FOCOJMENTS' Supplemental Letter No. 2 PORT OF PLOCE AUTHORITY June 19, 2014 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No.8077 -HR (Additional Financing Loan for the Trade and Transport Integration Project) Performance Monitoring and Evaluation Indicators Dear Sirs and Mesdames: This refers to paragraph A of Section II of Schedule 2 to the Loan Agreement of even date herewith between the International Bank for Reconstruction and Development (the Bank) and the Port of Ploce Authority (the Borrower). The Borrower hereby confirms to the Bank that the indicators set out in the attachment to this letter shall serve as a basis for the Borrower to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, PORT OF PLOCE AUTHORITY By: Authoriz d Rep ta AUTHO Attachment Attachment to Supplemental Letter no 2. Project Development Objectives (PDO): To develop trade along Corridor Vc by improving the capacity, efficiency and quality of services on the southern end of Corridor Vc with particular focus on the port of Ploce and on coordination aspects among all corridor participants. PDO remains unchanged Cumulative Ta et Values PDO Level Results Base line Progress Frequency Data Source/ Responsibility Comments Indicator Core UOM' original to date 2011 2012 2013 2014 2015 Methodology for Data start (2013) Collection (2005) Increased Capacity Bulk Cargo Technical Capacity (mil tones Mil. Tons p.a 3.1 4.2 4.2 4.2 4.2 4.2 8 Annual DocumentationLP p.a.) Direct Loading/Unloading Capacity for 1,000 TEU pa NA 66 66 66 66 66 66 Annual Technical LP Container CellularDouetin Documentation Vessels (TEU x 1,000 p.a.) General Cargo Technical Capacity (mil tones Mil. Tons pa 1.2 1.4 1.4 1.4 1.4 1.4 1.4 Annual Documentation LP p.a.) Efficient Operations Gross Container LoLo Productivity for Cellular Vessels Moves/our/gang NA 18 18 18 18 18 18 Annual Operational LP or crane documents (moves/hour/gang or crane) Gross Bulk Unloading Crane Tons/ Operational Productivity 100 700 700 700 700 700 700 Annual oet LP Prdutviyhour nnadocuments existing terminal (tons/hour) Gross Bulk Unloading No value is Capacity Tons/ 100 700 700 700 2000 Annual Operational LP possible to Productivity at the hour documents achieve until the New Terminal terminal is built (tons/hour) I 1 Unit of Measurement Gross General Cargo Crane/Gang Tons/ 42 50 65 65 65 65 65 Annual Operational Productivity hour documents (tons/hour) Safety: Lost Time Operational Accidents (per Accidents 3.1 1.8 1.8 1 8 1.6 1.6 1.6 Monthly documents PPA/LP 200k man hours) Quality of Service Average vessel waiting time for Hours <2 <2 <2 <2 <2 <2 <2 Monthly Operational PPA available berth documents (hours) Ability to track cargo (capacity of shippers to track % 0% 0% 40% 70% 90% 50% 90% Monthly Operational PPA, LP their cargo in the documents port through LP or PPA) Support Regional Development and Competitiveness Cargo Throughput (mil tones p.a. Mil Toms p.a. 2.05 3 8 4.6 4.8 5.8 3.2 3 8 Monthly Annual Report PPA excluding liquid bulk) Ploce Corridor (inland costs) cost vs Rijeka and Bar % 53% <80% <80% <80% <80% <80% <80% Annual Survey PPA (to be less than target %) Private Sector Involvement Revised and signed Priority concession 0% achieved Annual Agreement PPA agreement Private sector participation in Ministry of Ploc opeations % 40% 40.3% 80% 80% 80% Annual Annual report Mrie Afairs' Target achieved. (as a % of tons 4rTransport and handled excluding Infrastructure liquid bulk) Target Values Intermediate Core UOM Base line Progress Responsibility Results Indicators original to date 2011 2012 2013 2014 2015 Frequency Data Source/ for Data Comments start (2010) Methodology Collection (2005) Intermediate result 1.Port Development Construction of % 0 50% 25% 75% 40% 80% 100% Every six Project Monitoring PPA Bulk Terminal months Reports Construction of 0Every six Project Monitoring Completed in Contrin o l % 80% 100% 100% 100% 100% months Reports PPA 2009 Container Terminal Every six Project Monitoring Other Port % 50% 30% 80% 100% 100% 40% 100% months Reports PPA Infrastructure Intermediate result 2. Trade and Transport Integration Port Community Every six System in Place- months Electronic % 0 20% 40% 70% 90% 20% 90% exchange of documents within the port Intermediate result 3. Project Implementation Concession agreement for new 100% PPA Achieved terminal Client satisfaction Regular client 100% Annual Annual survey PPA feedback Supervision report Received Quarterly Supervision PPA for works I reports