Development Industrial Bank Project (03) - Public Documents

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Folder Title: Development Industrial Bank Project (03) - Egypt, Arab Republic of - Loan 1533 - P005010 - Subproject A-16 - Shalakani Tours Company

Folder ID: 30241357

Project ID: P005010

Dates: 12/10/1979 – 2/2/1981

Fonds: Records of the Middle East and North Africa Regional Vice Presidency

ISAD Reference Code: WB IBRD/IDA MNA

Digitized: 11/27/2017

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- - -

DECLASSIFIED WITH H.h~, RICTIONS

WBG Archives

~ ·,. ,, , , .,1 \III I 11 Ill II \II I I Ill II \\Ill 11111 Ill II Ill II Ill I Ill I

Ari;Hl~i R19&9-01!1 othe~~:2:,~:,57 1ioeae "' \.,. . t 03) Egypt Arab Republic of . Loan 1533 •

Development lndustriatl BAa~~ ~~~:~a~ani Tours C~mpany P00501 o • Subpro1ec s •

I I I I I I I I I I I I I I I I I I I ,,

I 1. I I I I I I I I I I I I I I I I I I

I I I I I I I I I I I I I I I I I I I .1

Name

Address

Capital

Legal Form

Activity

Loan lleguired

Purpose of Loan

Exchange Rate

Interest Rate

Period

-1-

Sfu.LAKANI TOUHS UO.

23, Orabi St., Cairo, ~gypt

L. E. 1,000,000.--

Ste en Commendite Simple

All kinds of touristic activities, particularly

floating as well as stationary hotels, planning

touristic trips in Egypt as well as abroad.

A) Foreign currency loan:

DM 6,418,238.--, equivalent to

US $ 3,379,498.--, equivalent to

L.E. 2,355,510.-- (including 10% margin

for escalation of prices)

B) Local currency loan:

L. b: . 240,000.--

A) Foreign currenQY loan:

B)

1

1

Importing ma chinery and equipment, cabins,

galley equipment, air-conditioning equi p-

ment etc. to complete a touristic s hip.

Loca l currency loan:

To finance part of the local currency - ~ ""o',.j.. .... ~ ' expenses.

DM = L.E. 0.376

us $ = L.E. o.697

----------- as on 25/4/1979

12% yearly, for ~ 1~

7 years, including 1 year grace period, then

the loans will be repaid in six equal

annual installments.

I I I I I I I I I I I I I I I I I I I 11

Securities

Project No.

2

1) ~ortgage of the existing steel hull, estimated

by the bank's expert at a value of L.E. 498,000 .--.

2) Cession of the shipping documents until the arrival

of the equipment, which then will be mortgaged

to the bank.

3) Mortgage of two buildings belonging to the part-

ners, estimated by the bank's expert at a value

of L.E. 511,000.--.

4) Full insurance of the completed ves s el in favour

of the bank.

5) 10% cash deposit out of the foreign currency

loan.

I I I I I I I I I I I I I I I I I I I I

3

INTRODUCTIO TO lIL~ CrtUI::3IhG

1) Tourism in Egypt had practically come to a standstill after the

war of 1967, but in the early seventies, and particularly after

the October war of 1973, and the ensuing Open Door Policy, which

started bringing many foreign businessmen to Egypt, tourism was

expanded and promoted by the construction of hotels.

2) Although the number of tourists, visiting Egypt, has greatly in

creased over the past few years, it must be noted that the actual

number of tourist nights has not yet reached the amount of tourist

nights of the peak year of 1976. This is due to the fact that

previously the visitors to Egypt were predominantly Arabs, staying

long periods at a time, whereas the ~uropean, American or other

tourist spends only a comparatively short time visiting Egypt.

It is the latter group that has increased. -----3) Nile cruising has been focused on only after 1973. Now there are

about lJ passenger ships, most of which cruise between Luxor and

Aswan . Assuming an occupancy rate of 100%, these would provide

for 160,000 touris t nights.

4) According to studies prepared by EGOTH++, only 3 ships are operating

all year round (ISIS & O~IRI~ with 52 cabins each and RAED with

25 cabins), with another 3 ships expected to go into operation

in the season 1979/80 (11'UT & ATOU}i with 90 cabins each and TUT

ANKH Al.IOUN with 55 cabins), these 6 ships being centrally air

conditioned and adequate for service during winter and summer.

The other ships, according to this study, are quite outdated,

being in service for more than 50 years, and operate only during

the winter season (September through May).


- ... .

4

5) Due to the increasing demand for ile cruises the duration

of such trips have been reduced from 8 to 5 days, so as to give

more tourists a chance to enjoy this kind of trip.

6) Furthermore it may be noted that ISIS and OSIRIS only accept

special group trips, being fully booked for the winter season.

7) As a consequence of the foregoing, several companies have placed

applications for the construction of such tourist vessels.

8) According to the marketing studies, the total amount of available

tourist nights for Nile cruising ships will be 706,000/year by

1981. This figure represents only 11% of total tourist nights in

Egypt in 1978, (providing that all planned Nile cruisers, including

the present project, will materialize and operate with 100%

occupancy).

I I I I I I I I I I I I I I I I I I I 11

5

Following are some statistics prepared \y the rdnistry of

Tourism and Civil Aviation as well as by E GOTH

I) 1U ~..BiH OF ~OURIST ' TH~IR AV~RAG~ P~ rlIOD OF J

8TaY AND lo. OF T U.r.U::iT Nl~HTS (in thousands)

1966 - 1977

Y~AR NO. 0 :11' TOUHIS '.rS AVBRAG~ P r;1UOD ~ 0. 0}' TvUrlIS ·r OP STAY

1966 579 16,9 9 783 1967 344 18,5 6 361 1968 318 13,4 4 376 1969 345 12,7 4 396 1970 358 12,8 4 574 1971 428 14,0 5 979 1972 541 12 ,2 6 614 1973 53 5 12,0 6 394 1974 668 9,8 6 505 1975 794 7,4 5 854 1976 983 6,9 6 796 1977 1 oo.~ 6, 3 6 339

1I) V .c,l<.n. li-.c, N UI...B..c;.t<. O.t 'l'0U1U::iT l I GHT.::> ACCv.rtl>I1~ -.

1'0 l: 1\.1..C Ul\JA TI.b;)

.N ATIOr ALITY 1973 1974 1975

Arabs 14,1 11,0 8,3 Western Countries 7,8 6,2 6,1 Eastern Countries 10,0 8,1 8,1

Others 9,9 6,7 5,9

12,0 9,3 7,4

l~IGHTS

I I I I· I I I I I I I I I I I I I I I I

III} :NUMB.c;rl Olt' l ILS

CAPACITI.t<.:S

NA!fu!: NO . OF B..t!.iDS

ISIS 124 OSIRIS 124 NEFERTARI 55 LOTUS 57 MEMPHIS 31 DELTA 50 TRITON 90 MEMNON 23 BARAKA 20 RAED 50 SULTANA ~2

TOTAL 665

IV) RATIO

D1:,SC1.I.PTIOY

Capacity (cabins) Availabl e touris t nights, at 100% oc c . double bert h Expected touri st nights Percent by bed

" "double cabins

Ratio of Cruising nights t o total tourist night s

6

CRUISBRS

IN 1977

.NO . OP PB

78 58 33 33 33 15 15 10 33 78

J~

1977

220

160

140.5 87.8%

90.0%

2.2%

\ 'ITH Tfu:IR .i; A iliS &

'l'RIPS DURATIOl~ Oi<' TRIP NO . 01'' TOURIST Y~AR DAYS/1~IGHTS IGHTS

{in thousands }

5 I 4 38.7 5 I 4 28.8 8 I 7 12.8 8 I 7 13.2 8 I 7 2.2

14 /lJ 9.8 14 /13 17.6 14 /13 4.2 8 I 7 4. 6 5 I 4 15.6 8 L 7 1.1

159.9

1978 1979 1980 1981

375 435 645 840

200 . 8 317 .6 475. 8 613.2

181 . 8 234 .5 321.5 391.1 90.5% 73.9% 68.3% 63 .8%

92.8% 75.7% 75.1% 65.4%

2.45% 3.7% ). 0% J. 0%


7

V) l'LANl~BD l~ILB CRUISir G SHlPj

COMPANY :NAiv~ OF 'HIP O. OF BiD.:5

EGOTH TUT & ATOUN )56 (2 vessels)

" 2 VESSELS (names undeci

ded) )56

MENA TOURS 200

" 200

4 VESS.h:LS (names undeci

ded) 60

120

SHALAKANI ~KHNaTO 120

" NBFBRTITI 120 TANTA I & CO Ail I.:3R 110 'l'RAl'H:i~GYPT B~TOI 110 l'uIDDL.C: .C:AST CARAV 44

" fuIDDL.C: .t:AS'l' e::: HA.BI TOURb (name undeci

ded) 16

(name undeci ded) 56

TOTAL C· PACITY 1 950 beds

~XP..c,CT.r.:D .liOUT.r.: STllliT U:P

1979

1980

1980

1980

1979

1980

1979

1979

1980

1980

1979

1978

1978

1978

N.B.

L / A

C I L I A C / L / A

L / A / L L / A / L C I L I A L / A I L / A I C I A I L I A I L I A I

L I A I

L I A I

C = Cairo

L = Luxor

A = Aswan

L L L L L

L

1

I

aC 'I\JaL DAT.i:;1

1979

1980

1980

1981

1980

1981

1979

1981

1980

1981

1979

1978

1978

197

I I I I I I I I I I I I I I I I I I I

8 •

VI) EXPECTED INCilliASE IN CABINS OVER THE NEXT 3 YEARS

1978 additional 77 double cabins

1979 " 275 " n

1980 n 348 " n

1981 ti 275 " n

Since some of these projects may not be realized, the following table

is based on 70% of the aforementioned projects:


1979 " 195 " n

1980 " 240 " " 1981 " 195 " "

CONCLUSION

It thus emerges that the rate of cabin increase is too low and

that the market can absorb more ships of adequate standard

THE PROJ'ECT

EKHNATON TOURS CO. applied for a loan to complete a tourist vessel,

the hull of which had been completed and launched. This ship was

constructed according to the regulations and under the supervision

of GERMANISCHER LLOYD, and a certificate was issued on 1/7/1977.

The ship is to have 70 cabins for a total of 130 passengers plus

accommodation for a crew of 66 persona.

MAIN DIMENSIONS

Length over all Width over all Height above keel Main draught No.of Passenger cabins Power Speed

66.00 m

11.00 m

10.75 m

1.50 m

70 2 x 460 HP 15 km/hr


9

The vessel consists of four Decks:

FIRST & SECOND DECK:

TaIRD & FOURTH DECK:

are for passenger and crew cabins.

Each passenger cabin is to have 2 beds,

an armchair, a table, telephone; stereo

music and a complete bathroom.

are partly for cabins, as well as for galley,

dining room, lounge, swimming pool, solarium,

bar and cafeteria.

The vessel i s to be centrally airconditioned throughout.

2) THE COMPANY

A commendite society was established on 1/11/1976, with a

fully paid capital of L.E. 500,000.-- and registered.

Address: 23, Orabi Street, Cairo, EGYPT.

The name of this company was changed from EKHNATON TOURS

to SHALAKANI TOURS, Hassan Abdel Fattah el Shalakani and

partners, and the capital was increased to L.E. 1,000,000.--.

The period of this company is three years, starting 1/11/76,

until 31/10/1979, to be extended.

10

• 3) OBJECT OF THE l'HOJECT

I I I I I I I 4)

I I I I I I I I 5)

I I I

lt is the object of this project to participate in the promotion

of tourism in Egypt, and to share in solving the crisis in the

lack of adequate hotel accommodation in all of Egypt, by constructing

floating hotel vessels to cruise on the Nile, as well as stationary

ones.

CRUISING LINE

The ship shall be cruising between Cairo and Aswan. One such cruise

shall last 14 days, while making the following stops:

Cairo - Beni Hassan - Abydos - Denderra - Luxor - Kom Ombo -

Edfu - Aswan or in reverse order.

THE C01'.tP ANY

The capital of L.E. 1,000,000.-- of S~I TOURS CO. is

shared by .the following partners:

Hassan Abdel :F1attah el Shalakani, managing partner L.E.

Abou Bakr Adel fattah el Shalakani, sleeping partner L.E.

Salwa Abdel Salam Shehata ' sleeping partner L.B.

Khalid Hassan el Shalakani, sleeping partner L.E.

Omar Hass an el Shalakani, sleeping partner L. E.

Hisham Hassan el Shalakani ' sleeping partner L. E.

Hanan Hassan el Shalakani, sleeping partner L. E.

Rasha Hassan el Shalakani, sleeping partner L.E.

360,000.--

160,000.--

80,000.--

80,000.--

80,000.--

80,000.--

80,000.--

80,000.--

L.E. 1,000,000.--

fuANAG~NT

The project will be run by the managing partner, Mr. Hassan Abdel

Fattah el Shalakani, who was graduated from the Faculty of Commerce

in 1959, Cairo University ( Business Administration Section). He is

also a partner in the NATIONAL ORGANIZATION FOR SHIPBUILDING AND

Et GI ~~RIG (N.O.S.E.), HALAKANI BH!PYARD, which has built several

I I I I I I I I I I ·1

I I I I I I I I I

11

similar projects, such as TRITON

Passenger Transport Vessels

Ships for the Archaeological Mission i n

Upper Egypt.

Mr. Shalakani visited several internationa l touristic establi shments,

such as Koeln - Duesseldorfer Co., West Germany and Wagons - Lits,

France, which gave him a great insight in this field.

He has, however, decided to entrust the management of the completed

cruising ship to an international hotel managemen t company (HOTEL

llhANAGEfuENT CORPO:liATION OF SCA1~DI1~AVIA), for a management fee of

5% of net income.

BASIS FOR CALCULATI NG I NC OfuE Al: D ~XP~Ntui;s

I ) At 1 00% occu:eancl r a t e :

Duration of one trip = 14 days

No. of tri ps per annum = 365 : 14 = 26 t rips

deducting 28 days fo r maint enence and r epai r = 26 - 2 = 24 t ri:es/annum

Cabins a nd Pa s s engers :

To t a l No . of passenger cabins = 70

Cabins to be double birth with some singles= 13°0 passengers

Yearly passengers = 24 trips x 130 passengers= )120 passengers/annum

No. of tourist nights/annum= 3120 x 14 = 43 680 tourist nights/annum I

II) I NCO~

Calculations are based on

a) Capacity and No of passengers/annum(= 3120) and tourist nights

per annum(• 43 680)

b) Comparing prices for bed and food/night/double cabin for

the following vessels:


12

1) TOUT & ATOUN (EGOTH) = 87.500 L.E.

2) ISIS & OSIRIS (HILTON) = 86.000 L.E. for the season 1978/1979

The Ministry of Tourism has increased prices by 12% for the

season of 1978/79

III) Estimated price for board and food/cabin on the SHALAKAtI

boat = 80.--- L.E.

per person = 40,--- L.E.

IV) Income per person/night consisting of

1) board 2) food

3) beverages

4) soft drinks

5) laundry

Total income per

=

=

=

= =

L.E. 40.--- x 70 % " 40.--- X JO%

L.E. 40.--- X 12 %

L. E. 40.--- X 5 %

L.E. 40.--- X 5 %

person/nigh

= =

=

=

=

=

V) Income of the vessel per year (43 680 tourist

1) board = 43 680 X L.E. 28.--- = 2) food = 43 680 X L.E. 12.--- = 3) beverages = 43 680 X L. E. 4.800 = 4) soft drinks = 4.J 080 X L.E. 2.--- = 5) laundry = 43 680 X L.~. 2.--- =

Total income per year =

L.E. 28.---L.E. 12.---

L.E. 40.---

L.E. 4.800

L. E. 2.---L.E. 2.---L. E. ~8.800

nights)

L. E. 1 ,223 , 040 .---L.E. 524,165.---L.E. 209,664.---L.E. 87,360.---L. E. 87,360.---

L.E. 2 11~1 1584.---


lJ •

COST

Ba0lS ~JR CALCULaTl1G COSTS

1) Cabin cleaning

2) Cost of food

J) Cost of beverages

4) Cost of soft drinks

5) Other costs

6) Salaries and wages

7) Fuel , oil & water

8) Publicity & advertise ment

9) Administration & insurance

L.E. 0.100/day/cabi n J8% of income for f ood 35% of income for beverages 35% of income for soft drinks 40% cf other income

L.E. 122,304.--/annum L.E. 18,250.--/annum

3% of cabin income

3% of cabin income

lO)Sightseeing : The salary of a tourist guide i s estima ted at L.E. 25 .--/day, i ncluding accommodation; i.e. L. E. 9,125 .--/annum, plus cost of visits to sights during each trip, amounting to about L. E.

350.-- every t wo weeks, i .e. L. E. 9,100. --/annum 11) Depr eciation :

a) Hull 5% of the cos t of t he hul l b) Furniture &

commodities 15% of their cost c J li,achinery & equip

ment 12) Nanagement lJ) ~aint enance & repair 14) Interest

1 ~· Cabin cleaning 2) Cost of food = J) Cost of beverages=

4) Cost of soft drinks =

5) Other costs = 6) Salaries and wages

= 7) Fuel, oil & water= 8) Publicity & adver-

tisement = 9) Admin. & insurance =

12 . 5% of their cos t

524 209

87 87

5% of total income 5% cabins income 12%/ annum

= 160 X 38% = 664 X 35% =

)60 X 35% = 360 X 40% =

= =

1 .223 040 X 3% = 1 223 040 X 3% =

L.E. L. E. L. E.

L. E. L. E.

L.~. L.E.

L.E.

L.E.

JOO.--199 180.--

73 382.--

JO 576.--

34 944.--

122 304.--18 250.--

J6 691.--36 691.--


15 •

VI) H.~~UilllilJ STA}11'1 AND C!UW FOH 'filli SHIP

The c ompany will recruit the required s taff for t he ship from the

TU I ST Al~D HOT.c.;L I1 ::i'l1I TV·r~ . Wherever i t de ems necessary, foreigners

sha ll be employed:

1 Mana6er 2 Tourist Guides

1 Maitre d'hotel 3 Waiters

1 Housekeeper 8 Asst. Waiters

1 Barman 8 Servants

2 Asst. Barmen 2 Laundry Valets

2 Barboys 2 Asst. 1:ec hanics

1 Accountant 1 Electrician

1 l'ie chanic 1 Piping r.:ec hanic

1 Grease r 3 Cooks

1 AC Tec hnician 4 Ki t c hen Boys

1 Chef 1 Ass t. Cap t ai n

3 Ass t. Chefs 1 Storekeeper

1 Cap t a in

The tot a l numbe r of cr ew and st f f wi l l be 66 persons . Their sal a ri e s

and s ocial benefits wi ll be L. E. 1 22 , 3 4. --.

I I I I I I I I I I I -, I I I I I I -, I

16

BCG.t O ~IC AhAJ...YSIS

It err1erges that:

Pi10DUCTI0l = TOT.AL n Cvh • .i..: = TO'l'AL .C.:X ~1 S.DS

without any profit or loss to the company,

as follows:

a) Income

b) Variable cost

Gross profit

Even point

VALU.w ADD~

Profit

c) Fixed cost

= 55.5%

Interes t of the bank (bor both loans)

Depreciation

Salaries & wages

Total

(in t housands) L. E. 2 1)1.6

L. E. 363.0

L. E. 1 501.6

L.E. 8)3.2

( i n thousands)

L. E. 668 . 3

L • .I:!, . 311 . 5

L. E. 411 . 0

L. E. 122.J

L. E. 1 213.1

In spite of all the previous assumptions taken into consideration,

we will assume , in order to be on the safe side, a maximum

occupancy rate of 60% on the boat, during the whole period

of the loan.

•

I I I I I I I I. I I I I I I I I I I I I

17

COST OF TH~ PROJ~CT

D..c.,JCnIP'r I 01 J:1'0.r<..!!;I ' 1 CUrlltbNCY TOT.-lL (in L.E. eguiv) in L. r

null 498 ,000.-- 498,000.--Machinery & equipment to be financed by DIB 2,355,510.-- 2, 355,510.--Cost of erection,customs transport,insurance, foreign experts, local labour 595,000.--Hiring winches & e quipment 30 , 000. --Decoration 75,000.--Miscellaneous 82,725.--Trials 5,000.--Adve r tis i ng & opening

expenses 35,000. --Cash deposit 240 ,000.--

595 , 000 .--

30,000 .--75, 000.--82,725. --

5, 000.--

35, 000 .-240 ,000 .

1,540,725.-- 2 ,J 55 ,510 .-- 3 ,896 , 2)5 . -

The cos t of the ship ha s been calculated by the bank on t he

fo l lowinf; basis :

a) Cost of t he hull

b) Local cost fo r completing the project, including opening expenses

c) Cash deposit

d) The owners have decided upon the most suitable of offers for machinery & equipment to be imported, amounting to

TOTAL

:u .1. 498,0 o. --

L. t . 802 ,725 .--

1 .E. 240 ,000 .--

L. E. 2 ,355,510. -

L. E. 3,896,235.--


18

From the a bove table it emerges that the tot a l cost of t he pro j ect

is L.E. 3,896,235.--, out of which L. ~ . 2,355, 510.-- is in for eign

currency, and the rema inder of L. E. 1,540,725.-- i s in loca l

currency, which the company will finance as follo ws:

A) Long term foreign currency loan:

DM 6,418,283.-- =US $ 3,379,498.-- = L.E. 2,355,510 .-

for buying machinery and equipment required.


amounting to L. E. 240,000.--, to finance part of the local

currency expenses.

C) The remaini ng sum of L. B. 1 ,300 ,7 25 .-- will be financed by the

company' s own sour ce s , s i nce t he owners of u -AL.Al\.A.LI OUtlu ar

also the owner s of N. O. S. E. (~ ational Organi za t ion f or

Shi pbuilding and Engineering) , ith an annual tur no·rer o:

L. E. 1 , 000, 00

1 . 0.S . E. have cons truc t ed t he hull, and the company nas fin need

L. E. 69 2 ,4 50 .--, out of which amount L. E. 498, 100 .-- went for

the construc tion of the hull and L.E. J2,725.-- f or pumps anc

deck e quipment.

The remainder was for inter ior decoration, local ma teria ls and

labour.


19

COST U} ' fu.ACHI1 ~HY AID ~~UIPI1ili ~T TO B~ :F'I.1: Ai-,C.c;D BY DIB

D~SCHI.P·r::i:m

1) Main Engines 2) Propellers 3) Airconditioning equipment 4) Aux . Engines & Electrical Equipment 5) Piping, Heaters , Swimming Pool 6) Sundeck Equipment 7) Paint 8) Cabins, Bulkheads, Ceilings & Furniture

9) Doors for Rooms and Entrance 10) Bathrooms 11) Galley and Laundry 12) Windows 13) Insulation 14) Vacuum Sys tem 15) Pumps for Hot Water and Sewage

SUi3TO'.rA1

Di scount 12%

10% Pric e I ncrea se

TOTAL

Al' om T I ~ L. ~.

128,450.--264,240.--

297,450.--594,715.--141,884. --34,328.--8,292.--

364 ,858 .--54 , 321. --

184 ,227.--134 ,337 .--

78,887 .--64 ,492 . --49,59 4.--32 ,725.--

2 ,436,800. --291,936 .--

2 ,140 ,864. - -214,085. - -

2 , 354,949 . - -


20

rt.BA.::i01 S FOK CHOOS1.r G 'l'Hiu AJ\.CHI1 .c; . 'i ru 'D .c; .-tUIPh~l 'l'

The client, together with his naval engineer, took several trips

abroad and finally decided on European equipment and machinery

for the following reasons:

1) to have up-to-date equipment

t) their competitive prices

3) good quality

Rr;1i.W{KS BY DIB ' S T~CID ICaL S.E:CTION

According to the technical report on the project, dated 20/5/1979,

the work carried out so far has been inspected, anc the hull was

estimated at a value of L.E. 498,000. --. Out of this amount

L. E. 70,000 .-- were paid fo r design cost and specification.

The report further mentiones the fo llowing:

It is felt by the technical section of DIB that the ship in i ts

present state is a big loss to rile tourism. Bgypt is great ~y in

need for this cruising hotel , and it t her efo~e is considered

necessary to complete the ship wit h t he financing of t ha oank,

in view of such r easonable pri ces.

TD~ S CHBDUL.b:

The company expects that the s hip will s tart cruising 8 months

after opening the Letter of Credit.

Assuming the L/C's will be opened by the end of January 1980, it

is expected that the ship will start operating by t he beginning of

October 1980, i.e. the beginning of the winter season, the main

touristic season in Egypt.


21

• lhA.Rh~T I1~ G

The floating hotel consists of four floors with 70 cabins for a

total of 130 passenger-&. It will make 24 cruises per year. The tou

rist will be able to visit the sights on t he various stops.

Bookings will be available for the season 1980/81, and the

company is now negotiating with the HOT.t:L l\lLIU AG~ll.LNT COR.PO..liA'f ION

Oi SCANDI£AVIA (HMCS) for joint management of the cruiser and

its marketing.

The company has already obtained approval from the Ministry of

Tourism for docking facilit ies in 'aadi.

15C01~0kIC EF _i, ~C'fS 01" TH.c. PJ. OJ~CT

1 ) To suppor t balance of payments , since revenues shall be paid

in foreign currency.

2) To help in s olving the shortage of hot el accommodation i n

E -ypt.

3) To employ te chnicians and staff f rorr. Egypt ian tourist i nstitutes .

Their salaries will amount t o L. E . 122 ,304 .--/annum.


22

C01 CLUSION

We r e commend gr anting 3 ' ..ALAKJ\.HI TOURS CO. t he f ollowing :

A) A foreign currency loa n amounting to

D~ 6,418,283.-- equivalent to US$ 3,379,498.-- equivalent to

L. E. 2,355,510.-- (including 10% for increase in prices).

B) A loca l currency loan amounting to

L.E. 240,000.--

Bot h loan s a re a t an interest rate of 12%, fo r a period of 7

years, including one year gr a ce, then both loans will be r epaid

in s ix e qua l annual i nst allments.

Both l oans are against t he follo wi ng guarante es :

1) Uo r tgage of t he exist ing hull, es tim ted a t a va lue of

L. E. 498 ,000 .--

2 ) Cess i on of t he shi pping do cuments unti l t t e a r rival of the

equipmen t , whic h t hen wi ll be mort gaged to the bank .

3) Kortgage of t wo buildi ngs belon~ing to t he partners , e s tima ed

a t a va l ue of L. E. 511 , 000 .--.

4 ) Full insuranc e of t he c ompl e ted vessel i n f a vour of t he bank .

5) 10% ca s h de posit ou t of the f oreign currency loan .


'. '

SCHEDULE I

INAUGURAL BALANCE SHEET

ASSETS

Fixed Assets

Completed ship J,631,235.--Hull 49~,ooo.--Deck equip. 32,725.--Equip. & Furni

ture 3,100,510.--

Cash deposit •

Cash

J,631,235.--240,000.--25,000.--

3,896,235.--

DEBT/ EQUITY RATI 66.6 . .

1/1/1980

D.!!.BITS

Capital 1,000,000.--Financed by partners 300 ,725.--Total 1,300,725.--Long term foreign currency loan 2,355,510.--Local currency loan 240,000.--Credit 2,595,510.--

3,896,235.--

SCHEDULE II

I I I I I

AMORTIZATION SCHEDULE

I

AMOUNT PERIOD INTEREST

I CAPITAL

I I I I I I I I I I I I I

2 356 2 356 2 566 1 741 1 377

969 512

: L.E. 2,356,000.--: 7 years, including 1 year grace : 12% yearly

( in thousands L.E.)

INTEREST DEPRECIATION FIXED INSTALLMENT

283 283 290 573 248 325 573 209 364 573 165 408 573 116 457 573

61 512 573

l 365 2 356 3 438

DUE DATE

31/12/1980 Jl/12/1981 Jl/12/1982 31/12/1983 Jl/12/1984 31/12/1985 Jl/12/1986

I I. I I I 'I I I I I I I I I I I I I I I


CAPITAL

3 380 3 380 2 964 2 498 l 976 l 390

734

•

(... \

SCHEDULE III


: u.s. $ 3,380,000.--

. •

7 years, including 1 year grace 12% yearly

(in thousands U.S.$)

INTEREST DEPRECIATION FIXED

406 406 416 356 466 JOO 522

236 586 166 656

88 734

822

822 822 822 822 822

l 958 J 380 4 932

DUE DATE

31/12/1980 31/1211981 Jl/12/1982 31/12/1983 31/12/1984 Jl/12/1985 31/12/1986


SCHEDULE I V

AMORTIZATION SCHEDULE (LOCAL CURRENCY LOAN}

AMOUNT : L.E. 240,000.--PERIOD : 7 years, including l year grace INTEREST : 12% yearly

(in thousands L.E.)

CJU>ITAL INTEREST DEPRECIATION FIXED INSTALLMENT DUE DATE

240 240 210.4 177 .3 140.2

98.6 52 .1

28.8 28.8 25.J 21 . 3 16 .8 11.9

6.3

1)9.2

29 . 6 33 .1 37.1 41.6 46 .5 52.1

240 .0

Jl/12/1980 58.4 Jl/12/1981 58.4 Jl/12/1982 58.4 31/12/198) 58.4 31/12/1984 58 .4 31/12/1985 58 .4 J l/12/1986

350.4

I SCHEDULE V

I PROFIT AND LOSS ACCOUNT

I (in thousands L.E.)

I' DESCRIPTION .. 1 2 3 4 5 6 7

I Occupancy 100% 60% 60% 60% 60% 60% 60% 60%

INCO~ 2131,6 1278 1278 1278 1278 1278 1278 1278

I QQ§.!

variable cost 338.1 203 203 203 203 203 203 203

I wages & insurance 122.J 86 88 90 92 94 96 98

I cabin clean. 3 3 3 3 3 3 3 J fuel, oil 18 18 18 18 18 18 18 18 advertising,

62 I administrat . 73.4 50 52 54 56 58 sightseeing 18 18 18 18 18 18 18 18

I maintenance & r epair 61.2 37 37 37 37 37 37 37 management 106 . 6 61 6! 61 61 6! 6! 6!

1· SUBTOTAL 740.6 479 483 487 491 495 499 503 depr eciation 411 411 411 411 411 411 411 41

I interest (foreign loan)283 283 283 248 209 165 116 61 (local loan) 28.8 28 . 8 28.8 22.J 21.J 16.8 11 .2 6.J

I TOTAL COST l!6J.1 1201.0 1202.8 1111 .J 1122. J 1081 .8 10J1·2 281.J Profit 668.2 76. 2 72.2 lOi.7 145.7 190.2 240.1 296. 7

I Taxes 26 118.z Profit after taxes 668.2 76.2 72.2 106.7 145.7 190.2 144.1 178

I Percentage of profit 31.3% 6% 5.6% 8.3% 11.4% 14.9% 11.3% 13.9%

I I I I ·1

I SCHEDULE VI

I. .CASH FLOWS


I DESCRIPTION 1 2 3 4 5 6 7

I REVENUES Income 1278 1278 1278 1278 1278 1278 1278 EXPENSES

I Coat 479 48) 487 491 495 499 503 Taxes 96 118.7

I Fixed install ments

I 1) Local loan 28.8 58.4 58.4 58 .4 58.4 58.4 58.4 2) Foreign" 283 573 573 573 573 573 573 Profit for

I distribution 76.2 72.2 106.7 JO 140 40 140

TOTAL 867 1186. l 1225.l 1252.4 1266.4 1266.4 1153.1

I Remainder 411 91.4 52.9 25 . 6 11.6 11.6 124 .9 Opening funds 2

I Final funds 436 527.4 580.3 605 .9 617.5 629. 1 754

I I I I I I I I I

--------------------SCHEDULE VII

FIN AN C L-i.L R1i. TE OF ETURN

DESCRIPTION 0 1 2 3 4 5 b 7 8/12 REMAINDER

REVENUES Income 1278 1278 278 1278 1278 1278 1278 1278 EXPENSES Cost 479 48.3 487 491 495 499 503 507 Taxes - 9b 119 121 Fixed assets 3631 36.3

Cash deposit 240 (240)

Working capital 25 25

TOTAL 479 483 487 491 495 595 382 b28

JiET 3896 1'j9 795 791 787 783 68.3 896 b50 388

Rate (20%) ~ 66b 5?2 485 .J80 315 228 251 ?43 44

?fb'..,, REMAI DER: 10% of the ship '1 ~ 100% of t he capital

. I ' ..

J



Name

Address

Capital

Legal Form

Activity

Loan Required

Purpose of Loan

Exchange Rate

Interest Rate

Period

- I -

: SHALAKANI TOUHS CO.

23, Orabi St., Cairo, ~gypt

L. E. 1,000,000.--

: Ste en Commendite Simple

All kinds of touristic activities, particularly

floating as well as stationary hotels, planning

touristic trips in Egypt as well as abroad.


DM 6,418,238.--, equivalent to

US$ 3,379,498.--, equivalent to

L.E. 2,355,510.-- (including 10% margin

for escalation of prices)


L .,B . 2 40, 000. --


Importing ma c hinery and equipment, cabins ,

galley equipment, air-conditioning e qui p-

ment etc. to compl ete a touristic s r.. i p.


To finance part of the local currency

expenses.

1 DM = L.E. 0.37 6

1 us $ = L.E. 0.697

as on 25/4/1979

12% yearly, for both loans

7 years, including 1 year grace period, then

the loans will be repaid in six equal

annual installments.

I I I I I I I I I I I I I I I I I I I 1l

Securities

Project No.

2

1) ~ortgage of the existing steel hull, estimated

by t he bank 's expert at a va:ue of L.E. 498 , 000 .--.

2) Cession of the shipping documents until the arrival

of the equipment, which then will be mort gaged

to the bank.

3) Mortgage of two buildings belonging to the part

ners, estimated by the bank 's expert at a value

of L.E. 511,000.--.

4) Full insurance of the completed ves s el in favour

of the bank.

5) 10% cash deposit out of the foreign currency

loan .


3

INTRODUCTIO TO lIL~ CHUIS }G

1) Tourism in Egypt had practically come to a standstill after the

war of 1967, but in the early seventies, and particularly after

the October war of 1973, and ~he ensuing Open Door Policy, which

started bringing many foreign businessmen to Egypt, tourism was

expanded and promoted by the construction of hotels.

2) Although the number of tourists, visiting Egypt, has greatly in

creased over the past few years, it must be noted that the actual

number of tourist nights has not yet reached the amount of tourist

nights of the peak year of 1976. This is due to the fact that

previously the visitors to Egypt were predominantly Arabs, staying

long periods at a time, whereas the ~uropean, American or other

tourist spends only a comparativ~ly short time visiting Egypt.

It is the latt er group that has increased.

3) Nile cruising has been focused on only after 1973. Now there are

about 13 passenger ships, most of which cruise between Luxor and

Aswan. Assuming an occupancy rate of 100%, these would provide

for 160,000 tourist nights .

4) According to studies prepared by EGOTH++, only 3 ships are operating

all year round (ISIS & OSIRIS with 52 cabins each and RAED with

25 cabins), with another 3 ships expected to go into operation

in the season 1979/80 ('.l'UT & ATOUh with 90 cabins each and TU11

A.l'JKH AMOlJl'IJ with 55 cabins), these 6 ships being centrally air

conditioned and adequate for service during winter and summer.

The other ships, according to this study, are quite outdated,

being in service for more than 50 years, and operate only during

the winter season (September through May).

I 11 I

I I I I I I I I I I I I I I I I I

I

11

• 4

5) Due to the increasing demand for Nile cruises the duration

of such trips have been reduced from 8 to 5 days, so as t o give

more tourists a chance to enjoy this kind of trip.

6) Furthermore it may be noted that ISIS and OSIRIS only accept

special group trips, being fully booked for the winter season.

7) As a consequence of the foregoing, several companies have placed

applications for the construction of such tourist vessels.

8) According to the marketing studies, the total amount of available

tourist nights for Nile cruising ships will be 706,000/year by

1981. This figure represents only 11% of total tourist nights in

Egypt in 1978, (providing that all planned Nile cruisers, including

the present project, will materialize and operate with 100%

occupancy ).


5

Following are some statistics prepared by the Ministry of

Tourism and Civil Aviation as well as by EGOTH

I} 1\J'UkB~rl 01«, TOURIST ti I TH.c;IR AV .C:RAG.C.: P.C:rlIOD Olt1

~TAY A.tD NO. OF TOU.tUST NIJHTS (in thousands)

1966 - 1977

Y.r.:AR NO . 01«' TOURIST~ AVERAG.B P~tUOD 1·0 . 01!' Tu .tUS:r' .t IGHTS O:b1 S'l'AY

1966 579 16,9 9 783 1967 344 18,5 6 361 1968 318 13,4 4 376 1969 345 12,7 4 396 1970 358 12,8 4 574 1971 428 14,0 5 979 197 2 541 12,2 6 614 1973 535 12,0 6 394 1974 668 9,8 6 505 1975 794 7,4 5 854 1976 983 6,9 6 796 1977 1 00-~ 6,3 6 339

NA'.1.' I01~ALITY 1973 1974 1975

Arabs 14,1 11,0 8,3 Western Countries 7,8 6,2 6,1 Eastern Countries 10,0 8,1 8,1 Others 9,9 6,7 5,9

12,0 9,3 7,4

I I I I I I I I I ·1 I I I I I I I I I I

6

III) U~BBrl 0}' l ILS CRUIS.t<.:RS 1 "ITH T~Ili ~A ir.:S &

CAPACITI1',;S I 1977

NA.1d .NO . OJ!, .NO . OP 'rRIPS DUliATIOi~ 01<' TRIP NO . OF TOURIST 13.!!JJJt> pr.; Y,t;AR DAY'i3 / .rHGHTS l IGHTS

(in thousands)

ISIS 124 78 5 I 4 38.7 OSIRIS 124 58 5 I 4 28.8 NEFERTARI 55 33 8 I 7 12.8 LOTUS 57 33 8 I 7 13.2 :MEMPHIS 31 33 8 I 7 2.2 DELTA 50 15 14 /13 9.8 TRITON 90 15 14 /13 17.6 ME?l~ON 23 10 14 / 13 4.2 BARAKA 20 33 8 I 7 4.6 RAED 50 78 5 I 4 15.6 SULTANA j2 ~~ 8 L 7 7 . 4

TOTAL 665 159.9

IV) RATIO OF GRUI S~ ~IGHTS TU '£0TAL Alv:OUl T OJ!' .C.:XP~CT.c;D TOURIST NIGHTS

D1:,SC1~I.PTION 1977 1978 1979 1980 1981

Capacity ( cabins) 220 375 435 645 840 Available touris t nights , at 100% occ. double berth 160 200 . 8 317.6 475. 8 613 . 2 Expected tourist nights 140.5 181.8 234.5 321.5 391.1 Percent by bed 87.8% 90.5% 73.9% 68.3% 6J.8%

" "double cabins 90. 0% 92.8% 75.7% 75.1% 65.4%

Ratio of Cruising nights to total tourist night s 2.2% 2.45% 3.7% J.0% J.0%


7

V) .PLJU l ED l ILB CRUISil G i:>HIP:i

C01.PANY i~M~ OF SHIP 0 . 01'1 Bt.:D~

EGOTH TUT & ATOUN 356 (2 vessels)

" 2 VESSELS (names undeci

ded) 35 6

MENA TOURS 200

" 200

4 VESS:h:LS (names undeci

ded) 60

120 SHALAKAl:. I .l<.:KHNATOH 120

" BF.l<.:RTITI 120 TAJ: T.A I & CO AlJ I SR 110 '11futl dbGYPT B~TO 110 11'.!IDDL..C: ~AST CARAVA.N 44

" 1ilDDL..C: .c;AST e 2

HAB TOURS (name undeci ded) 16

(name undeci ded) 56

TOTaL CAPACITY 1 950 beds

_t;XP..c.CT.c;D HOUT~ ACTUAL DAT dTAHT UJ:>

1979 L / A 1979

1980 1980

1980 C I L I A 1980

- 1980 C I L I A 1981

1979 L / A / L 1980

1980 L / A / L 1981

1979 C j L / A 1979

1979 L I A I L 1981

1980 L / A / L 1980

1980 C I A I L 1981

1979 L / A I L 1979

1978 L I A I L 1978

1978 L I A I L 1978

1978 L / A / L 19 78

N. B.

r. = Cairo

A = A wan


8

VI) EXPECTED INCH.SASE IN CABINS OVER THE NEXT J YEARS


1979 " 275 " " 1980 " 348 " " 1981 " 275 " "

Since some of these projects may not be realized, the following table

is based on 70% of the aforementioned projects:


1979 " 195 " " 1980 " 240 " " 1981 " 195 " "

CONCLUSION

It thus emerges that the rate of cabin increase is too low and

t hat t he market can absorb more ships of adequa t e standard

THE PROJECT

EKHNATON TOURS CO . applied f or a loan t o compl ete a touri s t easel ,

the hul l of which had been completed and launched. This ship was

constructed according to the regulations and under the supervi s i on

of GERMANISCHER LLOYD, and a certificat e was iss ued on 1/7/1977.

The ship is to have 70 cabins for a total of 130 passengers plus

accommodation for a crew of 66 persons.

MAIN DIMENSIONS

Length over all Width over all Height above keel Main .draught No.of Passenger cabins Power Speed

66.00 m

11.00 m

10.75 m

1.50 m 70 2 X 460 HP 15 km/hr

I I I I I I I I I I I I

II I I I I I

, I I

9

The vessel consists of four Decks:

FIRST & SECOND DECK:

TaIRD & FOURTH DECK:

are for passenger and crew cabins:

Each passenger cabin is to have 2 beds,

an armchair, a table, telephone, stereo

music and a complete bathroom.

are partly for cabins, as well as for galley,

dining room, lounge, swimming pool, solarium,

bar and cafeteria.

The vessel is to be centrally airconditioned throughout.

2) THE COMPANY

A commendite society was established on 1/11/1976, with a

fully paid capital of L.E. 500,000.-- and registered.

Address: 23, Orabi Street, Cairo, EGYPT.

The name of this company was changed from EKHNATON TOURS

to SHALAK.ANI TOURS, Hassan Abdel Fattah el Shalakani and

partners, and the capital was increased to L.E. 1,000,000.--.

The period of this company is three years, starting 1/11/76,

until 31/10/1979, to be extended.

10

I I I

3) OBJ~CT OF THE PROJECT

I I I I I· I 4)

I I I I I I I I s)

I I I

lt is the object of this project to participate in the promotion

of tourism in Egypt, and to share in solving t he crisis in the

lack of adequate hotel accommodation in all of Egypt, by constructing

floating hotel vessels to cruise on the Nile, as well as stationary

ones.

CRUISING LINE

The ship shall be cruising between Cairo and Aswan. One such cruise

shall last 14 days , while making the following stops :

Cairo - Beni Hassan - Abydos - Denderra - Luxor - Korn Ombo -

Edfu - Aswan or in rever se order .

THE C01'i:PANY

The capi tal of L. E. 1,000 , 000.-- of ~HALAKAl~I TOUR CO . is

s hared by t he following pa r t ners:

Ha s s an Abdel ] a tt ah el Shalakani , managing part ner L. E.

Abou Bakr Adel f at t ah e l Shalakani, sleeping partner L. E.

Salwa Abdel Salam Shehat a ' sleeping partner L • .J:!.: .

Khalid Ha ssan el Shalakani, sleeping part ner L.E .

Omar Has s an e l Shalakani, sleeping pa rtner L. E.

Hisham Hassan e l Shalakani ' sleeping partner L. E.

Hanan Hassan el Sha lakani , s leeping partner L. E .

Rasha Hassan e l Sha lakani, sleeping partner L. E.

360,000 .--

160 , 000 . - -

80,000. - -

80,00 .--80 , 000 .--

80 , 000 .--

80 , 000 .--

80 ,000 .--

L. E. 1,000 ,000 .--

The project will be run by the managing partner, ?fr. Hassan Abdel

Fattah el Shalakani, who was graduated from the Faculty of Commerce

in 1959, Cairo University ( Business Administration Section). He is

also a partner in the lATIONAL ORG.Af.lI ZATION FOR SHIPBUILDI~G A~D

E~GlN~gRI G (N.O.S. E.), HALAK.A.NI SHlPYARD, which has built several


11

• similar projects, such as TRITON

Passenger Transport Vessels

Ships for the Archaeological ~i ssion in

Upper Egypt.

Mr. Shalakani visited several international touristic establishments,

such as Koeln - Duesseldorfer Co., West Germany and Wagons - Lits,

France, which gave him a great insight in this field.

He has, however, decided to entrust the management of the completed

cruising ship to an international hotel management company (HOTEL

N.t.ANAGBfoENT CORPOrt.ATION OF SCANDil~AVIA), for a management fee of

5% of net income.

BASIS FOR CALCULATING I NCOJ.vili Al~D ~XP~YS~S

I) At 100% occu:eanci rate:

Duration of one trip = 14 days

No. of trips per annum = J65 : 14 = 26 trips

deducting 28 days for maintenence and r epair = 26 - 2 = 24 triEs/annum

Cabins and Pass engers:

Total No. of passenger cabins = 70

Cabins to be double birth with some singles= 1)0 passengers

Yearly passengers = 24 trips x 130 passengers= 3120 passengers/annum

No. of tourist nights/annum= 3120 x 14 = 43 680 tourist nights/annum

II) INCOhili

Calculations are based on

a) Capacity and No of passengers/annum(= 3120) and tourist nights

per annum (s 43 680)

b) Comparing prices for bed and food/night/double cabin for

the following vessels:

'J ·

I '

I I I I, I I ,, I I I I I I I I I I I . I

I

1) TUT & ATOUN

2) ISIS & OSIRIS

(EGOTH)

(HILTON)

• 12

= 87.500 L.E.

= 86.000 L.E. for the season 1978/1979

The Ministry of Tourism has increased prices by 12% for the

season of 1978/79

III) Estimated price for board and food/cabin on the SHALAKAtI

boat = 80.--- L.E.

per person = 40,--- L.E.

IV) Income per person/night consisting of

1) board = L.E. 40.--- X 70 % = L.E. 28.---

2) food = II 40.--- X 30 % = L.E. 12.---

L.E. 40 .---

3) beverages = L. E. 40.--- X 12 % = L.E. 4.800

4) soft drinks = L.E. 40.--- X 5 % = L.E. 2.---5) laundry = L.E. 40.--- X 5 % = L.E. 2. ---

Total income per person/night = L.E . 48.800

V) Income of the vessel per year (43 680 tourist nights)

1) board = 43 680 X L.E. 28.--- = 1 • .c. • 1,223,040.---2) food = 43 680 X L.E. 12.--- = L.E. 524,165.---3) beverages = 43 680 X L. E. 4.800 = L.E. 209,664.---4) soft drinks = 4J 080 X L.E. 2.--- = L.E. 87,360.---5) laundry = 43 680 X L.E. 2.--- = L.E. 87,360.---

Total income per year = L.E. 21lJl1284.---


13

COST

BA~IS FJR CALCULATlr G CO~TS

1) Cabin cleaning L. E . 0.100/day/cabin

2) Cost of food 38% of income for f ood

3) Cost of bevera ges 35% of income for beverages

4) Cost of soft drinks 35% of income for soft drinks

5) Other costs 40% of other income

6) Salaries and wa ges L. ~ . 1 22,304.--/annum

7) Fuel, oil & water L.E. 18,250 .--/annum

8) Publ icity & advertise ment 3% of cabi n income

9) Administrat i on & i nsuranc e 3% of cabi n i ncome

lO) Si ghtseeing : The sala ry of a tourist 6 uide i s estima t ed a t L. E . 25 .--/day ,

i n cluding accommoda tion; i.e. L. S. 9 , 125 .--/annum, plus cost

of vi s it s t o s i ght s during eac h trip, amounting to about L . E .

350 .-- eve r y t wo we eks , i .e. L. h . 9,100 .--/annum

11) De pre c iat ion:

a) hul l 5% of the cost of the hull

b) Furniture & c ommodities 15% of their cost

c I I .. a c hinery & equipment

1 2 ) Ca nag emen t

13) ~aintenance & re pair

14) Interest

1 ~ Cabin clean ing

2) Cost of f ood =

3) Cost of beverages=

4) Cost of .soft drinks =

5) Other costs =

6) ~alaries and wages =

7) Fuel, oil & water=

8) Publicity & advertisement=

12 . 5% 01 their con ·

5% of t o tal income

5% cabins i n come

1 2%/ annum

524 160 X 38%

209 664 X 35%

87 360 X 35%

87 360 X 40%

1 223 040 X 3%

I \

= L. E. J OO .-

= L. B. 199 180 .-

= L. E . 73 382.--

= L. E . 30 576.-

= L. E . 34 944.--

= L. t . 122 304.-

= L.E. 18 250.--

9) Admin. & insurance= 1 223 040 x 3%

= L. E . 36 691.-

= L.E. 36 691.--

\ ,

I '

I I 1·

I I\

I I I I I I I I. I I I

I I

I I

10) Sightseeing 11} Deprecia tion

a) = b) = c} = 2

12) Foreign Management =. 2

13) Maintenence & Repair = 1

14) Interest foreign currency

loan= 2

15) Interest local currency loan

=

, ·1 0'1.'AL Il'iC01~

'l'0TAL UvST

• 14

800 000 X 5%

553 516 X 15% 302 209 X 12.5%

131 584 X 5%

223 040 X 5%

355 510 X 12%

240 000 X 12%

TOTAL

L. ~ . 2 131 584.-

L. E. 1 463 238.--

~. ~. 66a 346.--

=

= = =

=

=

=

=

L. E. 18 225.--

L. E. 40 000.--L. :r; . 83 021.--

L.E. 287 776.--

L.E. 106 57j.--

L.E . 61 152.--

L.E . 282 661.--

L.E. 28 800.--

L.E. 1 1;6~ 2~8. - -

I I I I I I I I I I' I I I I I I I I I I

15

The company will recruit the re quired staff for the ship from the

Tu I0T A.l: .D OT~1 l!81ITUT~. Wherever it deems necess ary, foreigners

shall be employed:

1 !(ana6e r 2 Tourist Guides

1 Maitre d'hotel 3 Wai ters

1 Housekeeper 8 Asst . Waiters

1 Barman 8 Servants

2 Asst. Barmen 2 Laundry Valets

2 Ba.rboys 2 Asst . Ille c hani c s

1 Accountant 1 Electrician

1 Mec hanic 1 Piping I.:echanic

1 Greaser 3 Cooks

1 AC Technician 4 Kitchen Boys

1 Chef 1 Asst . Captain

3 sst . Chefs 1 Storekeeper

1 Captain

The t otdl number of crew and staff will be 66 pers ons. Their s alarie~

and social benefits will be L. E. 122 , 304 .--.

I I I I I I I I I I I I I I I I, I I I I

16

It en.erges that:

P ODUCTI l = TO AL I.I: Cv ,L =

without any profit or loss to the company,

as follows:

a) Income

b) Variable cost

Gross profit

c) Fixed cost

Even point = 55.5%

Profit

Interest of the bank (bor both loans)

Depreciation

Sal aries & wages

To t a l

(in t housands) L.E. 2 131.6

L.E . 363.0

L. E. 1 501.6

L. E. 8JJ.2

(in thousands)

L. E. 668 . J

L. E. Jll.5

L. E. 411. 0

L. E. 1 22.3

L. E. 1 513.1

In spite of all the previous assumptions taken into consideration,

we will assume, in order to be on the safe side, a maximum

occupancy rate of 60% on the boat, during the whole period

of the loan.

I I I I I I I I

11

I I I I I I I I I I I

17

COST OF TH~ ~ROJ~CT

D~~CrtI PT I O~ L. ~ . }'Ort.c;IG.1.~ t.:UH.J.{l!.NCY 'l'OT.11.L (in L. E . equiv) i n L . E.

Hu 1 498 ,000 . - - 498 ,000 .--Mac hinery & e quipmen t to be financed by DI B 2 ,355 , 510.-- 2 , 355 , 510.--Cos t of erection , customs t r ansport,insurance, foreign experts , local labour 595,000 . -·-Hiring winches & e quipment

Dec oration

Mi scellaneous

Trial s Adve r tis ing & opening

expense s

Ca s h deposi t

30 ,000 . -75 ,000. - -82 ,7 25 . - ··

5 ,000. - -

35,000 .--240,000 . - -

595 ,000 .--

30 ,000.--75 , 000.--82,725 .--

5, 000 .--

35 , 000 .--240 ,000.--

_1 .... ,_5_4_0 .... , __ 7_2 ...... 5_._-_. _ _ _ l'. __ ,_3 __ 5 __ 5_· , .... 5 ... 1_0_. -- - ----~.;...1: .... , 8 __ 9._6__..,i ) 5 • - -

Th~ co s t of t he s hi p has been ca l culat ed Ly the ba~t on the

: ollo vi n <.:- basi eo.

I

a) Cos t of the hul L. ~ ~

b) Loc a l co s t f or completing t he pro ject , including opening expenses L~ b .

c) Cas h depo s it LoE .

d) The owners have decided upon the most suitable of offers

498 , 1..0. - -

802 ,7 25 . --

240 ,000 .--

fo r machinery & e quipmen t t o be i mpor ted , amount ing t o L. E. 2,355 , 510 . --

TOTAL L. E'. 3 ,896 ,23 5.--


18

From the above table it emerges that the total cost of the project

is L. E. 3,896 , 235 .--, out of which L. ~ . 2,355, 510.-- i s in fore ign

currency, and the remainder of L. B. 1,540,725.-- is in local

currency, which the company will finance as follows:

A) Long term f oreign currency loan:

DM 6,418,283.-- =US $ 3,379,498 .-- = L.~. 2,355,510.-

for buying machinery and equipment required.


amounting to L.E. 240,000.--, to finance part of the local

cur rency expenses.

C) The remaining sum of L. E. 1,300,725. -- will be financed by the

company's own sources, sine& the owners of SALAK I T tlS are

also the owners of . O. S . E. ( ational Organizat i on f ar

Shipbuilding and Engineering ) , wi t h an ann ua l ~urnover o-f'

L . B. 1, 000 , 000 .--

· .o. S . E. have cons tructed the hull , and the cunpany h~s f i n~. ced

L. E. 6')2 ,4 50 .--, out of which amount L. E. 498 , JOO . - - ,;vent .1.o r

the construction of the hull and L. E . J2,725 .-- for pum~s and

deck equipment .

Tbe remainder was for inter ior deco1ation , loc~l mat er i als ~nd

lar "!Ur.


1•

19 •

COST u}' fuACHD .J;;HY A! D ;c;~UI l11m T Tu B~ .li'Il iihC.c;D BY DIB

DiSCHIP·:rroN

1) Main Engines 2) Propellers 3) Airconditioning equipment 4) Aux.Engines & Electrical Equipment 5) Piping, Heaters , Swimming Pool 6) Sundeck Equipment

7) Paint 8) Cabins, Bulkheads, Ceilings & Furniture 9) Doors for Rooms and Entrance

10) Bathrooms 11, Galley and Laundry 12) Windows 13) Insulation 14) Vacuum System 15) Pumps for Hot Water and Sewag

·, u.aTuTaL

Discount 12%

10% Price Increase

TOTAL

A1,0Ul T D L.:C:.

128,450.--264,240.--

297,450.--594,715.--141,884.--34,328.--8,292.--

364,858.--54,321 .--

184,227 .--134 ,337.--78,887 .--64,492.--49,594. --32 ,725 .--

2, 436,800 .--291,936 .--

2,140,864 .--214, 085. --

2,354,949 . - -


• 20

The client, together with his naval engineer, took several trips

abroad and finally decided on European equipment and machinery

for the following reasons:

1) to have up-to-date equipment

f) their competitive prices

3) good quality

RE].W{KS BY DIB ' S T.C:CHiaCaL S~CTI01

Ac cording to the technical report on the project, dated 20/5/1979,

the work carried out so far has been inspected, a the hull was

estimated at a value of L. E. 498,000.--. Out of this amount

L. E. 70 ,000 .-- were paid for design cost and specifi ca tion.

The report further ment iones the following :

It is felt by the technical se ction of DI B that t he ship in its

present state is a big l oss t o Nile tourism . Egypt is great~y in

need for this cruising hotel, and it therefore is considered

necessary to complet e the ship with the financing of t ha bank,

in view of such reasonable prices .

TILI SCH.C:DUL.C:

The company expects that the s hip will s tart cruising 8 months

after opening t he Letter of Credit.

Assuming the 1/C's will be opened by the end of January 1980, it

is expected that the ship will start operating by the beginning of

October 1980, i.e. the beginning of the winter season, the main

touristic season in Egypt.


21

IYiARh~TL G

The floating hotel consists of four floors with 70 cabins for a

total of 130 passenge1·s. It will make 24 cruises per year. The tou

rist will be able to visit the sights on the various stops.

Bookings will be available for the season 1980/81, and the

company is now negotiating with the HOTgL fo.AlAGi~NT CORPOliATIO~

OF BCAYDINAVIA (HMCS) for joint management of the cruiser and

its marketing.

The company has already obtained approval from the A~nistry of

Tourism for docking facilities in Maadi.

1SC01~ 0J.LIC iF l· ~CTS 0:B' Tfu. P.i.10J~CT

1) To support balance of payments, since revenues sh 11 be paid

in foreign currency.

2) To help in solving the shortage of hotel accommoda tion in

t;ypt.

3) To employ technicians and staff fro . Egyptian touri s t inst itutes .

Their sala ries will amount to L. E. 122,304.--/annum.


22

Cur CLUSION

We recommend granting 3~..ALAKA!H TOURS CO. t he following :

A) A foreign currency loan amounting to

DM 6,418,283.-- equivalent to US$ J,379,498.-- equivalent to

L.E. 2,355,510.-- (including 10% for increase in prices).

B) A loca l currency loan amounting to

L.E. 240,000.--

Both loans are at an interest r a te of 12%, for a period of 7

years, including one year grace, then both loans will be repaid

in six equa l annual inst allments.

Both loans are against the following guarantees:

1) kortgage of the existing hull, estima t ed at a value of

L. E. 498, 000.--

2) Cession of the shipping documents until tlle a rrival of the

equipment , which then will be mortgaged tote bank.

J) lortga6e of two bui ldi gs belon0 in0 to the par~ners , e ~irn~ted

at a value of L.L . 511,0 0. --.

4) Full insurc:1.nce of the COffip l eted vessel in favour of the bank.

5) 10% cas h deposit ou t of the foreign currency loan .


' . '

SCHEDULE I

INAUGURAL BALANCE SHEET

ASSETS

Fixed Assets

Completed ship J,631,235.--Hull 498,000.--. Deck equip. 32,725.--Equip. & Furni

ture J,100,510.--

J,631,2)5.--Cash deposit 240,000.--. Cas h 25,000.--

J,896,2)5.--

DEBT/ EQUITY RATIO 66.6

1/1/1980

DbBITS

Capital 1,000,000.--Financed by partners 300,725.--Total l,J00,725.--Long term foreign currency loan 2,355,510.--Local currency loan 240,000.--Credit 2,595,510.--

J,896,2)5.--

: 33 .4

I I I I I 1·

I I I I I I I I I I I I I I

SCHEDULE II


AMOUNT : L.E. 2,356,ooo.--P~RIOD INTEREST

: 1 years, including l year grace

: 12% yearly

( in thousands L.E.)

CAPITAL

2 356 2 J56 2 566 1 741 1 377

969 512

INTEREST

28) 28) 248 209 165 116

61

l 365

DEPRECIATION FIXED INSTALLMENT

290 57)

325 573 364 573 408 57 3 457 573 512 573

2 356 3 438

DUE DATE

)1/12/1980 )1/12/1981 Jl/12/1982 31/12/1983 31/12/1984 31/12/1985 31/12/1986

I ~·



CAPITAL

3 380 3 380 2 964 2 498 1 976 1 390

734

SCHEDULE III


: u.s. $ 3,380,000.--. . 7 years, including 1 year grace

12% yearly

(in thousands U.S.$)

INTEREST DEPRECIATION FIXED INSTALI&ENT DUE DATE

406 31/12/1980 406 416 822 31/12/1981 356 466 822 31/12/1982 300 522 822 31/12/1983 236 586 822 31/12/1984 166 656 822 31/12/1985

88 734 822 31/12/1986

1 958 3 380 4 932

I I I I I I I I I I I I I I ., I I I I I

SCHEDULE rv

AMORTIZATION SCHEDULE (LOCAL CURRENCY LOAN}

AMOUNT : L.E. 240,000.--PERIOD : 7 years, including l year grace INTEREST : 12% yearly

(in thousands L.E.)

CAJ>ITAL INTEREST DEPRECIATION FIXED INSTALLMENT DUE DATE

240 240 210 .4 177 . 3 140 ,2

98 .6 52.1

28 .8 28 .8 25.3 21.3 16.8 11.9

6.3

1)9.2

29 .6 33 .1 37.1 41.6 46.5 52 .1

240.0

31/12/1980 58 .4 31/12/1981 58.4 31/12/1982 58.4 31/12/1983 58. 31/12/1984 58.4 31/12/1985 58 . 4 Jl/12/1986

350.4

I SCHEDULE V

I PROFIT AND LOSS ACCOUNT


I DESCRIPTION .. 1 2 3 4 5 6 1

Occupancy 100% 60% 60% 60% 60% 60% 60% 60% I INCOME 2131,6 1278 1278 1278 1278 1278 1278 1278

I QQ§! variable

cost 338.1 203 20.3 203 203 203 203 203

I wages & 96 98 insurance 122.J 86 88 90 92 94

cabin clean. 3 3 3 J 3 3 3 3

I fuel, oil 18 18 18 18 18 18 18 advertising,

62 I administrat. 73.4 50 52 54 56 58 6 sightseeing 18 18 18 18 18 18 18 18

I maintenance & repair 61.2 37 37 37 37 37 37 37 management 106.6 61 6~ 6~ 6~ 6~ 6~ 6!

I s r BTOTAL 740.6 479 48.3 487 491 495 499 503 depreciation 411 411 411 411 411 411 411 411

I interest (foreign loan)283 283 28.3 248 209 165 116 61 (local loan) 28.8 28.8 28.8 22.J 21.J 16.8 11.2 6.J

I TOTAL COST 1~6J.! 1201.8 1202.8 1111.J 11J2.J 1oa1.8 lOJ1·2 281.J Profit 668.2 76.2 72.2 106-.7 1~5.1 190.2 240.1 296. 7

I Taxes 26 11a.1 Profit after taxes 668.2 76.2 72.2 106.7 145.7 190.2 144.1 178

I Percentage of profit 31.3% 6% 5.6% 8.3% 11.4% 14.9% 11.)% 13.9%

I I I I I

I SCHEDULE VI

I .CASH FLOWS


I DESCRIPTION 1 2 3 4 5 6 1

I REVENUES Income 1278 1278 1278 1278 1278 1278 1278 EXPENSES

I Cost 479 483 487 491 495 499 503 Taxes 96 118.7

I Fixed install ments

I 1) Local loan 28.8 58.4 58 . 4 58.4 58.4 58.4 58 . 4 2) For eign" 283 57) 57) 573 573 573 57 3 Profit for

I distribution 76.2 12.2 106.7 130 14 40 1 0

TOTAL 867 1186. 1 1225.1 1252.4 1266.4 1266.4 115).1

I Remainder 411 91 . 4 52.9 25.6 11.6 11.6 124.9 Opening funds 2

I Final funds 436 527.4 580.J 605.9 617.5 629. 1 754

I I I I I I I I I

--------------------SCHEDULE VII

FINANCL L R.h. TE OF RETURN

DESCRIPTION 0 1 2 3 4 5 b 7 8/12 REMAINDER

REVENUES Income 1278 1278 1278 1278 1278 1278 1278 1278 ; . EXPENSES Cost 479 483 487 491 495 499 503 507 Taxes - - 9b 119 121 Fixed assets JE>.31 J6J

Cash deposit 240 (240)

Working capital 25 25

TOTAL 479 483 487 491 495 595 382 b28

BET 3896 7':J9 795 791 787 783 683 896 b50 388

Rate (20%) 3437 66b 5?2 485 j80 31, 228 251 ?43 44

REMAINDER: 10% of the ship

100% of he capital


-. - -

I

FORM NO. 27 · OCR (11 78) WORLD BANK OUTGOING MESSAGE FORM (Telegram, Cable, Telex)

IMPORTANT (PLEASE READ INSTRUCTIONS BELOW BEFORE TYPING FORM.)

0

START 1 HERE

Class ott:13~-- --=-T.::.E:...:L::..,E,:__X,_,_ __________ Date:---'.___.,,_,,._,_,..,,._,u..u_,_........_,__._,---""-.,__------Telex N~ ~/'---__ 9_2_6_4 __ 3 __________ Originators Ext-------

12

TO DEV BANK

CITY/COUNTRY CA IR O.. EGYPT

MESSAGENO FOR MR. GEORGE ISSA .. GENERAL MANAGER. REURTEL FEBRUARY 2,

4

5

6

7

8-

9

10

11

12

13

14

15

16

-18

19

20

21 END OF

22 TEXT

1981 RE LOAN 1533 EGT SUBLOAN NO. A 16 SHALAKANI TOU RS CO.

YOUR WITHDRAWAL APPLICATION NO. 266 WAS PAID ON JANU ARY 23,

1981 INVOICE NO. TR 20368. REGARDS, DESHPANDE, INlBAFRAD.

NOT TO BE TRANSMITTED SUBJECT: DRAFTED BY:

EGYPT: DIB - Loan 1533 A-16 ADeshpande: ak CLEARANCES AND COPY DISTRIBUTION:

Cleared and cc: Mrs. Vivoda (CTR)

AUTHORIZED BY (Name and Signal r~\f"" f V 17 .--

Ab hay Deshpande l DEPARTMENT: I

EMENA Prcjects/IDF Division SECTIO ~,~ ~·"' ' ""' USE OF CABLE SECTION

CHECKED FOR Dl, -""" f I

10

DISTRIBUTION: WHITE - File Copy WHITE - Transmittal Copy CANARY -{) ill Copy BLUE - Originator to Keep

. .

e

WORLDBA K4Lt009

'2 6 4 3 D I bA K UN

DISTRIBUTION: WG

Mk¥XKXIX~~X~~~ ~r ~ Zq i._dqn /

Mr. Koepp ,, F O\~ DEtt.:LOPMEt'-JT I NDU0 TRI AL BA.NI< CAIRO

TO I NTBAF ·D WASHINGTON - A .GOU

T - LEX 10

D :rr; R.~C

A TT . M ) • DES HPA 1DE

Re LOAN 1533 EGYPT R SUB LQI\ ' A 1 SHA~K NI TOURS WOULD

~EFE TO YOUR TELEX JAl 1UARY 5/1 '~1 ANO OUR T~LEX EPL Y OF

J1\ f\JU,\R Y 1..,/Eh 1 NILL 8- MUCH APPR::C I ATED I NFffi ~l ,'G U~; FATE

OU~ I TIIOHA~ AL A PPL! CAT I ON NO 2 - ~ UNDER P O ;.::DUHE

111 FOR OM 10G ;)...:L • . >J 'i TOP BEST REGARoc.;

0 18 K++1-

\,Or<LOBAt K44009 'l>

) 2 ,A 7 D I BA K UN

DISTRIBUTION: WG DI BAK UN NMXMKXIXViMMIKNMlv"

Mr. Zaidan /'/

Mr. Koepp FR DEVELOPMENT I NOUS TR I AL eANK CA IR 0

TO TBAFRAO WASH! NGTON EMEHA REGI'O?f

TELEX 1 0

e )/2/19d1

INDUSTRIAL DEVEf PUENT AND l'INANC!

DATE BECCU ,_EB~ 198t : OUNTBY/ ID1' ~ - ~

•

... I

wr,.1;cRrorr ·o. J .f 3 '"?.:::>

ATT. MR. DESHPANDE

--------------------RE LOAN 1533 EGYPT E SUB L~N A-16 SHALAKANI TOORS VOULD

REFER TO YOUR TELEX JANUARY 8/1981 ANO OUR TELEX REPLY OF

JANUARY 13/1981 WILL BE UCH APPRECIATED INFffiMING US FATE

ouq WITHDRAWAL APPL! CATI ON NO 266 UNDER PROCEDURE

I 11 FOR OM 1069824.50 STOP BEST REGARDS

0181\K+++-

WORLOBANK440098o:>

9 2 64 3 0 I BAK UN

r.. '

, ,2/4~ D18AK UN

1GA (Telex NO.)

F OM OEVELOP.AENT INDUSTRIAL BA.NK CAIRO

TO I NTBA FRAD

~,ASH I NGTON

13/1/81

TELEX NO . 35

- TENTION R. DES GPA OE

RE AN 1533 EGYPT SUB LOAN A Y

sd

Distr ibution:

Mr . Zaidan

Mr~

~ r-~ ~

SHALAKANI TOURS THANKS YOURS JANUARY 8, 1981 STOP HAVE ALREADY

AIRMAILED YOU ON JANUARY 5, 1981 ITHDRA AL APPLICATION N0. 266

UNDER PROCEDURE 111 F~HOM . 1069824 . 50 CO PRISING ALLNECESSARFUOOCU i::NTATI

ON ANO REQUIREMENTS STOP WE TRUST ABOVE APPLICATI0'-1 -HAS ALREADY BEEN ECEIVED BY WOGLD BANK DISBURSE ENTS DIVIS!~

. dEING AIRMAILED BY SPECIAL C<XJRIER STOP iOULO APPRECIATE

CONTACTING DISBURSEMENTS DIVISION THIS EFF£CT AND LO()( Fffi ARD

TO HEARi NG FROM YOU THIS EFFECT FULLSTOP BEST REGARDS

GEORGA ISSA+++

ORLD8ANK440098•

92643 DI BAK UN

(

J

Record Removal Notice Arch0ives

& Records Management

File Title Barcode No. Development Industrial Bank Project (03) - Egyp t, Arab Republic of - Loan 1533 - P005010 - Subproject A-16 -Shalakani Tours Company

Document Date Document Type

08 January, 1981

Correspondents I Participants To : DevBank, Cairo, Egypt For Mr. George Issa, General Manager From : Deshpande, INTBAFRAD

Subject I Title Egypt : Loan 1533 - A-16

Exception(s) Financial Information d

Additional Comments

Outgoing wire

30241357

The item(s) identified above has/have been removed in accordance with The World Bank Policy on Access to Information . This Policy can be found on the World Bank Access to Information website.

Withdrawn by

Chandra Kumar

Date

09-Mar-15

Archives 1 (August 2014)

Record Removal Notice Arch0ives

& Records Management

File Title Barcode No. DeveJopment Industrial Dank Project (03) - Egypt, Arab Republic of - Loan 1533 - P005010 - Subproject A-16 -Shalakani Tours Company

Document Date

18 December, 1980

Correspondents I Participants

To: Mr. A. Deshpandi From : George Issa

Subject/ Title

Document Type

Letter

Shalakani Tours Company - Project No. A/16

Exception(s) Financial Information d

Additional Comments

30241357

The item(s) identified above has/have been removed in accordance with The World Bank Policy on Access to Information .· This Policy can be found on the World Bank Access to Information website .

'Withdrawn by 'Date

_____________________________________ I'-C_h_an_d_r_a_K_u_m_a_r ______ .,_lo_9_-M_ a_r-_l_s ___ __j

Archives 1 (Augus: 2014)

Record Removal Notice Arch0

ivei & Records Management

File Title Barcode No. Development Industrial Bank Project (03) - Egypt, Arab Republic of - Loan 1533 - P005010 - Subproject A-16 -Shalakani Tours Company

Document Date

28 August, 1980

Correspondents/ Participants

To: Mr. George Zaidan From : G. Issa

Subject/ Title Shalakani Tours Company

Exception(s) Financial Infom1ation d

Additional Comments

Document Type

Letter

------------------------------------

30241357

The item(s) identified above has/have been removed in accordance-with The World Bank Policy on Access to Information. This Policy can be found on the World Bank Access to Information website.

!

'Withdrawn by

Chandra Kumar !

Date

09-Mar-15

Archives 1 (August 20: 4)

Eligible f or Bank financing Above free limit of $400,000 Uncommitted balance after this authoriza t i on : $15 , 530 , 018 Final date for project submission: 6/30/80 Date of receipt of request for author i zat i on: 12/10/79

December 21, 1979

Mr. George Issa General Manager Development Indus t rial Bank 110 Al Galaa Street Cairo, Egypt

Dear Mr. Issa:

cc:

Re: Loan 1533-EGT Shalakani Tours Co. A-16

I wish to confirm my t elex of today, which I quote:

"REURLET DECEMBER 10, 1979, BANK HAS TODAY DECEMBER 21, 1979, AUTHORIZED YOU TO WITHDRAW FROM LOAN ACCOUNT 1533 EGT ON FURNISHING SATISFACTORY DOCUMENTATION THE EQUIVALENT OF UP TO USDOLLARS THREE MILLION THREE HUNDRED SEVENTY NINE THOUSAND FOUR HUNDRED NINETY EIGHT (USDOLLARS 3,379,498) FOR SHALAKANI TOURS COMPANY PROJECT NUMBERED A 16. REGARDS, GEORGE C. ZAIDAN, DIVISION CHIEF, INDUSTRIAL DEVELOPMENT AND FINANCE DIVISION, EUROPE, MIDDLE EAST AND NORTH AFRICA REGION, INTBAFRAD."

With best regards,

Sincerely yours,

George C. Zaidan Chief, Industrial

Development and Finance Division Europe, Middle East and North Africa Region

Messrs. Zaborski, Krishna, Hakim Tolbert Ms. Mendoza, Ms. Sprague

AH~ji:mab

OFFICIAL FILE COPY

FORM No 27 • ocR WORLD BANK OUTGOING MESSAGE FORM (Telegram. Cable, Telex) (11 78) --;:If 0 ANT (PLEASE READ INSTRUCl I S B LO E "ORE T Pl FORM.)

Class of Se c Telex Date December 21, 1979 1

Telex No.:_~ / 92643 Originator _xt (7)4600 12 10

0

START 1 HERE TO DEVBANK -----------------------

CITY/COUNTRY CAIRO EGYPT

MESSAGE NO _ RE_U_R_L_E_T_D_E_C_E_MB_E_R_ 1_0.__1_9_7_9.._B_A_N_K HAS TODAY DEC EMBER 21, 1979,

4

5

6

7

~ 9

10

11

12

13

14

15

-17

18

19

20 END OF

21 TEXT

AUTHORIZED YOU TO WITHDRAW FROM LOAN ACCOUNT 1533 EGT ON

FURNISHING SATISFACTORY DOCUMENTATION THE EQUIVALENT OF UP TO

USDOLLARS THREE MILLION THREE HUNDRED SEVENTY NINE THOUSAND

FOUR HUNDRED NINETY EIGHT (USDOLLARS 3,379,498) FOR

SHALAKANI TOURS COMPANY PROJECT NUMBERED A 16. REGARDS,

GEORGE C. ZAIDAN, DIVISION CHIEF, INDUSTRIAL DEVELOPMENT AND

FINANCE DIVISION, EUROPE, MIDDLE EAST AND NORTH AFRICA

REGION, INTBAFRAD.

NOT

EGYPT - DIS: Loan 1533 EGT A-16 .,..f B 0

T ANSMITTfD ---ro ED o

_I AHaj i :mab A ~E -----'-v (]Je

cc: Messrs. Zaborski, Krishna, Hakim Ms. Mendoza, Ms. Sprague

George C. rP, R.,..ME, r

::::>ISTRIBUTION W>-<ITE F le Copy WHITE "TransfT'ltlal Copy CANARY

, Division Chief

JE Or<; nat::ir to Keep

D ""' P. T \

1979 DEC 22 . S: 50

CABL . 10

-

-

TO: Mr. George (through

FROM: Abdul Raj i

WORLD BANK / INTERNATIONAL FINANCE CORPORATION

OFFICE MEMORANDUM C. Zaidan, Division Mr ~ Jacque Coudol)

~

DATE: December 21, 1979

SUBJ ECT: EGYPT - DIB: Loan 1533-EGT Subproject ,.

ce

----

A. BASIC DATA

SHALAKANI Tours Company US$3,379,498 (US$1 = LE 0.697)

Sub-sector Tourism (Boat for Nile Tours) Location Cairo -------Total Investment cost $5,590,000

incl. imports $3,379,500 domestic $ 2,210,500

Labor generated $ 66 Cost per job created ~ 84,333 Expected completion date- October 1980 Financial Discounted Rate of Return 20% Economic Rate of Return at least 20%

Financial Plan: (US$)

IBRD Other foreign resources Domestic financing Equity Others

B. RECOMMENDATION

Amount

3,379,498

344,332 1,866,170.

Rate

12%

12%

• Duration

7 yrs.

7 yrs.

Incl. Grace

1 yr.

1 yr.

1. I have reviewed the DFC's approval report of the above subproject, and the corresp_ondence relating to it. The project meets the selection criteria of our Loan Agreement. In my opinion the DFC has considered in a satisfactory manner all relevant factors affecting the technical, financial, and economic viability of the project.

2. The comments offered by .Mr. Christie , of Urban Projects Department (see attached memorandum dated ), do not raise such issues as to warrant our withholding approval of this project. ERR for this project has not been calculated. (Because of the difficulties involved in shadow-pricing DIB has not calcula-ted ERR for Tourism Projects in the past.) However a rough estimate shows that ERR would be above the FRR (of 20%) for this project.

A letter and a cable are

13.

(9 \I, attached

Gv

I reconnnend that you approve this subproject. for'your signature.

\~?\

REVIEW OF DFC's SUB-PROJECT APPRAISAL REPORT

Checklist on Status of Inforutation

A. Description of Company Capital Structure Ownership

e

Date of Establishment Project Entity Affiliated Co. as Upstream Supplier Affiliated Co. as Downstream Buyer

Description of Project .Capital Costs .

Local/Foreign Breakdown Land Building Equipment Working Capital Contingencies

Technological Process Licensing arrangements Turn-Key Contract Start Up/Breaking In Arrangements

Identity of Suppliers Type of Equipment Price List Procurement methods

Manpower Management Labor Training

Adequate

/ ./ ./

._L_

./ / l

. ./ :;

l Infrastructure Implementation Schedule Environ~e~t(Waste dj~~os ~l

.. "·---- ----

c.

Economic Analysis Supply and prices of inputs Market - demand/supply analysis Market - competition/price analysis Marketing channels Sales - domestic and foreign Import Substitution Effects Foreign Exchange Saved or Earned Jobs Created ERR - on fuil or incremental basis Shadow prices indicated Locational effects Externalities (non-quantifiable)

Financial Analysis Past financial stmts. of Co. Projected financial stmts. of Co. Past fin. stmts. of proj. entity Projected fin. stmts. of proj. entity · .FRR--on full or incremental basis Break-even analysis

ANNEX 1 .: Engineer's Comments ANNEX 2: ANNEX 3:

Lists of Equipment and Prices Amortization Schedule

/ / · 7 / /

/ 7

j

.. . ./ ./

Not Adequate

------

ANNEX III

Causes Not Substantive

App11Cabl;'e Pro"ol:ems.

.l v'

7

./

I (

l

,I I

7

./ /

TO: THRU:

FROM:

SUBJECT:

WORLD BANK / INTERNATIONAL FINANCE CORPORATION ~

OFFICE MEMORANDUM 1979

Mr. G. ~-EMP) DATE: December 20, 1979 J.A. Si Chief, URBTO) I.T. Ch tie (URBTO)

EGYPT: Shalakani Tours Company (:---------~----Subproject Appraisal Report

1. I have no direct experience in Egypt and thus my comments are limited to what I find in the report you sent me. I understand from those who know the tourism sector in Egypt that river boats can be a very profitable investment, if well managed - for example, the two Hilton and two Sheraton boats.

2. The proposed subproject appears reasonable in as far as the following are concerned: the debt/equity structure of the company (67/33 ratio), provided we are satisfied that the value of the hull has been established by independent appraisers; the medium term credit which corresponds to a realistic economic life of the investment; and the security which is offered (this appears even too restrictive). The concerns I have are discussed below.

3. Although Nile river boats are reportedly very profitable, capacity is forecast to expand rapidly over the next few years from about 700 beds (1977 data) to maybe 2,500 beds in 1981, although DIB thinks that this last figure is too high. This is significant expansion of capacity. DIB believes that the market can absorb this expansion as nights spent on Nile boats would not represent more than 3% of total tourist nights in 1981 if the expansion takes place. (Total tourist nights include, however, all visitors many of whom are not package tourists who constitute the market for Nile cruises.) The expansion data should be verified (many boats were planned for 1978 and 1979, page 7).

4. There is high seasonality in Egypt. A few boats do operate year round - some by cruising alone (this definitely requi res air conditioning) some by a combination of cruising in winter and functioning as a hotel in Cairo from a permanent berth in port in the summer months. It was not clear which option Shalakani has chosen from a quick reading of the report, but a stronger justification for the 60% occupancy (after allowing for a period out of service for maintenance) should be presented, particularly given the prospects for overexpansion and increasing fuel costs.

5. The boat is to be managed by the Hotel Management Corporation of Scandinavia, which is unknown to me. There is no documentation on this company and no details of the management contract. The company's credentials should, of course, be checked out. Its remuneration is to be 5% of gross sales. (The report talks of "net income", "income" and other nomenclature but the fee is, in fact, calculated as 5% of sales.) A fee based on sales

Mr. G. Zaidan - 2 - December 20, 1979

/

alone gives little incentive to control operating costs; it would be useful to explore the possibility of a fee structure based either on gross operating profit, or a combination of sales and gross operating profit. Could the hotel management company be induced to invest in the company?

6 . Aside from the comments above, the costs and operating projections appear reasonable as they are thought out in a fairly detailed way and are broadly consistent with those in the Bank's tourism project appraisal report (LE):

Investment cost per bed

Net receipts per guestnight

Variable operating costs

Fixed operating cost, per bed available

(of which payroll)

Operating profit per year, per bed

Management fees per year per bed

1/ Appraisal Report, Annex VI, Table 2. 2/ DIB Subproject Appraisal, Year 1 .

ITChristie/dm

cc: Mr. Haji (EMP)

I B RD 2284 EGT 1/ Schedule V ]:_/

30,000 29,971

32.5 29.3

5 4.65

1,650 2 , 123

(600) (661)

5,376 3,685

804 492

TO: TIIRU:

FROM:

SUBJECT:

/

• ;

WORLD BANK / INTERl~ATIONAL FINANCE CORPORATION

OFFICE MEMORANDUrv1 Mr. G. Z~EMP) J.A. Si~J~Chief, URBTO) I.T. Ch1l:ftie (URBTO )

EGYPT: Shalakani Tours Company Subproject Appraisal Report

DATE: December 20, 1979

1. I have no direct experience in Egypt and thus my comments are limited to what I find in the report you sent me. I understand from those who •know the tourism sector in Egypt that river boats can be a very profitable investment, if well managed - for example, the two Hilton and two Sheraton boats.

2. The proposed subproject aepears reasonable in as far as the following are concerned: the debt / equity structure of the company (67/ 33 ratio), provided we are satisfied that the value of the hull has been established by independent appraisers; the medium term credit which corresponds to a realistic economic life of the investment; and the s ecurity which is offered (this appears even too restrictive). The concerns I have are discussed below.

3. Although Nile river boats are reportedly very profitable, capacity is forecast to expand rapidly over the next few years from about 700 beds (1977 data) to maybe 2,500 beds in 1981, although DIB thinks that this last figure is too high. This is significant exp ansion of capacity . DIB be ievcs that the market can absorb this expansion as nights spent on Nile boats would not represent more than 3% of total touris t nights in 1981 if the expansion takes place. (Total tourist nights include, however, all visitors many of whom are not package tourists who constitute the market for Nile cruises. ) The expansion data should be verified (many boats were planned for 1978 and 1979, page 7).

d"tb l f , Thzre is high seasonality in Egypt. A few boats do operate ~~ year rotmd - some by cruising alone ( t his definitely requ · re

,,,. '\\> \..?/ conditioning) some by a combination of cruising in winter and functioning icS/ A 1::7 as a hotel in Cairo from a •permanent berth in port in the summer months . ~· '/ It was not clea1: which option Shalakani has chosen from a quick reading

'+ of the report, but a stronger justification for the 60% occup ancy (after allowing for a period out of service for maintenance) should be presented , particularl~given the prospects for overexpansion and increasing fuel cos

5. The boat is to be managed by the llotel Management Corporation of Scandinc>via, which is unknown to me . There is no documentation on this company and no details of t he management contract. The company's credentials should, of cours e , be checked out. Its remuneration is to be 5% of gross sales. (Th!:. rP.port t alks of "ne t inco~1e", "income" and other noment:.J ature but the fae is , in fact , calculated as 5% of sales .) . A fee based on sa les

Mr . G. Zai.dan - 2 - December 20, 1979

alone gives little incentive to control operating costs; it would be useful to explore t he possibility of a fee structure based either on gross operating profit, or a combination of sales and gross operating profit. Could the hotel management company be induced to i nvest in the company?

6. Aside from the comments above, the costs and operating projections appear re as onable as they are thought out in a f air ly detailed way ana: are """' ~nsist~vith those in the Bank's tourism project appraisal report (LE):

Investment cost per bed

Net r eceipts per guestnight

Variable operating costs

Fixed operating cost , per bed available

(of which payroll)

Operating profit per year, per bed

Management fees per year per bed

1/ Appraisal Report, Annex VI, Table 2. ]:_/ DIE Subproject Appraisal, Year 1.

ITChristie / dm

cc: Mr. Haj i ( EHP)

I B RD 2284 EGT 1/ Schedule V Jj

30,000 29,971

32.5 29.3

5 4.65

1,650 2,123

(600) (661)

5,376 3,685

804 492

Mr. Iain Christie (URB) December 17, 1979

George C. Za Chief (EMPID)

BY: A:bdul Haji, ~~ions Officer

Request for Review of DFC Sub-Project

DFC & Loan: EGYP.T - DIB: Loan 1533-EGT

Project: Name: Shalakani Tours Company

!Y.E_~: All kinds of touristic activities

Amount Reguested: $3,379,498

An appraisal repo~t on the above sub-~roject is attached. I

shall appreciate it if you can review the report and pass on your comments

to the Operations Officer whos name appears above.

AHaji:mab

OFFICIAL FILE COPY

: j\_,.a::11 ...:.,\_,:JI ,.,..... DIIRA. IIICJIO!I ~.

« cl-~-' )) ;.,tAl.11 \V'\t.o\ u.v

TELEGRAPH1c ADDRESS

IIINhlftltll.l, DEVELOPMENT J.Jft) lWI vt0 DEC 14 1979

~'tP F ~~ -)}d~

(~ L:..a.ll (_ •• ::JI cl_:., " " .

DEVELOPMENT INDUSTRIAL BANK

e

' ·DEVBANK"

,~---~;*~ D~ -

; _,--WI - •WI t_.;L..:. \ \ •

FILE· NO. ________ ....,._,

r. George Zaidan, Chief Industrial Development and Finance Division, The forld Bank, 1818 H.Street, N.W . 1ashington, D. C. 20433 U.S.A .

Cairo, J; .,.u11 ····---De-G--r--Jo.0-.-l-9+-9--······················

A.R.E. ·t ·r. ·C

Subject: Shalakani Tours Co .

Dear Mr. Zaidan, 1e have the pleasure to enclose herewith two copies

of the appraisal report of the project in the name of "Shalakani Tours Co . " for a lo an of U. S . $ 3 379 498 to import machinery and equipment from V .Germany and Sweden .

The loan is repaid in 7 years, including one year grace period, then the loan will be repaid in six e qual annual instal8ents at an interest rate of 12% and the normal banking charges.

de shall be glad if you kindly authorize us to withdraw under the credit 1533 EGT.

Vith best regards,

e

-

RECE\VEC;

\91~ OEC \ 4 ~ 0 t. 7

\NCOM\NG MA\l UN\1

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