The Islamic Republic of Mauritania has undergone a period of political instability with the overthrow of elected governments in 2005 and 2008. The presidential elections of July 18, 2009 facilitated the World Bank’s re-engagement with the government. These recent developments underline challenges, as well as opportunities for the county’s future. Following the discovery of oil, Mauritania became an oil producing country in early 2006. Although the oil actual reserves were not as large as originally expected, the production of about 100 thousand of high quality crude barrels a day together with a more stable political situation, imply that Mauritania’s medium growth perspectives have improved considerably.
Maritime infrastructure
However, Mauritania is still hampered by a lack of basic infrastructure particularly when it comes to maritime transport. Although the country has two ports, namely the Port of Nouakchott mainly aimed at commercial traffic and the Port of Nouadhibou, more specialised in fishing and mining exports, they do face real issues with regards to their capacity and productivity. The port of Nouakchott, also known as Port Autonome de Nouakchott dit Port de l’Amitié (PANPA), was built in the 1980s with Chinese funding, and the current operational structure was set up by a governmental decree in 1987. There are two World Bank projects in Mauritania directly supporting the project: the Urban Development Program which financed a multi-modal study of the sector in 2006 and a Nouakchott flooding risks analysis in 2004; and the Transport Sector Institutional Development and Technical Assistance Project (TSIDTAP), more specifically aimed at designing necessary reforms for highly ineffective institutions, which became effective December 29, 2009. These two projects paved the way for the definition of a project concept for PANPA, based on the issues discussed above. Moreover, the World Bank is also financing, under the Africa Catalytic Growth Fund (ACGF), an important section of Nouakchott-Rosso (between Bombri and Rosso) to complement the European Union (EU) financing.
Constraints to economic growth
Mauritania’s transport sector has been plagued by numerous institutional issues and deteriorating infrastructure, all of which combined, are impeding competitive and efficient transport services. There is a general consensus that poor quality, unreliable and costly transport have constrained economic growth, hampered delivery of social services, and slowed national integration efforts. The formulation of a holistic and coherent transport sector strategy has just started, based on already existing sub-sector strategies (land transport, maritime, and civil aviation); is yet to be approved. The World Bank-financed “National Transport Sector (Multimodal) Strategy Study” and the European Union (EU) funded “Road Management and Investment Program Study” have identified numerous structural problems: institutional (lack of capacity, weak institutions and inadequate institutional arrangements) and physical (deteriorating infrastructures due to insufficient maintenance). Maritime transport and port management functions are divided up among two ministries (Ministry of Equipment and Transport, and Ministry of Maritime Economy and Fishery), resulting in a lack of coordination for the sub-sector planning and management.
Traffic growth
In 1983, traffic in Nouakchott was equal to 304,000 tonnes, and the design was supposed to accommodate up to 900,000 tonnes. However, the projected traffic growth was largely underestimated, since PANPA reached traffic of 2.77 million tonnes in 2010 (including traffic linked to oil, which was not taken into account before). Over the last years, traffic at PANPA followed an average growth of eight percent a year. A study carried out in 2007 by the Chinese company SC TPC, funded by China concluded that, under a high growth scenario, PANPA may have to handle 4 million tonnes in 2015 and 8 million tonnes in 2025. It is worth mentioning that this study projected total port traffic of 2.6 million tonnes in 2010, while the total port traffic in 2010 was actually 2.77 million tonnes. As a result of the initial port design (three berths on a single pier), ships usually have to wait for a long time before unloading. This waiting time has been estimated to be more than half the time spent on operations, which is extremely high compared to other ports in the area and leads to demurrage fees imposed by shipping lines. The extension of PANPA’s capacity is therefore already overdue.
Infrastructure constraints
Container traffic growth over the last fifteen years has been particularly strong which has meant that the share of overall traffic moving by container has gone from 21% in 1995 to 38% in 2010. Furthermore, the number of container handled by PANPA has increased from 30,000 TEU in 2001 to 83,745 TEU in 2010. PANPA’s infrastructure was not designed to efficiently handle containers. Its two containers docks are located on a pier, over 1.5km from the container storage area, leading to highly inefficient container handling. Modern container terminal design imposes an integrated concept where storage areas are located just behind unloading areas. Furthermore, this arrangement does not allow for segregated management of the various kinds of traffic handled by PANPA (bulk including cereals for example) and there is no petroleum products terminal, which results in the city of Nouakchott being supplied through cabotage traffic from Nouhadibou at an estimated extra annual transport cost of USD8 million. Since the opening of PANPA, no port infrastructure development plan has been carried out. Finally, current port draft is only 9m which not adequate for modern ships, be it post-Panama container ships, oil tankers or bulk carriers which usually require a draft of 12m.
Operational inefficiencies and high costs
Port charges are higher than anywhere else in the area (more than twice that of Dakar, both in terms of cost per ship, as well as, cost per container delivered in Nouakchott). This combination of high costs and congestion contribute to PANPA’s lack of competitiveness and eventually, it has been estimated that Dakar captures annually 25% of PANPA traffic. Part of this high cost is directly linked to PANPA’s lack of appropriate infrastructure and equipment to deal with containers, as it has been estimated that handling from the ships to the container stacking area accounts for 42 to 49% of total container port handling cost.
Long term infrastructure development plans
China has always been the main partner of GOM for the development of the Port of Nouakchott. When it became obvious that the capacities of PANPA were not sufficient, China launched a study, which also confirmed the needs of PANPA in terms of capacity extension, as well as the need of a container terminal. This resulted in offering four possible scenarios for its expansion. Two of them were abandoned since they were obviously not offering long-term solutions, so only two scenarios remained: Scenario 1 (a container terminal on new quays along the shore) and Scenario 4 (a container terminal on new quays perpendicular to the south shore of the current pier). China has offered to help the Mauritanian Government to implement one of these scenarios, leaving the other one as a possibility of further extension in the future. The project aims to develop the transport sector and its economic management, which requires improving the quality of basic economic infrastructure. The operation itself was mentioned in the CAS but not explicitly in its results matrix, as the possibility of World Bank resources was not yet secured at that time. However, the CAS strongly suggested the use of World Bank enclave funding to accelerate Mauritania’s transition towards a middle-income country status. The new project’s primary development objective is to ensure that PANPA meets its long-term traffic growth in an efficient and effective manner, while effectively mitigating the n
egative environmental impacts generated by its activities and existing and planned infrastructure. In order to deal with the issues mentioned above, the Port of Nouakchott Development Program would be based on the following strategies: to build a container terminal parallel to the shore through a Public Private Partnership (PPP) financially supported by the World Bank, the Government of Mauritania (GOM) and the private sector; and to build new docks perpendicular to the shore through Chinese intervention, more specifically aimed at oil, bulk and general cargo traffic. This would be complemented by environmental measures aimed at mitigating the consequences of both the initial port infrastructure and their extensions. China is funding the construction of new docks, while the World Bank is supporting the government establishment of a PPP scheme for a new container terminal, under a World Bank enclave project while funding activities in support of the environmental action plan. The new World Bank project will have three components, for which several financial instruments available from the World Bank Group (WBG) might be used. A World Bank enclave Credit guaranteed by GOM will constitute the core of WBG support to PANPA, however. The estimated project cost is about USD110 million. The project comprises three main components; firstly, the mobilisation of private funding and securing private sector involvement in the container terminal management; secondly, supporting the optimised investment program for the long term development of PANPA; thirdly, mitigating of negative environmental impacts of existing and planned port infrastructure.