron and Steel          v         v          v       84.2       81,2
Automobiles & Trucks     a         a          a        5.5       5.7
Machinery                i         i          i       25.3      53.3
Food                     1         1          1        2.1       2.1
Wheat                    a         a          a       50.5      56.5
Miscellaneous            b         b          b        2.6      23.4
1         1          1
e   _  ~            e    _    -    _    -
Total         160.0    30f)~~~.joa.  2.0-1/  303.5i    362.3
Total                                     ______              ______
Coastal
(Discharged and Loaded)
?etroleux. Products    17. A.    N.A.       N.A.     N, A.    170 .0
General Cargo          N.A.      N.A.       N.A.      N.A.      30.0 /
Total                  N.A.                 N.AA.     N.hk b   200.Q
GQ4L\D TOTAL           N.A.      l.A.       N.A.      K.A.   1,092.0
q/ Approximate only.



NFW PORT OF GUAYAQUIL                 Appendix G
ESTIYTED COST OF PUERTO 1UEVO PROJECT
Total Cost
Local Currency     Foreign Currency               (1,000
Cost                  Cost           (1,000   U.S.3
Item                       (1,000 Sucres)  (1,000 U.S Tn  Equiv.)  Sucres)  Equiv.)
(a) Estero Salado
Channel, including
Navigational Aids         11,h99              2,85             54,737    3,613
(b) Wharves, Cargo,
Sheds, etc.               67,842              4,944           142,744   9,h22
(c) Estero Salado-Guayas
Canal Including Lock      11,347              1,585            35,360    2,334
(d) Services betreen Guayaquil
and New W-Vhar-vcs inclucdng
Po.werline, Telephones, etc.
but excluding AccessRoadsa  636                 370             6,242       412
(e) Land Acquisition            1,000                -               1,000        66
(f) Port Equipment                -                1,000            15,150    1,000
(g) Interest During Construc-
tion                          _               2,247            3h,OL2    2,214
Total                      92,32h             13,000           2B9,275   19,094
a/ The cost of the access roads is estimated to be S/5,000,00Q approximately.
Construction is already in hand, a transsfer having been made for the
purpose from the Puerto Nuevo fund.



NLW PORT OF GUAYAQUIL
Forecast of Future Traffic
(1,000 Metric Tons)
item                             1295    1929   1960  12961    962   J963   1964   l         1966   1967
Imports
(a)  General cargo imports       180    180    185    195    200    205    205    205    210    210
(b)  Petroleum products             7      7       7      7       7      8       8      8       8       8
(c)  Wheat                         55      5_    55 .     S      5S     55      55     55      5S      US
Total                 242    242    247_- 2 5?7   262    268    268    268    273    273
Exports
(a)  Rice                          27     28      29     30      31     32      33     34      35      36
(b)  Bananas                      410    420    430    440    450    460    460    46o    460    460
(c)  Coffee                         9     10      10     11      11     12      12     12      12      12
(d)  Cacao                         29     30      31     32      33     34      34     35      35     36
(e)  Molasses                      25     25      26     27      30     30      30      30     30      30
(f)  Sugar                         12     12      14     16      20     20      20      20     20      20
(g)  Miscellaneous                 20     21      22     21      24     26      27      28     29    n3
Total                 532    546    562    579   599    614    616    619    621    624
Coatise (Loaded and Discharged)
(a)  Petroleum products           300    315    330    345    360    375    375    375    375    375
(b)   General cargo                30 -nL 31     3 _L_   L33- .3k4   - 35.  35  __-35  --
Tot_al               2330    346    362    378    394    410    410    410    410    410
Grand Total                    4,104 1,134  1,171  1,214 1,255  1,292 1.294  1,292  1,304  1,307



lw PORT OF GU ^AA                                                                       Aiendix I
Freat of Probable Distribution of Traffic
(1000 Metric Ton.)
(1) Based on Actual Trafflc R.ecorded in 19S7                                                 (2)  Based on Traffic Forecast for 1961
Tonnge which
Tonnage Which    would hae       Tannage which                       Tonnage which Tonnage which
would have       been handled    would have         Total            will be        will be handled   Tonnage which
been handled     in Stro  in    been handled       tonnage           handled in      in stream in      will be handled      Total
lIte                            in River   ag  &Ltuero Sala", at ney wharves         le              River Guwas  iEstero Salado       at new wharves    tonnae
Isorte
(a) General cargo imports                              -                 178          178                  _                                 205             205
(t)  Petroleum products               130              -                 _            130                 8                                  -                 8
(a)   heat                             38                                 18           56                27                                   18              55
Total          168                          -                 196            44                                                                  - 221  268
1xmorts
(a) Rice                              -                  9                29           38                 -                 8                 24              32
(b) Bana_as                                            286               123          409                                 322                138             460
(a)  Coffee                           -                -                   9            9                 -                                   12              12
(d) Cacao                             -                                   26           26                 -               -                   34              34
(e) Molasses                           18              _                 -             18                30               -                  -                30
)   ugar                              -                -                  10           10                 -               _                   20              20
(g) Miscllaous                        -                  3                16           19                 -               -                   26              26
18              298              213           529              ,0                30                  2S4.  614
C-oas tw"
(Loaded and Discharged)
(a) Fetroleum products                170              -                 -            170               375               -                  -               375
(b) general cargo                      30            _ _                                                                                     - _              3
total  --9010                                     21- 2        0      0           410
ROMgl Tota                                                            -m -. 298 -.                                     _ _ 48                 477          1.29



APPENDIX J
Pro forma Financial Position, Ne-. Port of Guayaquil Authority
as of Jan. 1, 1959
(S/ COO)
Current Assets
Cash on hand and in bankls                           20.C00
Time deposits                                          5.-C0C
Ilarketable securities                                 1*100
I. Total            27.000
Current Liabilities
Assumed short-term debt of
Eapresa de 1luelles                                    5.000
Accrued interest on proposed
Bank loan                                                100
II. Total              5.100
Fixed Aissets
Operating equipment taken over
from Empresa de Aluelles                             13.000a)
Operating equipment taken over
from Highways Committee                                  806b)
Progress payments on New Port
project during 1958                                    7.000c)
III. Net fixed         20.800
assets
Rapayable Claims cn1iJdhways
Cornmittee
Loan for hightTay construction                       20.000
Other loans                                           3.2O0
IV. Total             23.200
FTet working- capital (I minus II)                      21.900
NTet fixed assets    (III)                              20.800
Repayable claims    (TV)                                23.200
Net properties                                       65.900
Drawings on proposed Bank loan                        4.500
Equity equivalent                                    61.o00
(a)  Depreciated value, as estimated by Bank staff, of equipment
which originally cost SI 25.1 million.
(b)  Depreciated value, as estimated by -Highwrays Committee, of
equipment wihich originally cost S/ 1.6 million.
(c)  Includes engineering fees, cost of land, and interest during
construction on proposed Bank loan.



Appendix K
NEW PORT OF GUAYAQUIL AUTHORITY
Forecast of Income and Earnings (Selected Years)
(S/ 000)
1963       1967       1973
Revenues
Dues on shipping                                   5,070      5,350       5,650
Cargo handling charges                            27.,190    29,520      32,000
Cargo storage charges                              7,140      7,540       8,190
Total operating revenues                39,400      42,410     45,840 d/
Expenses
Ordinary operating expenditure                    19,845     22,515      23,795
Allowance for maintenance dredging                 1,500      1,500      1,500
Allowance for depreciation                         7,395      7,395       7,395
Total operating expenses                28,740      31,410     32,690
Net operating revenue a/                          10,660     11,000      13,150
Interest on Bank loan h/                          10,610      9,270       6,630
Net earnings                                          50      1,730       6,520
(Times interest earned)                                l.Ox       l.lx        2.Ox
Net operating revenue, plus depreciation          18,055     18,395      20,545
Interest and amortization of Bank loan            16,140     16,1140    16,1140
(Cover of debt service)                                l.lx       1.Lx        1.3x
Net fixed assets c/                              295,900    262,800    241,200
Net operating revenue                             10,660     11,000      13,150
(Return on investment)                                 3.6%       4.2%        5.5%
a/  Operating revenues as shown above less operatLng expenses shown above.
b/  Interest due, in each selected year, assumes 'l-;13 million loan at 54/2%
repayable in 41 equal semi-annual instalments commencing 1963.
Average annual mnterest on such loan would appro2dnmate S/5.4 million
equivalent.
c/ As calculable from pro forma balance sheets, q.v. average net fixed
assets over entire 20-year period would approximate S/250 million
equivalent.
d/ The increase in revenue as compared with 1967 reflects the greater
proportion of traffic being handled at the new wiharves.
Note
The revenues shoTn are calculated on the basis of tlhe consultantsI
tentative list of rates and the forecasts of traffic tonnage and
distribution given in Appendices H and I.



Appendix L
Pro Forma Financial Position, New Port of Guayaquil Authority
selected dates during repa ment period of proposed loan
(S/ 000, as of Jan. 1)
(e)       (e)
1963     1968      1973
Current Assets
Cash and equivalent                            29.500   30.700    23.200
Repayment from Highwaya Committee
due in next 12 months                         2.500      _         -
I.  Total                        32.000   30.700    23.200
Current Liabilities
Accrued int7erest, Bank loan,
past 6 months                                 5.400    4.500     3.500
Current and next payment due
Bank loan                                     5.400    7.100     9.300
II.  Total                        10.800   11.6o0    12.800
Fixed Assets
E-res-a de Nluelles and Highway
Com]ittee equipment _ at
acquisition value                          13.800    6.800       -
New Port including construction
equipment, and interest during
construction                               289.000  289.000   274.000
Renewals of plant and equipment                 -       35.00   918.500
Fixed assets at cost                 302.860  )29) 300d) 25500
Depreciation reserve                   6.900a  36.500-      1.300
III.  Net Fixed Assets            295.900  262.800   241.200
Repavable Claim on Highway Committee
Outstanding,, pecified date                    12.500     -         -
Due within 12 months                            2.500
IV. Repayable Claim               10.000      -         -
Net working capital (I-II)                       21.200   19.100    10.400
Net fixed assets (III)                          295.900  262.800   241.200
Repayable claim (IV)                             10.000     -         -
Renewals Fund b)                                   -      16.500    27.300
Net Properties                                  37J15  295.400   27b.900
Outstanding Bank loan c)                     19.600  M.660   113,200
Equity equivalent                             135.500  138.600   160.700
Original investment                           135.500   135.500   1
Earned surplus                                   -       3.100    25.200
(a) Represents 50% of acquisitiosv wlue of equipment taken over from &Vpresa
de Nuelles and Highway Comrattee *& 1958*.59,
(b) Assumed equal to 50% of e'rcess et wumulative depreciation charges over
cumulative renewals ewxpnd±ttui4
(c) Excludes current and next repaym.ut dtscounte4 above as current liability.
id)  Assuming 40-year average servici Ufi for total facilities in service
as of Jan, 1, 1963.
(et  Does not inoelude any alldwanes fao possible receipts arising from the
continued assignment of custons duties.



Appendix M
SOURCE AND APPLICATION OF CAPITAL FUNDS
DURING REPAYMENT PERIOD OF PROP]SED LOAN
(S/ coo)
5  Years,    5  Years     10 Years
1963-2.1C67    1968-1972    1963-1972
Sources
Net earnings after interest         4,485        20,620       25,105
Depreciation charges               36,975        36,975       73,950
Repayments by Highways Committee   12,500          -          12,500
Reduction of net working capital                  8,700        8,700
(a)          (a)          (a)
Total                   53,960       66,295       120,255
Application
Reparment of Bank loan             33,560 oo,h95              74,055
Renewals of fixed assets            3,',00       1g,900       18,O60
Orowth of Renewlals Fundtb)        16,5'00       10,800       27,300
Increase of net working capital       4C)              (         4C)
(o)    ~     (G)          ( )
Total                   53,'36o      66,295       120,255
Net working capital
Start of period                 18,700        19,100       18,700
and of period                   19,100        10,400       10,00
Renewals ldcl
Start of period                  -           16,500        -
End of period                   16,500        27,300       27,300
(a) Excludes assigned customs duties which under the Decree Law could
continue to be paid to the Authority. (These would amount to
appro.aately S/ 8.5 million per year).
(b) Assumed equal to 50, of excess of cumulative depreciation charges
over cumulative renewals expenditure.
(c) Does not allow for surplus receipts which might be returnable to the
Governxaent in the event of the continued assignment of customs
duties; the Government is entitled to 50% of surplus receipts as
defined in the Decree Law.
(d) Excludes S/ 2.5 million due from Highways Coimmiittee during 1963 shon
as current assets in pro forma balance sheet, but as source of
funds in this table.



MAP I
Esmeraldos                                              0(
N XA
Nj~
Beh                            
%   \   7=               )     /     % 1i°                                /   $ ~~~~~~~~~~~~~~~~~COLOMBIA
Gu,uqi                 4g                                                                 E ECUADOR
Pto. Bolt   /  /              PORT OF GUAYAQ~~~~~~~~~0  GUYAUIL
: /              TRIBUTARY AREAS
PO RTVER, LOATND N R AND
J   j             \                                   ~~~~~~~~~~~~~~~~~~TRIBUTARY AREA SERVED BY ROAD,
fonbe                                    U-AND RAILWAY
A                                         P7  E RROADS
P R o._ Bliv                                    PO        RAILWAYS
4~~~~~~~
APRIL 1958                                                                                         IBRO-462R



A P 2
GUAYAQUIL          DURAN
ECUADOR
PORT OF GUAYAQUIL
ESTERO SALADO
AND GUAYAS RIVER
0      5      10    IS    20    25KM                                WHAR
N
ENTRA NCE ::t : PUNA i
CHCANNELHANNEL
C-RR                            P       UC  N   A 
CHANNEL                                                                          BR-43R
.APRIL 1958                                                                               IBRD-463R1



MAP 3
0  I  2  3  4  5KM
I        I~~~~~~~~~~~~~~GAI
;'1t;S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ f  Lt,  A NI
0~~~~~~~~~~~~~~~07
APRIL 958                                          IB6tort A
\,   <-=>  ,'ri </f@<   /    X \~~~ccess Canal 
t 9<\\<,>New Wharves ,            /
)  <    >    Fo~~~~0 AnchorageXECAO
l    >    oe  t   /     ~~~~PORT OF GUAYAQUIL
) ffi + 2' ~~PROPOSED NEW WHARVES
h / 4 \ at ~~~~~~AND APPROACHES
APRIL 1958                                          IBRD-464



MAP 4
0~~~~
Propose\d"'
Dredged \ "
Connecting X
Chonnel ; N> 
\ m V(               wte<    >~~~~~   A
V   0  100   200   300   400 METERS
7'~~~~~-
/     ~ECUA DOR
3                  /    PORT OF GUAYAQUIL
PROPOSED NEW WHARVES
APRIL 1958                                       IBRD-465R