Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
１．Name of the ProjectCountry：Kingdom of Cambodia
Project：Sihanoukville Port Multipurpose Terminal Development Project
Loan Agreement：August 21, 2009
Loan Amount：7,176 million Yen
Borrower：The Royal Government of Cambodia
２．Background and Necessity of the Project(1) Current State and Issues of the Port Sector in Cambodia
Cambodia has two major international ports, Sihanoukville Port facing the Gulf ofThailand and Phnom Penh Port located at the mouth of the Mekong River in Phnom
Penh. Due to the limited capacity of Phnom Penh Port as a river port, most cargos
carried by large vessels and container ships are handled at Sihanoukville port, theonly deep sea port in Cambodia. Supported by the steady economic growth ofCambodia, the amount of containerized cargo handled at Sihanoukville Port has been
growing at an annual rate of approximately 10%. Japan has provided continuous
assistances to enhance the cargo handling capacity of Sihanoukville Port through theinfrastructure development and the operation improvement since the Port has playeda key role in the development of Sihanoukville as a coastal industrial area and thedevelopment of Cambodia.
Meanwhile, a present bulk and general cargo terminal of Sihanoukville Port can notcope with the new demand for the export of wood chips that several companies are
now preparing to start the production and increasing demand for bulk and generalcargos such as coals, food, etc. lead by the economic growth of Cambodia.
Furthermore, oil and gas reserves were recently located near Sihanoukville Port andoil companies are currently exploring these reserves. In order to support the full-scale
production of oil and gas, construction of an oil supply base at Sihanoukville Port isurgently required. Therefore, the construction of a new multipurpose terminal atSihanoukville Port is essential.
(2) Development Policies for the Port Sector in Cambodia and the Priority of theProjectIn the National Strategic Development Plan 2006-2010 (NSDP) established in May
2006, the Royal Government of Cambodia (RGC) stated that trade promotion,
distribution improvement and market integration are of significant importance for theeconomic growth and the poverty reduction in Cambodia, so that RGC would focus on
the infrastructure development and improvement which support trade, distribution andbusiness activities. In addition, RGC also recognized that the development of oil andgas reserves would bring vast benefits to the economy of Cambodia and RGC statedto aim at developing the adequate system to utilize such benefits effectively. In theTransport Sector Strategy Study (2002), a master plan established by the Ministry ofPublic Works and Transport with support from ADB, securing competitive markets, athrifty transport fee structure, and an investment criteria for transport sector are set as
priority areas. Master Planning and Feasibility Study of the Sihanoukville Port and The
Study on Master Plan for Maritime and Port Sector in Cambodia, both supported byJICA, pointed out the necessity of the construction of Sihanoukville Port Multipurpose
Terminal.
(3) Japan and JICA’s Policy and Operations in the Transport Sector
Japan’s Country Assistance Program for Cambodia raises the port sector as one of
the important social and economic infrastructure and this project is consistent with theProgram which aims to facilitate the internationalization and the economic growth ofCambodia. In response to the Program, JICA set the realization of sustainable growthand stable society as a priority area for JICA’s cooperation and will continue to support
the economic infrastructure development to strengthen the basis for economic growth.
Assistance for the port sector is set in Program for Improving Main Economic
Infrastructure and this project will be executed as a part of the program.
Japan has provided continuous assistances to Sihanoukville Port through variousschemes. The Port Master Plan was established in the Master Planning andFeasibility Study of the Sihanoukville Port (1997). Along with the master plan, theconstruction of container terminal was supported by Japanese ODA loan for
Sihanoukville Port Urgent Rehabilitation Project (1999) and Sihanoukville Port Urgent
Expansion Project (2004), the improvement of container terminal operation wassupported by the technical cooperation project, The Project for Strengthening Port
Operation and Management (2007-2009), and the port security facilities weredeveloped with grant aid for the project for the Improvement of Security Facilities andEquipment in main International Ports (2006).
(4) Other Donors’ Activity
There is no direct assistance for Sihanoukville Port from other donors. The railway
between Phnom Penh and Sihanoukville is planned to be developed by the Railway
Rehabilitation Project supported by Asian Development Bank.
(5) Necessity of the ProjectThis Project contributes to the improvement of the cargo handling capacity ofSihanoukville Port and the industrial development in Cambodia through theconstruction of multipurpose terminal, and is consistent with Japan and JICA’s priority
areas. For these reasons, JICA’s support for this project is highly necessary andrelevant.
３．Project Description(1) Project Objective
The Objective of the Project is to improve the capacity of Sihanoukville port, the onlyinternational deep sea port in Cambodia, by constructing multipurpose terminal
including bulk terminal and oil supply base and developing infrastructure related to theterminal at the port, thereby contributing to industrial development and also economic
growth in Cambodia.
(2) Project Site/Target Area
Sihanoukville, Cambodia(3) Project Component(s)1) Construction of multipurpose terminal
2) Dredging
3) Procurement of cargo handling equipment (tug boat)4) Consulting Services (Detailed Design (D/D), tender assistance and constructionsupervision)(4) Estimated Project Cost (Loan Amount)
8,507 million Yen（Loan Amount：7,176million Yen）
(5) Schedule
Scheduled from August 2009 to July 2014 (60 months in total)
Project completion is defined as the completion of the all civil works.
(6) Project Implementation Structure1) Borrower：The Royal Government of Cambodia
2) Guarantor：None
3) Executing Agency：Port Authority of Sihanoukville4) Operation and Maintenance System：
The bulk terminal will be operated by the Port Authority of Sihanoukville, and theoil supply base will be jointly operated by the Port Authority of Sihanoukville andprivate company.
(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration① Category：A② Reason for Categorization：This project is categorized into Category A since it
falls into the port sector project which is likely to have significant adverse

impact on the environment under the “Japan Bank for International
Cooperation Guidelines for Confirmation of Environmental and Social
Considerations” (established in April 2002)③ Environmental Permit ： The Environmental Impact Assessment Report
regarding this project was approved on November 28, 2008 by the Ministry ofEnvironment in Cambodia.
④ Anti-Pollution Measures：Dredged soil is to be disposed of at the existing
offshore disposal station which still has sufficient capacity, and sewage waterand wastes produced from the Port and coal storage are to be processed incompliance with the domestic criteria. Therefore, there are no negative impactspredicted.
⑤ Natural Environment：The target area of the Project is not located in an area
where it can be easily effected, nor in the surrounding area thereof, such as innational parks, etc. Therefore, it is likely to have minimum impact the naturalenvironment.
⑥ Social Environment：The target area of the Project is inside of the existing port,
therefore, land acquisition and resident transfer are not required.
⑦ Other / Monitoring：The executing agency shall monitor the air and waterqualities.
2) Promotion of Poverty Reduction：None
3) Promotion of Social Development (e.g. Gender Perspective 、 Measure forInfectious Diseases Including HIV/AIDS、 Participatory Development、Consideration
for the Handicapped etc.)：An executing agency places an obligation on construction
companies to take measures against HIV/AIDS for construction workers throughtheir contracts.
(8) Collaboration with Other Donors：None(9) Other Important Issues：None
4. Targeted Outcomes(1) Performance Indicators (Operation and Effect Indicator)
Baseline

Target (2016)（Actual Value in 2007）【Expected value 2 years
after project completion】

Volume of Bulk/GeneralCargo (t)193,572

1,122,000

Total Gross Tonnage (GT)

470,641

982,000

Berth Occupation Ratio (%)

5654

Indicator

Maximum Dead Weight
Tonnage (DWT)

16,57950,000Note: Volume of Bulk/General Cargo is the total amount of general and bulk cargos
handled at Sihanoukville Port.
(2) Internal Rate of Return
Based on the conditions indicated below, the Economic Internal Rate of Return(EIRR) of the Project is 16.9%, and the Financial Internal Rate of Return (FIRR) is7.8%.
【EIRR】
Cost：Project cost (excluding tax and duties), Operation and Maintenance costs
Benefit：Reduction of transportation cost
Project Life：30 years【FIRR】
Cost：Project cost, Operation and Maintenance costs
Benefit：Cargo handling fees, Oil Supply Base rental fees, etc.
Project Life：30 years
5. External Factors and Risk Control
None
6. Lessons Learned from Past Projects
Ex-post evaluation for similar Japanese ODA loan projects in the past has shown thenecessity of active assistances for conducting surveys and developing plans that
contribute to the improvement of operation efficiency including the terminal operationstructure. Therefore, in this project, JICA will consider to support an executing agency
through the dispatch of experts, if necessary.
Furthermore, it is suggested that JICA should consider (1) the continuous effort tocollect information on plans and statuses of other closely related projects, and (2)prompt and flexible changes of the project plan for the achievement of project
objectives and effects utilizing the contingencies, if necessary and valid. In regard to(1), JICA will continuously collect information on the Railway Rehabilitation Project
supported by ADB, and to (2), JICA will check the status of project implementation
with the Project Status Report submitted by an executing agency, on-site visits and at
the time of other various opportunities, and will take the necessary measures throughconsultation with an executing agency.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Volume of Bulk/General Cargo (t)2) Total Gross Tonnage (GT)3) Berth Occupation Ratio (%)4) Maximum Dead Weight Tonnage (DWT)
5) EIRR (%) and FIRR (%)(2) Timing
2 years after the completion of the Project.