Dr Cibao Changed Project Budget

Feasibility Study of the Establishment of the CIBAO Trade Center in the Dominican Republic

Feasibility Study Report

Ver. 1.0

EC Plaza / MAXTRAT / DATEC Consotium

Table of Contents Chapter I. Project Overview ...................................................................... 1

1. Background and Objective.............................................................. 1

1.1 Background................................................................................................1

1.2 Objective....................................................................................................3

2. Project Summary............................................................................. 5

2.1 Project Scope .............................................................................................5

2.2 Project Executing Agency ..........................................................................6

2.3 Region to Execute the Project ....................................................................6

2.4 Estimated Budget .......................................................................................7

2.5 Project Period.............................................................................................7

Chapter II. Current Status......................................................................... 9

1. Country Status ................................................................................. 9

2. Politics · Society · Economy Status................................................ 13

2.1 Politics · Society Status ............................................................................13

2.2 Economy · Industry Status........................................................................13

2.2.1 Current Economic Trend............................................................................13

2.2.2 Industry and Export Trend .........................................................................14

2.2.3 Foreign Investment Status..........................................................................16

3. Status of Project Site...................................................................... 18

4. Information Technology Area ....................................................... 22

4.1 National Information Technology Status ..................................................22

4.1.1 ICT Industry Status....................................................................................22

4.1.2 Wireless/Wired Communications Status.....................................................22

4.1.3 Internet Status............................................................................................24

4.1.4 PC Distribution Status ...............................................................................25

4.1.5 S/W Developing Company Status ..............................................................26

4.1.6 Discussion Point ........................................................................................27

4.2 Government Information Status ...............................................................27

5. Import/Export Status and Related Policies .................................. 30

5.1 General Import/Export Status ...................................................................30

5.1.1 Export Status .............................................................................................30

5.1.2 Export Status .............................................................................................30

5.1.3 Import Status .............................................................................................31

5.2 Import/Export Status of Major Goods ......................................................31

5.3 Export Status of Free Trade Zone .............................................................32

5.4 Status of Exporting Companies ................................................................33

5.5 Trading Scope with Korea........................................................................34

Chapter III. Project Executing Agency and System ............................... 36

1. PEA and PMO ............................................................................... 36

1.1 Project Executing Agency (PEA) .............................................................36

1.2 Project Management Office......................................................................37

2. Project Execution and Cooperation System................................. 38

3. Experience in Similar Projects...................................................... 39

Chapter IV. Project Execution Plan......................................................... 41

1. Outline............................................................................................ 41

2. Construction of Trade Center ....................................................... 43

2.1 Status Analysis .........................................................................................43

2.1.1 Research on Land and Infrastructure..........................................................43

2.1.2 Comparison of Construction Features of Similar Local Constructions........49

2.1.3 Status of Major Exhibitions .......................................................................50

2.1.4 Exhibition Center Status ............................................................................51

2.1.5 Requests from Project Executing Agency ..................................................56

2.2 Best Practice ............................................................................................57

2.2.1 Cases of Trade center.................................................................................57

2.2.2 Exhibition Center Cases.............................................................................59

2.2.3 Discussion Points ......................................................................................61

2.3 Design Goal .............................................................................................62

2.3.1 Scope of Trade center and Major Facilities ................................................62

3. Construction of Integrated Trading System (ITS)....................... 68

3.1 Status Analysis .........................................................................................68

3.1.1 Business Status..........................................................................................68

3.1.2 IT Status Analysis ......................................................................................72

3.1.3 Discussion Point ........................................................................................76

3.2 Best Practice ............................................................................................76

3.2.1 Outline ......................................................................................................76

3.2.2 Trend of International Trading ...................................................................76

3.2.3 Status of Korean electronic trading system.................................................80

3.2.4 Discussion .................................................................................................81

3.3 Design Target Model ................................................................................82

3.3.1 Establish System Target Model..................................................................82

3.3.2 Definition of the system-building methods and applied technologies .......102

3.3.3 Definition of Measures to link relevant authorities...................................106

3.3.4 Definition of the plan to revamp laws and policies...................................109

4. Trade Academy .............................................................................111

4.1 Analysis of Current Status...................................................................... 111

4.1.1 Analysis of the current trade education .................................................... 111

4.1.2 Implications.............................................................................................114

4.2 Best Practices.........................................................................................114

4.2.1 Overview.................................................................................................114

4.2.2 The Status of Trade Academy Curriculum (2010) ....................................114

4.2.3 Implications.............................................................................................115

4.3 Designing a Target Model ......................................................................116

4.3.1 Basic Plan for Trade Academy Curriculums.............................................116

5. Project Execution......................................................................... 119

5.1 Establishing the process of project execution .........................................119

5.1.1 Procedure for Project Approval................................................................119

5.1.2 Inter-Agency Cooperation Process...........................................................119

5.2 Preparation for the Project......................................................................120

5.2.1 Preparations for the Project Implementation ............................................120

5.2.2 Preliminary Procedures............................................................................121

6. Consulting Service ....................................................................... 123

6.1 The Need for Consulting Service ...........................................................123

6.2 The Scope of Work.................................................................................123

6.2.1 Basic Design............................................................................................123

6.2.2 Bidding Support ......................................................................................123

6.2.3 Supervision..............................................................................................123

6.3 Considerations .......................................................................................124

6.4 Grounds to calculate the consultant input ...............................................125

6.5 Calculation of Consulting Costs .............................................................125

7. Education ..................................................................................... 126

7.1 The Need for Education .........................................................................126

7.2 Education Program.................................................................................126

7.2.1 Construction of Trade Center ...................................................................126

7.2.2 Integrated Trade System (ITS).................................................................127

7.2.3 Trade Academy........................................................................................129

8. Establishing Project Operating Measures.................................. 131

8.1 Trade Center ..........................................................................................131

8.2 Integrated Trade System (ITS) ...............................................................132

8.3 Trade Academy ......................................................................................136

8.3.1 Operational Structure...............................................................................136

8.3.2 Division of Works....................................................................................136

9. Project Period and Schedule ....................................................... 138

9.1 Construction of Trade Center .................................................................138

9.1.1 Construction Period .................................................................................138

9.1.2 Implementation Schedule.........................................................................138

9.2 Integrated Trade System.........................................................................140

9.2.1 Period for Establishment..........................................................................140

9.2.2 Implementation Schedule.........................................................................140

9.3 Trade Academy ......................................................................................141

10. Procurement Plan ........................................................................ 142

Chapter V. Project Budget Estimation .................................................. 143

1. Estimated Costs & Funding Plan................................................ 143

1.1 Estimated Costs......................................................................................143

1.2 Funding Plan..........................................................................................145

2. Specifications of Project Costs .................................................... 146

2.1 Costs for Trade Center Construction.......................................................146

2.1.1 Costs for site acquisition and infrastructure..............................................146

2.1.2 Architectural, mechanical, and electric costs............................................147

2.2 Cost for establishment of Integrated Trade System (ITS) .......................149

2.3 Cost for the Establishment of Trade Academy........................................151

2.4 Consulting Service .................................................................................152

2. Phase II: Evaluation of......................................................................... 152

2.5 Training .................................................................................................152

2.6 Taxes and Utilities..................................................................................153

2.7 Contingency...........................................................................................153

2.8 Project Management Cost ......................................................................155

2.9 Loan Commission ..................................................................................155

2.10 Applied Exchange Rate..........................................................................155

3. Annual Spending Plans ............................................................... 156

Chapter VI. Feasibility Analysis ............................................................ 158

1. Feasibility in Project Scale and Scope ........................................ 158

1.1 Construction of the Trade Center............................................................158


1.3 Trade Academy ......................................................................................159

2. Feasibility in Project Cost ........................................................... 160

2.1 Construction of the Trade Center............................................................160

2.2 Integrated Trade System(ITS) ................................................................162

2.3 Trade Academy ......................................................................................163

3. Technical Feasibility .................................................................... 164

4. Economic Feasibility.................................................................... 165

4.1 Outline ...................................................................................................165

4.2 Preconditions for Feasibility Analysis ....................................................165

4.2.1 Exchange Rate.........................................................................................165

4.2.2 Discount Rate ..........................................................................................165

4.2.3 Analysis Period .......................................................................................165

4.2.4 Inflation Rate and Wage Increase Rate.....................................................166

4.3 Investment Plan......................................................................................167

4.3.1 Estimated Project Cost.............................................................................167

4.3.2 Investment Plan by Years.........................................................................167

4.4 Maintenance Costs .................................................................................169

4.4.1 Maintenance Costs of the Trade Center....................................................169

4.4.2 Maintenance Costs for the Integrated Trade System.................................172

4.4.3 Other Operation Cost...............................................................................174

4.4.4 Cost Flow................................................................................................174

4.4.5 Estimated Profit .......................................................................................177

4.4.6 Benefit Flow............................................................................................189

4.4.7 Benefit/Cost Analysis ..............................................................................193

4.4.8 Sensitivity Analysis .................................................................................196

4.4.9 Summary of the Economic Feasibility Analysis result..............................202

5. Financial Feasibility .................................................................... 204

5.1 Review on Financial Feasibility .............................................................204

5.2 Sensitivity Analysis on Financial Feasibility ..........................................206

5.2.1 In case of charging membership fee for the Integrated Trade System .......206

5.2.2 In case of operating the trade center only .................................................206

5.2.3 In case of charging fees on each use of e-document of the trade portal.....206

6. Strategic Feasibility ..................................................................... 210

7. Environmental Impact Assessment............................................. 211

Chapter VII. F/S Items for EDCF Evaluation ...................................... 214

1. Capabilities of Project Executing Agency .................................. 214

2. Approval Process for Loan and important documents.............. 214

2.1 Approval Process for Loan.....................................................................214

2.2 Approval Process for Procurement & Consulting ...................................214

2.3 Approval Process of Construction Permit...............................................216

3. Probability to provide Korean materials & service ................... 217

4. The effect of Foreign Currency Earning .................................... 218

5. Responses against Risk Factors .................................................. 219

6. Expected Effects .......................................................................... 220

6.1 Dominican Republic ..............................................................................220

6.1.1 Laying the foundation for export growth..................................................220

6.1.2 Contribution to acquiring technologies and establishing policies..............220

6.1.3 Interrelation in conducting the project......................................................220

6.2 Korea .....................................................................................................220

6.2.1 Korean companies' advance into the Dominican Republic .......................220

6.2.2 Improvement of Bilateral Cooperation.....................................................221

7. Performance Evaluation Indicators ........................................... 222

8. Similar ODA projects in Dominica ............................................. 224

9. Analysis on the International Competitiveness of Korean Companies .................................................................................................... 225

9.1 Construction of Trade Center .................................................................225


For reference: Introduction of Korea’s uTradeHub............................... 228

Abbreviation Table ................................................................................... 238

List of Figures < Figure 2-1 Geographic Regions of the Dominican Republic > ...........................................10

< Figure 2-2 2009 Development Score for Dominican Republic > ........................................12

< Figure 2-3 2007 Industry Ratio in Dominican Republic's Zona Franca > ...........................15

< Figure 2-4 Map of Dominican Republic > .........................................................................18

< Figure 2-5 Santiago City expansion trend (1800~1994) > ..................................................19

< Figure 2-6 Growth trend of major industries (2002~2008) >..............................................20

< Figure 2-7 View of Santiago City > ...................................................................................20

< Figure 2-8 City view and CEI-RD headquarters >..............................................................21

< Figure 2-9 Number of installed wire/wireless lines > .........................................................23

< Figure 2-10 Communication Industry Registered Member Ratio > ....................................23

< Figure 2-11 Number of internet users > .............................................................................25

< Figure 3-1 CEI-RD Organization >....................................................................................36

< Figure 3-3 Project Management Office Organization >......................................................37

< Figure 3-4 Project Cooperation System > ..........................................................................38

< Figure 4-1 Location of CIBAO Trade Center >..................................................................43

< Figure 4-2 Photos of Antiguo Aeropuerto Cibao > .............................................................44

< Figure 4-3 Antiguo Aeropuerto Cibao: Satellite image >....................................................45

< Figure 4-4 Building exterior > ...........................................................................................52

< Figure 4-5 Building interior >............................................................................................52

< Figure 4-6 View of Trading the Center Building > .............................................................62

< Figure 4-7 View of business center >.................................................................................67

< Figure 4-8 Export Management Flow > .............................................................................68

< Figure 4-9 Coffee bean authorization process > .................................................................69

< Figure 4-10 Origin of certification flow >..........................................................................70

< Figure 4-11 SIVUCEX Function map >.............................................................................72

< Figure 4-12 SIVUCEX Work process for related offices >.................................................74

< Figure 4-13 SIGA system conceptual Diagram > ...............................................................75

< Figure 4-14 Trend of Global e-Trade > ..............................................................................77

< Figure 4-15 UN’s Roadmap toward e-Trade Development >..............................................78

< Figure 4-16 e-Trade development status in each country >.................................................79

< Figure 4-17 Comparison of trading dependence and e-Trade development status >............79

< Figure 4-18 Development phases of Korean e-Trade > ......................................................80

< Figure 4-19 uTrade Hub Concept drawing >......................................................................81

< Figure 4-20 Goal of system construction > ........................................................................82

< Figure 4-21 To-be system conceptual diagram >................................................................83

< Figure 4-22 Hardware and Network Configuration >.........................................................83

< Figure 4-23 Overview of Building e-Marketing Portal >....................................................85

< Figure 4-24 e-Marketing Portal Objectives > .....................................................................86

< Figure 4-25 e-Marketing Portal System Structure > ...........................................................86

< Figure 4-26 e-Marketplace Concept Diagram > .................................................................88

< Figure 4-27 Before and After e-Marketing Portal System Establishment >.........................89

< Figure 4-28 e-Trade Portal Overview > .............................................................................90

< Figure 4-29 e-Trade Portal Objectives > ............................................................................91

< Figure 4-30 e-Trade Portal Function Block Diagram > ......................................................91

< Figure 4-31 Before and After the establishment of the system for the issue of certificate of origin >.................................................................................................................................94

< Figure 4-32 Overview of e-Trade Document Repository >.................................................95

< Figure 4-33 Structure of e-Trade Document Repository >..................................................96

< Figure 4-34 Overview of e-Document Relay System > ......................................................98

< Figure 4-35 Key Factors of the System >...........................................................................98

< Figure 4-36 Structure of e-Document Relay System > .......................................................99

< Figure 4-37 CEI-RD The size of the existing Server Room >...........................................101

< Figure 4-38 Expanded Size of Server Room > .................................................................101

< Figure 4-39 TBB(Technical Building Block) Hierarchy Diagram > .................................104

< Figure 4-40 Export-related authorities > ..........................................................................106

< Figure 4-41 Work Flow of Export Customs Clearance with Linked Systems >.................108

< Figure 4-42 Implementing Procedures by Relevant Authorities > ....................................108

< Figure 4-43 Conceptual Map of Trade Academy >...........................................................116

< Figure 4-44 Curriculum Examples by Program >.............................................................117

< Figure 4-45 Project Approval Procedure in Dominica >...................................................119

< Figure 4-46 The Process to Implement Public Projects in Dominica > .............................120

< Figure 4-47 Operational and maintenance structure of trade center >...............................131

< Figure 4-48 Example of Maintenance Structure at the Similar Facility in Korea > ...........132

< Figure 4-49 Overview of System Operation >..................................................................133

< Figure 4-50 Strategy of Maintenance >............................................................................134

< Figure 4-51 Example of Trade Academy Organization >..................................................136

< Figure 5-1 Total Costs >..................................................................................................144

< Figure 6-1 Details of the Project Cost >...........................................................................169

< Figure 6-2 Annual Trade Center Maintenance Costs >.....................................................170

< Figure 6-3 Annual Trade Center Maintenance Costs (Present Value) >............................171

< Figure 6-4 Annual Maintenance Cost for the Integrated Trade System >..........................173

< Figure 6-5 Annual Cost Flow > .......................................................................................177

< Figure 6-6 Income Benefit from Lending Office Space/Lecture Room > .........................179

< Figure 6-7 Income Benefit from Lending Exhibition Hall and Meeting Room > ..............182

< Figure 6-8 Annual Benefit on the Use of the System > ....................................................186

< Figure 6-9 Annual Benefit from the Utilization of the Trade Portal > ..............................188

< Figure 6-10 Annual Benefit Flow by Items (Based on Present Value) (Residual Benefit of Land Excluded) > ...............................................................................................................189

< Figure 6-11 Total Annual Benefit Flow (based on Present Value)(Residual Benefit of Land Included) > .........................................................................................................................190

< Figure 6-12 Annual Benefit/Cost Flow > .........................................................................195

< Figure 6-13 Changes in NPV in Accordance with the Discount Rate > ............................197

< Figure 6-14 Changes in B/C Ratio in Accordance with the Discount Rate > ....................197

< Figure 6-15 Changes in B/C Ratio in Accordance with Changes in Cost >.......................199

< Figure 6-16 Changes in IRR in Accordance with Changes in Cost >................................199

< Figure 6-17 Changes in NPV in Accordance with Changes in Cost > ..............................199

< Figure 6-18 Changes in B/C Ratio in Accordance with Changes in Benefit > ..................200

< Figure 6-19 Changes in IRR in Accordance with Changes in Benefit >............................200

< Figure 6-20 Changes in NPV in Accordance with Changes in Benefit > ..........................200

< Figure 6-21 Changes in B/C Ratio in Accordance with Changes in Cost/Benefit > ..........201

< Figure 6-22 Changes in IRR in Accordance with Changes in Cost/Benefit > ...................201

< Figure 6-23 Changes in NPV in Accordance with Changes in Cost/Benefit > ..................202

< Figure 7-1 Annual Overseas Construction Orders >.........................................................225

List of Tables < Table 2-1 Regional divisions and actual provinces of the Dominican Republic > ...............10

< Table 2-2 Global Competitiveness Ranking of Middle and South American Countries >....11

< Table 2-3 Major Economic Indicators of Dominican Republic >........................................14

< Table 2-4 Major Import/Export Goods and Import/Export Countries > ..............................15

< Table 2-5 CEI-RD 2010 Foreign Investment Solicitation Plan > ........................................16

< Table 2-6 Foreign Investments in Dominican Republic >...................................................17

< Table 2-7 Communication line installation status in Dominican Republic > .......................22

< Table 2-8 Comparison of Major Communication Companies >..........................................24

< Table 2-9 Cell phone market share per communication company >....................................24

< Table 2-10 Internet line status and number of internet users >............................................24

< Table 2-11 PC distribution rate in major countries > ..........................................................26

< Table 2-12 Annual PC distribution rate >...........................................................................26

< Table 2-13 Status of major S/W developing companies > ..................................................26

< Table 2-14 2006~2008 Major Electronic Government Project Funded by the Government >.............................................................................................................................................28

< Table 2-15 Economic Prospect of Dominican Republic > ..................................................30

< Table 2-16 Annual Import/Export Status >.........................................................................30

< Table 2-17 Five Major Export Countries >.........................................................................31

< Table 2-18 Five major import countries > ..........................................................................31

< Table 2-19 Export Status of Major Trading Goods > ..........................................................32

< Table 2-20 Import Status of Major Trading Goods >..........................................................32

< Table 2-21 Export Statistics per Good in Free Trade Zone (03/1~07/1) >...........................33

< Table 2-22 Number of Exporting Companies Based on Their Scope >...............................34

< Table 2-23 Exporting Amount Per Scope >........................................................................34

< Table 2-24 Export Status to Dominican Republic >............................................................34

< Table 2-25 Major exporting goods to Dominican Republic in 2008 >.................................35

< Table 2-26 Products that showed significant growth in 2008 >...........................................35

< Table 2-27 Products that showed significant downfall in 2008 >........................................35

< Table 2-28 Major import products from Dominican Republic in 2008> .............................35

< Table 3-1 Project Summary for Similar Projects > .............................................................39

< Table 4-1 Comparison of construction features > ...............................................................49

< Table 4-2 Schedules of Dominica’s major exhibitions >.....................................................50

< Table 4-3 Facilities for Major Exhibition Centers > ...........................................................58

< Table 4-4 Calculation of trade center scope – per floor > ...................................................64

< Table 4-5 Calculation of the trade center scope – per usage > ............................................65

< Table 4-6 Major contents of SIVUCEX > ..........................................................................73

< Table 4-7 Major Contents of SIGA > .................................................................................75

< Table 4-8 Work Scope and Details > ..................................................................................87

< Table 4-9 e-Trade Portal work scope >...............................................................................92

< Table 4-10 Relevant Authorities > .....................................................................................92

< Table 4-11 Work Scope and Details > ................................................................................95

< Table 4-12 Work Scope and Details > ................................................................................99

< Table 4-13 Equipment Scale for ITS Operation >.............................................................102

< Table 4-14 TBB(Technical Building Block) Hierarchy Descriptions > .............................104

< Table 4-15 Trade-related educational institutions >.......................................................... 111

< Table 4-16 2010 I*CEi Curriculums > .............................................................................113

< Table 4-17 Trade Academy Curriculums for 2010 >.........................................................114

< Table 4-18 Work scope and duration of Consulting Service > ..........................................124

< Table 4-19 Consultant Structure of Each Phase >.............................................................125

< Table 4-20 Maintenance Details by Category >................................................................134

< Table 4-21 Maintenance Support Activities Guideline > ..................................................135

< Table 6-1 Construction Cost per unit area according to building type as surveyed in the project site >.......................................................................................................................160

< Table 6-2 Construction cost composition percentage per work types according to building usage types >......................................................................................................................161

< Table 6-3 Calculation of Function Point >........................................................................162

< Table 6-4 Latest Inflation Rate and Annual Average Wage >...........................................166

< Table 6-5 Estimated Project Cost >..................................................................................167

< Table 6-6 Investment Plan by Years-EDCF > ..................................................................168

< Table 6-7 Investment Plan by Years-DR >.......................................................................168

< Table 6-8 Trade Center Maintenance Costs >...................................................................171

< Table 6-9 Maintenance Cost for Integrated Trade System > .............................................173

< Table 6-10 Annual Cost Flow(Future Value) > .................................................................175

< Table 6-11 Annual Cost Flow (Based on Present Value)> ................................................176

< Table 6-12 Income Benefit from Lending of Office Space/Lecture Room >.....................180

< Table 6-13 Income Benefit Lending Exhibition Hall and Meeting Room > ......................183

< Table 6-14 Benefit on the Use of the Integrated Trade System >......................................185

< Table 6-15 Benefit on Utilization of the Trade Portal >....................................................188

< Table 6-16 Annual Benefit Flow (Based on Future Value) >............................................191

< Table 6-17 Annual Benefit Flow(Based on Present Value) >............................................192

< Table 6-18 Comparison of Benefit/Cost Analysis Methods >...........................................194

< Table 6-19 Benefit/Cost Analysis Results > .....................................................................195

< Table 6-20 Sensitivity Analysis Results According to Discount Rate > ............................196

< Table 6-21 Sensitivity Analysis Results in Accordance with variation in Benefit/Cost >..198

< Table 6-22 Benefit/Cost Analysis Results > .....................................................................203

< Table 6-23 Income and Expenditure(Based on Future Value) > .......................................205

< Table 6-24 Income and Expenditure in Case of Not Charging Membership Fee for the Trade Information System(Based on Future Value) > ...................................................................207

< Table 6-25 Income and Expenditure in Case of Consideration of the Trade Center Building(Based on Future Value)> .....................................................................................208

< Table 6-26 Income and Expenditure in Case of Charging each Use of e-document on Export/Import(Based on Future Value) >............................................................................209

< Table 7-1 Project Budget of Eligible Source Country(EDCF)> ........................................218

< Table 7-2 Risk Factors and Responses > ..........................................................................219

< Table 7-3 Expected Amount of Overseas Construction Orders for 2010 >........................226

< Table 7-4 Trade-related capabilities of domestic companies >..........................................227

< Table 7-5 Summary of Trade-related Laws in Korea>......................................................235


Feasibility Study of the Establishment of the CIBAO Trade Center in the DR 1

Chapter I. Project Overview The name of this project is “The Establishment of the CIBAO Trade Center in the

Dominican Republic.”

1. Background and Objective 1.1 Background In a bid to achieve a dynamic economy through creating employment, one of

the four core strategies of the “2010~2030 National Development Plan” 1 announced in November 2009, routes to boost exports(plan and system, etc.) must be strengthened and plans to develop export financing must be made.

The current government of the Dominican Republic with President Leonel Fernandez re-elected in 2008 has established 4 core strategies, 51 detailed objectives (Objetivos Especificos), and 274 action lines (Líneas de Acción) through a discussion with relevant ministries in a bid to present the blueprints on the nation’s future. They announced the “2010~2030 National Development Strategy (Estrategia Nacional de Desarrollo de la República Dominica 2010~2030)” in November 2009.

It was recommended that the Dominican Republic promote exports and enhance its export capacity through the Knowledge Sharing Program (KSP) of the Republic of Korea, which started in 2008. Through this opportunity, the Dominican Republic realized the need to support trade by constructing a trade center and requested the support of the Korean Economic Development Cooperation Fund (EDCF).

President Leonel visited Korea in 2006, acknowledged the development experience of Korea and ordered Executive Director Eddy Martinez of the Export and Investment Center of the Dominican Republic (CEI-RD) to cooperate with the Korea Development Institute (KDI). In August 2007, Mr. Martinez visited Korea and asked for policy advice through Korea’s Knowledge Sharing Program. In March 2008, the Korean Ministry of Strategy and Finance designated the Dominican Republic as a partner state of KSP in 2008-09 at the official request of Mr. Martinez under the theme of “Promoting exports and developing the export capacity of the Dominican Republic” and collaborated with CEI-RD.

By analyzing the economic development process and current state of the country’s economy through the KSP project, the Dominican Republic’s strategies were reset. By

1 See details of “2010~2030 National Development Strategy” on the “6. Strategic Feasibility” in Chapter VI.



analyzing the development state of its human resources and its problems, education and job training policies that would form the basis for the promotion of exports were recommended, in addition to Korea’s policy experiences for the development of human resources handed down. Also, measures to revitalize export finances were suggested in order to recommend policies that would promote exports and foster the capability to export. Such economic development strategies are meaningful in that they would provide the opportunity for the country to raise its economic development a step higher by revitalizing exports.

National interest in a project for sharing economic development experiences was very high, making it easier to effectively hand down Korea’s export-oriented economic development experiences. The Dominican Republic’s view of the project was very positive, and this was a great opportunity to raise Korea’s national image.

Need to build the trade center in Santiago, a central city of CIBAO As the capital of fabric exports, the fabric industry was the main export industry in the

late 90s. However, there is no upcoming industry that can replace the fabric industry in the export market. Also, the amount of exports that takes up the GDP has decreased to 15% in 2007 from 27% in 2003, and therefore this country is in serious need of policies supporting exports.

The CIBAO region has established and managed a Free Trade Zone based on its ample human and physical resources, being the main region that produces export goods with more trade activities than other regions. But it does not have a permanent exhibition hall to support exports, and consequently the lobby in the 1st floor of the CEI-RD located in Santo Domingo 180km southeast of Santiago, has been used instead. Also, EXPO CIBAO2, the largest trading exhibition held every year, is hosted by borrowing a gymnasium located far away from the suburban area of Santiago.

It is a long-cherished wish of the Santiago Chamber of Commerce to construct a trade center with an exhibition hall where they can support the export industry, permanently exhibit regional products, and hold the international trade expo every year.

Need to build the Integrated Trade System(ITS) The Dominican Republic enjoyed the most rapid economic growth (average 9.5%)

among countries in Latin America, but the annual export increase rate was below 6% during 2005-2007, significantly lower than the average annual export increase rate of DR-CAFTA member countries, 11%. The number of exporters stood at about 3,000 as of 2009, out of which about 98% were SMEs recording annual revenues less than USD1 million. Therefore coming up with supportive measures for such SMEs is essential.

2 See details on the “2.1.3 Status of Major Exhibitions” in Chapter IV.



In order for exports to increase, the President ordered measures to strengthen marketing capabilities and overseas information collection abilities. A portion of requirements verification for exports has been done via an on-line system, but the usage rate is only about 10%, and most of this is being done manually by visiting relevant organizations. Accordingly, there is a need to build a pan-national electronic trade infrastructure, innovate the trade process in accordance with changes in the information environment, and gain a competitive edge to cope with the changing global trade environment.

Organizations such as the UN, APEC and ASEM recommend the construction of an “Electronic Trade Single Window” for the promotion of global trade. The Electronic trade single window is an integrated trade information system that is currently operated or will be implemented by governments to provide a one-stop service in connection with services of related organizations such as customs clearance, harbors, quarantine, and foreign exchange to various trading companies attempting to trade goods with local companies.

Need to enhance curriculum and operation method of the trade academy of CEI-RD in order to foster trade experts in CIBAO.

Even though providing capable human resources was considered a key factor in Korea’s success in achieving rapid economic growth and building a knowledge-based economy, the lack of Dominica’s human resources is holding their economy back, limiting the nation’s strategy to beef up exports and strengthen competitiveness in the industry.

However, there is only one professional training institution on trade, the Overseas trade and corporate innovation institute(I*CEi) run by CEI-RD, within the capital, Santo Domingo. Also, the curriculum of the I*CEi center on seminars and trade-related training focusing on practical business has not been conducted successfully. Therefore, it is necessary to build an institution to foster human resources, to develop a training curriculum and training materials, and to adopt advanced techniques for the operation of the trade academy.

1.2 Objective In order to strengthen exports and revolutionize the business environment of Santiago,

the second largest city of Dominican Republic, through corporate innovation and business continuity;

Construct the CIBAO Trade Center that can provide a physical space to display goods, hold trade expos, and support the business of exporters.

Implement an integrated trade system (hereinafter referred to as “ITS”) to



provide a one-stop trading service Improve management and education courses of the trade academy to raise the

quality of future human resources.



2. Project Summary 2.1 Project Scope

This project is divided into a consulting service and a construction project.

Consulting Service

Scope Contents

Basic design for construction of trade center and ITS (Integrated Trade System)

Provide bidding documents including Technical Assistance reports for bidding documents

Evaluate proposal and support contract negotiations EDCF

Supervise the trade center construction and trade system implementation

Construction Project

Scope Contents

Design and land work for cconstruction of a 20,000 m2 CIBAO construction center that can host the ‘EXPO CIBAO’ as well as hold an exhibition and training center for export purposes. (Construction, electricity, mechanical work)

Detail design work and implementation for marketing portal, trading business portal, electronic document storage, and relay system

Establishment of materials needed for installation and operation of ITS (H/W, N/W, S/W)

Development of a curriculum and education materials Consulting service for the operation of the trade academy

Education required for operation and maintenance of the trade center and ITS

EDCF

Support maintenance efforts of ITS for 2 years

Obtain and confirm the construction site (obtaining permission for a construction license and land-use)

Perform soil tests and underground utility surveys

Construction of the trade center infrastructure (road, electricity, gas, water)

Deliver furniture and office automation equipment for the trade center

Dominican Republic

Construction and expansion of a server room, power supply, and UPS



2.2 Project Executing Agency The project executing agency is the Export and Investment Center of the Dominican

Republic (Centro de Exportación e Inversión de la República Dominicana – CEI-RD) under the direct command of DR’s president.

The organization has 242 staff members as of February 2010 under the direction of Executive Director Eddy Martinez. They are divided into the Dominican Exports Corporate Services and the Foreign Investment Dominican Republic Headquarters, located in Santo Domingo with a regional office in Santiago.

2.3 Region to Execute the Project The Dominican Republic is divided into the southeast area (Sur Occidental Region)

where the nation’s capital Santo Domingo is located, the northwest area (El Cibao Region) where Santiago, the second largest city and commercial center of the nation is located, and the southeast area (Sur Oriental Region).

The region where the project is to be executed is Santiago, the central city in the region of CIBAO and the industrial center of the Dominican Republic.

Santiago City was formed after the discovery by Columbus in 1495. It is the first city established on the American continent and is located 180 km northwest of the capital city, Santo Domingo.

The area of CIBAO is 3,112㎢ with about three million inhabitants while the area of Santiago is 489㎢ with about one million inhabitants as of 2006.

In Santiago, an international airport linking it to major cities abroad has been operated since 2002 and more than 20 percent of the country’s export products are produced here, taking up 14 percent of the country’s Gross Domestic Product (GDP). It is in dire need of the construction of trade center that can support active industries of the Santiago City.

Santo Domingo City, where ITS will be constructed holds 30% of the Dominican population. It is estimated that 3 million Dominicans reside within the city. It is the capital of education and economy in the Dominican Republic. ITS will not only support companies within the CIBAO region but it will continue to support the entire exporting industry of Dominican Republic. In order to support the entire nation, the ITS system will be located along the main system of the Ministry of Export Investment.



2.4 Estimated Budget The total cost of the project is estimated to be US$ 62.44 million with loans of US$ 30

million from EDCF.

Of the direct cost of the project, EDCF will financially support 70.4 percent of the Trade Center Construction, 20.7 percent of the cost to build the Integrated Trade System, 7.3 percent of the provision of Consulting Services, 1.3 percent Training and 0.3 percent of the Trade Academy.

(Unit: USD)

EDCFForeign Currency Portion

Korea 3rd Countries

1. Trade Center Construction 8,754,820 1,481,240 8,763,940 19,000,000 25,474,318 44,474,3181) Land Acquisition & Infrastructure - - - - 25,474,318 25,474,3182) Architecture 6,164,740 186,200 7,253,060 13,604,000 13,604,0003) Mechnical 1,222,080 611,040 712,880 2,546,000 - 2,546,0004) Electric 1,368,000 684,000 798,000 2,850,000 - 2,850,000

2. Integrated Trade Data System 4,431,767 430,636 724,500 5,586,904 - 5,586,9041) Equipment 304,545 430,636 735,182 - 735,1822) S/W Development 3,633,890 - 724,500 4,358,390 - 4,358,3903) Installation & Test 493,332 - 493,332 - 493,332

3. Trade Academy 87,882 - 87,882 - 87,8824. Consulting Services 1,822,266 - 147,000 1,969,266 - 1,969,2665. Training 345,506 - - 345,506 - 345,506

1) Local Training 174,616 - - 174,616 174,6162) Overseas Training 170,890 - - 170,890 170,890

Base Cost 15,442,242 1,911,876 9,635,440 26,989,558 25,474,318 52,463,8776. Taxes & Duties - - - - 1,349,478 1,349,4787. Contingencies 1,708,112 207,794 1,064,565 2,980,471 4,570,530 7,551,001

1) Physical Contingency 772,112 95,594 481,772 1,349,478 1,273,716 2,623,1942) Price Contingency 936,000 112,200 582,793 1,630,993 3,296,814 4,927,807

8. PMO(2% of base cost) - 1,049,278 1,049,2789. Service Charge(0.1% of EDCF) 29,970 29,970 29,970

Total 17,180,324 2,119,670 10,700,005 30,000,000 32,443,604 62,443,604Percentage(%) of EDCF 57.30% 7.10% 35.70% 100%Percentage(%) of Total 27.50% 3.40% 17.10% 48.00% 52.00% 100%

ItemGov. of

DominicanRepublic

TotalLocal CurrencyPortion EDCF Total

2.5 Project Period

The project period is composed of the professional consulting service period and the main project period established during consulting. In order to execute a successful consultation outcome, a professional consulting company will be hired.



ITEM 1M 2M 3M 4M 5M 6M 7M 8M 9M 10M 11M 12M 13M 14M 15M 16M 17M 18M 19M 20M 21M 22M 23M 24M 25M 26M 27M 28M 29M

PMO

Consulting Service

Trade Center

Construct’n

ITS

Trade Academy

Overseas Tra ining

Local Tra ining

Const.

TAIT IT

IT

Select Consultant

Organize PIU Secure & Survey Site Elec./Water/Sewage Server room Setup Road Widening

Project Management (Schedule Mgt, Administrative Support, Leading PIU, Mediation & Approval, etc.)

* IT : Inform ation T echnologyT A: Trade Academ yC onst.: C onstruction

Execution Drawing

Construction Work

Mechanical Work

Electric Work

Procurement SupportProposal

Evaluation &Contract Sup.

Supervision

Anal. Pre. Design &Build Exec. Drawing

Analysis & Planning

Analysis & Planning

Location Survey &Set-up Environment

Civil construction & Foundation

Finishing & BuildingEquipment construction

Structure construction

Ordermaterial Air conditioner & Equipment installatiom

Switchgear equipment & Power plant,,Power trunk

Test

Ordermaterial Test

Analysis& Design

Construction& Deploy Test

Analysis& Design

Construction& Deploy

TestOrderequipment

Install-ation

Phase I

Phase II

ConsultancyService

Period of selecting professional consultant: 3 months Bidding process will be led by the project execution agency’s PMO.

Consulting service period: 26 Months Basic design for the first 3 months and bidding support for 2 months are carried out. Proposal evaluation and negotiation of a contract supporting work are done for three

months. During the 18 months and 12 months allocated for trade center construction and

trading information system implementation respectively, three inspections should be performed at the inception, interim, and the final stage of each process.

Construction project period: 18 months The trade center construction process will take a total of 18 months. During that time,

design, construction, mechanical work, and electric work will be performed. The first phase of the integrated trading data system construction will take 6 months

and the second phase will take 8 months.

The trade academy consulting and education will be performed during the construction project.



Chapter II. Current Status

1. Country Status The Dominican Republic takes up 2/3 of the Hispañola Island in the Caribbean. A total

of 9.9 million citizens reside within the country with a GDP of 4,930 US dollars per individual.

The territory of the Dominican Republic was under the rule of Spain after its discovery by Christopher Columbus in 1492. The population is composed of 73% mulatto, 16% white, and 11% black people. Most of the people are catholic and the national language is Spanish.

The Dominican Republic is divided into the southeast area (Sur Occidental Region) where the nation’s capital Santo Domingo is located, the northwest area (El Cibao Region) where Santiago, the second largest city and commercial center of the nation is located, and the southeast area (Sur Oriental Region).



< Figure 2-1 Geographic Regions of the Dominican Republic >

< Table 2-1 Regional divisions and provinces of the Dominican Republic >

Regions Geographic regions Sub-regions Provinces Provincial capital

Duarte San Francisco de Macorís Hermanas Mirabal Salcedo

María Trinidad Sánchez Nagua

Cibao Oriental

Samaná Samaná

Santiago Santiago de los Caballeros Espaillat Moca Cibao

Norcentral Puerto Plata San Felipe de Puerto Plata

La Vega Concepción de La Vega Sánchez Ramírez Cotuí Cibao

Central Monseñor Nouel Bonao

Valverde Santa Cruz de Mao Monte Cristi San Fernando de Monte Cristi

Santiago Rodríguez San Ignacio de Sabaneta

El Cibao Cibao

Cibao Occidental

Dajabón Dajabón



Regions Geographic regions Sub-regions Provinces Provincial capital

Azua Azua de Compostela San Juan San Juan de la Maguana El Valle Elías Piña Comendador Barahona Santa Cruz de Barahona Baoruco Neiba

Independencia Jimaní

Sur Occidental

Enriquillo

Pedernales Pedernales Distrito Nacional Santo Domingo de Guzmán Metropolitana Santo Domingo Santo Domingo Este San Cristóbal San Cristóbal Monte Plata Monte Plata

Peravia Baní Valdesia

San José de Ocoa San José de Ocoa La Romana La Romana

San Pedro de Macorís San Pedro de Macorís

Hato Mayor Hato Mayor del Rey El Seibo Santa Cruz de El Seibo

Sur

Sur Oriental

Yuma

La Altagracia Salvaleón de Higüey

The report presented by the World Economic Forum (WEF) in 2009 showed that out of the 133 countries surveyed worldwide, the Dominican Republic’s national competitiveness ranked 95th . As shown in <Table 2-2>, it is in the lower middle level among Latin American countries.

< Table 2-2 Global Competitiveness Ranking of Middle and South American Countries > Category

Name Global

Competitiveness Ranking

(2009~2010) Basic

Requirements Efficiency Enhancers

Innovation and Sophistication

Factors Costa Rica 55 62 58 37

Brazil 56 91 42 38 Panama 59 55 70 54 Mexico 60 59 55 67

Columbia 69 83 64 62 El Salvador 77 66 83 87

Peru 78 88 59 85 Argentina 85 84 84 76 Jamaica 91 101 73 83



Dominican Republic 95 98 88 82 Ecuador 105 93 113 123

Venezuela 113 104 108 130 Paraguay 124 122 115 131 ※ Reference: WEF(2009-2010 Global Competitiveness Ranking)

<Figure 2-2> below shows the development score of the Dominican Republic in 2009. The lowest score is 1 and the highest score is 7.

< Figure 2-2 2009 Development Score for Dominican Republic >



2. Politics · Society · Economy Status 2.1 Politics · Society Status As a republic, the Dominican government is currently led by Leonel Fernandez of

Partido de la Liberacion Dominicana(PLD) since he was elected in May 2004. The congress is elected every four years.

During his first term, President Fernandez contributed significantly in overcoming the economic crisis in 2004. Thanks to his strong leadership, we won the election again in 2008. Ironically during that time, economic depression, social instability and various scandals made the voters turn away from him and his party. However, his newly announced "2010-2030 National Development plan" in 2009 is attracting Dominica again with new goals and development strategies.

Shying away from "US oriented" foreign policies, the Dominican Republic started to host SICA and OAS in 2006. It is focused on strengthening diplomatic relationship with Arab countries as well. It is rising up as one of the strong diplomatic voices in the Central and South American countries by participating in the temporary UN Security Council, and Rio Trilateral Commission in 2008-2009.

2.2 Economy · Industry Status 2.2.1 Current Economic Trend Since the launching of new regime in 2004, various economy support plans have been

implemented to deal with the bankruptcy of Baninter Bank, the 2nd largest bank in Dominica, and IMF funding in 2003. Since then, the macro-economy of Dominican Republic has been stabilized along with increase in travel industry and internal market growth. Dominica showed annual growth of 8% during 2005-2007, the fastest economic growth in the Central and South American countries.

Economic growth in 2008 decreased 5% due to the global economic depression which ultimately led to a decrease in foreign investments and profits from the export market. President Leonel Fernandez is currently focused on "stabilizing the economy and recovering the growth". His main policies deal with cost stabilization, currency stabilization, electric supply stabilization and employment stabilization.

As shown in <Table 2-3>, foreign bonds of the Dominican Republic has been limited to 30% of the GDP since 2005. The DSR is within 10% and is not a significant burden on the Dominican economy.

The Dominican Republic received 1.7 billion USD from IMF and 0.5 billion USD from IDB in order to fund various economic growth policies. Even though increased debt may become a serious burden to the country, IMF is optimistic about Dominica's economic growth in the future. Dominica is expected to reach its rapid economic



growth rate within a couple of years.

< Table 2-3 Major Economic Indicators of Dominican Republic > Classification 2005 2006 2007 2008

GDP(US$100 Million) 293.3 318.0 412.2 457.1 GDP(US$100 Million) 3,247 3,468 4,404 4,797 Economic Growth(%) 9.3 10.7 8.5 5.0 Inflation (%) 7.4 5.0 8.8 10.6 Unemployment (%) 17.9 16.2 15.5 14.0 Foreign Exchange Holding (US$100 Million) 10 17.9 29.4 28.1 Foreign Bond (US$100 Million) 70 79 89 93 Yearly average currency (Compared to US$) 30.14 33.36 33.26 34.41 D. S. R. 6.1 9.3 9.8 11.3 Balance on current account (US$100 Million) -4.8 -11 -22.3 -26 Export (US$ Million /FOB) 6,145 6,610 6,270 6,949 Import (US$ Million /FOB) 9.614 9,559 13,820 13,569

Reference: 2009 data from Central Bank of Dominican Republic, EIU, IMF, KOTIS

2.2.2 Industry and Export Trend As a capital of fabric exports, the fabric industry was the main exporting industry in

the late 90s. However, there is no uprising industry that can replace the fabric industry in the export market. Also, the amount of exports that take up the GDP has been decreased to 15% in 2007 from 27% in 2003. Dominica is in serious need for another strong exporting industry to support the market.

Below, <Figure 2-3> represents ratio of various industries within the Zona Franca, a major part of Dominica's exporting industry.



< Figure 2-3 2007 Industry Ratio in Dominican Republic's Zona Franca >

16%

11%

11%

13%12%

7%

31%

도미니카공화국산업비중

제조업

유통업

건설업

통신업

농수산업

관광업

기타

29%

6%

17%9%

18%

15%6%

도미니카공화국 자유무역지대 업종 비중

의류

신발

전자제품

담배

의료제품

보석류

기타

Industrial Component Ratio in DRComponent Ratio by the types of business in Free Trade Zone

The manufacturing industry

Distribution industry

Construction industryTelecommunication industryAgriculture and fisheries industryThe tourist industry

The others

Clothes

Footwear

Electronic products

Tobacco products

Medical products

Jewelry

The others

※ Reference: 2007 KOTRA and CNZFE Data

< Table 2-4 Major Import/Export Goods and Import/Export Countries > Classification Export Import

Ferro nickel 25 Petroleum 9.3

Steel 8.1 Gasoline 6.3 Ratio of 3 major products (%)

Rum 4.8 Fuel 4.5

USA 20.9 USA 30.2

Haiti 12.7 Venezuela 10.4 Ratio of 3 major import/export countries (%)

Spain 8.4 Taiwan 6.7 ※ Reference: 2008 Dominican Republic Ministry of Export Promotion Report and Export data from Custom Service

As shown in <Figure 2-3> and <Table 2-4>, Dominica is focused on promoting various export industries to avoid relying solely on the fabric industry to maintain the export market. Based on the most advanced communication infrastructure among Central American countries, Dominica is focused on promoting various high-value industries such as IT and the travel industry. A reflection of the president’s willingness to develop the economy and advance industrial structure, and emphasize development of systems and human resources, the nation has established and promoted the “Mid- and long-term plan for educational innovation, technological promotion, and vocational training improvement for 10 years(2008~2018).”

The major details are shown below.

▪ Require everyone 15 years or older to complete elementary school curriculum by 2015 in line with the UN Millennium Goals(MDGs)

▪ For educational innovation, promote 10 innovation tasks including budget allocation of



16% of public expenses and 4% of the GDP into educational expenses

▪ For vocational training, promote 10 tasks led by INFOTEP including vocational qualification system, vocational training facilities, industry-academy collaboration, industrial demand survey, financial aid, labor ethics, etc.

▪ In order to gain a competitive edge, promote the innovation of technology led by PECYT+I(INFOTEP) and SEESCyT.

While the National Plan 2010~2030 presents the blue-print of the Dominican Republic society, economy, environment areas, the “Mid-and long-term plan for educational innovation, technological promotion, and vocational training improvement for 10 years (2008~2018)” establishes nation-wide HRD goals and presents strategic tasks concretely.

In order to promote the exporting industry, various tax alleviations and advantages are given to companies residing within the free trade zone which takes up 70% or more of exports of Dominican Republic. Also, by signing free trade agreements with CARICOM and CACM as well as the Contonou agreement with EU, Dominica is focused on opening up the trading market to the world.

2.2.3 Foreign Investment Status Since DR-CAFTA in March 2007, FDI influx has increased significantly. In order to

promote direct foreign investments and exporting markets in the free trade zone, CEI-RD has focused its efforts on implementing various policies to entice foreign investments. CEI-RD has surveyed FDI scale and tendency, roles of multi-national companies and their influence over the Dominican Republic, set a direction for boosts in export and export solicitation, and establish and make PR activities on “National brand” through PR program. For PR activities of the nation’s brand, the nation has prepared the plan as shown below in <Table 2-5>.

< Table 2-5 CEI-RD 2010 Foreign Investment Solicitation Plan > Target Details

PR via press ▪ PR activities regarding nation’s brand image through TV, radio, newspaper, internet, etc.

▪ In order to promote brand PR campaign in the global market, hold international forums and workshops for study, analysis, and definition of proposed strategies.

External supportive activities

▪ In collaboration with the overseas offices of CEI-RD, promote PR activities by visiting Europe(Spain, Germany, France, Swiss), US(Miami, New York, New Jersey), Caribbean countries(Puerto Rico, Jamaica), Latin America(Columbia, Peru, Argentina, Brazil) and holding international road shows

▪ Visit the Cacao area of the Dominican Republic, hold leaders’ meetings and presentations



Others (National

image improvement

activities)

▪ Plans to start a reality show called 'Beisbol Republic' to strengthen the symbol and value of Dominican Republic baseball

▪ Plans to make documentary named “Caribbean Sun” to introduce mass culture ▪ Plans to publish ‘National brand’ covering noble image of Dominican Republic ▪ Plans to promote PR activities for Dominican Republic fashion through an event

called ‘Dominicana Moda’

In order to promote various high-value industries such as IT and high-technology industries as the main exporting industries of Dominica, an IT industry valley called "Cyber Park" has been constructed near Santo Domingo

< Table 2-6 Foreign Investments in Dominican Republic > Classification Foreign Investment Status

Scope of Foreign

Investments (2004~ 2008)

Country 2004 2005 2006 2007 2008 % USA 176.6 254.6 671.5 796.1 497.4 28.1 Spain 126.6 220.6 178.0 258.3 190.0 17.5

Canada 274.2 194.9 90.5 163.3 587.1 15.7 Others 331.6 352.9 243.3 479.9 1,610.2 38.7 Total 909.0 1,023.0 1,183.3 1,698 2,884.7 100.0

Investment in different

Areas

Year Mineral Communication Energy Manufa

cturing Free

trading zone

Finance Travel Real estate Total

‘08 299.6 283.1 51.7 703.6 66.5 237.3 236.9 656.0 2,884 Ratio 6.5 15.0 10.6 20.2 5.0 5.4 19.0 14.5 100

Reference: 2008 Statistics from Central Bank of Dominican Republic



3. Status of Project Site Santiago City Name : Santiago

Location : 180km Northwest from Santo Domingo

< Figure 2-4 Map of Dominican Republic >

Climate : Tropical climate (Temperature : 20~40 C degrees, Humidity: 50~60%)

Landscape : Flat land (Cibao region) between central and north mountain range.

Population: Approximately 1,051,522 (Male: 519,586 Female: 531,936), 2006

Administrative District : Santiago City is the central city of 7 regional communities in the Cibao area (Janico, Licey al Medio, Santiago, San José de las Matas, Tamboril, Villa Bisonó, Villa González).

Scope : Total area(2,839), Urban Area(612), City Area(75)

City expansion trend



< Figure 2-5 Santiago City expansion trend (1800~1994) >

※ Reference: Santiago City Development Society (CDES)



< Figure 2-6 Growth trend of major industries (2002~2008) >

※ Reference : Central Bank of the Dominican Republic

As shown in table above, President Fernandez’s economic promotion policy led to rapid growth in the real estate and trading industry since his reelection in 2008. Santiago City, Dominican Republic's No. 1 city in terms of industrial market, is suited for the implementation of various economic growth polices led by the government. In order to further promote the economic growth of the Dominican Republic, construction of a Trade center seems appropriate.

< Figure 2-7 View of Santiago City >



Santo Domingo City Name : Santo Domingo

City Area : 104.44㎢

Population: 2,987,013 (2006 standard)

Climate: The city has a monsoon climate (Koppen classification). Trading winds function as a decreasing factor for both temperature and humidity, which accounts for large differences in climate even within the city. The average precipitation is 1,445㎜. During January to April when there is a dry period, where the monthly average precipitation is less than 60㎜. December to January is the coldest season with 24℃ of temperature. The hottest months are July and August with average temperatures of 27℃.

Administrative district: It is divided into one Guzman National District and three regional districts. The three regional districts are Santo Domingo Norte, Santo Domingo Este and Santo Domingo Oeste.

City status: As the capital of the Dominican Republic, many local and international company headquarters are located within Santo Domingo City. The Ozama River that measures 148㎞ runs across the city connects to the Caribbean. The city is equipped with a high-tech IT communication web and has the potential to become a global city.

< Figure 2-8 City view and CEI-RD headquarters >



4. Information Technology Area 4.1 National Information Technology Status

4.1.1 ICT Industry Status Despite the global economic depression, Dominica's ICT industry still showed

economic growth under President Leonel Fernandez's strong policies. Dominica's ICT industry still has momentum for future growth.

In order to become the best IT country in the Caribbean, the Dominican Republic continued to invest in the wireless communication industry and broadband distribution. By increasing both domestic and foreign investments into the field, the distribution rate of internet and wireless networks have also increased significantly during the last few years. The amount of foreign investments in the IT field during 2004-2008 was 1 billion USD and continues to increase very rapidly. According to the statistics provided by the Central Bank (Banco Central), ICT industry shared 15.1% of Dominica's GDP and became one of the leading industries in the Dominican economy.

4.1.2 Wireless/Wired Communications Status The communications industry has grown very rapidly in the past few years. The

growth was 27% in 2008 and 13.9% in the third quarter of 2009. The total number of installed lines up to the third quarter of 2009 was 9.33 million lines, exceeding the total number of installed line in 2008. Out of 9.33 million newly installed lines, 8.37 million lines (90%) are wireless lines.

< Table 2-7 Communication line installation status in Dominican Republic > (Unit: Lines)

Classification 2004 2005 2006 2007 2008 2009(1~9) Communication 902,258 896,252 897,026 906,485 985,711 962,432

Wireless Communication 2,534,063 3,623,289 4,605,659 5,512,859 7,210,483 8,374,077

Total 3,436,321 4,519,541 5,502,685 6,419,344 8,196,194 9,336,509 Reference: OPTIC



< Figure 2-9 Number of installed wire/wireless lines >

※ Reference: OPTIC

According to data collected up to September 2009, 10% of registered members use wire-based communications and 90% of registered members use wireless communications. Cell phones are becoming a significant part of the communication industry.

< Figure 2-10 Communication Industry Registered Member Ratio >




Dominica's communication market is shared by Dominica's Tricom, Mexico's Codotel and France's Orange.

< Table 2-8 Comparison of Major Communication Companies >

Company Market introduction

Number of employees Number of wireless members Service area

Tricom 1988 n/a n/a Fixed telephone, wireless telephone, internet, TV cable

Codetel 1987 1500 2. million (Wireless Service brand name is Claro>

Fixed telephone, wireless telephone, internet

Orange 2000 n/a 2.2 million Reference: KOTRA

< Table 2-9 Cell phone market share per communication company > Name Codetel Orange Tricom Viva Others

Market Share 57% 21% 11% 7% 4% Reference: KOTRA Santo Domingo KBC

4.1.3 Internet Status The distribution rate as well as internet users are growing rapidly in Dominican

Republic. Dominica has one of the highest internet distribution rates among Central South American countries. In September 2009, Dominica had 31.1% (total of 3 million people) of internet distribution rate, being ranked first in the Caribbean countries in terms of internet distribution rate. The number of internet users has reached 1 million in 2005, 2.14 million in 2008 and 2.5 million in September 2009. Now, 25% of the total population has internet access in the Dominican Republic.

< Table 2-10 Internet line status and number of internet users > (Unite: Thousand lines, %)

Classification 2004 2005 2006 2007 2008 2009(1-9) Number of lines 106 134 183 264 340 399

Internet usage rate 9.2 11.9 15.4 17.7 22.6 25.8



< Figure 2-11 Number of internet users >


Most wired/wireless communications companies are involved in the internet business as well. Codetel, Tricom and Onemax are the leading competing companies in the high-speed internet market. In October 2007, Onemax announced the launching of the WiMAX service in junction with Alcatel-Lucent. Also, after WindTelecom's entrance in November, wireless internet has become prevalent in Dominican society. Codotel, sharing 44% of the entire market, has launched a wireless internet program called "Internet Flash" in order to share the wireless internet market as well.

High speed internet lines have been installed near the borderlines of Haiti, far away from urban and city areas. Dominica is focusing their efforts on constructing communications lines between 508 regions across the nation. However, due to the high membership costs, high speed internet users only make up 10% of total internet users across the nation.

4.1.4 PC Distribution Status According to the ITU, (International Telecommunication Union) Dominica's ICT

development index in 2009 showed a lower PC distribution rate than other neighboring Central South American countries. However, increase in the distribution rate is significantly higher in the Dominican Republic compared to other neighboring countries. According to PC distribution rates up to September 2009, there are significant yearly increases.



< Table 2-11 PC distribution rate in major countries >

Country name 2002 2007 Growth rate compared to 2002(%)

Argentina 27.0 36.4 34.8 Brazil 14.2 20.8 46.4 Chile 20.5 36.4 77.5

Dominican Republic 5.5 12.5 127.2 Mexico 15.2 22.1 45.3

Republic of Korea 78.6 80.0 1.7 United States 59.0 70.2 18.9

Reference: ITU

< Table 2-12 Annual PC distribution rate > (Unit: Number)

Classification 2004 2005 2006 2007 2008 2009(1-9)

Number of PC 159,432 177,147 196,830 218,700 243,000 270,000

Number of homes 2,182,764 2,182,764 2,182,764 2,182,764 2,182,764 2,182,764

PC distribution rate (%) 7.3 8.1 9.0 10.0 11.1 12.3

Reference: CEI-RD

4.1.5 S/W Developing Company Status After interviews with CEI-RD, the main S/W developers are as shown below.

< Table 2-13 Status of major S/W developing companies > Name CAM Informatica, S.A.

Representative Marcos Mejia Vice-President Ejecutivo Telephone 809.331.7000 Ext.309 E-mail [email protected] Homepage www.caminf.com

Major business area

Software development and BAS solution (accounting ERP) Work with CODETEL - Development/application of CLL - Development/application of IDW - Development/application of STR - Development/application of SGC - Development/application of SDP - Development/application of UNICO



Name SINERgIT Telephone 809.368.4000 Telephone www.sinergit.com.do

Major business area

Software development : - BPM - ERP - CRM Distribution of PC and related accessories

Name MERCASEND

Representative Felix Diaz Telephone 809.531.2676 Homepage www.mercasend.com Major business area

Software called Delphos, Apoyo, Matrix, Funciona, Simes, and ICG have been provided to more than 200 companies.

Reference: CEI-RD

4.1.6 Discussion Point Central American internet users make up 5% of total Internet users around the world.

In the last two years, the increase of Internet users in the Central American region has been increased significantly. According to the World Bank and the International Electronic Communication Association, the distribution rate of cell phones in the Dominican Republic has already exceeded the distribution rate in Mexico. The rapid growth can be explained by the increase of foreign investments into the nation after introducing competition in the communications market.

Even though high speed internet, wireless internet and internet phones are being distributed rapidly in the nation, the distribution rate within the Dominican population is still very low. However, considering the current increasing trend as well as the investment trend into these markets, the distribution rate is expected to grow rapidly within the Dominican population.

4.2 Government Information Status Every September, electronic government strategy is established by OPTIC and CNSIC

to construct e-Dominicana (updated annually).

IT electronic government promotion plan, mobile electronic government plan and other various master plans for the construction of an electronic government are currently being discussed.

A significant synergy effect is expected when the master plan business is funded properly considering the president's focus in the electronic government business.



Korea's Uni-Pass and NEIS system are being implemented in the Dominican Republic government.

< Table 2-14 2006~2008 Major Electronic Government Project Funded by the Government > Project Budget Use Remarks

Government Intranet Feasibility Investigation (Estudio de Factibilidad)

US$ 100,000 Feasibility study for the construction of government intranet

In progress/G2G Opened in 2006.10

Intranet for Public Security Offices

(IESP, Interconexion Estatal por la Seguridad publica)

N/A

Information share within 17 public safety offices (Ministry of Communication, Internal Affair, Police, National Security, Construction, Immigration and others)

In progress/G2G

Government Intranet (Intranet Gubernamental) US$ 3 million Construction of

government intranet G2G Executed after feasibility report/G2G

Management System for Social Assistance

(SIGAS, Sistema de gestion de Ayuda Social)

US$ 55,000 System to process social fund cooperation and adjustments

Opened in 2006.10 G2G/G2C

Import/Export Portal (Portal del Exportador) US$ 30,000 Portal site for

import/export companies Opened in 2006.10 G2B

Virtual Government Directory

(Proyecto Directorio Virtual) US$ 31,000 Construction of

government address book Opened in 2006.9 G2G/G2C

Emergency 911 System N/A Construction of emergency 911 system Planning Stage

Single Window for Business Establishment

(Ventanilla Unica para la Creacion de Empresa)

US$ 570,000 Integration of systemized portal for business establishment

Opened in 2006.11 G2B

Electronic Complaint Management Center (Centro de Gestion y

Atencion al Ciudadno)

N/A Electronic process of civil complaints toward public services

Opened in 2006.12 G2C

Reference: KOTRA

In order to distribute internet networks on a national level, a total of 1 billion Pesos have been invested by the Dominican government until November 2008 and 867 'Internet Centers' have been constructed around the nation. The Ministry of Communication aims to construct 1,400 technology centers equipped with an electronic library and internet access computers.

In order to promote the IT industry in the Dominican Republic, large-scaled IT districts have been constructed to promote investments from foreign companies. Also,



by establishing the ITLA research center, Dominica is aiming to become the mecca of the Central South American IT industry.

INDOTEL is planning the following business to promote the ICT industry.

Digital Cities, Communication Technology Centers

Supply computers to education centers, construct digital rooms within universities, construction of electronic library and others

Provide internet access in public libraries, police stations, and culture centers

Strengthen civil security with support from police offices

Telemedicine and others

Also, by utilizing its central location in Central and South American countries, it can become a new “e-Trade Hub” of the neighboring region. The DR government is focusing its efforts on promoting export businesses through the ICT system.



5. Import/Export Status and Related Policies 5.1 General Import/Export Status

5.1.1 Export Status The annual export increase rate was below 6% during 2005-2007, significantly lower

than the average annual export increase rates of DR-CAFTA member countries, 11%. The sudden decrease of the exporting market in the Dominican Republic may be explained by the downfall of the free trade zone, the delay in selecting prospective exporting industries and the lack of exporting finance policies.

< Table 2-15 Economic Prospect of Dominican Republic > 2008 2009 2010 2011

Economic Growth (%) 4.5 3.8 4.5 4.5 Inflation (%) 10.5 8.2 6.1 5.4 Export Growth (%) 3.1 1.1 0.2 4.0

Reference: EU

5.1.2 Export Status The exporting drive of the Dominican Republic has been weakened significantly in

recent years. Since the 1990s, 35% of Dominica's GDP was supported by goods exports. However, it has decreased to 27% in 2003 and 15% in 2007.

The reason behind the sudden decline of the exporting industry in the Dominican Republic has to do with the downfall of the free trade zone, delay in selection of prospective exporting industries, and lack of exporting finance policies. Even though the decline of the free trade zone is persistent, it still shares 65.3% of the Dominican exporting market.

The total exports of the Dominican Republic was 5.5 billion USD in 2003, 5.9 billion USD in 2004, 6.1 billion USD in 2005, 6.6 billion USD in 2006, and 7.2 billion USD in 2007. However, the increasing trend started to disappear in 2008. It was 6.9 billion USD in 2008 and 5.8 billion USD in 2009. Thanks to the economic boom in the US, the exporting market of the Dominican Republic also marked its peak at 7 billion USD in 2007. However, the importing market has also peaked in the same year (13.6 billion USD). (The trade balance was minus 6.4 billion USD, the largest loss in the history of the Dominican Republic.)

< Table 2-16 Annual Import/Export Status > (Unit: Million USD)

2003 2004 2005 2006 2007 2008 2009 Export 5,470 5,935 6,144 6,610 7,160 6,949 5,765 Import 7,626 7,888 9,869 12,174 13,597 16,080 12,449



Reference: EU

< Table 2-17 Five Major Export Countries > (Unit: Million USD)

2007 2008 Rank Country Export scope Share(%) Country Export scope Share(%)

1 USA 597 26.4 USA 388 20.9 2 Netherlands 355 15.7 Haiti 235 12.7 3 China 190 8.4 Spain 156 8.47 4 Haiti 155 6.8 Netherlands 143 7.7 5 Korea 135 5.9 Belgium 118 6.3

Reference: Export statistics from Tax Service

5.1.3 Import Status Imports were decreased during 2002-2003 due to the economic depression. Imports

were at 7.9 billion USD in 2004, 9.9 billion USD in 2005, 12 billion USD in 2006, 13.1 billion USD in 2007, and 16 billion USD in 2008. The increasing trend has stopped in 2008-2009 due to the global economic depression. Imports were at 12 billion USD in 2009.

The five major importing goods of the Dominican Republic are petroleum and its derivative products, large consumption food products, automobile and electronic goods, steel products, and medical and chemical goods. Imports of petroleum and its derivative products scaled up to 4.22 billion USD, sharing 31.4% of total importing goods.

< Table 2-18 Five major import countries of the DR > (Unit: Million US$)

Origin country + FOB standard Shipping country + FOB standard Rank

Country Exporting scope Share (%) Country Exporting scope Share (%) 1 USA 4,034 30.2 USA 4,423 33.1 2 Venezuela 1,397 10.4 Venezuela 1,397 10.4 3 Taiwan 895 6.7 Mexico 781 5.8 4 Mexico 836 6.2 Columbia 712 5.3 5 Columbia 723 5.4 Taiwan 612 4.6

Reference: Export statistics from Tax Service

5.2 Import/Export Status of Major Goods The major exporting goods of the Dominican Republic are sugar, coffee and its

derivatives, cacao and mineral. Major importing goods are consumer goods, raw



materials, and capital goods. Excluding exports from the free trade zone, ferro nickel showed 60.5% increase in 2007 but showed 56% decrease in 2008. The export increases of coffee and cacao were 31% and 18% respectively in 2008.

The exports from the free trade zone shared 65.3% of total exports in 2008. The exports from the free trade zone showed 2.1% increase in 2003, 6.3% increase in 2004 and 1.4% increase in 2005. However, it showed 1.5% decrease in 2006, 4% decrease in 2007 and 0.4% increase in 2008. A total of 525 companies resided within 48 districts of the free trade zone until 2008. Out of 525 companies, 44% are from the US, 32.1% are from the Dominican Republic, 3% are from Puerto Rico, and 2.6% are from Korea.

< Table 2-19 Export Status of Major Trading Goods > (Unit: Million US$)

Category 2003 2004 2005 2006 2007 2008 Sugar 97.0 93.5 73.1 104.9 98.0 84.8 Coffee 16.5 5.8 4.1 8.79 6.37 8.3 Cigarettes 13.3 37.4 11.5 6.2 14 11.1 Cacao 77.0 59.4 26.8 57.9 81.0 92.6 Ferro Nickel 238.7 390.0 289.1 709.9 1,098 492 Free Trade Zone 4,398 4,416 4,545 4,507 4,525 4,544 Total 4,840.5 5,002.1 4,949.6 5,394.6 5,822.3 5,232.8

Reference: Central Bank of Dominican Republic

< Table 2-20 Import Status of Major Trading Goods > (Unit: Million US$)

Category 2003 2004 2005 2006 2007 2008 Consumer Goods 2,009 2,750 3,086 4,437 5,915 6,856 Raw material 1,072 1,350 1,560 2,963 3,561 4,570 Capital goods 815 870 1,060 1,345 1,812 2,143 Total 3,896 4,970 5,706 8,745 11,288 13,569

Reference: Central Bank of Dominican Republic

5.3 Export Status of Free Trade Zone The number of free trade zones has increased to 59 locations in 2007 from 46 locations

in 2000. The number of employees in the region has been decreased to 120,000 employees in 2007 from 190,000 employees in 2000. The fabric industry, one of the major industries in the free trade zone, has been declining since 2000. Total exports have decreased to 1.7 billion USD in 2007 from 2.2 billion USD in 2003.

The decrease in free trade zone exports has to do with the decline of major industries



in the Dominican Republic as well as increases in labor costs. As the labor costs of the Dominican Republic increased significantly since the termination of import quarters in US, many Asian investors turned to Guatemala, Honduras and other neighboring countries for new investments. Clothing exports have decreased to 1.7 billion USD in 2007 from 2.2 billion USD in 2003. It has decreased by almost 50%. (Weekly pay for workers within the free trade zone was 718 Pesos in 2000. It has been increased to 1,480 per week in 2007.)

Also, failure to find an alternative industry other than the fabric industry to support the export economy was one of the main reasons for the decline of free trade zone trading. Thirty-two percent of 526 companies residing within the free trade zone deal with fabric trading. Other companies deal with agricultural devices, service, tobacco, plastic manufacturing and other goods. In order to promote the exporting market in the Dominican Republic, there is a crucial need to find an alternative industry to lead the economy. Various export finance policies and promotion strategies must be implemented soon.

< Table 2-21 Export Statistics per Good in Free Trade Zone (03/1~07/1) > (Unit: 1,000 US$)

Good 2003 (Jan) 2004 (Jan) 2005 (Jan) 2006 (Jan) 2007 (Jan) Fabric 2,196,435.8 2,120,564.7 1,904,637.7 1,596,319.0 173,998.5

Electronics 577,590.4 630,522.6 700,330.0 666,415.5 89,521.6 Jewels 466,820.7 600,949.9 602,893.5 631,498.8 76,113.8

Medical goods 320,725.3 288,338.6 284,107.0 294,127.8 38,857.0 Shoes 202,547.3 234,728.7 315,321.5 287,852.8 36,797.0

Tobacco 287,620.8 308,607.4 334,073.2 364,529.3 51,971.5 Others 355,018.3 501,528.9 608,287.4 665,905.8 98,685.1 Total 4,406,758.4 4,685,240.8 4,749,650.3 4,506,649.0 565,944.5

※ Reference: Central Bank of Dominican Republic

5.4 Status of Exporting Companies The number of export companies in the Dominican Republic was 3,000 in 2009.

Seventy percent of these companies have less than 100,000 USD of annual exports. Even though only 2.9% of these companies have more than 10 million USD annual exports, they share 80% of the total export market in the Dominican Republic. Therefore, various policies to support mid-sized companies should be implemented to promote the export market.



< Table 2-22 Number of Exporting Companies Based on Their Scope > Number of Companies

Scope 2005 2006 2007 2008 2009

More than 100 million 7 9 7 8 8 More than 10 million 70 72 81 77 78 More than million 255 246 257 293 249 More than ten thousand 542 481 699 666 563 Less than ten thousand 1,994 1,675 2,133 2,041 2,043 Total 2,868 2,483 3,177 3,085 2,941 ※ Reference : CEI-RD

< Table 2-23 Exporting Amount Per Scope > Exporting Amount (Total: FOB US$10,000)

Scope 2005 2006 2007 2008 2009

More than 100 million 1,310.63 1,684.88 2,341.20 1,846.47 1,218.15 More than 10 million 2,185.46 2,397.18 2,259.38 2,624.34 2,442.57 More than million 776.37 765.47 849.46 883.83 799.51 More than ten thousand 188.60 169.13 241.90 225.27 194.98 Less than ten thousand 34.64 30.92 37.00 38.00 41.17

Total 4,495.70 5,047.58 5,728.94 5,617.91 4,696.38 ※ Reference : CEI-RD

5.5 Trading Scope with Korea Income of the Dominican Republic during the first half of 2009 decreased by 80.1%,

and exports decreased by 43.4%. The export of automobiles, the major export product to the Dominican Republic, has been decreasing rapidly in past few years but exports of zinc plate and medical goods are increasing over the years.

< Table 2-24 Export Status to Dominican Republic > (Unit: 1,000 US$)

Classification 2003 2004 2005 2006 2007 2008 First half of 2009

Export 81,526 73,867 120,437 108,864 120,362 125,500 37,000 Import 71,844 121,849 68,544 87,216 126,158 90,200 11,000 Trade balance 9,682 -47,982 51,893 21,648 -5,796 35,300 26,000 ※ Reference : KOTIS



< Table 2-25 Major exporting goods to Dominican Republic in 2008 > (Unit: 10,000 US$)

Classification Automobile Truck Zinc plate

Automobile parts Tire Fabric Steel

plate

Scope 2,592 860 656 469 412 355 353

※ Reference : KOTRA

< Table 2-26 Products that showed significant growth in 2008 > (Unit: 10,000 US$)

Category 2007 2008

Zinc plate (35.9%) 4,826 6,560

Medical goods(33.9%) 2,105 2,820

※ Products that were above 1 million USD IN MT14Unit are included ※ Reference : KOTIS

< Table 2-27 Products that showed significant downfall in 2008 > (Unit: 10,000 US$)

Category 2007 2008 Automobile(-55.4%) 46,749 25,920 Tire (-13.3%) - -

※ Products that were above 1 million USD IN MT14Unit are included ※ Reference : KOTIS

The main product imported from Dominica to Korea was steel alloy (ferro nickel). Imports have increased from 53 million USD (61% of total imports) in 2006 to 114.65 million USD (91%) in 2007. Even though the importation amount has been decreased to 47.77 million USD (-58.3%) in 2008, it is still being ranked as number one product that is being imported to Korea (52.9% of total amount). On the other hand, imports of ferro nickel have decreased in 2008, while imports of used batteries were increasing rapidly along with copper scrap, steel scrap and sanitized medical goods. However, the total import amount has decreased by 28.5%.

< Table 2-28 Major import products from Dominican Republic in 2008> (Unit: Million US$)

Classification Steel alloy Steel scrap Used batteries

Sanitized medical goods

Aluminum and steel

scrap Cost 48 17 8 4 2

Increase rate(%) -58.3 2,668.9 4,118.9 24.0 4,895.9

※ Reference : KOTRA



Chapter III. Project Executing Agency and System

1. PEA and PMO 1.1 Project Executing Agency (PEA) Name of Project Executing Agency

CEI-RD: Centro de Exportación e Inversión de la República Dominicana

Outline

CEI-RD is an organization made from combining CDEOPEX and OPI-RD in 2003.06.17. It is focused on promoting the international export industry and foreign investments in the Dominican Republic.

Business area

In order to advertise and promote the Dominican Republic’s export industry, various policies are being implemented to increase nation’s competitiveness in the global market and to entice company investments into the Dominican Republic.

Organization (242 employees)

Directly under the president’s command, CEI-RD is composed of the export promotion department, foreign investment promotion department, and service support department.

< Figure 3-1 CEI-RD Organization >

※ Reference: CEI-RD



1.2 Project Management Office Cooperation between the Korean organization and the Dominican team is crucial for

the successful execution of this project.

The Project Executing Agency, CEI-RD, is planning to form the Project Management Office as shown in Picture 3-2 for an effective execution of the project.

< Figure 3-2 Project Management Office Organization >

Director of PEA(CEI-RD Minister)

PMO Director

Inter-department Unit (PIU) Administration Team

Management of construction

inspection

Support construction certif ication/

authorization process

Work with related offices to construct

required infrastructure (electricity,

water line, gas line and others

Soil investigation required for design

and construction process

Construction Team

Management of system development

Work with related offices for export

authorization, transaction and

shipment process

Review legal policies and its

implementation required for eTrade

system

Trade System Team

Management of education course

development

Operation of academy and

establishment of strategies

Establishment of training program for

teachers

Cooperate with other education

offices

Trade Academy Team

Before starting this project, bidding documents should be drafted in order to select professional consultants for this project. Then, the following tasks must be executed with help from consulting companies.

Preparation of bidding documents, bidding proposal evaluations, authorization of design drawings

Authorization of actual design drawings and specifications Project progression management Preparation for authorization from the Dominican Republic Government (documents

and reports)



2. Project Execution and Cooperation System In order to execute this project successfully, PEA and PMO must work together to

form a Project Implementation Unit (PIU) that can intervene in the early stages if there are any problems. Then, in order to have fluent communication between different departments, each department should appoint an employee who specializes in this project. All of the parties should work together closely to execute this project successfully.

< Figure 3-3 Project Cooperation System >



3. Experience in Similar Projects JICA Project: Construction of Human Resources Education Center for Promotion of

International Exports

< Table 3-1 Project Summary for Similar Projects >

Classification Contents

Fund JICA Fund

Cost ▪Total cost :USD 7,000,000 - Free credit : USD 6,000,000 - Material donation : USD 1,000,000

Project Scope

▪3 Floors ▪Total area: 3,065 ㎡ - 1st floor : 1,075 ㎡ - 2nd floor: 978 ㎡ - 3rd floor: 1,012 ㎡

Project goal Provide basic business education to foster human resources required to promote international exports.

Project details Construct a center focusing on supporting companies and providing basic business education to foster human resources required to promote international exports.

Major training program

General courses such as ‘Basic international trade’ are opened, and seminars and workshops covering export business plan, business opportunities in the European market, effective promotion of export offer, are to be furnished. *Refer to the <Table 4-16> for further details.

Project period 2007~2008

Location Next to the CEI-RD Headquarters in Santo Domingo City

Beneficiary Private investments composed of middle sized companies

Expected effect Train professionals in international trading

Result

By providing a wide range of education such as management, freight, sales, and development of new markets to anyone willing to learn about international trading, it became one of the major international trading company centers (I*CEi) in the Dominican Republic.



Current status

▪Provide basic human resources education programs to trading companies each year ▪Provide high quality education programs for trading company CEOs ▪Promote various culture activities for local and international participants interested in trading with Dominican companies ▪Cooperation with local and international university research centers ▪Operation of a trade academy program

Weak point

▪Since the education program is limited to theoretical aspects of trading, more specialized education that can be used directly in the field is needed. * Refer to 2010 I*CEi basic education program and CEO education program

Application to this project

▪The training program that will be provided in our project will be upgraded version from I*CEi education program.



Chapter IV. Project Execution Plan

1. Outline As shown in the status analysis, Dominican Republic also went through several

economic crises after 1980s. However, its economic development trend is much better than its neighboring countries.

Even though the fabric industry became the leading industry of the exports market in 1990s, its role in GDP has been decreased to 15% in 2007 from 27% in 2003. Dominica is in need of a new industry to lead the exports market. Also, there is a need to implement various cooperation systems to promote exports from companies with less than 10,000 USD of annual exports since they form 70% of the 3,000 exporting companies in the Dominican Republic.

Also, even though the CIBAO region established the free trade zone to promote active trading within the region, there is no exhibition center that can aid trading businesses around the region. EXPO CIBAO, a trading exhibition that is held every September, is located far away from the suburban area of Santiago City. Not only that, but it does not have its own exhibition building and is being hosted in a gymnasium. The lack of an exhibition center led Dominican to host only 10 major exhibitions each year as shown in <Table 4-1>. Therefore, there is a need to provide a system that will host and promote these exhibition centers.

Also, there is a need to reform the trade process in accordance with changes in the information environment and gain a competitive edge to cope with changes in the global trade environment. Consultation bodies including the UN, APEC, ASEM has recommended building a [e-Trade Single Window] to invigorate trade. The e-Trade Single Window aims to build an integrated trade information foundation that can provide one-stop service in connection with relevant organizations’ services such as customs clearance, quarantine, foreign exchange, etc.

In addition, the Trade Academy in CIBAO for vocational training must be built to boost exports. In Korea, the supply of well-trained human resources contributed to rapid economic growth and transfer to a knowledge-based economy in Korea, but the Dominican Republic lacks such development of human resources, the major reason that limits enhancement in exports and the strengthening of competitiveness in businesses.

Similar to what Korea did to promote their trading businesses, the Dominican Republic should also execute the following under CEI-RD’s command.

Construction of a trade center, which is a physical requirement

Construction of a trade academy for human resources, which is a personnel requirement



Construction of an integrated data system for operation purposes, which is an operational requirement



2. Construction of Trade Center 2.1 Status Analysis

2.1.1 Research on Land and Infrastructure A. Proposed project site

The proposed project site location of the CIBAO trade center is as shown below. It is 20km from Santiago International Airport, 2km from downtown, and 3km from the free trade zone. It is easily accessible from any region in Santiago City.

< Figure 4-1 Location of CIBAO Trade Center >

The trading support business is being led by CEI-RD of Santo Domingo City. The trade academy is being operated at a small 3 story building constructed during the JICA project.

Therefore, Santiago City is the perfect location to construct a trade center that can hold various exhibitions and provide the proper education required to promote trading businesses in the city.

B. Opinions after Visiting the Construction Site and Analyzing the Status

After considering neighboring environment, social facilities, accessibility, cost, size, and future potential, Antiguo Aeropuerto Cibao has been selected as the site for the construction.

Name: Antiguo Aeropuerto Cibao



Location

▪ Averida Bartolome Colon corner Padre Las Casas : Sector Padre Las Casas, Santiago, Republica Dominican

▪ 180km Northwest from Santo Domingo City (2 hours by car)

Status

▪ 2km from downtown, 3km from free trade zone and 20km from international airport

▪ It was used as an airport site previously and is located with residential and commercial areas nearby.

▪ A large area has been obtained to fulfill required functions and future development is also possible

▪ The construction of a park in the earlier runway area will serve as a green axis that will provide environment-friendly and buffer zone around the region.

< Figure 4-2 Photos of Antiguo Aeropuerto Cibao >



< Figure 4-3 Antiguo Aeropuerto Cibao: Satellite image >

Neighboring area

▪ The neighboring area is composed of small residential and commercial regions. The region may be developed along with the construction of a trade center in this area.

▪To the north is Rio Yaque Del Norte. The site’s boundary is not clear around the neighboring region.

▪ An airport terminal building is still present and the runway is being used as a car racing track.

▪ Since it is only 20km away from major regions of Santiago City, it will have advantages in hosting international visitors.

Soil quality

▪ Visible land area is composed of sedentary soil. Based on visible land sites, it will have no problem withstanding the weight of construction center.

Slope

▪ Inspections showed no slope issues for the construction. It was previously used as an airport.

▪ Since the land has been previously constructed as an airport, additional cost required to prepare the land will not be an issue for this project. It will be of great help in managing the construction cost efficiently.

▪ By considering possibilities of expansion around the area, this site has the most advantages compared to other candidates.



▪ The executing agency must submit information about the exact boundaries of the site and land research data before the project is started.

Earth Strength

▪ Based on inspections, the site seems to be normal ground composed of sedentary soil.

▪ Earthquake frequency 1 /5-10 years. 7 years ago, 4.3 strength earthquakes occurred in the Santiago City. Based on experiences in Haiti, it is important to perform investigations about the land before starting the construction.

▪ The executing agency must perform soil investigations and earth strength tests for the entire land site in order to form basic and design drawings based on accurate data.

Direction

▪ Since the site has been used as an airport before, it has clear view around the city from 2-3 stories high.

▪ The main road from Santiago City is from the Southeast and other roads are connected from different directions.

▪ Therefore, the buildings must be allocated so that it faces the main road in the Southeast region. Future expansions may be constructed in the Northwest region. (Setting of construction axis and main input road)



Infrastructure

① Road

▪ The main road in Southeast direction (Round 4 lines) is too small for the promotion of Trade Center. There should be expansion construction conducted by the Dominican Republic for a better flow of traffic into the building.

▪ Southeast area: During the construction of trade center, the Southeast road should be expanded and used as a main input road to the building.

▪ Northwest area: Since the border line is unclear with different residential and commercial area, the Dominican Republic must clear out the boundaries before starting construction.

② Electricity

▪ Even though electricity is currently available, a large amount of electricity is required when the Trade Center is constructed in this site. Therefore, expansion construction is needed.

▪ Since many of the buildings are equipped with electricity-generation facilities to compensate with shortages of electricity, the Trade Center must also be equipped with electricity- generation facilities to host exhibitions and international meetings.

③ Water

▪ Even though there is an existing waterline, the water contains too much calcium that makes it undrinkable. There is a need to install a purification system during the construction of trade center.

▪ PVC pipes must be used to protect the pipes from calcification.

▪ Currently, sewage water from Santiago City is being handled in the Santiago City sewage center using a separate line.

▪ During the basic design phase of the Trade Center, the capacity of sewage center in Santiago City must be analyzed to determine whether the installation of private sewage processing center/device is needed during the construction.

④ Air Conditioning/Heating System

▪ Even though hot water is needed, there is no need for a heating system due to the hot weather.

▪ Considering operation and maintenance of the Trade Center, a central air system (CAV/VAV method) should be applied.

⑤ Wireless Communication System



▪ Use of wireless communication, LAN and Wi-Fi is common.

After visiting the site, we determine that the site is optimal for construction of the trade center due to its large and flat area and its view from every direction of the city.

However, the infrastructure needed for the construction of the trade center is still not prepared for construction. There is a need to expand these infrastructures before construction of the actual building.

A careful investigation on the land including contour surveys and soil tests should be done due to earthquake risks of the Dominican Republic. Also, anti-shock considerations should be made during the design process of the Trade Center.

Summary of Preceding Tasks prior to Start-up of the Project

Category Tasks Purpose

Site Boundary and topographic survey, and land facilities survey

Figure out boundary of site and facilities underground → Building arrangement data

Soil Geological survey and earth strength test

Make decision on structure of construction

Road Road expansion work, arrangement of back-side area

Facilitate transportation system surrounding the site

Electricity Electricity extension work Secure electric capacity

Water Figure out sewage treatment plant capacity

Decide sewage treatment method



2.1.2 Comparison of Construction Features of Similar Local Constructions

< Table 4-1 Comparison of construction features > Classification Case-1 Case-2

Photo

Use Residential building (apartment) Commercial building (shopping center)

Structure RC SRC

Exterior Painting Curtain wall + AL panel + steel

Features

In order to avoid sunlight, terrace and sun blind louver figures at the front part of the building are being used major functional/design factors Roof insulation constructions are

being commonly installed to protect the building from the solar heat Detailed constructions are being done Recently, construction of residential

buildings with more than 10 story high has been increased Closed space

Commercial buildings use SRC structure to form a long span space within the building

Since the size of steel structure in the building is not big, the ceiling construction is very complex

New construction methods and materials are being used

Strong colors and open inner/outer space Opened elevation

Modern style buildings with opened floor plans and elevations are being constructed across the nation.

However, this construction must also consider traditional construction properties (sun light, terrace, closed elevation) as well as environment-friendly construction during the planning phase.

By applying modern and regional construction properties, we are planning to implement an environmental-friendly construction design to the building.



2.1.3 Status of Major Exhibitions

< Table 4-2 Schedules of Dominica’s major exhibitions >

Name City Period Time in year Location Remarks

International Energy Santo Domingo Annually October Hotel

Renaissance Jaragua

Santo Domingo International Steel Exhibition

Santo Domingo Annually ‘09.03.12~15 Hotel

Dominican Fiesta

Santo Domingo International Furniture Exhibition

Santo Domingo Annually Mid March Hotel

Dominican Fiesta

Puerto Plata Integrated Exhibition

Puerto Plata Annually Late March

Polideportivo General Gregorio Luperon

Santo Domingo International Book Exhibition

Santo Domingo Annually Late April Teatro

Nacional

Santo Domingo Construction Exhibition

Santo Domingo Every

other year ‘09.05.14~17

Hotel Dominican

Fiesta

Santo Domingo Automobile Exhibition

Santo Domingo Annually Late July Estadio

Quisqueya

Santo Domingo Hotel and Restaurant Exhibition

Santo Domingo Annually Late August Hotel

Dominican Fiesta

Cibao Exhibition Santiago Annually ‘09.09.16~20 Complejo

Deportivo La Barranquita

Santo Domingo IT Exhibition

Santo Domingo Every

other year ‘10.10.20~24

Puerto San Souci

Constatucion Exhibition San Cristobal Annually ‘09.11.04~09

As shown in the above table, exhibitions during the year have been held in Santo Domingo, the capital of Dominican Republic, excluding three(3) exhibitions held in local areas. EXPO CIBAO is the largest and global exhibition, which is held in Santiago every mid September.



The general exhibition EXPO CIBAO boasting the largest scale in Latin America faced difficulties in finding a place for exhibition; it was held in the yard of Bukka minor University, but the place was changed to Santiago Hall, and then it was held in the Barranquita Sports Complex for the last 9 years. During five(5) days of EXPO CIBAO last year, about 350,000 people visited 420 booths of 220 participants of the EXPO CIBAO where transactions worth USD 10 mil. were concluded through about 150 cases of exports consultation.

In case of Santiago, the biggest agricultural product site and one of the major export cities of the Dominican Republic where the free trade zone, which was the major source of US dollar influx for the last 10 years, declined due to financial crisis under IMF. The city has exerted efforts to boost exports through industry-academy collaborations. Such efforts started before (e.g., the nation promoted the building of a convention center at the center of the country about 15 years ago), but it was suspended due to financial problems among others. The DR began to promote the plan to build a standing exhibition hall in the free trade zone again.

Similiar to Korea, economic development based on exports is the Dominican Republic’s major national policy. While the Dominican Republic – especially Santiago – is equipped with conditions for active promotion of exports such as solid financing capability, systematic cooperation system, and new port construction plan in Monte Cristi, etc., it lacks an exclusive exhibition hall, and therefore there is an urgent need to build the standing exhibition hall to boost exports.

When the exhibition hall is constructed by construction of the CIBAO Trade Center, EXPO CIBAO, which is planned to be reshaped into a specialized exhibition from general exhibition, can be held in a smoother manner. Also, other exhibitions which have been held in Santo Domingo can be held in Santiago, thanks to a well-established road network. Various exhibitions in relation to active industry activities of Santiago can also be held, which may invigorate the economy of Dominican Republic.

2.1.4 Exhibition Center Status CEI-RD of the recipient country has 3,100m2 construction on the north side. It has

been constructed in 2008 with JCA (Japan International Cooperation) support. The first floor is being used as an exhibition and business center. The second floor is used as 4 class rooms including a computer class room. The third floor is used as offices and a small sized auditorium.

The export product exhibition center installed in the lobby of the 1st floor of this building is 120m2 of space where there are no separate booths and only some medical products, agricultural/livestock products, construction raw materials, food/beverages required for aid to Haiti, therefore there is a need to construct a broader space standing exhibition center to hold exhibitions and hold PR activities in systematic manner.



< Figure 4-4 Building exterior >

< Figure 4-5 Building interior >



A. Exhibition center

Photo Status

Exhibition of goods is being done to show products that may be exported to Haiti.

The space is too small compared to the number of

provided goods. It is a temporary exhibition space and not suitable

for exhibitions of Dominica’s main products. There is no exclusive exhibition center for export

goods. Current exhibition goods: agricultural goods, dairy

goods, light industry goods



B. Classroom

Photo Status

Not enough space and lecture rooms to hold various classes

Not enough sound/video systems needed for the

classes Classroom status:

One 30㎡ room, one 45㎡ and two 85㎡rooms 30 ㎡ size room : 1 EA 45 ㎡ size room : 1 EA 85 ㎡ size room : 2 EA

C. COMPUTER CLASSROOM

Photo Status

Not enough room compared to the number of computers

No sound/video system is installed the classes No computer desks (cables are exposed) The access floor is not utilized properly and the cables

are fully exposed No installation of individual cooling devices to cool

down heat from computers One with 30 space 24 computers



D. Business center

Photo Status

Even though it is a clean environment, there is not enough space for export/import business consultations to support trade business

It is practically not functional because there is no

updated information No consultation space available

(Area of business center: 90)

E. Auditorium

Photo Status

Auditorium (step-wise room) has 130 seats, not large enough to hold various national events and large-sized seminars. (Auditorium area : 240)

Not enough stage space limits events Since there is not enough sound/video systems as well

as interpretation systems, it is not enough to be recognized as CEI-RD’s main auditorium

CEI-RD representatives also understand the need for

modern conference facilities.



2.1.5 Requests from Project Executing Agency The following are the requests from CEI-RD regarding the construction of the CIBAO

trade center.

A. Function and Design

Suggest the best construction site from 4 candidates suggested by the executing agency

Construct an exclusive exhibition center for CIBAO EXPO which is growing rapidly in size

Include exclusive conference facilities (including live interpretation systems) composed of at least 300 seats

Include an exhibition room that can be used to advertise Dominica’s products

Include a trade academy (small, medium and large class room, computer class room and business center) for the education of professionals

Include the most recent and largest facilities as possible within the budget

Large exhibition rooms should not look like a factory

Apply light and modern construction designs so it can be distinguished from other buildings

An earthquake-proof design should be applied in consideration of what happened in Haiti and the risk of earthquakes in the Dominican Republic

B. Opinions about the request from PEA

A total of 50,000㎡is needed based on the space program given by CEI-RD. By applying USD800/ of construction, total of 40 million USD of construction budget is



needed.

Considering Korean cases, the sizes of the exhibition center, convention center, and grand ballroom should be adjusted.

By comparing trading scope, population and other various factors of Korea and Dominican Republic, it would be effective to have a trade center with size of 20,000. After constructing the center, the government can decide on future expansions based on Santiago City’s status for an effective execution of the project.

2.2 Best Practice 2.2.1 Cases of Trade center

A. Opinions after Reviewing Korean Cases

In order to select the role model for CIBAO Trade Center, economic scope, exhibition frequency/status, operation organization, main use and other various complex factors must be considered.

Comparing with COEX (Seoul), BEXCO (Busan), ICC (Jeju), CONVENSIA (Incheon) and CECO (Changwon, CONVENSIA and CECO shared the most similar characteristics as the CIBAO Trade Center.

Considering building coverage ratio of 50 % and its strategic location (within free trade zone), the most optimal reference project for CIBAO Trade Center construction should be CONVENSIA.

CONVENSIA is designed to support the trading business by being the key location in Incheon Free Trade Zone. Its purpose is to upgrade Songdo City into a center of Northeast Asia’s trade industry.

Santiago city has a free trade zone (Zona Franca) 4km away from the downtown. The construction of a trade center will focus the CIBAO industry onto one location and aid in upgrading the city into the center of Central and South American trading business. Its purpose is similar to that of CONVENSIA of Korea.

The exhibition center project does not end with the construction of the building. In order to maximize its effect, promotion of exhibitions and active operation of cooperation system must be implemented around the region to make this project successful. There are many Korean cases to support how important these activities are after the construction of the trade center.

B. Korean Case Analysis



< Table 4-3 Facilities for Major Exhibition Centers >

Classification SONGDO CONVENSIA CECO

Location Incheon Songdo Gyungnam Changwon

Area 102,166.20m2 39,817 m2

Main purpose Exhibition center, international convention

Exhibition center, international convention

Aboveground 37,396.87 m2 46,714 m2

Underground 19,770.99 m2 - Area

Total 57,167.86 m2 46,714 m2

Scope 1 underground, 4 ground floors 6 floors

Structure Steel reinforced concrete, steel structure

Steel reinforced concrete, steel structure

Exhibition center

▪ Area:8,416m2 (108m x 90m) (Can be divided into two) ▪ Usage: Professional exhibition, fashion show, concert and various events ▪ 450 exhibition booth(3mx3m)

▪ Area:7,827m2 (144m x 54.4m) ▪ Use: Professional exhibition, fashion show, concert and various events ▪ 500 exhibition booth (3mx3m) ▪ Able to hold 7,000 people (theater type) ▪ Headquarters 3 rooms(100m2) Storage 4rooms (332m2) Ticket room 2 units (42m2)



Convention

▪ Premier ball room(2nd floor): 1,716m2

(Can be divided into two) ▪ Meeting room(1st floor) : Maximum division 16/ Six rooms if combined 81m2 (2 rooms), 72m2 (8 rooms), 144m2 (6 rooms) ▪ Meeting room (2nd floor) : Maximum division 3/ Two rooms if combined 81m2 (2 rooms), 108m2 (1 rooms) ▪ VIP Meeting room(3rd floor): 108m2 (1 room) ▪ Meeting room (3rd floor): Maximum division 3 / One if combined 108m2 (3 rooms)

▪ Convention hall (3rd floor): 1,653m2 (Can be divided into 3), Able to hold 2,000 people Class, Award, events Control room, interpretation room: 8VIP room ▪ Meeting room (3rd floor) :

480 m2(Can be divided into two) 400 seats, 6 languages interpretation system International meetings and classes Control room, interpretation room: 6 rooms

▪ Meeting room (6th floor) : 651 m2 Medium sized meeting room (80 ~ 123m2) Can be divided into 7 rooms for meeting, events and symposiums

2.2.2 Exhibition Center Cases Exhibition centers may be classified into permanent exhibition centers and temporary

event exhibition centers based on their function.

According to recipient country’s request, the exhibition center needed in the constructed center seems to be a permanent exhibition center that can be constantly used to exhibit Dominican products to international buyers.



Name COEX Exhibition Center (Trade Market)

Area Approximately 8,900m2

Composition 155 offices with sizes 27~40m2

Operation ▪ Professional trading companies exhibit and sell their products ▪ Synergistic effect from nearby international meeting center

Name Gyungsangnamdo Tourism Goods Exhibition Center

Area 690m2

Composition Exhibition center, high quality good exhibition center, advertisement center, experience center, sales center



Operation

▪ Located at the first floor of Changwon Convention Center ▪ Sells 1,000 tourism goods ▪ Exhibit and sells goods crafted by masters ▪ The space is focused to exhibit, sell and experience the goods at the

same time.

2.2.3 Discussion Points In the Changwon Convention Center and CONVENSIA project, we propose a plan

where we install exhibition facilities, meeting facilities and trade academy in the same room for them to interact both functionally and spatially. Also, instead of dividing the spaces into exhibition center, grand ball room, and conference room, more active methods could be taken to maximize the utilization of different spaces.

CONVENSIA uses 35% of the total land area as a parking lot. If CIBAO Trade Center wishes to construct an underground parking lot, it will take up a large part of the project construction cost. Considering the space of the construction site, huge open land area can be used for ground parking lot. This plan should help reduce the construction cost significantly.

Korean exhibition centers also have operational issues when it is only used as a convention center. Therefore, it is important to actively look for future expansion plans and operation plans during the planning phase of the project. By doing so, overlapping investments could be minimized and the effects of Trade Center will be maximized in the future.

The selection of location that will allow easy access for both international and local buyers should be done after careful review.

The center should not just focus on the exhibition and advertisement of exporting goods. It should also be used as a showroom and as various office spaces so that it can be utilized at its maximum level by various trading companies.

Also, the space allocation of the exhibition center, convention center and auditorium should be done carefully so it can create a synergistic effect both functionally and spatially.

Even though EXPO CIBAO is a large-scale exhibition in Central and South America that holds approximately 470 booths, it does not have an exclusive exhibition center. It is in need of an exclusive exhibition center that can hold international events.



2.3 Design Goal 2.3.1 Scope of Trade center and Major Facilities

A. Bird’s eye view and 3D view of Trade center

Design Direction Proposal

The CIBAO Trade Center is an integrated-functional center that requires exhibition center, convention center and trade academy in the same building. It is a special project that requires adequate allocation of different spaces and functions. There is also a need to utilize and block sunlight at different parts of the building to maximize energy savings. Considering the nation’s love of art and nature, it should be designed with modern styles and materials. It will become the landmark of Santiago City and aid in becoming the trading capital of the region.

< Figure 4-6 View of Trading the Center Building >



B. Area Per floor

< Table 4-4 Calculation of trade center scope – per floor >

Classification Function Area(m2) Remarks

EXHIBITION 8,600m2 480 booths (3mx3m) : Partitions into 4 sections

GRAND BALLROOM

1,050m2 54 exhibit booths (3mx2m), 1,000 people

AUDITORIUM 1,400m2 540 seats , A/V system , auto screen, translation booths

SHOW ROOM 300m2 video conference, stage, auto screen

IDC / OFFICE 900m2 CEI-RD regional office

PUBLIC (CIRCULATION)

3,425m2 concourse, stair, escalator, elevator, restroom, storage etc

1st FLOOR

SUB TOTAL 15,675m2

CONVENTION HALL

900m2 1,000 people, auto screens, battens

CONFERENCE ROOM

750m2 140 ~ 450 people, A/V system, translation booths, stage, auto screen, batten

BUSINESS CENTER / OFFICE

600m2 partitions into 5 sections, 15 management offices

LECTURE ROOM 450m2 70 seats x 3 rooms, 40 seats x 1 rooms


750m2 stair, escalator, elevator, restroom, storage etc

2nd FLOOR

SUB TOTAL 3,450m2

LECTURE ROOM 700m2 70 seats x 4 rooms, 40 seats x 1 rooms, 25 ~35 seats x 2 rooms


175m2 stair, elevator, restroom, storage etc 3rd FLOOR

SUB TOTAL 875m2

TOTAL 20,000m2



C. Area Per Use

< Table 4-5 Calculation of the trade center scope – per usage >

Classification Function Area(m2) Remarks

HALL 8,600m2 exhibition space, meetings, events, trade shows etc

SHOW ROOM 300m2 video conference EXHIBITION

SUBTOTAL 8,900m2

CONVENTION HALL

900m2 seminars, banquets, exhibitions, large events, etc

CONFERENCE ROOM

750m2 flexible spaces modular divisions

AUDITORIUM 1,400m2 Int'l conferences, video conference

GRAND BALLROOM

1,050m2 Int'l meetings, banquets, various events, etc

IDC / OFFICE 900m2 Computer server management center, management office

CONVENTION

SUBTOTAL 5,000m2

LECTURE ROOM

1,150m2 computer, documentation center, video conference, flexible spaces

BUSINESS CENTER / OFFICE

600m2 management office

TRAINING CENTER (TRADE ACADEMY)

SUBTOTAL 1,750m2

PUBLIC SPACE 4,350m2 elevator, escalator, stair, restroom, machine room etc

TOTAL 20,000m2

D. Trade academy and Export Goods Exhibition Center Area Calculation

As stated before, it would be efficient to allocate the exhibition center, convention center, export goods exhibition center and trade academy into the same space to reap synergistic effects from one another. It will also aid in the effective operation of the Trade Center.



The export goods exhibition center will be located in the first floor where most of the visitors enter. Part of second floor and the entire third floor could be used as a trade academy to gain synergy effects from both the exhibition centers and functional effects.

Since JICA building’s second floor had rooms with 15 seats, 25 seats and two rooms with 45 seats were not enough, therefore, one room with 70 seats, 2 with 25-35 seats, 2 with 60 seats and 2 computer classes with 40 seats were requested. These requests will be applied to the design process considering that adequate training/education programs will be established to meet the spaces. More spaces for installation of meeting rooms and other facilities were also considered as well.

According to PEA, only 200㎡ of export goods exhibition center space was requested to replace JICA building’s temporary exhibition space. However, 300㎡ space was designed to serve both exhibition and advertisement functions.

The space allocation has considered future expansions and its connection with existing space.

By allocating first floor as the export goods exhibition center near the convention area, it can be visited by most people who visit the Trade Center.

Exhibition goods such as drinks, agricultural goods, leather, accessories, furniture and tobacco can be allocated categorically along with various advertisement techniques to maximize its effects.

By providing cooperation system from the offices, professional manpower that can provide information about the product should be allocated to maximize the advertisement effects.

A 300㎡ space has been allocated which is bigger than requested to maximize exhibition effects as well as Trade Center’s role in hosting various cultural events.

Strengthen business center functions

Provide space and business support: space to meet company representatives and share information

Trade- related advisors: Advisors professionalized in accounting and tax affairs Provide information: Information about seminars and exhibitions hosted by

CEI-RD



< Figure 4-7 View of business center >

E. Cross Sectional view of the Trade center

Floor plan : Annex #4~#6

Ceiling plan: Annex #7

3D plan: Annex #8



3. Construction of Integrated Trading System (ITS) 3.1 Status Analysis

By analyzing the current trading and IT status of the Dominican Republic and comparing it to Korean cases, it can be used as a basis for setting goals as well as creating tasks.

3.1.1 Business Status This trading business status is drafted based on visiting CEI-RD and local interviews.

< Figure 4-8 Export Management Flow >

As seen in the above flow chart, custom clearance and shipping of general goods are possible immediately after query into export procedures to CEI-RD, but some goods such as coffee, animals/plants, medicine, etc. require export permission or approval. In this case, a few approval authorities can be involved for such permission or approval processes.

Trade business status based on result of on-site interview and data collected is as shown below.

Overseas Marketing

Currently, trade companies of Dominican Republic are relying on individual contacts from international exhibitions and the Chamber of Commerce. Advertisements are being done in offline settings. There is a lack of on-line sites for overseas marketing.



Contract

D/A, T/T shares 80% of the total contract forms. Since there are not enough financial guarantees from financial organizations, there are a few contracts made with L/C transaction.

Authorization/Approval

The export authorization policy was banned in 1992. However, products such as cocoa, coffee, fabrics and steel craps require special export authorizations. Goods such as animals and plants also require inspection records. Most of the goods require business documents, export contracts, shipment notices, and export authorization forms in order to receive export authorization. Since Dominica’s major export products are composed of agricultural goods such as cacao and coffee, there are a lot of authorization processes needed to export these goods. However, since the authorization process is not clearly organized, many companies require overlapping visits to related offices for the authorization process.

The following is the authorization process for coffee beans before being shipped out. It required a total of 5 steps as shown below.

< Figure 4-9 Coffee bean authorization process >



Certifying Origin of Goods

In order to certify the origin of goods, it requires authorization from DGA and CEI-RD for trading purposes. Therefore, all export companies are required to go through two different government offices to receive the certification. The certification processes for origin of goods in major countries are as shown below.

- Central America : Free trade certification between Dominica and Central America

- Panama : Origin of goods certification between Dominica and Panama

- Caribbean : Origin of goods certification between Dominica and CARICOM)

- USA : GSP Form A Origin of Good certification, CBTPA(Caribbean Basin Trade Partnership Act) origin of good certification, DR-CAFTA origin of good certification

- EU : EUR-1 Freight transaction certification, GSP Form A origin of good certification

- Canada, Japan, Swiss, Norway, East Europe, New Zealand, Australia : GSP Form A Origin of good certification

- Other countries : Normal origin of good certification

< Figure 4-10 Origin of certification flow >

① Purchase a form by visiting D G A

④ A pplication of sealing & signing

⑤ Sealing & Signing⑦ A pproval of

taking out

⑧ Export of

products⑥ Subm ission of C.O .

D G A

CEI-RD

Trade

Com pany

② A pplication for issuing C.O . of preferential

agreem ent③ Issuing process

Custom clearance

Exporting companies submit their documents to DGA. Even though alternative parties may submit these documents for trading companies, most companies are handling these documents internally. DGA operates a system that will be tested on other offices starting February 2010. It will be implemented in all export transaction starting July of this year. The following documents are needed for the export transaction process.

- Invoice



- DUA(Declaracion Unica Aduanera) - Bill of Landing or Shipment invoice - Certificate for origin of good - Export authorization (depending on goods) - Plant and animal inspection document

Transportation/Shipment

95% of Dominica’s trade is being done by ship. Airport transportation is used for goods that need “just in time” shipment, goods with short expiration dates, and goods that cannot be transported by ship. Land transportation is done only by automobiles because there is no train transportation system available in Dominica. Container transportation is done by trailers provided by shipment companies free of charge for five days.

Insurance

Even though MIC is dealing with issues that come up during the trading process, most companies rely on their private lawyers to settle with issues that occur during the trading business. There is no export insurance led by a government organization like in Korea. Since most of the trading freight has FOB contracts, the need for insurance coverage is minimal and there are not many insurance companies that can cover trading goods. However, in order to promote the trading business, the government is promoting insurance as an investment opportunity for foreign investors.

Export promotion policies such as tax returns

In order to promote exports in the Dominican republic, tax returns, tax awards, and temporary authorization polices are being implemented.

The tax return policy deals with tax returns for export transactions that contains raw material and wear-off goods. The tax award policy is a policy that returns up to 3% of export FOB costs as a tax return. The temporary authorization policy is the most commonly applied policy for most of the companies. It is a policy that does not collect import taxes when certain freights have been re-imported to Dominica with 18 months of its export. In order to utilize these policies, companies need bank insurance.

Other export related business (quality certification)

The office related to quality certification is DIGENOR of MIC. There are some quality certification offices within the Ministry of Health and Agriculture as well. Even though the Dominican Republic has its own quality certification standards, there is no separate certification office that provides a proper authorization process. It recognizes international standards such as ISO and CE.



3.1.2 IT Status Analysis Dominica is preparing an on-line trading system to support the trading industry.

However, most works are being processed in an off-line base environment. CEI-RD’s SIVUCEX system and DGA’s SGA system are the only computerized systems in Dominica and most trading companies are limited to utilizing their computers to draft documents and share files through a LAN network.

CEI-RD’s SIVUCEX system is working with DGII, CNZFE, INTABACO and MA in order to process civil documents more efficiently. It provides similar interfaces such as Outlook.

CEI-RD SIVUCEX

▪ As an integrated single window system for international trading, it has been developed to support global trading businesses. However, its function overlaps with DGA’s SIGA system and only supports small portions of export works.

▪ As shown in <Figure 4-11>, SIVUCEX system’s functions are ①Submit integrated export report ②Review and authorize various documents ③Final shipment authorization from the shipment site.

< Figure 4-11 SIVUCEX Function map >

▪ Major contents of SIVUCEX system are as shown in <Table 4-6>



< Table 4-6 Major contents of SIVUCEX > Classification Major contents

Developer Innovatica.com.do

Development Tool ASP.NET C#

Provided service - Provide documents needed for exporting goods - Export statistics (Provided to companies who signed up>

Major function

- Send integrated export document and it will be registered to DGA server

- Online submission of export document and offline authorization

- Various documents are provided in PDF form and it should be submitted after printing them out

Certification Tool VeriSign (Private certification)

Differences between DGA’s SIGA system

- SIVUCEX has been developed in 2005 for export authorizations. It is currently I/F with SIGA.

- CEI and DGA will share the database for export document works.

- Less than 10% of the companies are using the SIVUCEX system. Other companies are using manual off-line method. Off-line documents are accepted and processed once a month.

Connected office

- DGA, DGII, CNZFE, INTABACO, MA - DGA is the only office that has connected system - Other offices do not have individualized system. Document

processing functions are being provided with function similar to outline.

Service cost None

Operation organization

Three Technical Support (H/W-Network, server, PC management), One secretary

▪ The work processing function provided by SIVUCEX to other offices is composed of simple processes such as search, authorization and reject. It does not have file attachment function and cooperative communication system function. Therefore, an off-line communication has to be made in order to make an actual authorization.



< Figure 4-12 SIVUCEX Work process for related offices >

▪ As shown above, SIVUCEX system is limited to supporting only a small portion of the exporting business. Therefore, many export companies are reluctant to use this system, and its functions overlaps with the SIGA system of DGA. Also, its connection with related offices is not practical. There is a need to add other functions in order to make it efficient for both companies and related offices to utilize them to its full potential. Also, in case s new system with these functions is established and operated, it may include all the functions of the SIVUCEX system, so operation of this is deemed unnecessary.



DGA SIGA System

The Unipass system operated in the Korea Tax Office has been converted to a Dominican version (MS .NET base). It was executed as an EDCF project with a 20 million USD (19.98 million USD) budget. It is currently being test operated in one tax office since Feburary of 2010. It will be expanded into all tax offices starting in June of this year.

< Table 4-7 Major Contents of SIGA > Classification Major Contents

Developer Auto Ever Systems- Interdev

Development Tool .NET * Major system language in Dominica .NET based C#, Java, Oracle, ASP

Major function

- On-line documents of all import/export documents - 24 hour report, electronic signing - 13 other functions including management, law and storage

management functions

Certification Tool VeriSign (Private certification)

Connected office - Connected with SIVUCEX

Service cost None

Operation Organization 60 employees

< Figure 4-13 SIGA system conceptual Diagram >



3.1.3 Discussion Point Not enough connection with trading related offices and overlapping functions

Requires off line paper work and original copy for trading related business

Overlapping functions with related offices

Need to visit banks and related offices to pay transaction fees and submit related documents

Overlapping work created by off-line visitation confirmation after online submission of documents

Difficulties in storing/searching paper documents

Lack of support system that utilizes three export promotion policies

3.2 Best Practice 3.2.1 Outline

In order to maximize the effectiveness and reduce the margin of error for Dominica’s ITS, international electronic trading trends as well as Korea’s uTradeHub will be analyzed for comparison purposes.

3.2.2 Trend of International Trading A. Outline

Organizations such as the UN, APEC and ASEM are recommending construction of the e-Trade single Window for the promotion of international trade. The construction of the e-Trade Single Window is focused on providing a one-stop trade service to both trade companies and related government offices that facilitate international trade. Many countries are focused on creating this system based on long-term plans to cope with global trends, and actively move ahead with preparations for establishment of the e-Trade Single Window by making survey into best practices, etc.



< Figure 4-14 Trend of Global e-Trade >

B. Construction of step-wise electronic trading system based on national development status

UN’s roadmap towards eTrade that was launched in 2006 suggests step-wise development of an electronic trading system. It suggests the initial construction of electronic transaction system and further expanding it to connect with related offices, airports, and harbors. After the system has been fully connected nationally, it could be used to make trading international.



< Figure 4-15 UN’s Roadmap toward e-Trade Development >

C. Development of Electronic Trading in APEC countries

In the APEC e-Commerce Business Alliance meeting held in September 2005, the research result for development status of an electronic trade system in member countries was announced. According to the research, Korea, Singapore, Hong Kong, USA, Australia and Taiwan are equipped with an acceptable level of National Single Window. However, countries like Philippines, Russia, Peru, Vietnam, Malaysia, Mexico, China, Thailand and Indonesia are in need of help in the organization their infrastructure/policy to implement electronic single window.



< Figure 4-16 e-Trade development status in each country >

PhilippinesRussiaPeruVietnam

M alaysiaM exicoChinaThailandIndonesia

JapanCanadaN ew ZealandChile

U SAA ustraliaTaiw an

South KoreaSingaporeH ong Kong

Level 1

Level 2

Level 4

Level 5

Starting Po int

(0 ~ 35)

Starting Po int

(36 ~ 60)

Starting Po int

(61 ~ 70)

Starting Po int

(71 ~ 80)

Starting Point

(81 ~ 100)Level 3

* D ata : A PEC A ssessm ent Report on APEC paperless Trading D evelopm ent 2005

According to this report, countries like Malaysia, Vietnam, and Philippines rely mostly on trading to support their economy and yet they do not have a proper electronic trading system in place. The report suggested that the introduction of electronic trading in these countries will have the maximum effect.

< Figure 4-17 Comparison of trading dependence and e-Trade development status >



3.2.3 Status of Korean electronic trading system A. Development phase of Korean Electronic Trading system

The legal background was first established in 1991 with the announcement of an automatic trading system development. Since then, the EDI-based electronic trading system project has been started. In 1995, eTrade was implemented in trading/transaction/freight related work. In 2003, BRP/ISP was used to reorganize the master plan for electronic trading. In 2008.7, a XML-based system was constructed.

Considering the wide range of electronic trading work, a long-term goal and master plan must be established during the initial phase of the project in order to apply the system efficiently throughout the trading system.

< Figure 4-18 Development phases of Korean e-Trade >

1990 1991 1994

A nnouncem ent of

integrated eTrade

m anagem ent task

force

Legal policy

established to

prom ote

developm ent of

eTrade system

Start eTrade

service

1995

Start electronic

transaction service

1996

Start electronic

freight service

BPR/ISP for

construction of

single w indow

2005 2006

1st construction

project for eTrade

service

2nd construction

project for eTrade

service

20082007

3rd construction

project for

eTrade service

2003 2004 2009

ISP under

progress for

future electronic

tradingCurrent State

B. Korea Electronic Trading status

The uTrade Hub as an electronic trading single window will be utilized as an electronic trading hub for global eTrade business. Starting from internet market research, the system could be utilized for transactions and account processing purposes and provides a one-stop single window platform for both trading companies and trading related government offices. It also provides the infrastructure for collaboration commerce to trading related parties.



< Figure 4-19 uTrade Hub Concept drawing >

3.2.4 Discussion Promotion of e-Trade is needed all over the world.

Considering Korean and international development status, it is ideal to construct e-Trade system in a step-wise manner.

A stable project execution organization and policies that can support the development of system should be established before the construction of the system. Also, a long-term master plan must be established before starting system construction.



3.3 Design Target Model 3.3.1 Establish System Target Model

A. Overview of Target System

A) Goal of Target System

The user service will be integrated, and the electronic trading business process will be implemented throughout the nation by proposing a goal system and future model/direction of Dominica’s national Integrated Trade System (ITS). The construction electronic trading process will require implementation of technology and legal changes in the nation.

< Figure 4-20 Goal of system construction >

B) Target System Concept Diagram

ITS(Integrated Trade System) is composed of an electronic document storage system for storage of electronic documents, electronic trading relay system that utilizes cutting edge technology, an e-Marketing portal that can aid companies in finding international business partners, and an e-Trade portal that provides currency, transaction and freight-related services to its users.



< Figure 4-21 To-be system conceptual diagram >

C) Composition of Target System

< Figure 4-22 Hardware and Network Configuration >



D) Definition of the Target System Process

Overview

By analyzing the process of trade businesses and job connection between those interested identified in surveys and interviews to build the ITS, the system is to produce measures to improve online management of trade businesses and employ the measures to re-engineer the business process.

Scope of Analysis & Preconditions

▪ For an electronic trade that fits the current situation in the Dominican Republic, the analysis focuses on making the existing offline businesses online, instead of consolidating and modifying the business process.

▪ Re-engineering the post-contract process, centering on maritime transportation and T/T settlement, the major methods for transportation and settlement of exporting and importing items.

▪ Storage of documents in the electronic repository after considering their significance and necessity of distribution, and exemption from the submission of attached documents or post submission

▪ Documents stored in the electronic repository can be printed out in hard copy only by the original owner or assignee. When printed out in hard copy, the ownership for the document would terminate.

▪ The original contract from trade related-institutions (such as banks and logistics companies), except government agencies, would not be subject to submission in order to protect confidential corporate information.

Improvement Measures

▪ Realizing a one-stop online process for trade business

▪ Simplifying trade appendixes by distributing electronic documents

▪ Establishing the system to share the information between relevant agencies

▪ Improving lead time of business process

Expected Effects

▪ Fundamental improvement in the process linking all companies and agencies including trade companies, the customs, authorizing agencies, banks, and transporters.

▪ Improving trade-related practices, institutions, and laws & implementing structural reforms in relevant agencies and companies during the process

▪ Significantly reducing trade-related costs for businesses and improving international competitiveness by innovating the trade process

▪ Attracting overseas investments by providing a trade environment with better



competitiveness

B. Implementation Plan of Unit System

A) e-Marketing Portal

Overview

The scope of work will cover building an e-trade marketing portal and a comprehensive marketing data search system, integrating contents and establishing management functions. In other words, the purpose is to establish a system where trading companies can search essential marketing data before trade contract and to provide the service through the marketing portal. Links to broker sites and trustworthy information on overseas markets will also be provided for effective businesses of trading companies.

< Figure 4-23 Overview of Building e-Marketing Portal >

As the e-marketing portal will be offered as a sub-portal of ITS (Integrated Trade System), systematic application is required by linking e-Trade Portal with contract-related data. The lead agency should also have active consultations with relevant agencies on the contents link and issues from the collective use before application.

Objectives

The e-marketing portal is designed to provide a consolidated search service for



marketing data, encourage overseas buyers' visit through unified window, and contribute to the provision of seamless e-trade services.

< Figure 4-24 e-Marketing Portal Objectives >

System Structure

< Figure 4-25 e-Marketing Portal System Structure >

The e-Marketing Portal will consolidate and categorize marketing data by theme, provider, and marketing information so that users can conveniently search data. The portal will also serve as a channel to search for data on overseas markets, trade statistics, and other general trade-related information in one place without having to visit different



websites.

< Table 4-8 Work Scope and Details > Trade

Information Trade statistics, trend, practical data, trade support, logistical data

e-Marketplace Offer data, company info, buyer info, exhibition info, credit info

e-Marketing

Portal

Basic Functions Realizing basic functions for notification, bulletin board, Help, Q/A, FAQ, Help

Realizing portal management functions to take care of the usage and linked contents status

Management of log-in and membership data, provision of personalization service and English webpage.

Integrated Search System Search by key word or directory is available Category map by theme and directory service are available Most searched words and statistics per period are provided

Link, collect, and manage contents

Management of linked sites and spec Functions to collect contents and metadata and categorize the

contents are available Dead Link, prevention of data redundancy

Establish a comprehensive search category

Provide directory categories by data provider

In particular, e-Marketplace will enable trading companies to publicize products, find buyers, and exhibit products online, making it easier for many buyers and sellers to promote themselves and their products and seek new business partners. That would reduce the time and costs required for a trade contract. The portal will support e-transactions between nations and provide exporters and importers with functions to save, read, and search the information.



< Figure 4-26 e-Marketplace Concept Diagram >

Establishment measures

▪ Convenient access ∙ Establish a SSO infrastructure that allows users to have access to all information

systems with only one verification ∙ Users can see information with one click on the personalized screen ∙ Accessible anytime and anywhere ∙ Consolidated verification and authorization that fits the service type of users

▪ Sharing data and exchanging opinions with ease ∙ Personalized services that allow users to get desired data ∙ Effective sharing of information and exchange of opinions through communities and

bulletin board ∙ Interactive operation and consolidation

▪ Collecting data and providing services with speed ∙ Analysis of usage by monitoring the system and data



∙ Easily and swiftly gathers a variety of information ∙ Immediate application of changes, such as system priorities

▪ Standard interface ∙ Establish a standardized interface for future expansion of the system ∙ Organized the platform-independent system with openness and scalability

Expected effects

If the e-marketing portal is established, trading companies will be able to use the system to collect marketing data (trade info, market info, exhibition info, product PR, buyer search), gathered through phone-calls, faxes, and direct visits. That would reduce time and costs, enabling buyers and sellers to directly publicize their products and implement transactions on the system

< Figure 4-27 Before and After e-Marketing Portal System Establishment >

Before building System

Collection of marketing information individually by telephone, fax, visit Performing local marketing directly each time for promoting

products, finding buyers

Promoting products, finding Buyers via Tel. Fax.

Investigation individual for finding buyers, exhibition information, trading information

Request of help like market survey

TradeCompany

Buyer

After building System

Saving time and cost by collecting marketing information via on-line Many purchasers and sellers promote products and find

buyers via e-Marketplace

ITS(e-Marketing

Portal)A package (overall) collection of marketing information such as finding buyers, offer info., exhibition info., trading info.

Buyer

A package (overall) collection of marketing information such as offer info., seller info.

TradeCompany

Registration of al l kinds of marketing info. and export support

B) e-Trade Portal

Overview

The development scope for the e-Trade Portal will be the creation of an export business process from contract management to payment, by considering discontinuous and redundant service, and the various reasons why e-documents cannot be recognized as originals. That is, the portal will realize functions to handle L/C/non L/C, produce export license, issuance of other permits, Invoice/Packing management, C/O, shipping, customs clearance, receipt of charges, and payments. The portal will also be systematically linked to relevant authorities, ultimately strengthening the continuity of work and the one-stop service foundation. Particularly in customs clearance, the link to the DGA SIGA system will simplify work, consolidate processes, and increase cost



effectiveness for the convenience of trading companies.

In addition, for relevant agencies with no independent system at the time of establishment, work management functions will be equipped within the system. In the systematic link with DGA, standardization will be conducted to prevent redundancy in the future work of the system link.

< Figure 4-28 e-Trade Portal Overview >

Implementation of One-Stop Service Base of Trade Business

To provide Business Infra through Implementation of Trade Portal Service

• Sales Order• Master L/C• T/T Contract• D/A Contract

Contract

• To issue Certificate of Origin

• To issue Agricultural Product License

• etc

Export License

• Delivery Order• Commercial

Invoice• Packing List• Insurance Policy• Shipping Request• Bill of Lading

Shipping Doc.

• Request for Customs

• Clearance License

Clearance

• Bill of Exchange• Negotiation• Export Expense

Negotiation

To overcome limit of pending problems on e-Trade: Discreteness, Duplication, Originality

To implement core e-Trade infrastructure on trade area

To provide User-oriented simplified Workplace

Objectives

The e-Trade Portal aims to enhance effectiveness, promote trade, provide a unified workplace, establish a visual process basis, strengthen cooperation with relevant agencies, offer quality services, prevent redundant submission of documents, simplify the distribution of documents, and secure open and operative international e-transactions.



< Figure 4-29 e-Trade Portal Objectives >

To contribute to trade activation through provision of information for the trade companies and convenient business environments

To increase business efficiency and trade

activation

To implement user-oriented workplace rather than service-oriented to identify work progress in real time

Simplified workplace

To improve business processing speed and capability, allowing real time monitoring of civil appeals and process identification/analysis of problems

To realize visualized process base

To secure flexibility between partners utilizing XML Document

To increase business quality of trade companies by providing them with good quality services

To reinforce collaboration between organizations,To provide good quality

services

To increase trade competence by reducing business cost (trade, system investment of trade companies

To reduce offline businesses for trade partners such as financial institute

To prevent duplicated document submission/To simplify distribution

To increase interoperability of e-Document through unified development and preparation of XML Document with standardization

Openness/operability of international e-Trade

System structure

The e-Trade Portal provides e-trade services including foreign currency, trading, customs clearance, transportation, and settlement through basic functions, e-document management, and business processing management (BPM). The resulting business processes and meta data are also managed by the Portal.

< Figure 4-30 e-Trade Portal Function Block Diagram >



< Table 4-9 e-Trade Portal work scope > Trade Portal Progress management on e-documents

Manage transmission and reception of documents & log BPM on the progress of e-trade Management of e-trade services Manage basic functions of the portal, including SSO, security, and users

Business Process

Manage the definition and changes of trade service processes Monitoring and reporting Process repository management

e-Trade Services

Sales Order management (L/C/non-L/C data) Receiving export L/C at banks L/C data management through standardized export-import L/C Issue of licenses for farm produce export Issue of general export licenses Cooperation in the issue of general and preferential certificates of origin (DGA) Provide the credibility of companies linked to marketing portal Booking management on cargo Transportation order Management of attached documents including Invoice, P/L, and B/L Management of freight settlement Information link between B/L and AWB Management of export declarations and business link (DGA) Verify errors on drafted e-documents Payment control for collection, transmission and L/C types

System Link Management of export declaration through link to DGA SIGA Standardization of links

The following <Table 4-10> shows relevant authorities of e-trade service.

< Table 4-10 Relevant Authorities >

Category Businesses From To Remark

Sales Order Trade

Company

Signed contracts would be linked to e-Marketing Portal

Receipt of export L/C Bank Trade

Company

Contract

D/A, T/T

Request for export approval

Trade Company

Relevant agencies

Approval

Approval of export Relevant agencies

Trade Company

Relevant agencies : MA, CODOCAFE, CNZFE



Request for certificate of origin

Trade Company

DGA, CEI-RD

Issue of certificate of origin

DGA, CEI-RD

Trade Company

System I/F for DGA

Create Invoice, P/L

Create Delivery Order

Transportation order Trade

Company

Shipping company, Forwarder

B/L or AWB management

Shipping company, Forwarder

Trade Company

Shipping

Management of freight settlement

Request for export declaration

Trade Company

DGA Customs Clearanc

e

Approval of export declaration

DGA Trade

Company

System I/F for DGA

Management of payment for collection, transmission, and L/C types

Payment

Settlement of other costs

Banking fees, approval and customs charges, and transportation expenses are included

Expected effects

As the e-Trade Portal supports all sectors of export businesses including non-electronic documents (Sales Order, Invoice), the portal can provide trading companies with a single window for trade businesses and one-stop services through a connection with related agencies. Through the system, companies can simplify business processing, while maximizing effectiveness. Relevant agencies can also simplify work processes and manage statistics and businesses in real time by converting existing off-line processes into on-line ones.

For example, the following <Figure 4-28> compares the situations before and after the establishment of the system for the issue of certificate of origin.



< Figure 4-31 Before and After the establishment of the system for the issue of certificate of origin >

Before building system

Overlapping visit to related organizations many times and delay of processing time for issuing C.O.

After building system

Simplification of work process by applying and issuing via System and reduction of time and cost by its result

① Purchasing a form by DGA

④Application for signing and sealing

⑤ Signing and sealing

⑦ Approval of taking out

⑧Export of products

⑥Submission of C.O.

DGA

CEI-RD

TradeCompany

② Application for issuing preferential agreement C.O.③ Issuing process

ITS(e-TradePortal)

①Application of C.O.

TradeCompany

CEI-RD

②Receiving andprocessing SIGA

DGA

③Request for signing & sealing④

Processing of signing & sealing

⑤Issuing C.O.

⑥Export of products

C) e-Trade Document Repository

Overview

Rapid changes in the IT environment require innovations throughout the business process. Companies and agencies are competing to promote paperless transactions. Against this backdrop, we need to actively respond to these changes. The system of e-trade document repository employs state-of-the-art technology in its design to ensure safety. The system is also designed to store documents safely, manage certificates with credibility, and ensure interactive operation of document standardization and data link.

In order for the repository to be effective, legal and institutional mechanisms should be established. Among all the trade documents, the repository will keep the e-Trade documents in need of distribution. Laws and regulations should be improved to recognize such documents as originals.



< Figure 4-32 Overview of e-Trade Document Repository >

System Structure

The e-trade document repository will be structured to prevent redundant submissions of documents, simplify distribution for greater effectiveness, give credibility to stored and distributed documents, and expand the service of connections to relevant agencies/companies, thereby resolving disconnection of process.

< Table 4-11 Work Scope and Details >

Document control ● Registration of e-trade documents ● Setting the authority for registered documents

Delivery of document ● Registered documents are available by users at other services Management of e-certificate

● Establishing the system that complies with DVCS ● Issue, disposal, and transfer of e-certificates

User management & manager functions

● Acquisition of consolidated user data ● Manager functions on history and statistics

Security functions ● Safe storage of the original and converted copies ● DVCS-based system for the issue of certificates



< Figure 4-33 Structure of e-Trade Document Repository >

Establishment measures

▪ Management of e-documents This refers to the life-cycle management from the registration of e-documents to the

search, reading, disposal, and transfer of documents. Additional functions include management of document information inputted at the registration, print-out of e-documents, and management of storage history.

▪ Delivery of e-documents The functions include e-document relay system for storage and verification,

transmission and receipt of documents, transfer of issued certificates, and history management.

▪ Verification of e-documents Verification of e-Trade documents is the key function of the repository, confirming the

authenticity of distributed e-documents and time of delivery. Additional functions include authentication of the verified documents, management of certificates and certification history.

▪ Management of Users



The functions include registration and identification of users and management of the records of system usage.

▪ Manager functions Managers control the methods to convert documents, versions and forms of

conversion. They also manage policies of history; history to be saved, periods for keeping and storage.

▪ Security functions Encryption is applied to key information in communication with users

▪ Common functions of the system The common functions are error processing, format conversion, and log management

for system operation. As for security functions, communication security is provided for confidentiality of messages transferred and electronic signatures are available to prevent denials.

D) e-Document Relay System

Overview

The e-document relay system allows users to transfer and receive standardized e-documents with stability and credibility, while providing seamless links to relevant agencies to promote administrative convenience and efficiency. In addition, manager functions for effective operation are offered with stability secured through duplex system.

To distribute e-documents (transaction documents between trading companies and relevant agencies), standardized e-documents should be designed to secure interactivity. When connected to the existing legacy system, standardized methods for connections should be presented and applied. The current global trend of distributing e-documents is XML-based e-documents, so we present ebXML-based standardization to Dominica. As

for data conversion, the conversion of XML⟷XML, XML⟷EDI, and XML⟷Flat File

will be materialized in the Adaptor way, in order to enhance the scalability of data.

The scope of the relay system considers various corporate environments in Dominica to relay e-documents and convert messages, building the foundation for relays to internal portals and relevant agencies.



< Figure 4-34 Overview of e-Document Relay System >

To implement infra for activation of e-Document

To eliminate the existing offlineDocument Tx/Rx

To provide relay and conversion services through application of standard technologies

To implement infrastructure available for real time message Tx/Rx through interconnection with disconnected partners To suggest

interconnection method to fully utilize the existing infra

To implement internet based Document Tx/Rx for user familiarity

To pursue user convenience through fault to lerant system with redundancy

To implement infra to play a role of core trade node in Latin America Region To implement

saleable system so as to allow interconnection with systems in the future

e-Document Relay System

e-Document Relay & Conversion

PartnersInterconnection

To pursue User convenience

To implement connection

base in the future

To implement streamlined business process environmentsthrough interconnection with external partners

< Figure 4-35 Key Factors of the System >

To implement integrated platform through interconnection with customs, authorities, bank, shippers, logistics companies, etc. of Dominican Republic To implement One-Stop service environments to allow

corporate users to process business with one time access

Connection with

Partners

To realize seamless business process through interconnection with e-Trade Portal and e-Trade Document Repository. To provide single view for the entire e-Trade services through

interconnection

Internal Connection

To convert standard/non-standard documents such as XML, EDI, Flat File, etc. To support creation of conversion rule through Mapping Tool

Message Conversion

To play a role of relay to allow various corporate users to send/receive e-Documents to/f rom desired Partners To support various communication protocols and document

formats to accommodate various users and partners

e-Document Relay



System Structure

Two-way conversion into various types of message formats will be supported for relays. The system also supports various telecommunication protocols and mail boxes for user to ensure the stability and credibility of e-document relays.

< Figure 4-36 Structure of e-Document Relay System >

< Table 4-12 Work Scope and Details > System Management

● TP Management: Trade Partner ID, password, codes to identify sender and receiver ● BP Management: Business Process control of e-documents ● Scheduler: automatic transmission and receipt of documents through demon-based scheduler ● Document control: the status of e-documents, re-transmission, re-receipt ● Backup: Monthly and daily backup and recovery of data ● Management of transmission and receipt logs: error verification & control of transmission and receipt logs ● Check the system status / Queue monitoring ● DB setting / communication setting / code management ● Upload/Download of documents ● Transmission/receipt/re-transmission of documents ● Change of the document status ● Auto-recovery in case of the system-off



XML Messaging Processing

● XML data management ● XML Parsing & Generation ● Security control of e-documents

XML Conversion

● Free conversion of formats among XML, EDI, Flat File ● Flat File is defined in any types ● Provision of Rule based conversion engine ● Auto-calling of conversion through TP setting information ● Calling of functions in conversion ● Checking the document structure in parsing or conversion ● Processing all documents in XML formats ● Parsing non-standardized documents such as EDI, Flat File

XML communication

● Provision of TCP/IP FTP, X.25 communication protocol ● Support of document transfer standards including UN/EDIFACT, ebMS ● Auto-routing through TP setting ● Broadcasting function ● Separation of communication servers / support of communication module for Client

C. The Operating Environment Target

The target areas of ITS will not be limited to the CIBAO region, but will be designed and operated to support all export related companies throughout the DR. A number of relevant agencies are expected to use the system both directly and indirectly, and most decision-making IT bodies for consultation are located in the capital, Santo Domingo. The IT division of CEI-RD, the future operator of the system is located in the headquarters of the CEI-RD, in Santo Domingo. Therefore, it seems appropriate for ITS to be operated at the headquarters of CEI-RD. In fact, the existing IT division of CEI-RD is now running the current system of SIVUCEX and basic works within ICE*i.

However, the existing server room at the CEI-RD headquarter is small in size, as shown in <Figure 4-37>, and operating conditions are poor.



< Figure 4-37 CEI-RD The size of the existing Server Room >

In the above image, the left one is the server room of the headquarters and the right is I*CEi server room. As the I*CEi Server is currently located within the I*CEi building and being used independently for I*CEi businesses, the server does not have to be integrated with this project. However, it might be necessary to consider the integration of the server into the server room of the headquarters in the long run.

Given the demands from the project executing agency, the efficiency of employees management, and the fact that it is easy to secure the space of the expanded Server Room in the CEI-RD headquarters, we suggest that the CEI-RD head office becomes the place of operations for ITS.

The server room should be expanded to the following size of <Figure 4-38> so that the current system can be managed together.

< Figure 4-38 Expanded Size of Server Room >

To supply power to the newly-introduced equipment (refer to <Table 4-13>), an additional 6KW is required. We also need batteries that last at least 30 minutes with the UPS capacity of 10KVA. (*UPS capacity of 10KVA is calculated under the formula of



Total load (6,000W) / Power factor of load (0.8) * Reserve rate (1.3))

For smooth operation of the system in the future, the following equipment should also be added.

Temperature and humidity controllers

Fire-proof equipment and counter measures against fire

< Table 4-13 Equipment Scale for ITS Operation > Name Model Qty Unit capacity Total capacity

Main Server R710 3 870W 2,610W

Backup Server R710 1 870W 870W

Main SAN PS6000E 1 550W 550W

Backup SAN PS6000E 1 1,650W 1,650W

SAN/L2 2960 4 30W 120W

Router 3845 1 100W 100W

42U Rack - 1 100W 100W

Total 6,000W

3.3.2 Definition of the system-building methods and applied technologies

A. Principles to Design the Target System

Application Service

▪ Form a N-Tier architecture

▪ Design and develop a concept model to establish a system for component-based application service

Database

▪ Database should be integrated

▪ If necessary, a separate database can be set up on a limited basis.

▪ Integrated database (Enterprise level) should be separated to another server.

▪ As for data provided to the outside, direct access to its database should be limited.



Platform Service

▪ Server Consolidation is required

▪ Separate the storage from server and consolidate

▪ In cases where plenty of impacts and interventions take place between system units, platforms can be separated

▪ As for different service characteristics and purposes, platforms can be separated

▪ Create a server environment that separates development and operation

Communication Service

▪ Establish a structural network

▪ Establish functions separated by service features

▪ Back-up and recovery equipment should be established separately not to affect normal traffic.

Security Service

▪ Strengthen security

▪ Strengthen back-up and recovery system

B. Applied Technologies

Hierarchy Diagram of Information Technology

IT-based structures are classified into 9 areas. For each area, define a technical structure required to establish ITS through the TBB diagram (Technical Building Block, a diagram that logically groups H/W, S/W, and N/W supporting the operation of application and data based on mutual relevance)



< Figure 4-39 TBB(Technical Building Block) Hierarchy Diagram >

Information on Applied Technologies

< Table 4-14 TBB(Technical Building Block) Hierarchy Descriptions > TBB Structure Substances

CUI/GUI As user convenience is important for applications, WEB standard UI technology is used, while CUI (Character based User Interface) and GUI (Graphical User Interface) are applied for the system S/W, because performance is important.

User Interface

Personalization The technology provides a service of displaying a user-customized screen and is applied to offer proper screen menu for each trading company.

.NET It is an internationally-used web-development environment, especially for recipient countries.

Development Environment

CBD CBD (Component based Development) is a comprehensive concept of SW engineering process, methodology, and technology that supports development, assembly, and maintenance of component unit.



UML UML(Unified Modeling Language) is designed to help communication among developers during the system development process including request analysis, system design, and system materialization.

Information engineering methodology

It is the most common methodology of development environment

EP EP(Enterprise Portal) is an information system that allows managers, employees, suppliers, partners, and customers to have SSO-based access to the internal data, process and applications within the value chain to handle businesses appropriately

Application

SSO SSO (Single Sign On) is an integrated certification system in which users need only one log-in to use different systems

WAS A service to effectively manage web applications Application Support Service

ebXML a XML-based international standard for document exchange

Data Service RDBMS Compared to the existing RDBMS, higher availability and

expandability are applied. External Interface

XML Extensible Markup Language, the internet language of the next generation with remarkably improved HTML

Open System

It refers to a system whose internal structure is open and developed according to the standards. Linux is a typical example.

64Bit Computing

It is CPU technology where 64 bits comprise a word, a data processing unit in the server. 64Bit Universal CPU is applied as it has high data processing capacity, compared to its price.

HA System

HA System (High Availability System) is a technology for business continuity and high availability and used to duplex linked servers.

ECC ECC (Error Checking and Correction) can detect and correct errors by adding certain redundancy to the inputted data.

RAID RAID(Redundant Array of Independent Disk) allows users to a group of several drives as one storage and prevents data damage in error. It is applied for OS Mirroring of servers.

System Platform

CAS CAS(Content Addressed Storage) is greater than ATA(IDE) in terms of stability and data transfer speed and its price is much lower than SCSI.

Network Gigabit Network

Giga networks consists of the internal LAN environment. It is applied to reduce the internal data traffic.

Security & IPS IPS(Intrusion Prevention System) is a security solution that



can find attached signature in the network and take automatic actions to stop abnormal traffic.

Firewall Hardware and software that can set up measures against unexpected external intrusion.

PKI Encryption

As a verification technology in the Internet-based transactions, it is used for user verification and data encryption.

Secure OS

The technology prevents illegal attacks to servers and is used for this project in which security is important.

NMS NMS(Network Management System) is a system to effectively manage a large amount of servers and network equipment

System Management

Backup & BRS

Backup & BRS(Business Recovery System) is a system to protect the data in the case of system failure.

3.3.3 Definition of Measures to link relevant authorities The Dominican authorities related to ITS (Integrated Trade System) are as follows:.

< Figure 4-40 Export-related authorities >

DGM

BANK MSPAS

INTABACO

Trade Company

CEI-RD

CODOCAFE

MA

Forwarder

DGII

CNZFEDGA

ITS(Integrated

Trade System)

Export approval

Approval fortobacco products export

Approval forcoffee products export

Inspection of minerals

Duty

Clearance forexport

Certificate of inspection for animals and plants

Certification oflegal effect

Contract, settlement of incidental expenses, payments

Shipping, transport

Among these, DGA has the system to support exporting companies, while DGII, CNZFE, and INTABACO support export through CEI-RD-run SIVUCEX system. Other agencies handle their jobs offline.

Therefore, the following measures and procedures should be implemented in order to connect relevant agencies for smooth operation of ITS.



Forming a consultative body among relevant authorities

▪ Form a consultative body, as inter-agency consultations are important.

▪ The body should be created before the consulting phase to establish a main project so that concrete measures can be provided during the consulting project.

Establishing a standard linking system

▪ A standard linking system should be set up, centering on the consultative body

▪ If there is an existing linking system, it would be appropriate to accept the existing one.

▪ The main substances in creating a standard linking system

∙ Establishing a linking service model: Define linking process, method, and procedure

∙ Establishing a measure to design a standard electronic document: Identify documents to be standardized, analyze technological trends and international technological standards, design and create electronic documents based on standard technologies

∙ Establishing a measure to create a standard linking system: Build a standard linking system

Conducting a pilot project

▪ The consultative body leads the selection of institutions for the pilot project

∙ It is appropriate to select DGA and banks, as they have the available system.



< Figure 4-41 Work Flow of Export Customs Clearance with Linked Systems >

Trade C om pany ITS SIG A

Export declaration

N o

Yes

D raw ing up a declaration

O bject of inspection?

Receiving process of declaration

Confirm ing a declaration/Print

it out

D esignating m ethod of evaluation

D esignation ofa review er

A ssigning an inspector

Verifying error of declaration

System I/F

Details ofexport

declaration

System I/F Details ofexport

declaration

Export declaration

▪ The agencies without the system would handle their works through ITS

Phase-in Expansion

▪ After the pilot project, the consultative body needs to make a plan to link relevant authorities step by step.

< Figure 4-42 Implementing Procedures by Relevant Authorities >

Building its own system of related organizations

U se of ITS systemM aking BPR/ISP

for related organizationsITS and system I/F

[Step1] [Step2] [Step3] [Step4]



3.3.4 Definition of the plan to revamp laws and policies A. Definition and Necessity of the Revamp

This plan aims to devise measures to upgrade existing laws in order to establish legal grounds for the promotion of electronic trade.

Dominica has revamped e-trade related laws before, but some insufficient or declarative rules should be overhauled or new regulations be created for promotion of e-trade. By doing so, e-trade infrastructure and operating system and support bases for active e-trade should be established.

At the same time, the basic direction of relevant laws should be set to innovate the trade process through e-trade. The relevant regulations should be harmonized and thoroughly analyzed to prevent existing procedures and rules from being an obstacle.

B. Revamping trade-related laws and setting the direction

Expanding the definition of trade to include electronic trade

▪ The scope of trade stated in the foreign trade act should be expanded to electronic trade, making legal recognition of electronic trade. By doing so, subordinate legal institutions required for the implementation can be created and updated on the legal grounds.

Expanding legal effects of electronic trade

▪ Relevance should be given trade-related laws and the electronic document control act

∙ A clear definition of electronic document should be stated in the E-Commerce Law Article. The Article should also prescribe requirements in cases where paper documents such as a contracts are transferred into the electronic ones, which can be processed at the information system. The legal effects of such electronic documents should be recognized.

∙ E-Commerce Law Article 4 prescribes that electronic documents have the same effect as the paper, but trade-related laws such as foreign trade and customs acts have no provisions concerning electronic documents.

∙ For efficiency, electronic documents should be recognized as originals, paper documents as a copy.

∙ It is necessary to add regulation that if electronic and paper documents have different substances, the electronic one should be regarded as the original.

Establishing legal grounds for government support, cooperation among relevant



agencies, and information sharing

▪ The need for information sharing

∙ No legal institutions have been enacted on information sharing

∙ Information sharing is required to promote informatization and lay the foundation for further advancement of ICT industry.

▪ The scope of information sharing

∙ The heads of public agencies should implement information sharing of the public sector, including administrative work and the trade environment. They also need to support the corporate sector to build and use networks for industrial information sharing.

Establishing legal grounds to introduce the accredited certificate system

▪ E-Commerce Law Title Ⅳ states electronic signature and certification, but there is no specific law on accredited certificate

▪ The substance on accredited certificate should be added to the E-Commerce Law or a new act should be created.



4. Trade Academy 4.1 Analysis of Current Status

4.1.1 Analysis of the current trade education The Dominican Republic is providing various levels of trade-related education within the

programs of official and unofficial educational institutions.

The official institutions include universities and other higher educational institutions. They have undergraduate and graduate degree programs for conventional sectors. There is no single course for overseas trade, but a few relevant subjects (including overseas marketing, international finance, and international negotiation) are being offered.

On the other hand, other official institutions are providing bachelor’s and master's degrees that are directly related to overseas trade, like special courses at the life-time education program.

< Table 4-15 Trade-related educational institutions >

Name Introduction Name of the related courses

UASD (Universidad Autónoma de Santo Domingo)

The first university to be established in the modern history, with the largest numbers of curriculums and students

Master: International Business Management and Economic Relations

PUCMM (Pontificia Universidad Católica Madrey Maestra)

Private School The main campus is located in Santiago de los Caballeros with another campus in Santo Domingo (Distrito Nacional).

Master: Business Management, Marketing, and Economy Doctor: Business Economy Master: Logistics Management Master: Marketing Diploma: Creation and Management of SMEs

UNAPEC (Universidad APEC)

Private School It has 4-year regular undergraduate courses as well as 2-year technical training course.

Master: International Trade Master: E-Commerce Professional Course: CEO Professional Course: International trade laws and etc.

UNIBE (Universidad Iberoamericana)

Private School UNIBE provides courses, workshops, seminars and certificates through the graduate school's lifetime education department to educate professionals, and corporate

International Master: Business Administration (MBA) Diploma: E-commerce and Digital Enterprises Workshop: Management Planning and Export Strategy



executives.

INTEC (Instituto Tecnológico de Santo Domingo)

Private School INTEC is offering various educational programs on business administration including not only bachelor's and master's degree courses, but also Diploma and short-term courses through lifetime education department INTEC has opened the international trade diploma course three times in cooperation with CEI-RD and produced 70 graduates.

Master: Overseas Trade and Global Economy Master: Marketing Master: Overseas Trade and International Finance <Short-term Courses of Business Administration and Trade> - Statistical Methods for market survey - Market strategies - Project Management Software - Sales Prospects

CAMPE- INTEC

It is a national center run by INTEC to support small and medium sized enterprises.

Diverse educational programs are provided to improve business administration capabilities for increased productivity and competitiveness

BARNA Business School

As a recently-established institution, it developed its own education program called Management Development for CEOs.

Master: Business Administration (MBA) Management Development Program (PDE)

I*CEi is an institute run by CEI-RD to nurture talent for overseas trade and innovate businesses. The local institution has focused on support for businesses and development of human resources with great results. In accordance with annual report(2004) of CEI-RD, information and technical support were given to 1,200 persons regarding 2004 trade agreement and standard program and to 2,955 persons regarding regulations and export affairs. This indicates that average 17.3 persons were provided with such service a week, implying that there were high demands for technical support and information sharing.

The future plans of I*CEi include a wide range of educational courses on management, logistics, sales, new markets development, and innovation. In particular, the plan is to provide tools for not only professionals at companies, but also for everyone with innovative ideas to make right decisions. However, its curriculum for 2010 mainly consist of seminars, so it seems that professional curriculums are insufficient.



< Table 4-16 2010 I*CEi Curriculums > Course Name Location

Lecture "Basics of Overseas Trade" Santo Domingo, Santiago, La Vega

Seminar "Business Plan for Export" Santo Domingo, Santiago

Seminar Workshop "DUA" Santiago

Seminar "Exports to EU" Santo Domingo, Santiago

Seminar "Safeguard" Santo Domingo, Santiago

Seminar Workshop "TBIS Compensation" Santiago

Introduction of the Article 84-99 "Export Procedure"

Santiago, Puerto Plata, San Pedro Macoris, San Francisco Macoris

Seminar "Establishment of Export Ministry" Santo Domingo, Santiago

Seminar "Beauty-labeled products of US and the Caribbean countries"

Santo Domingo, Santiago

Seminar "Labeling Regulations in EU Market" Santo Domingo, Santiago

Seminar "Export to the Caribbean Countries" Santo Domingo, Santiago

Seminar “Business Opportunities in EU Food Market" Santo Domingo

Seminar "Business Opportunities in EU Aliment Market" Santiago

Seminar "Establishing trade relationship with Haiti" Santo Domingo, Santiago

Seminar "Package in EU Market & International Logistics" Santo Domingo, Santiago

Seminar "Sales Contracts and Payment Vehicles" Santo Domingo, Santiago

Seminar "Euro Gap" Santo Domingo, Santiago

Seminar "Customs Management and Production Activities" Santo Domingo, Santiago

Seminar "Regulations for the application of best practices in agriculture and manufacturing"

Santo Domingo, Santiago

Seminar "Effective Proceeding of Export Offers" Santo Domingo, Santiago Seminar "Quality and Flawlessness of Exporting Plants" Santo Domingo, Santiago Seminar "Export PR and Advertising" Santo Domingo, Santiago



4.1.2 Implications Lack of systematic and continuous education programs specialized in trade

Lack of an appropriate education environment such as locations, facilities, curriculum, etc. in comparison with demands for specialized education on trade.

Lack of mid-and long term plans and strategies on nurturing talent

4.2 Best Practices 4.2.1 Overview

Regarding the establishment of Trade Academy in the trade center of Santiago, this report analyzed the current curriculum at the trade center of Korea Investors and Traders Association (KITA) in order to minimize trials and errors and maximize results.

4.2.2 The Status of Trade Academy Curriculum (2010) KITA, established in 1965, is the specialized education academy for trade which has trained

200,000 students or more per year. This academy has developed and operated various education curriculum such as off-line/on-line curriculum, short-term/long-term curriculum, corporate training, industry-academy collaboration courses, etc. In addition, through various benefits such as return of tuition based on collaboration with the Ministry of Labor, it has exerted efforts to provide education on trade for many people.

< Table 4-17 Trade Academy Curriculums for 2010 > Curriculum Name of Course Note

Export, import, transportation and customs clearance specialist program Trade contract specialist program Trade payment specialist program Letter of Credit Specialist Program Merchandising/Processing trade on consignment specialist program Credit/Contract risk management strategies Foreign Exchange risk management strategies Customs clearance/tariff risk management strategies Trade payment risk management strategies

Education for trading companies

Specialist Programs by sector

Transportation insurance risk management strategies



Export and import expenses innovation strategies E-trade practices E-trade marketing FTA Comprehensive Practice Management International Business Negotiation Specialist Program Trade Marketing Strategies Exhibition and Convention Specialist Program Business Negotiation Business English Conversation Business Writing Business Presentation Business English Essence

Customized Corporate Training

Trade practices, International Marketing, Foreign languages for business, Foreign Exchange and Finance, ITㆍOA

Global Leadership Program CEO Program Global Logistics Management Program(GLMP)

4.2.3 Implications Operate systematic and continuous trade-exclusive curriculum

Adopt various training methods actively embracing demands of trainees

Benefit more trainees by providing various benefits



4.3 Designing a Target Model 4.3.1 Basic Plan for Trade Academy Curriculums

A. Overview

The plan is to establish a trade academy at the CIBAO trade center, the heart of the Dominican trade, with aim to give practical training for users and managers on e-trade, support SMEs' export, nurture trade experts, and solidify the foundation for e-trade.

B. Concept Diagram

The trade Academy will nurture e-trade experts by providing users and managers with training ranging from overall IT education to advanced utilization of e-trade. The academy also plans to have e-trade experts use e-Marketing Portal to support SMEs' export, thereby enhancing competitiveness of trading companies.

< Figure 4-43 Conceptual Diagram of Trade Academy >

Educate e-Trade professionals

• Develop e-Trade professional education curriculum

• Analyze education curriculum and education course matrix

• Commence electronic trade education by stage

• Assign e-Trade professional education exclusive agency

• Educate electronic trade professionals

Produce e-Trade professionals

Establish Education

System

DevelopEducation

course

CommencePractice

education

OperateEducationPracticing

organization

C. Measures to Nurture Talents

Developing curriculum to educate e-trade experts

▪ Instead of making a new curriculum, the existing curriculum and international marketing education at I*CEi will be strengthened and improved.

▪ Education required for IT factors will be additionally developed and applied.

▪ Subjects will include electronic trade, market survey/marketing, negotiation, trade contract, document forms for trade, foreign exchange/finance, settlement/letter of credit, logistics/transportation, customs clearance/tariff refund claim/arbitration,



credit investigation, trade cases, and trade English, so that participants can develop necessary skills in doing trade.

Developing educational programs

▪ Various programs will be developed for each task.

▪ The programs will include export & import logistics specialist, comprehensive trade practice, export & import payment practice, nurturing international business negotiation/contract specialists, trade marketing strategies, international market business practice, IT business specialist, and e-trade master.

< Figure 4-44 Curriculum Examples by Program >

Electronic

trade

Market

research/ma

rketing

Negotiation

Trade

contract

Trade

format

Foreign

exchange/fi

nancial

Payment/

credit

Distribution/

transportation

Customs

Freight

insurance

Claim/

mediation

Credit

research

Trade

examples

Trade

English

Other (law/

tax etc)

Ex/import distribution professional

General trade practice

Ex/import fee payment business

Educate international business

negotiation/contract professional

Trade marketing strategy

International market business

IT business professional

Electronic trade master

e- trade education steps

▪ To systematically foster trade experts, education will be divided into two parts; training to nurture practitioners and e-trade specialists.

▪ Would-be practitioners refer to those who have over 3-years experience in overseas sales/trade with the knowledge of practical trade. They are also capable of doing general tasks of export and import.

▪ By limiting the target of e-trade specialist education to those who can practice trade, the quality of education can be improved.

Cooperation with overseas education institutions

▪ Through cooperation with similar trade education institutions (such as Korea’s Trade Academy), higher quality curriculum can be developed.



▪ By sharing information on global e-trade trends, a practical curriculum can be developed, improving the quality of education.

D. Measures to nurture operating staff and instructors

Upon the establishment of the trade academy, we will invite operating staff to share Korea’s experiences in trade policies, education strategies, and development and help them cultivate capabilities to establish policies and strategies fitting Dominican circumstances.

Upon the establishment of the trade academy, we will invite key instructors to Korea to provide training on the development of curriculum, teaching-learning methods, strategies to develop materials, and IT utilization methods so that they can immediately use these skills when returning to the DR.



5. Project Execution 5.1 Establishing the process of project execution

5.1.1 Procedure for Project Approval

< Figure 4-45 Project Approval Procedure in Dominica > Project Executing A gency

(CEI-RD )

C onsultation w ith M O F and relevant m inistries

Registration in the PN PIP List

M O F

G overnm ent of the lender country

Inter-country negotiation

N ational A ssem bly of D om inican Republic

Entering into L/A

M O F

D G IP

M EPyD

①Request of prom oting loan acquiring procedures① Request of prom oting loan acquiring procedures

③ D rafting a report

on loan

conditions and

necessity review

④ Request of approval to M O F

⑤ Request of loan

⑥ Presentation of A /R, L/A (D raft)

⑦ Request of approval for L/A (D raft)

⑧ A pproval by the N ational A ssem bly

② A nalysis on

the project

and technical

review

5.1.2 Inter-Agency Cooperation Process The Dominican Republic has decided to actively operate SNIP (National Public Investment

System) within the government budget through MOF and MEPyD from 2009. In line with this, the Republic has enacted Rules and Procedures of the National Public Investment System for the National Public Investment Plan 2009.

The established process to implement public projects is as follows.



< Figure 4-46 The Process to Implement Public Projects in Dominica >

5.2 Preparation for the Project 5.2.1 Preparations for the Project Implementation

After consultation among MEPyD(Ministerio de Economía, Planificación y Desarrollo), relevant authorities, and MOF(Ministry of Finance), the project was registered on



PNPIP(National Plan of Public Investment) in 2010. Therefore, the project has obtained priority in budget allocation. Currently, the report on the conditions and validity of the loan is under way to get approval from MOF.

Led by Mr. Eddy Martinez, head of the executing agency, the Export and Investment Promotion Agency has already secured the site for the CIBAO trade center. TFT for the project is now working on the organization of the PMO(Project Management Office).

In addition, members of the chamber of commerce and industry expressed their commitment to the project during the visit to Santiago, the site for the trade center. This indicates that the project is expected to greatly contribute to the export increase of Dominica.

5.2.2 Preliminary Procedures A. Procedure for the introduction of loan

The Dominican government is being given a stand-by loan from IMF, so it is necessary to discuss the size of foreign debt with IMF. However, the project is included in IMF-recommended projects, along with immigration and logistical system improvement. Therefore, there will be no problem with the introduction of this loan.

B. The Government's Strong Support

For a swift approval of the project by the borrower country, close inter-agency cooperation and understanding are required. Especially in Dominica, consent from Congress should be granted before signing a loan agreement, as shown in <Figure 4-31>. Accordingly, Congress's swift approval should be made in the second half of 2010 in order to start the project in 2011.

Furthermore, as the construction of trade center is the major part of the whole project, and the trade system and applications should be installed and supplied in time, the Dominican government needs to actively cooperate for equipment shipping and customs clearance.

C. Link to Other Projects

To ensure the project's compatibility with the system of the customs office after its completion, the DGA Computerization project should be finished by June when the system is scheduled to be fully opened.

In addition, the laws related to the system should be revised and executed before the completion of this project. The relevant laws will be presented in the e-Document system project of OPTIC (Information and Telecommunication Committee of Dominica), which is now waiting for the results of a feasibility study. Legal review is required to make sure that there will be no problem with system operation.



D. Forming a consultative body with relevant authorities

For smooth implementation of the project, we need to form a consultative body with relevant authorities and agencies for prior coordination. Through consultations with persons in charge, concrete plans including systematic links with the project and construction approvals should be established.



6. Consulting Service 6.1 The Need for Consulting Service Construction management and supervision over the whole site are required to make

sure that the construction meets the orders in terms of quality and risk management. The consultant should proceed with the construction of CIBAO trade center, develop the trade system, and make sure that the equipment is installed in cooperation with suppliers. Given this nature of the project, a consultant should be employed for supervision and management of the project under the EDCF process.

In addition, since the Dominican Republic has insufficient experience in building a trade center and developing and operating trade system applications, professional consulting service is needed for effective construction, development, and operation.

6.2 The Scope of Work The duration of the project will be a total of 29 months; 3 months to select a contractor, 5

months to support drafting basic design and bidding requests, 3 months to evaluate proposals for selection and conclude an agreement, and 18 months to supervise the progress after employing a consultant.

6.2.1 Basic Design During the period of basic design, the consultant selected by the Dominican government

should prepare for bidding to select suppliers in cooperation with the Export-Import Bank of Korea after signing the Loan Agreement between the DR and Korea.

6.2.2 Bidding Support During the period, the consultant would evaluate RFPs and support negotiations between

the short-listed bidders and project executing agency.

6.2.3 Supervision The supervising consultant will monitor the status of the project on behalf of the executing

agency during the 18 months of implementing period. The consultant would report the progress and risk factors of the project and present alternatives to the executing agency.



< Table 4-18 Work scope and duration of Consulting Service > Phase Activities Period

Basic Design

● Analysis of the Feasibility Study report ● Basic design of the trade center and trade information system ● Support for writing a bidding document under the「Guidelines

for Procurement under the EDCF Loan」 ● Cooperation in the procedure for approval of the bidding

document

5 months

Bidding Support

● Support for the invitation for bid and bid conference ● Support for Q & A ● Evaluation of proposals to select suppliers ● Support for the selection of the short list ● Support for contract negotiation between purchaser and short-

listed supplier

3months

Supervision

● Feasibility review on the supplier's plan to manage the project ● Examine the detailed schedule and management plan of each

supplier, and the properness of the personnel input ● Mid-term and final check-up for each factor ● Presenting measures to respond to a risk ● Submission of reports

- Construction: 18 months

- System: 12 months

6.3 Considerations The consultant should start procurement work within 2 weeks after selection and

present proper procedures to the executing agency so that all procurement procedures meet the Guidelines for Procurement under the EDCR, while coordinating difference between the Export-Import Bank of Korea and project executing agency.

Supervising consultants should start at the same time as the supplier starts the project. The consultant would monitor the progress of the project and report to the executing agency for coordination.

During the 18 months for construction and 12 months for the trade information system, PM will serve as a resident consultant, while other supervising consultants will be non-resident. Local supervising consultants will be employed for each sector.



6.4 Grounds to calculate the consultant input

< Table 4-19 Consultant Structure of Each Phase > Phase Category Level of staff # of Staff

Project Manager (PM) Over principal engineer

Architecture Consultant Over senior engineer including architect

Business Process Re-engineering(BPR) Consultant

Over principal engineer

ITS engineering consultant Over senior engineer

Basic Design

ITS Application Development consultant

Over senior engineer

▪ Foreign 14, 50M/M ▪ Local 3, 15M/M


Architecture Consultant Architect

Business Process Re-engineering(BPR) Consultant

Over principal engineer

ITS engineering consultant Over senior engineer

Bidding Support

ITS Application Development consultant

Over senior engineer

▪ Foreign 5, 13M/M


Architecture Consultant Architect

IT engineering consultant Over principal engineer Supervision

Application Development consultant Over senior engineer

▪ Foreign 7, 31M/M ▪ Local 7, 38M/M

6.5 Calculation of Consulting Costs Consulting costs for each phase were calculated based on「Appendix 2. Specifications of

Project Cost Estimates」.



7. Education 7.1 The Need for Education

To effectively build and operate an advanced trade center and system, education by experts is required.

In addition, as it is important for the ICT sector to obtain information on up-to-date IT trends and the utilization of electronic trade in advanced countries, overseas trainings for relevant officials are also needed. As for the trade academy, overseas training for managers and instructors is needed in order to swiftly stabilize and activate the system after establishment.

7.2 Education Program 7.2.1 Construction of Trade Center

The trade center will be used for multiple purposes including international conferences, domestic and international exhibitions, and the trade academy during normal hours. In order to effectively operate the center with proper security and emergency responses, plans should be made in terms of the target trainees, methods, and contents of education. Customized education for each sector is also necessary for practical and effective management of the center

As for the construction of trade center, only on-site education will be implemented on manuals and equipment operation for 6 areas including mechanical, electric, communication, fire-proof, stage and acoustics for one month before completion.

Training Methods

▪ Establishing education plans for each sector

▪ Providing machinery and electric equipment, acoustic system manual and user manual

▪ Technical education by suppliers

▪ Education on work procedures regarding maintenance

Check-list

▪ Educational environment check

▪ The project schedule and status to plan a detailed education schedule

▪ Thorough preparation for manuals and textbooks



▪ Submission of the education plan after consultation with working levels on the details

To help actual users and operators of trade center learn and develop related technologies, diverse programs including on-site education and workshop will be provided. The basic principles will be situation-based education, participation by persons in charge, and free materials.

Curriculums by education sector/target

▪ Customized education for managers and maintenance controllers

Flexible education

▪ Providing additional technical support and education by team or technical part, if necessary

▪ Practical education depending on different situations by season, exhibition type, nature of conference

Effective on-site education

▪ Maximizing benefits through practice-based education

▪ Implementing practice-based education that has immediate results

7.2.2 Integrated Trade System (ITS) To ensure stable operation, security and emergency recovery of ITS and improve users'

capability to utilize the system, plans should be established for the methods, target, substances, jobs and structure of education. By doing this, we can conduct systematic education differentiation by level. This high-quality education would enable users to have better understanding of the project and carry out jobs efficiently. Training will be divided into local education at the recipient country and foreign education where trainees are sent abroad.

A. Local Education

Training Methods

▪ Establishing a plan based on collective education

▪ Supporting distance education on the product information

▪ Providing H/W manual, system S/W manual and user manual

▪ Technical education by suppliers on system S/W, H/W and other equipment



▪ Education on work procedures regarding maintenance

Check-list

▪ Providing preliminary education environment (consultation on training room)

▪ Confirming the education schedule including consigned education

▪ The overall project schedule and progress to set up a detailed education schedule

▪ Thorough preparation for manuals and textbooks

▪ Submission of the education plan after consulting working levels on the details

In order to help users, operators, and managers of the trade information system to learn new technology, education will focus mainly on practices. Participation will be encouraged by persons in charge, and learning materials will be provided free of charge. In addition, diverse programs will be offered including off-line education, workshops, and overseas training.

Curriculums by target/role

▪ Customized education for managers, system operators, actual users, and maintenance controllers

Flexible education

▪ Providing additional technical support and education by team or technical part, if necessary

Education by highly-qualified instructors

▪ System developers, project engineers, or professional instructors

▪ Systematic education through sufficient experiences

Lively education focusing on practices

▪ Maximizing learning effects by focusing on practices

▪ Using a lecture room where everyone can secure a PC

Providing the best learning environment

▪ Assistants for instructors will be employed for the greatest education outcome.

▪ Focusing on new technologies

▪ Providing education guides by manager, operator, and user

Offering overseas training



▪ Access to the newest IT trend

▪ The introduction of Korea’s e-trade

▪ Sharing the information on e-trade policies

B. Foreign Education

Training Methods

▪ Training by visiting Korea

▪ Education will be provided at the start of the first and second phases with 5 trainees each for 2 weeks

Details of Education

▪ The up-to-date IT trend

▪ The status of Korea’s e-trade

▪ Sharing the information on e-trade policies

7.2.3 Trade Academy In order to swiftly establish and stabilize the trade academy, education differentiated by

class will be implemented. Top quality training will be provided to help trainees have better understanding of the project and carry out their tasks more efficiently.

Local education through dispatch of experts

▪ Dispatched Korean experts will provide advice on trade education policies and implementation measures and educated ICT-based teaching methods for sustainable education.

Foreign education by inviting related staff

▪ We will invite operating staff to share Korea’s experiences in trade policies, education strategies, and development and help them cultivate capabilities to establish policies and strategies fitting the Dominican circumstances.

Foreign education by inviting key instructors



▪ We will invite key instructors to Korea to provide trainings on the development of curriculums, teaching-learning methods, strategies to develop materials, and IT utilization methods so that they can immediately use the skills when returning to Dominica.

▪ To help the instructors deliver the training program to Dominica, training support materials will be provided.



8. Establishing Project Operating Measures 8.1 Trade Center

The primary goal is to ensure stable and efficient operation of facilities after undergoing test runs, and transfer of all equipment at the completion of trade center construction. Through screens optimized for each type of work, users can monitor the operational status and dysfunctions in real time and immediately take actions for recovery when errors and dysfunctions occur.

< Figure 4-47 Operational and maintenance structure of trade center >

A rchitectural U nitA rchitectural m aintenance/structure, interior, exterior finishes

Facility M aintenance Team

M echanical U nit

Electrical U nit

D isaster Prevention U nit

M echanical m aintenance/stable equipm ent operation

Electrical m aintenance/effective operation of electrical equipm ent

Disaster prevention, elevator maintenance /equipment maintenance

The scope of the operation covers maintenance of the building, mechanical and electric equipment, and recovery of errors. In the operation of equipment and facilities, stability and economic efficiency should be taken into consideration.

Maintenance activities

For stable operation of the building after completion of construction, proper maintenance standards should be set and obeyed. Maintenance activities should be continued until the operation is on track.



< Figure 4-48 Example of Maintenance Structure at the Similar Facility in Korea >

M achinery U nit(3)

U nit H ead : 1In-charge/Adm inistration: 1

Construction : 1

M aintenance of

m achinery

M achinery w ork order

placem ent

M anagem ent of facility-

related outsourcing

com pany

Purifying tank o utsourcing

m anagem ent

Pow er facility outsourcing

m anagem ent

Autho rities-related

business(KO G AS)

Statutory inspection

m anagem ent

Electricity U nit(3)

U nit H ead : 1In-charg e/Ad m inistration: 1

A dm inistrative Support: 1

M aintenance o f electricity

Electric w ork order

placem ent

U PS outso urcing

m anagem ent

W ater sp arkling facility

outsourcing m anagem ent

Electric b reaker

m anagem ent

Authorities-related

business(KESC O )

Statutory insp ection

m anagem ent

Construction U nit(5)

In-charge/A dm inistration: 1

D esign: 1Construction : 1

M aintenance of

construction

C onstruction w ork

order placem ent

Trade C enter space

m anagem ent

Blueprint(C A D )

m anagem ent


m anagem ent

Perm ission/approval

m anagem ent

N ew construction plan

establishm ent

Fire-proof U nit(3)

U nit H ead : 1Lift/A dm inistration: 1

Fire-proof/Construction: 1

M aintenance of fire-proof

w o rks

Fire-proof/lift w o rks o rder

placem ent

Lift o utsourcing

m anagem ent

M anagem ent of resources

of the Trade Center

Authorities-related

business(Fire Station)


m anagem ent

Construction M gm t U nit (5)

U nit H ead : 1C onstruction M gm t : 3

Receipt/G uide : 1

O rder-placing,

constructio n m anagem ent

Construction

receip t/Approval

Construction w rap-up

m anagem ent

Landscape construction

m anagem ent

Civil petition m anag em ent

Construction draw ing

review

FM S input m anagem ent

Technical Support Team H ead (1)

D irector of Technical Support Team and

C onstruction U nit H ead (C oncurrent position)

8.2 Integrated Trade System (ITS) Consolidated management environment will be created in the main servers of ITS to ensure

effective and stable operation of the system. Through screens optimized for each type of work, users can monitor the performances and dysfunctions of resources in real time and take immediate actions in case of overload or dysfunction.



< Figure 4-49 Overview of System Operation >

To minimize downtime To maintain emergency

contact system

To develop and apply business processing

guideline and operation manual

To comply with operation

procedures by the System operators

Operation Plan

Operation Support from Developer

Constant System Monitoring Centralized Management & User-oriented

Operation Remote Tx/Rx Management Standardization of Operation Procedures

Optimal System Operation

The scope of ITS operation covers performance, operation of application, dysfunctions, backup and recovery management. In the operation of each area, stability and economic efficiency should be taken into consideration.

After establishment, stable operation of the system will be promoted through efficient management of resources and continuous update. We will also present a maintenance system that can respond to rapidly changing IT and any type of errors with flexibility.



< Figure 4-50 Strategy of Maintenance >

< Table 4-20 Maintenance Details by Category > Category Scope of

Support Details

H/W, N/W equipment to be introduced

Warranty against defects Repair support

● Basic checking service, environmental checking service before installation - location of installation / space / power / humidity / temperature - Methods of access to LAN and cable - Required conditions for connection between different models ● Warranty service - Repair & free replacement of defect parts - Periodic repair service



System S/W to be introduced

Support for the operational status

● Evaluate operational status & resolve operational problems or present improvement measures ● Support necessary technologies and education to solve and improve problems ● Patch during the maintenance period ● If there is any upgrade in the same product, examine the performance and conduct upgrade

S/W to be developed and applied

Correction of defective parts

● Errors in design and program ● Change in hardware platform with the same number of users

Maintenance Support Activities

The system developer will carry out activities to support maintenance for the stable operation the system for 24 months after completion.

< Table 4-21 Maintenance Support Activities Guideline > Category Details

Organization System developer

Period Two years upon the completion of final review (24 months)

The number of staff 2 Person

Setting 1st year : 2 experts will reside in Dominica 2nd year : 1 will reside in Dominica, 1 for remote support

Scope

- Hardware, system S/W, application S/W - OS upgrade * Additional demands that are not included in the detailed design do not belong to maintenance support activities. (Separate consultation is required)

Maintenance Activities

After the maintenance support, the IT division of CEI-RD, the project executing agency, should take over the maintenance activities. There will be no changes in activities, but the staff should fit the following requirements, as they are not system developer.

- Those who understand the objectives and concept of ITS - Those who understand specifications of various designs in ITS - Those who participated in ITS development - Those who have experience in maintenance of H/W, N/W, S/W and other equipment



8.3 Trade Academy 8.3.1 Operational Structure

The current I*CEi will lead the establishment of trade academy in Dominica, but the operational structure should satisfy the following requirements, given that the academy will be operated at the CIBAO area.

Centering on local experts with the local culture of the CIBAO region in mind

Staff at the initial stage should be formed mostly by trade experts

< Figure 4-51 Example of Trade Academy Organization >

Consultation Committee

Trade Academy

Establishment of businessstrategies Management of Academy Hire of instructors Development of textbooksand management Development of certificateand operation

Strategy Planning Team

Support of corporate training Industry-academic

cooperation Project Overseas internship project

Business Cooperation Team

Trade Training Team

Development of education course Operation of education course Management of trainee Operation of On-line education

Instructor Pool

8.3.2 Division of Works Strategy Planning Team

▪ Set short, mid, and long term business strategies of trade academy

▪ Recruit new instructors and manage instructors' pool



▪ Develop, operate and manage teaching materials according to the curriculums

▪ Develop and operate trade-related certificates in the future

Trade Training Team

▪ Develop and operate professional trade education programs

▪ Manage trainees (Recruitment of trainees, and attendance management)

▪ Operate on-line curriculums in the future

Business Cooperation Team

▪ Support corporate training and customized training

▪ Promote industry-university cooperation.

▪ Develop and manage overseas internship programs

Advisory Committee

▪ Formed with university professors and manager-level officers of relevant agencies, the committee will provide advices on the overall operation of trade academy, including development and operation of programs.



9. Project Period and Schedule 9.1 Construction of Trade Center

9.1.1 Construction Period

ItemM 1 M 2 M 3 M 4 M 5 M 6 M 7 M 8 M 9

M1 0

M1 1

M1 2

M1 3

M1 4

M1 5

M1 6

M1 7

M1 8

D esign

Building

M achinery equipm ent

Electric equipm ent

O n-site training

Plan

Item

Basic design analysis and detail d esign

Civil en gineerin g/ basic con stru ctionM easuring / p reparatio n for start-up

Test run

Sw itchbo ard, pow er generatio n eq uipm ent, electronic com m on line installation

6persons/4w eeks/o ne tim e

Test run

Fram ew o rks(Steel-fram ed co ncrete/steel-fam e) Fin ishing and su p plem entary w orks

Status analysis/construction plan establishm ent

Status analysis/construction plan establishm entO rder for m aterials

A ir-co nditioning pip ing w o rks, air-co nditioning d uct w o rks, air-cond itioning installation, equip m ent installation

O rder for m aterials

Construction

9.1.2 Implementation Schedule The trade center will be built under the following procedure; construction documents,

construction, and test. The construction part will be executed in four major sectors including construction works, structural works, mechanical works, and electric works. The details of works are as follows.

Analysis of the basic design & construction documents (4 months)

∙ Through surveys and measurements on the site (ground conditions, existence of obstructers)

∙ Analysis of design development drawings and documents prepared in the consulting phase after consultation with the project executing agency

∙ Prepare construction documents that reflect particular circumstances on site

∙ Re-check demands from the executing agency and collect additional changes

∙ Check the administrative procedures before commencement

Construction (13 months)

∙ Civil works, foundation work, structural work (reinforced concrete and steel frame), and interior and exterior finish work



∙ Mechanical work, electric work, fire-proof work

∙ Other work including landscaping

∙ Site preparation work, completion cleaning

Test & Transfer (1 month)

∙ Test runs of equipment

∙ Educate staff on mechanical and electric facilities manuals and operation

∙ Educate staff on the manual of sound and video equipment

∙ Transfer of facilities

The construction period is scheduled to be a total of 18 months. If any extraordinary circumstances such as delay of construction occur, the supervisors should take measures to meet the scheduled time.

If a delay is caused by the client, separate consultation is required.

During the last test run period, experts from all sectors including architecture, structural design, mechanical and electrical equipment will be dispatched to the site for one-month education.



9.2 Integrated Trade System 9.2.1 Period for Establishment

M 1 M 2 M 3 M 4 M 5 M 6 M 7 M 8 M 9 M 10 M 11 M 12

Step1

e-M arketingPortal

e-TradeD ocum entRepository

Step2

e-Trade Portal

e-Trade RelaySystem

ICT

O verseas Training

일정구분

Test &Im p lem entationD evelopm entA nalysis and D esign

Test &ImplementationD evelopm entAnalysis and Design

Test &ImplementationDevelopmentAnalysis and Design

Test &ImplementationDevelopmentAnalysis and Design

ed ucatio n

education

education

education

H /W , N /W , S/W Installation

5persons/2w eeks

/one tim e

5persons/2weeks/one time

9.2.2 Implementation Schedule A total of 4 systems will be established in two phases. Each system will go through

analysis, design, development, test, and application for completion. The details of each process are as follow.

Analysis & Design

∙ Current process & analysis (Define As-Is Process & System )

∙ Define requirements (functions and technologies, other system interfaces)

∙ Process modeling (Define To-Be Process, functional charts)

∙ Data modeling (ERD)

∙ Define the optimal architecture

∙ Design screen standards (page layout & display)

∙ Design system structure and database

∙ Test Scenario

Development

∙ Program coding



∙ Unit test

Test & Application

∙ Integrated test

∙ Educate how to use the system

∙ Quality test

∙ Data convergence (if necessary)

Basically, H/W, N/W, and S/W required to develop and operate the system will be installed when project development starts.

Overseas training will be provided for CEI-RD personnel(mainly computing dept.), who will take charge of system operations. The two-week training session will begin at the onsets of the first-phase and the second phase with 5 workers for each session.

9.3 Trade Academy The plan for the development of curriculum and training materials and operation

consulting will require two months. Overall operating plans and the curriculum will be developed for this period. (Size and other construction-related information are stated in the trade center construction part.)

Set up a general plan for operation

∙ Prepare individual plans (finance, human resources, and facility operation)

∙ Measures to provide instructors for short and long term and to form an operating organization

∙ Prepare education and IT equipment plans that fit the size of facility

Develop educational programs

∙ Short/long term curriculums, industry-academic cooperation program, corporate training program,

∙ New curriculum for the establishment of ITS



∙ Prepare basic measures to develop education materials

Overseas training

∙ Implement for two weeks, targeting key staff and instructors

∙ Sharing experiences in trade policies, education strategies, and development

∙ Cultivating capabilities to develop policies and strategies for trade academy

∙ Cultivating capabilities to develop trade education curriculums, teaching-learning methods, and strategies to develop education materials

10. Procurement Plan The Dominican Republic government should take responsibility for procurement for

detailed designing, supervising, constructing, and system-building and implement procurement procedures under the EDCF procurement guidelines. CEI-RD recognizes this from consultations during the feasibility study.



Chapter V. Project Budget Estimation

1. Estimated Costs & Funding Plan 1.1 Estimated Costs

Total costs are divided into direct and indirect costs. Direct costs would be spent on trade center construction (direct construction costs), trade system establishment (equipment and materials, development, installation, and operation costs), consulting on the establishment of the trade academy, consulting services, and training. Indirect costs would include taxes & utility charges, contingency, management, and loan commission.



< Figure 5-1 Total Costs >

(Unit: USD)

EDCFForeign Currency Portion

Korea 3rd Countries

1. Trade Center Construction 8,754,820 1,481,240 8,763,940 19,000,000 25,474,318 44,474,3181) Land Acquisition & Infrastructure - - - - 25,474,318 25,474,3182) Architecture 6,164,740 186,200 7,253,060 13,604,000 13,604,0003) Mechnical 1,222,080 611,040 712,880 2,546,000 - 2,546,0004) Electric 1,368,000 684,000 798,000 2,850,000 - 2,850,000

2. Integrated Trade Data System 4,431,767 430,636 724,500 5,586,904 - 5,586,9041) Equipment 304,545 430,636 735,182 - 735,1822) S/W Development 3,633,890 - 724,500 4,358,390 - 4,358,3903) Installation & Test 493,332 - 493,332 - 493,332

3. Trade Academy 87,882 - 87,882 - 87,8824. Consulting Services 1,822,266 - 147,000 1,969,266 - 1,969,2665. Training 345,506 - - 345,506 - 345,506

1) Local Training 174,616 - - 174,616 174,6162) Overseas Training 170,890 - - 170,890 170,890

Base Cost 15,442,242 1,911,876 9,635,440 26,989,558 25,474,318 52,463,8776. Taxes & Duties - - - - 1,349,478 1,349,4787. Contingencies 1,708,112 207,794 1,064,565 2,980,471 4,570,530 7,551,001

1) Physical Contingency 772,112 95,594 481,772 1,349,478 1,273,716 2,623,1942) Price Contingency 936,000 112,200 582,793 1,630,993 3,296,814 4,927,807

8. PMO(2% of base cost) - 1,049,278 1,049,2789. Service Charge(0.1% of EDCF) 29,970 29,970 29,970

Total 17,180,324 2,119,670 10,700,005 30,000,000 32,443,604 62,443,604Percentage(%) of EDCF 57.30% 7.10% 35.70% 100%Percentage(%) of Total 27.50% 3.40% 17.10% 48.00% 52.00% 100%

ItemGov. of

DominicanRepublic

TotalLocal CurrencyPortion EDCF Total



1.2 Funding Plan The total estimated cost is US$62,443,604 and the EDCF loan will fund US $30 million,

which account for 48.0 % of the total. The Dominican government will pay US$ 32,443,604. Compared to the total cost, foreign currency earning rate is 31%. <Table 5-1> shows the funding plan.

< Table 5-1 Funding Plan > (Unit: US$)

Foreign Currency Category

Korea 3rd country Local Total

EDCF 17,180,324 2,119,670 10,700,005 30,000,000

Recipient - - 32,443,604 32,443,604

Total 17,180,324 2,119,670 43,143,609 62,443,604

Out of EDCF (%) 57.3% 7.1% 35.7% 100%

Out of Total (%) 27.5% 3.4% 69.1% 100%



2. Specifications of Project Costs 2.1 Costs for Trade Center Construction

2.1.1 Costs for site acquisition and infrastructure In trade center construction, the Dominican Republic should pay a total of

US$25,474,318 for site acquisition and infrastructure. Specifically, US$ 18,750,000 was allocated for site acquisition, US$5,727,273 for building infrastructure, and US$997,045 for furnishings and fixtures in the center. These estimates are based on the following:

Item Amount(USD) Description/Precondition

Land Acquisition US$18,750,000 The building-to-land ratio - 40%, floorage - 15,000 square meters, price ofland per square meters - 500 USD

High VoltageCable

ConstructionUS$545,455

* Based on Approx. 7,500KVA Transformer Installation for Capacity of22.9KV/380-220V (Korean Standard)* Construction Range : Assuming 600m (perimeter of property line abutsonto roads)* Material Cost : 360,000,000 (US$ 327,000) Labor Cost : 120,000,000 (US$ 109,000) Overhead Cost : 120,000,000 (US$ 109,000)

RoadWidening

ConstructionUS$4,909,091

* Based on Unit cost for Korean Road Widening Construction US$8,180/meter (Based on 2008 Korean Procurement Service Data)* Widening Construction Range : assuming 600m (perimeter of propertyline abuts onto roads)

Water andSewage

ConstructionUS$218,182

* Expansion Construction Range : assuming 600m* not including additional Sewage Treatment Plant construction cost dueto insufficient capacity of existing plan

Soil/Underground Utility

SurveyUS$54,545

* Soil Test: 10 Boring Hole per each Building* Proposed Building Location Underground Utility

US$5,727,273

OfficeFurniture &Equipment

US$818,182

* Grand Balloom: Banquet Table 36 EA Banquet Chair 360 EA* Convention Hall: Conference Table 4 SET Conference Chair 320 EA* Conference Room: Conference Table 117 SET Conference Chair 351 EA* Office Desk & Chair: 108 EA* Computer Classroom Desk & Chair: 72EA* Miscellaneous

OAEquipment US$178,864

* Office Computer : 109 EA* Office Combination (printer, scanner & fax Machine): 35 EA* Computer for computer Classroom :36EA

US$997,045

Total US$25,474,318

Infrastructure

Furniture& OA



2.1.2 Architectural, mechanical, and electric costs Conditions for estimates

▪ Floor area of the trade center: 20,000㎡

▪ Construction costs per unit area: US$ 950/㎡

▪ Ratio of material cost to the total construction cost: 70%

▪ Ratio of local labor cost to the total labor cost: 80%

▪ The amount of steel rebars used per unit area: 75㎏/㎡

▪ The price of steel rebars per ton: 700,000 won

▪ The amount of remicon used per unit area: 0.8㎥/㎡

▪ The price of remicon per unit volume: 53,000 won/㎥

Construction Conditions ▪ Site location: Located in the downtown of Santiago, the second largest city in

Dominica. As remicon and steel bar plants are situated in the vicinity, it seems that there would be no problem with the supply of main materials. Therefore, additional burden for logistics would not occur.

▪ Site conditions: It has long been used as an airport, so the site is plane with no steep slopes. The ground also seems to be suitable for construction, and the lack of need for underground excavation is another advantage.

▪ Material Supply: Recently, there was a change in finishing the exterior wall. Most interior and exterior finish materials will be imported. Other basic materials including steel rebars, cement, remicon, and blocks will be smoothly supplied.

Cost estimate for construction: Construction would consist of architectural, mechanical, electric, and fire-proofing work. Resources for major equipment are as follows.

Architectural work: Given the nature of construction, many kinds of materials and equipment are required. Based on the two rounds of on-site surveys, we induced the active use of materials easily obtained on site, materials used in locally specialized work, such as reinforced concrete, masonry, and plaster, and local basic equipment. In particular, civil and landscaping work are supplied mostly by local materials for greater effectiveness.

On the other hand, stone and finishing materials for the interior and exterior finish were made in Korea, as they are greater in terms of cost and quality than the ones from the third country.



As for other work, there is no preferred local equipment or material, so the construction costs were allocated to made-in-Korea materials and local materials in a ratio of 6 to 4.

※ Especially for the scope of the interior finishing, the costs can vary greatly, depending on the finish type. Therefore, the following will be the standards as the most commonly used materials.

Category Floor Wall Ceiling Note

Exhibition hall Concrete floor/ epoxy coating Vinyl paint Exposed steel structure

Convention related Vinyl tile Vinyl paint sound absorption tex

Auditorium Wooden flooring Partial painting / partial wood

Patterned wood on gypsum board / sound absorption tex

Offices/Lec ture rooms Vinyl tile Vinyl paint sound absorption tex

Mechanical and electric works: In the first and second field surveys, we failed to obtain detailed information on mechanical and electric equipment, compared to the unit price of construction. We just confirmed that the centralized air-conditioning system is common and that electricity is more preferred than gas as a heat source. However, considering that no remarkable system exists for cooling and heating, we decided to adopt a common system here. As the equipment is mostly produced and sold by multinational companies, items made in Korea and the third country would be mixed and the maximum ratio of local workers for installation is 70%.

<Major materials(mechanical) specification> Item Specification & Usage

20RT(air conditioning)

30RT(air conditioning) Rooftop Units

50RT(air conditioning)

Water tank For freezer

Water pump For circulating cold water

Ventilator For circulating cooling water

PACair conditioner Room air conditioning

Fire pump For water supply

Pipes and ducts

Others



<Main materials(electric) specification > Item Specification

High pressure

Low pressure

transformer(1000KVA):lighting/heating Switchgear

transformer(2000KVA):power/for events use

Power generator 1000KVA

UPS equipment 160KVA parallel (including battery)

Feeder Power distribution unit exhibition power/lighting/heating lights

Power equipment MCC sub-equipment

Video/sound equipment pipes/wires and tools 3.3m² x 1.5 million won

others

The total costs of architecture, mechanical, and electric works are as follows. (Unit: US$)

Item Amount Materials Labor

Architecture 13,604,000 7,926,800 5,677,200

Mechanical 2,546,000 1,527,600 1,018,400

Electric 2,850,000 1,710,000 1,140,000

Total Cost 19,000,000 11,164,400 7,835,600

2.2 Cost for establishment of Integrated Trade System (ITS) Estimate of Equipment and Material Costs: Equipment and materials required to build

the system are divided into H/W, N/W, and S/W, and the specifications are as follows. Given the features of ICT equipment, most equipment was made in the third country, while some special equipment is made in Korea.



1. Hardware Item Specification/Usage Qty

Main Server 2way 4core, 32GB, 146GB*2 3

Backup Server 2way 4core, 8GB, 146GB*2 1

Main SAN Storage 500GB*16 units (8TB) 1

Backup SAN Storage 500GB*48units (24TB) 1

Total 6

2. Network Item Specification/Usage Qty

SAN/L2 Switch 24Port 4

Router 2Port 10/100/1000, 4Port Serial, Over 4Slot, Redundant power supply

1

Total 5

3. Software Item Specification/Usage Qty

Vmware VMware vSphere 4 Enterprise Plus for 1 processor

1

Firewall / VPN 2Gb firewall, 1Gb 3DES VPN 1

Web Server Web to B 3

Web Appl. Server JEUS 3

Database SQL Enterprise 2

EDMS EDM Engine 2

Other Utilities Backup, SMS/NMS, etc. 1

Total 13

Estimate of Development Costs: We estimated the number of workers required for 4 works and calculated the costs based on the unit labor costs by level.

As for Korean technicians, [Labor costs for software technicians (2010)] provide by 'Korea Software Industry Association] was applied, while the information obtained in the field surveys was adopted to calculate local labor costs.

Direct costs would be incurred from the office operation for 14 months; 6 months for the first phase and 8 months for the second phase. The costs were calculated for air fare, housing, communication, rent, and interpretation costs.



[Phase 1] Category Period Amount(US$) e-Marketing Portal 6M $462,834 Electronic Document Repository 5M $322,158 Direct Costs $459,000 Total $1,243,992

[Phase 2] 3. Trade Portal Establishment Category Period Amount(US$) e-Trade Portal 8M $1,593,393 Electronic Document Relay System 6M $909,205 Direct Costs $611,800 Total $3,114,398

Estimate of Operating Costs: Two developers are supposed to stay in Dominica for a year to support the system maintenance and one will provide remote support for a subsequent year. Accordingly, operation costs cover maintenance labor and direct costs.

Category Period Amount(US$) Maintenance Outsourcing Cost 24M $385,532 Direct Costs $107,800 Total $493,332

2.3 Cost for the Establishment of Trade Academy The costs cover labor costs required for consulting services and direct costs. (The

equipment cost is included in the construction cost of the trade center)

[Calculation of labor costs to dispatch experts to trade academy] Category Period Amount(US$)

Labor costs for expert dispatch 2M US$58,282 Direct costs US$29,600 Total US$87,882



2.4 Consulting Service The project will be conducted for a total of 26 months; 8 months for procurement in which

a contractor is selected to sign an agreement, and 18 months for implementation. The consulting service will be divided into "procurement support" and "project supervision". The "procurement support" will then be separated into basic design and evaluation of proposals/contract support.

The resulting consultant costs were calculated for Korean and local staff at each phase.

Category Amount(US$) Note

1. Phase I: basic design, drafting RFP US$951,227 Foreign: 14, total 50MM

Local: 3, total 15MM

2. Phase II: Evaluation of

proposal/Contract support US$242,275 Foreign: 5, total, 13MM

3. Phase III: Supervision US$775,764 Foreign: 7, total 31MM Local: 7, total 38MM

Total US$1,969,266

2.5 Training According to consultations with CEI-RD, the training costs cover on-site education

(dispatch of experts) and overseas training (invitation to Korea for training).

On-site education will be provided by architecture and IT experts. One architect and two IT experts (1 for hardware and 1 for software) are contracted to conduct education for 6 months and 1.5 months, respectively.

Category Period Amount(US$) Cost for architectural expert dispatch 6M US$67,320 Cost for IT expert dispatch 3M US$30,596 Direct costs US$76,700 Total US$174,616

Overseas training will be implemented in Korea for two weeks, targeting 20 trainees(10 for trade academy, 10 for IT).



Category Amount(US$) Note

The number of trainees 20

Period 13 days

housing US$50 Per day

food US$20 Per day

Daily cost US$20 Per day

insurance US$40 Per business trip

Air fare US$2,500 Per business trip

Basic Costs

Sub total US$74,200

Allowance US$7,800 30$ per day Professional Education costs Material costs US$2,400

Orientation, etc US$4,800

Teaching Korean US$1,290 Others Education costs

Completion Ceremony US$2,400

Sub total US$92,890

Program management cost US$78,000

Total US$170,890

2.6 Taxes and Utilities Out of the total costs, 5% is allotted for taxes and utilities. This cost will be paid by the

Dominican GOD fund.

2.7 Contingency Contingency is a reserve set to prepare for a cost increase between estimates and actual cost.

The reserve comprises quantity and price contingency and was categorized by EDCF (Korea, the third country, local) and the DR.

Quantity Contingency

The project requires a detailed design for construction and there can be a discrepancy



in quantity between the detailed design and F/S phases. In addition, changes in the field conditions and methods may lead to quantity change. In this regard, we earmarked 5.0% of the direct costs for quantity contingency through consultations with the executing agency in Dominica.

Price Contingency

Price contingency is a reserve set to prepare for cost increases from price appreciations and changes in foreign exchange rates. In general, the cost is calculated by applying the project period to the 3-year average of Consumer Price Index (CPI) and the total of direct costs and quantity contingency. The reserve fund was calculated at US$8.4 mil., but it was regarded that this might lead to the overestimates of the price reserve fund, so it was adjusted to 89.23%.

2007 2008 2009 CPI (2007~2009) Dominica 6.14 10.64 1.44 6.01 Korea 2.53 4.67 2.60 3.26 World 4.00 5.98 2.54 4.17 ※ source: IMF

2011 2012 2013 CPI for the project period Dominica 5.903 12.140 18.760 12.268 Korea 3.269 6.700 10.230 6.733 World 4.179 8.570 13.130 8.626 ※ Compound interest is applied to CPI for the project period: (1+r)n

Contingency

The following is quantity and price contingency calculated based on the above.

(Unit: US$)

EDCF Foreign Item

Korea 3rd country

Local Sub total GOD Total

1. Direct costs 15,442,242 1,911,876 9,635,440 26,989,558 25,474,318 52,463,877 2. Qty

contingency 772,112 95,594 481,772 1,349,478 1,273,716 2,623194

Total(1+2) 16,214,354 2,007,470 10,117,212 28,339,036 26,748,034 55,087,070 Price contingency 936,000 112,200 582,793 1,630,993 3,296,814 4,927,807



2.8 Project Management Cost Management costs is the expense required for the DR to smoothly conduct the project and

accounts for 2.0% of the direct costs.

2.9 Loan Commission As for loan commission, 0.1 % of direct costs and contingency was allocated in EDCF

foreign currency.

2.10 Applied Exchange Rate As of February 26, 2010, DOP 36.1 was applied for 1 USD. As for materials and labor

from Korea, 1 USD was calculated at 1,100 won, based on SERI Economic Focus No. 277 issue, "Background and Prospect of the Recent Instability in Exchange Rate"



3. Annual Spending Plans The execution plan was established by reflecting general work processes. The resulting

spending plans by year, except taxes and utilities are displayed in the following <Table 5-2> and <Table 5-3>. The whole project is scheduled to last for 3 years, but the period of maintenance is 24 months and spending for this period occurs in the fourth year. Therefore, the plan for the fourth year is also included.

< Table 5-2 Annual Spending Plan-EDCF > (Unit: US$)

Category Y1 Y2 Y3 Y4 Total Note

Consulting 1,181,560 393,853 393,853 - 1,969,266

Architecture 2,040,600 9,522,800 2,040,600 - 13,604,000

Mechanical 381,900 1,782,200 381,900 - 2,546,000 Construction

Electric 427,500 1,995,000 427,500 - 2,850,000

Introduction of equipment 735,182 - - - 735,182

The first phase development 624,403 416,269 - - 1,040,672

The second phase

Development - 3,317,718 - - 3,317,718

System

Maintenance - 123,333 246,666 123,333 493,332

Consulting - 87,882 - - 87,882 Trade

Academy Overseas training - 85,445 - - 85,445

Expert dispatch - 54,496 120,120 - 174,616 Education Overseas

training 42,723 42,722 - - 85,445

Contingency - - 2,980,471 - 2,980,471

Loan commission 6,034 19,700 4,009 137 29,970

Total 5,439,902 17,841,508 6,595,120 123,470 30,000,000



< Table 5-3 Annual Spending Plan-DR > (Unit: US$)

Category Y1 Y2 Y3 Total Note

Site acquisition 18,750,000 - - 18,750,000

Infra building 5,727,273 5,727,273

Trade center furniture works 997,045 997,045

Taxes and utilities 1,349,478 1,349,478

Contingency 4,391,643 178,887 4,570,530

Project management 1,049,278 1,049,278

Total 28,868,916 1,175,932 2,398,756 32,443,604



Chapter VI. Feasibility Analysis

1. Feasibility in Project Scale and Scope 1.1 Construction of the Trade Center The CIBAO area (including Santiago) where the trade center will be built an area that

develops more active trade activities than other areas (e.g., the Free Trade Zone is established based on abundant personnel and physical resources). By building the trade center in this area, we can establish a stronghold to invigorate exports of not only the CIBAO area but also over the entire Dominican Republic.

Especially, those engaged in the commerce and industry of Santiago have had strong needs for construction of the trade center that can support a permanent exhibition hall for export products and assist trade businesses within the Free Trade Zone to the extent that they have reviewed construction projects similar to this several years ago. It was also found out that they have desired to build a trade center which can function as shown above.

In addition, the biggest EXPO CIBAO has been held in the outskirts of the city with an inconvenient transportation system and in a gymnasium which is not generally used for exhibitions. In a bid to iron out these inconveniences, building an exhibition hall in the trade center will help exhibition events become invigorated and have a positive influence on relevant businesses. This will lead to flourishing exports and boosted morale. Also, by installing the convention facilities and trade academy facilities in the same space, it will contribute for the trade center to perform its role as an industrial hub, not only for the Dominican Republic but also for the Caribbean area.

During the first business trip of the F/S Project Team, the Dominican Republic requested a space about 50,000㎡ to be used as a convention hall, exhibition hall, and trade academy, but in consideration of similar examples in Korea, trade volume between two countries, and GDP, etc., an area that is about 20,000㎡ has been deemed to be more appropriate. Whether or not this building will be expanded or not will be considered separately based on the needs of the project executing agency.

1.2 Integrated Trade System As seen in the status analysis, the Dominican Republic has enjoyed the fastest

economic growth (Avg. 9.5%) out of countries in Latin America during the period between 2005 and 2007, and the DR has kept promoting expansion of overseas trade through the efforts such as concluding FTA with Latin American countries, the US, and EU, etc., and operated the Free Trade Zone which entitles various benefits in taxes and tariffs, among others. In case of the infocom industry, President Leonel Fernandez



has presented his vision to make the country become the IT Mecca of Latin America, and consequently this area became the only area exhibiting growth notwithstanding the recent great depression that the country faced.

However, annual export increase ratio of the Dominican Republic during the period between 2005 and 2007 failed to reach 6%, showing a big gap compared with the annual average export increase ratio of member countries of DR-CAFTA, 11%. And, the number of export companies of this country is about 3,000 as of 2009, out of which 98% are SMEs recording annual revenues less than USD1 mil. Hence, it is necessary to come up with various supporting measures to boost exports of SMEs.

Accordingly, the project to build the integrated trade system, which will provide the integrated trade data for acquisition of corporate information, information on products/markets/buyers for negotiation cost saving, and support the entire process of the export business by connecting trade information which has not been exchanged among approval authorities such as CEI-RD, DGA, etc., is expected to result in cost savings for trading companies, higher business efficiency, and a competitive edge, and thereby this project is considered worthwhile.

1.3 Trade Academy As shown in the status analysis, Santiago is the central commercial city of the CIBAO

area. However, there is only one professional training institution on trade named the Overseas trade and corporate innovation institute(I*CEi) run by CEI-RD, and this is available within Santo Domingo where the head office of CEI-RD is located. Also, the curriculum of the I*CEi centers on seminars, and thereby trade-related training focusing on practical business, which trading companies require, has not been conducted successfully.

Therefore, the project to establish the trade academy, which will strengthen and improve the existing curriculum and overseas marketing training of I*CEi, and foster workforce specialized in e-Trade through practical training for users and managers, at CIBAO Trade Center is deemed appropriate.



2. Feasibility in Project Cost 2.1 Construction of the Trade Center The F/S Project Team finalized the scale of the trade center as 20,000㎡ based on

negotiations with the project executing agency, and in this case about half of the entire space will be constructed as a steel structure, which requires column-free long span space. This space will be used as an exhibition hall while the remaining half will be constructed as a reinforced concrete structure.

In the first field survey, it was determined through interviews with a representative of a local construction company that construction of the convention hall building will not be ordinary, and the data we collected shows that construction costs of no less than US$1,000/㎡ per unit area is expected to be spent.

< Table 6-1 Construction Cost per unit area according to building type as surveyed in the project site >

Type Residence Factory Commercial

Bldg.(Including Convention)

Remarks

PEA - - 900~1,000

Constructora Teddy, S.A

700~900 - 1,100 Construction Enterprise

in Santiago

Mera,Munoz Fondeur, S.A

500~600 180 900~1,200 Construction Enterprise

in Santiago

Grupo P 800~1,000 250~300 1,000~1,200 Construction Enterprise

in Santo Domingo

Average 750 230 1,050

In case of the exhibition building, the construction cost range deviation is much bigger than other types of building. Furthermore, it is difficult to figure out the standard construction cost in a feasibility study phase due to not having detailed design documents and barometers.

We consider that a steel structure is more efficient and can save at least 20~30% of construction costs than a reinforced concrete structure. At the same time, if we construct 43% of CIBAO Trade Center with steel structure, we assume that the saving would be 28% for steel structure applied area's total construction cost and it would come up with a unit construction cost of US$950/m2 which is 88% of US$1,083/m2.

When we compare to the recent construction costs of Changwon Convention Center in



Korea, the 1st phase opened in 2005 is a total area of 41,233m2 with total construction costs of US$53,156,278 (Unit construction cost of US$1,200/m2). And the 2nd phase convention hall extension in 2008 is total extension area of 5,481㎡ with US$8,915,367 (Unit construction cost of US$1,514/m2). Since the extension for convention hall was built on the existing roof used as outdoor parking lot with structural investigation and reinforcing work, it required extra costs than general construction. Therefore, we need to manage every level of work in terms of budget and work schedule control other than comparing other sample projects.

In another Korean case, the unit construction cost for the cultural center construction finished on 2009 with a total area of 18,065m2 with 2 and a half years construction period was US$ 2,360/m2. This case requires at least double the construction costs due to expensive acoustic equipment, audio/visual equipment, and solar energy generating hardware. Considering all the cases mentioned above, we need to concentrate on finding efficient advantages at the project site and other construction cost saving factors with sufficient preparation and evaluation before starting construction.

< Table 6-2 Construction cost composition percentage per work types according to building usage types >

Work Type Construction Mechanical Work

Electric Work

Communication Work Total

Gov. Office Building 63.71 21.16 9.95 5.08 100

Sports Complex 75.50 10.67 10.49 3.34 100

Exhibition Hall 66.96 14.43 14.67 3.94 100

Average 67.24 17.90 10.59 4.28 100

Compared to other types of facilities, exhibition facilities requires higher electric construction costs due to various special lighting fixtures and acoustic equipment. Besides electric work, the cost of average construction cost for exhibition facility is medium. By natural lighting system through sky light and applying efficient acoustic system, CIBAO Trade Center could achieve cost saving target in electric construction.

In a local supermarket, La Sirena, with a total area of 8,000m2, 2 story high construction case, the unit construction cost is US$600/m2 with a light steel structure. And another case of Terminal de Cruceros de Sans Soucithe in Rio Ozama, downtown Santo Domingo's unit construction cost was US$1,200/m2 with multiple use function of passenger terminal and convention center. Since the CIBAO Trade Center is a single function building, we expect at least 15% saving in construction.

In general, the major two components of construction cost are labor and materials. The material cost between Korea and DR is about to same but the local labor cost is only



11% of Korean labor cost. As such, the low labor cost in the local labor market would be a big advantage for this project.

In conclusion, it is not easy to confirm the accurate construction costs for CIBAO Trade Center with data we have so far. Therefore, we could achieve a successful result when we prepare optimal design and documentation for efficient construction with systematic support from the DR Government and Department of Export Investment.

2.2 Integrated Trade System(ITS) When calculating the FP (Function Point; Method to measure the scale of software

based on the number of functions of a software) in accordance with the presented project scale, FP 4,562 is calculated as shown below.

< Table 6-3 Calculation of Function Point > Data Function Transaction Function

External Input System Name Internal Logical

File

External Interface

File Addition Modification Deletion External Output

External Inquiry

Function Point

ITS (Integrated Trade

System) 159 7 147 146 146 108 260 4,562

When assuming the required man-hour per 1FP as 11.0MH/FP, the estimated man-hours are calculated as 475M/M, and thereby it was determined that the appropriate amount of manpower is to be inputted for 12 months of the construction period, and such costs are also deemed appropriate. (Refer to the 「Attachment 2. Detailed

Evidence for Estimated Cost」 for further details.)

As it has been more than twenty years since set-up of the e-Trade System of Korea after launching of the Trade Automation Business Promotion Committee in 1990, comparison of the project scale and cost with ITS is deemed inappropriate, and thereby it seems useful for judgment of feasibility in the project cost to compare ITS with that of other countries under construction or to be constructed by benchmarking the latest e-Trade system model of Korea.

In case of Libya where the e-Trade system is being built, the project scope includes export, import, and other businesses; Looking into project costs for building the export cooperation system that is similar to ITS, the system construction period is 12 months, manpower is 337M/M, and construction cost is about USD4,000,000. Also, in case of Romania set-up of the export system similar to the ITS, this requires 24 months with manpower of 675M/M and R&D costs amounting to USD6,400,000. Although inputted manpower and project cost differ by countries due to their own characteristics,



ITS project cost is deemed appropriate in view of the comparison of ITS with the afore-mentioned cases of other countries.

2.3 Trade Academy In case of the trade academy, its construction is included in the construction of the

trade center, and therefore we would like to judge propriety in consulting the workforce in accordance with establishment of the operation plan. It is determined that about two(2) months are required for professional consultants to come up with an operation plan and develop curriculum and training materials after establishment of the academy.



3. Technical Feasibility Technical feasibility refers to whether or not applicable conditions including technical

presence and technical risks have been established.

Santiago, the second biggest industrial city of the Dominican Republic, has accumulated a systematic industrial system and capital power through the textile industry and other industries, and has reviewed plans similar to this such as the construction of the standing exhibition hall and trade support center in the Free Trade Zone(Zona Franca), with the goal of invigorating new industries.

During the first business trip of the F/S Project Team, a large-scaled shopping center in steel structure has been used already, and work using concrete for existing buildings are known to be very difficult.

The exhibition function of the trade center will be in the column-free steel structure, often used in the Dominical Republic, providing a long space for exhibitions, and the convention and trade academy are mainly built by steel structures and the walls by masonry; Therefore, measures to utilize merits and demerits of construction technologies of the Dominican Republic in an efficient manner are needed.

Hence, if comparatively-inexpensive steel structure and proficient concrete work is used for construction space, the design of such construction is concrete, and the construction process is efficient, we will be able to achieve our goals.

As of 2010, major countries worldwide have promoted e-trade. In case of EU, the country has pushed ahead with alignment of laws and systems and international cooperation by utilizing e-trade, and countries of East Asia have established government-led e-trade service and are trying to connect this service globally. Therefore, it seems reasonable for Dominican Republic to promote e-trade through this project, as it is to be in line with global trend, and thereby it is deemed appropriate to utilize the .NET, the global IT technical standards.



4. Economic Feasibility 4.1 Outline

In this chapter, we conducted economical feasibility analysis concerning EDCF investment project for construction of the CIBAO Trade Center in Dominican Republic by using the Cost-Benefit Model. In other words, by analyzing the social benefits and costs, we determined the economic efficiency of such a project through B/C Ratio, Net Present Value(NPV), and Internal Rate of Return(IRR), and etc. Also, we performed a Sensitivity Analysis on the influence of major variables such as discount rates, costs, benefits, and etc., on economic efficiency.

4.2 Preconditions for Feasibility Analysis 4.2.1 Exchange Rate

In the economic efficiency analysis, DOP36.1 per 1 USD will be applied, and KRW1,100 per 1 USD will be used for calculation of materials from Korea, etc.

4.2.2 Discount Rate As to discount rate used for economic efficiency analysis, the 「General Guidelines for

Pre-feasibility Study(2004, Revised Edition)」 stipulates that real discount rate, 7.5%, is generally used for public investment project, but in case of Dominican Republic, a developing country, discount rate by 12% is used based on the 「EDCF Project Feasibility Study Guidelines」.

4.2.3 Analysis Period When this project is promoted, about 26 months will be required for construction of the

trade center and set-up of the Integrated Trade System, and etc. Base year for the economic efficiency analysis is 2011. Beginning of the project is assumed as January, 2011, and completion is projected as February, 2013. It is also projected that pre-consulting of this project will be conducted from January to end-August, 2011(For 8 months), and this project will be promoted from September, 2011 to February, 2013(For 18 months).

It is determined that construction of the CIBAO Trade Center will require 18 months(From September, 2011 to February, 2013), and set-up of the Integrated Trade System 12 months(From September, 2100 to end-August, 2012).

In relation to the cost-benefit analysis, the benefits from utilization of the CIBAO Trade



Center is assumed to be 40 years3 according to an opinion of a staff member in charge of COEX facilities and the service life of a building made up of steel framed reinforced concrete. Utilization of the Integrated Trade System is assumed to be until 20194 for 7 years after termination of such project, and this utilization is likely from September, 2012, i.e., benefit period for utilization of the Integrated Trade System is assumed to be 7 years and 4 months in reality. Hence, the overall benefit is considered to be 40 years after termination of the project(By 2052, accurate period: 39 years and 10 months). Maintenance costs for the Integrated Trade System are assumed to be incurring until 2019, when the utilization will end, and it is determined that operation/maintenance cost will be incurred for 40 years for the building mentioned above.

4.2.4 Inflation Rate and Wage Increase Rate The inflation rate of the Dominican Republic is determined as 6.01%, the average of the

last three years, and the wage increase rate in the trade industry as 5.90% based on the wage increase rate of the last three years. Average estimated values of the increase rate and the wage increase rate in the trade industry of the Dominican Republic are as shown in the <Table 6-4>.

< Table 6-4 Latest Inflation Rate and Annual Average Wage > (Unit: %)

Type 2007 2008 2009 Average

Inflation Rate 6.14 10.64 1.44 6.01

Wage Increase Rate5 11.3 3.8 2.8 5.90

3) In reference to opinions of COEX facilities manager and service life of steel-framed reinforced structure pursuant to Tax Act. 4) According to the ‘Standard Guidelines for Pre-Feasibility Analysis of IT (KDI, YR2004), life cycle of the information system is recommended to be 5~10 years in the economic feasibility analysis. In reflection of the opinions of expert in developing trade information system, the life is assumed to be 7 years. After 7 years, it will be assumed as reconstruction, not a simple system upgrade. 5) In case of wage increase rate, the data of those engaged in tourism industry and increase rate in the remittance amount of those residing overseas are used only, and wage increase rate of those engaged in tourism industry is used as an estimated value of those engaged in trade industry.



4.3 Investment Plan 4.3.1 Estimated Project Cost

Estimated project cost of entire project is US$62,443,604 including EDCF borrowings amounting to US$30,000,000(48.06% of entire cost) and expenditure of Dominican Republic US$32,443,604(52.0% of entire cost).

Details on the estimated project cost are as shown below in the <Table 6-3>.

< Table 6-5 Estimated Project Cost > (Unit: US$ K)

Korea EDCF Dominican Republic

○ Land acquisition and infrastructure

US$25,474K

○ Taxes and duties US$1,349K

○ Construction of the trade center - Securing land, approval,

construction works, machinery works, and electrical works

US$19,000K

○ Integrated Trade System - Equipment, R&D cost, installation, test-run

US$5,587K

○ Contingency US$4,570K

○ Trade academy US$88K ○ Consulting service US$1,969K

○ Training - Local training, overseas

training

US$346K

○ Contingency US$2,980K

○ Loan Commission US$30K

○ Project management cost US$1.049K

Total US$30,000K Total US$32,443K

4.3.2 Investment Plan by Years Total project duration is planned to be 26 months, and investment plan by years thereof is

as shown below in <Table 6-6> and <Table 6-7>.

Investment plan by years is drafted based on the development plan by years.



< Table 6-6 Investment Plan by Years-EDCF > Category Y1 Y2 Y3 Y4 Total Remarks

Consulting 1,181,560 393,853 393,853 - 1,969,266

Construction 2,040,600 9,522,800 2,040,600 - 13,604,000

Machinery 381,900 1,782,200 381,900 - 2,546,000 Construction

Electricity 427,500 1,995,000 427,500 - 2,850,000

Equipment 735,182 - - - 735,182 1st stage development 624,403 416,269 - - 1,040,672

2nd stage development - 3,317,718 - - 3,317,718

System

Maintenance & repair - 123,333 246,666 123,333 493,332

Consulting - 87,882 - - 87,882 Trade Academy Overseas

training - 85,445 - - 85,445

Dispatch of an expert - 54,496 120,120 - 174,616

Training Overseas training 42,723 42,722 - - 85,445

Contingency - - 2,980,471 - 2,980,471

Loan Commission 6,034 19,790 4,009 137 29,970

Grand Total 5,439,902 17,841,508 6,595,120 123,470 30,000,000

< Table 6-7 Investment Plan by Years-DR > Category Y1 Y2 Y3 Total Remarks

Land Acquisition 18,750,000 - - 18,750,000 Infrastructure Cost 5,727,273 5,727,273 Cost for furniture of the trade center 997,045 997,045

Taxes and duties 1,349,478 1,349,478 Contingency 4,391,643 178,887 4,570,530 Project management cost 1,049,278 1,049,278 Grand Total 28,868,916 1,175,932 2,398,756 32,443,604



< Figure 6-1 Details of the Project Cost >

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4.4 Maintenance Costs 4.4.1 Maintenance Costs of the Trade Center

Maintenance costs for the trade center are assumed to be incurred from termination of this project for 40 years, the usable period of this building; This is assumed to be incurred from the completion year of this project 2013 to 2052(40 years).

In COEX of Korea, costs for operation of the trade center are classified into utility cost, maintenance & repair costs, outsourcing costs, sanitation costs, operation management costs, depreciation costs, marketing costs, management service fees, interest costs, and others. However, this classification is available upon completion of the basic design of the trade center, and thereby we estimated maintenance cost of the trade center of Dominican Republic based on the maintenance costs spent for COEX of Korea. The formula for the maintenance costs of the trade center is as follows.



n = 2, ......, 41 (Operation costs will be incurred for the usable period of building (For 40 years),

Space of the trade center of Dominican Republic is assumed to be 20,000m2,

Operation cost per unit space of COEX is calculated as 194.81USD/㎡(As of YR2010) by dividing the total operation budget for one(1) year by space and considering exchange rate, 6

Cost conversion rate is estimated as 74.27% in consideration of the shopping arcade lending expense of Dominican Republic to COEX lending expense,

In case of YR2013, the project will be terminated at the end of February, expenses for 10 months only are reflected,

Annual trade center maintenance costs reflect inflation rate (6.01%).

Details on the annual trade center maintenance cost is as shown in <Figure 6-2>, <Figure 6-3>, and <Table 6-8>.

< Figure 6-2 Annual Trade Center Maintenance Costs >

Year

Maintenance Cost for Trade Center

Annu

al C

ost (

unit:

$)

Present Value

Future ValueYear

Maintenance Cost for Trade Center

Annu

al C

ost (

unit:

$)

Present Value

Future Value

Present Value

Future Value

6) Detailed operation cost of COEX is the internal data, and is not subject to disclosure.



< Figure 6-3 Annual Trade Center Maintenance Costs (Present Value) >

Year

Ann

ual C

ost (

unit:

$)

Maintenance Cost for Trade Center (PV)

Present ValueYear

Ann

ual C

ost (

unit:

$)

Maintenance Cost for Trade Center (PV)

Present ValuePresent Value

< Table 6-8 Trade Center Maintenance Costs > (Unit : US$)

Year 2013 2014 2015 2016 2017

Future Value 2,872,513 3,654,069 3,873,560 4,106,235 4,352,886

Present Value 2,289,950 2,600,894 2,461,717 2,329,988 2,205,307

Year 2018 2019 2020 2021 2022 Future Value 4,614,352 4,891,525 5,185,346 5,496,817 5,826,996

Present Value 2,087,299 1,975,605 1,869,888 1,769,828 1,675,122


Present Value 1,585,484 1,500,643 1,420,342 1,344,338 1,272,401


Present Value 1,204,313 1,139,869 1,078,873 1,021,141 966,499




Present Value 914,780 865,829 819,498 775,645 734,140


Present Value 694,855 657,672 622,479 589,170 557,643


Present Value 527,803 499,559 472,827 447,526 423,578


Present Value 400,912 379,459 359,153 339,935 321,744

Future Value 533,797,554 Total

Present Value 45,203,706

※ Discount rate=12%, inflation rate=6.01%

4.4.2 Maintenance Costs for the Integrated Trade System Maintenance cost for the Integrated Trade System has an assumption that the system will be

completed in August 2012 and can be used during the period between September 2012 and the end of 2019 (For seven years and four months). Maintenance cost of the Integrated Trade System is valued at 15% of the system development cost7, and costs for 4 months are reflected for the 2012. The formula used to estimate the Integrated Trade System maintenance cost is as shown below.

n = 1, ......, 8 (Maintenance cost will be incurring for five(5) years after the termination

7) In case of the general information system, maintenance cost is estimated for HW as 10% and for SW as 15%~20%, but in this project the weight of HW is less than 1/5, and thereby it is estimated to be 15%.



of this project),

Cost for set-up of the Integrated Trade System is estimated as 5,586,710US$(As of YR2010),

Annual maintenance cost of the Integrated Trade System in reflection of inflation rate (6.01%) is as shown below.

< Table 6-9 Maintenance Cost for Integrated Trade System > (Unit : US$)

Year 2012 2013 2014 2015

Future Value 313,912 998,304 1,058,270 1,121,837

Present Value 280,279 795,842 753,256 712,948

Year 2016 2017 2018 2019

Future Value 1,189,223 1,260,657 1,336,381 1,416,654

Present Value 674,797 638,688 604,511 572,163


Present Value 5,032,484 ※ Discount rate=12%, inflation rate=6.01%

< Figure 6-4 Annual Maintenance Cost for the Integrated Trade System >

Year

Ann

ual C

ost (

unit:

$)

Maintenance Cost for Integrated Trade System

Present Value

Future ValueYear

Ann

ual C

ost (

unit:

$)

Maintenance Cost for Integrated Trade System

Present Value

Future Value



4.4.3 Other Operation Cost The work related to the trade academy in this project is to come up with the basic plan on

training curriculum of the trade academy. In accordance with such a plan, the trade academy may have a different costs and benefits structure, and thereby this economic feasibility analysis includes the project cost related to the establishment of the plan on trade academy, but excludes operation costs and benefits in relation to operation of the trade academy.

4.4.4 Cost Flow Cost flow of this project, including overall cost and operation/maintenance cost, is as

shown in <Table 6-10> and <Table 6-11>.



< Table 6-10 Annual Cost Flow (Future Value) > (Unit : US$)

Annual Cost Category

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021~2052 Total Trade Center Construction 27,327,273 14,297,045 2,850,000 0 0 0 0 0 0 0 0 44,474,318

System Development 1,359,585 3,857,320 246,666 123,333 0 0 0 0 0 0 0 5,586,904

Trade Academy 0 173,327 0 0 0 0 0 0 0 0 0 173,327 Consulting

Service 1,181,560 393,853 393,853 0 0 0 0 0 0 0 0 1,969,266

Training 42,723 97,218 120,120 0 0 0 0 0 0 0 0 260,061 Taxes and

Duties 0 0 1,349,478 0 0 0 0 0 0 0 0 1,349,478

Contingency 4,391,643 178,887 2,980,471 0 0 0 0 0 0 0 0 7,551,001 Project

Management Cost

0 0 1,049,278 0 0 0 0 0 0 0 0 1,049,278

Loan Commission 6,034 19,790 4,009 137 0 0 0 0 0 0 0 29,970

Trade Center Maintenance

Expense 0 0 2,872,513 3,654,069 3,873,560 4,106,235 4,352,886 4,614,352 4,891,525 5,185,346 500,247,068 533,797,554

System Maintenance

Expense 0 313,912 998,304 1,058,270 1,121,837 1,189,223 1,260,657 1,336,381 1,416,654 0 0 8,695,240

Total 34,308,818 19,331,352 12,864,693 4,835,809 4,995,397 5,295,458 5,613,543 5,950,734 6,308,179 5,185,346 500,247,068 604,936,398

※ Inflation rate=6.01%



< Table 6-11 Annual Cost Flow (Based on Present Value)> (Unit : US$)

Annual Cost Category

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021~2052 Total Trade Center Construction 27,327,273 12,756,219 2,272,003 0 0 0 0 0 0 0 0 42,364,494

System Development 1,359,585 3,444,036 196,641 87,876 0 0 0 0 0 0 0 5,088,047

Trade Academy 0 154,756 0 0 0 0 0 0 0 0 0 154,756

Consulting Service 1,181,560 351,655 313,977 0 0 0 0 0 0 0 0 1,847,284

Training 42,723 86,802 95,759 0 0 0 0 0 0 0 0 225,284 Taxes and

Duties 0 0 1,075,796 0 0 0 0 0 0 0 0 1,075,796

Contingency 4,391,643 159,721 2,376,013 0 0 0 0 0 0 0 0 6,927,377 Project

Management Cost

0 0 836,478 0 0 0 0 0 0 0 0 836,478

Loan Commission 6,034 17,669 3,196 98 0 0 0 0 0 0 0 26,997

Trade Center Maintenance

Expense 0 0 2,289,950 2,600,894 2,461,717 2,329,988 2,205,307 2,087,299 1,975,605 1,869,888 27,383,058 45,203,706

System Maintenance

Expense 0 280,279 795,842 753,256 712,948 674,797 638,688 604,511 572,163 0 0 5,032,484

Total 34,308,818 17,260,136 10,255,655 3,442,033 3,174,665 3,004,785 2,843,995 2,691,810 2,547,768 1,869,888 27,383,058 108,782,610

※ Discount rate=12



Cost flow during the period between 2011 and 2052 is as shown in <Figure 6-5>.

< Figure 6-5 Annual Cost Flow >

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4.4.5 Estimated Profit Construction of the exhibition convention hall, such as the trade center, is known to have

various effects on total output inducement (e.g., value-added inducement, employment inducement, and net indirect taxes inducement, etc.). For example, a survey conducted in 2009 showed that the total output inducement effect of exhibitions in COEX of Korea reached KRW562.9 billion per annum including value-added inducement worth KRW311.4 billion, employment inducement for 7,058 persons, and net indirect taxes inducement worth KRW29.2 billion, and etc. In addition, holding exhibitions relating to the export/import business through the trade center brings benefits such as a boost in exports/imports and invigoration of the industry, among others.

Development of the Integrated Trade system is estimated to have significant cost-saving effects on trade business. For example, in Korea, results of the “Joint Project on e-Trade ISP of Ministry of Knowledge Economy, Ministry of Land, Transport and Maritime Affairs, and Customs Service” show that the e-Trade system has economic effects amounting to about KRW2 trillion and KRW980.4 billion per annum, including improvements in productivity, savings of additional costs, and savings of duplicate IT investment costs, and etc. In this economic feasibility analysis, benefits will be estimated centering on direct benefits, excluding indirect effect such as effects on output inducement and effects on increases in exports, among others.



A. Benefit Items

Five benefit items considered in the economic feasibility analysis are as shown below.

Income benefit from lending office space/lecture room

In the trade center that will be constructed, there will be a space for offices and IDC, and etc.; therefore we can earn benefits from this space by renting it out or using it.

Income benefit from lending exhibition hall and meeting room

In the trade center that will be constructed, there will be facilities such as the exhibition hall, halls, convention facilities, and meeting room, etc., and therefore we can earn benefits by renting out these facilities.

Income benefit from administrative fees for exhibition hall and meeting room.

When renting out the exhibition hall and meeting room, we can earn administrative fees accrued from use of electricity, water, etc. as well as rent from users of such facilities.

Benefit from the use of the Integrated Trade System

By using the Integrated Trade System, trading companies can easily access information required for trading business via Internet.

Benefit from utilization of the trade portal

By utilizing the trade portal system, we can save processing time and documentation expenses during promotional businesses, such as contract, export/import permission, shipping document submission, custom clearance, collection of money, and etc.

B. Benefit Analysis

Income benefit from lending office space/lecture room

Out of the total space of the trade center, 20,000㎡, we can secure the space for offices totaling 2,650㎡ including 600㎡ for business center, 900㎡ for IDC and office space in the convention hall, and 1,150㎡ for lecture room. Such benefit from lending this space for office is estimated based on the rent of offices in the Santiago(USD12.6 per month/㎡, as of 2008). The formula for calculation of benefit from rent of space for offices by years is as shown below.



▪ It is assumed that n=2,......,41, indicating that building can be used from n=2(2013) up to n=41(2052).

▪ Space for lending is 2,650㎡ in total including 1,150㎡ for lecture room, 1,500㎡ for IDC and office space in the convention hall.

▪ Rent of offices per annum of each space is based on the monthly rent of Santiago(USD12.6 per month/㎡, as of 2008), and it is converted into the figure as of 2010, and USD182.95 is used consequently.

▪ In case of 2013, the benefit from lending will be generated from March, the benefit for ten months is reflected.

▪ Increase rate of rent by 10% is reflected into benefit on lending.

Benefit on lending the office space is as shown in the <Table 6-12>.

< Figure 6-6 Income Benefit from Lending Office Space/Lecture Room >

Year

Ann

ual C

ost (

unit:

$)

Office Space / Lecture Room (Present Value)

Present Value

Year

Ann

ual C

ost (

unit:

$)

Office Space / Lecture Room (Present Value)

Present Value



< Table 6-12 Income Benefit from Lending of Office Space/Lecture Room > (Unit : US$)

Year 2013 2014 2015 2016 2017

Future Value 537,749 709,829 780,812 858,893 944,782

Present Value 428,690 505,242 496,220 487,359 478,656

Year 2018 2019 2020 2021 2022

Future Value 1,039,261 1,143,187 1,257,505 1,383,256 1,521,582

Present Value 470,109 461,714 453,469 445,371 437,418

Year 2023 2024 2025 2026 2027

Future Value 1,673,740 1,841,114 2,025,225 2,227,748 2,450,522

Present Value 429,607 421,936 414,401 407,001 399,733

Year 2028 2029 2030 2031 2032

Future Value 2,695,575 2,965,132 3,261,645 3,587,810 3,946,591

Present Value 392,595 385,585 378,699 371,937 365,295

Year 2033 2034 2035 2036 2037

Future Value 4,341,250 4,775,375 5,252,912 5,778,204 6,356,024

Present Value 358,772 352,365 346,073 339,893 333,824

Year 2038 2039 2040 2041 2042

Future Value 6,991,627 7,690,789 8,459,868 9,305,855 10,236,440

Present Value 327,862 322,008 316,258 310,610 305,064

Year 2043 2044 2045 2046 2047

Future Value 11,260,084 12,386,093 13,624,702 14,987,172 16,485,890

Present Value 299,616 294,266 289,011 283,850 278,781

Year 2048 2049 2050 2051 2052

Future Value 18,134,479 19,947,926 21,942,719 24,136,991 26,550,690

Present Value 273,803 268,914 264,112 259,395 254,763


Present Value 14,710,277 ※ Discount rate=12%, increase rate in rent=10%

Income Benefit from Renting Out Exhibition Hall and Meeting Room

In the trade center that will be constructed, there will be an exhibition hall, a convention hall, an auditorium, and a meeting room; We can obtain income by renting out these facilities to events or meetings, etc. In a bid to calculate income from rent,



we utilize the exhibition lending rate of COEX of Korea, estimate the exhibition lending rate of this trade center, and calculate benefits based on this data. Detailed assumptions used are as shown below.

▪ It is assumed that benefits from renting out facilities such as the exhibition hall and meeting room will be incurring for forty (40) years.

▪ In the first floor, a space of 11,350㎡ including 8,600㎡ for exhibition hall and

1,050㎡ for the grand ballroom can be used for lending, and for the second floor the

space about 1,650㎡ including 900㎡ for convention hall can be rented as a venue

for events or meetings. Therefore, we assume that the space totaling 13,000㎡ can be rented for exhibitions, events, meetings, and so on.

▪ Rent per unit space is based on the exhibition lending rate of COEX (KRW1,750, per day per㎡). We estimate the rent as 74.27% in consideration of the rent of COEX, and rent of commercial area of Santiago (That is, this rate indicates that when the same space is rented in Santiago, it requires 74.27% of rent of COEX).

▪ In case of exhibition facilities, the operation rate is maximum 70% due to hours required for preparations of exhibition events. In case of local exhibition facilities of Korea, such rates reach 30%~40%. Accordingly, we assume the operation rate of the trade center as 30% in the first year(2013) and suppose that it increases by 2% every year, reaching 40% after five years(2018), and this rate is kept afterwards.

The formula used to calculate benefit on income from lending exhibition hall and meeting room is as shown below.

▪ It is assumed that n=2,......,41, indicating that building can be used from n=2(2013) up to n=41(2052).

▪ Space for lending is assumed as 13,000㎡.

▪ Rent per unit space is calculated by multiplying rent of COEX (USD 1.5909 per day)



with comparative rate of rent 0.7427.

▪ Operation rate is assumed as the following: 2013(n=2) 30%, 2014(n=3) 32%, 2015(n=4) 34%, 2016(n=5) 36%, 2017(n=6) 38%, 2018 and after(n=7~41) 40%.

▪ In case of 2013, the benefits of lending will be generated from March, the benefit for ten months is reflected.

▪ Increase rate of rent by 10% is reflected on the benefit from lending.

Benefit from lending exhibition hall and meeting room is as shown in <Table 6-11>.

< Figure 6-7 Income Benefit from Lending Exhibition Hall and Meeting Room >

Year

Ann

ual C

ost (

unit:

$)

Exhibition hall / Conference Room (Present Value)

Present ValueYear

Ann

ual C

ost (

unit:

$)

Exhibition hall / Conference Room (Present Value)

Present Value



< Table 6-13 Income Benefit Lending Exhibition Hall and Meeting Room > (Unit : US$)

Year 2013 2014 2015 2016 2017

Future Value 1,865,572 2,626,725 3,069,984 3,575,629 4,151,703

Present Value 1,487,222 1,869,651 1,951,031 2,028,908 2,103,382

Year 2018 2019 2020 2021 2022

Future Value 4,807,234 5,287,958 5,816,754 6,398,429 7,038,272

Present Value 2,174,549 2,135,718 2,097,580 2,060,123 2,023,335

Year 2023 2024 2025 2026 2027

Future Value 7,742,099 8,516,309 9,367,940 10,304,734 11,335,207

Present Value 1,987,204 1,951,718 1,916,866 1,882,636 1,849,018

Year 2028 2029 2030 2031 2032

Future Value 12,468,728 13,715,601 15,087,161 16,595,877 18,255,465

Present Value 1,816,000 1,783,571 1,751,722 1,720,441 1,689,719

Year 2033 2034 2035 2036 2037

Future Value 20,081,011 22,089,113 24,298,024 26,727,826 29,400,609

Present Value 1,659,545 1,629,910 1,600,805 1,572,219 1,544,144

Year 2038 2039 2040 2041 2042

Future Value 32,340,670 35,574,737 39,132,210 43,045,432 47,349,975

Present Value 1,516,570 1,489,488 1,462,890 1,436,767 1,411,111

Year 2043 2044 2045 2046 2047

Future Value 52,084,972 57,293,469 63,022,816 69,325,098 76,257,608

Present Value 1,385,912 1,361,164 1,336,857 1,312,985 1,289,539

Year 2048 2049 2050 2051 2052

Future Value 83,883,368 92,271,705 101,498,876 111,648,763 122,813,640

Present Value 1,266,511 1,243,895 1,221,682 1,199,867 1,178,441

Future Value 1,318,167,305 Total

Present Value 66,400,694 ※ Discount rate=12%, increase rate in rent=10%

Benefit from Income Generated from Administrative Fees for Exhibition Hall and Meeting Room

When lending the exhibition hall and meeting room, the lessee should pay administrative expenses for use of electricity, heating/cooling, and water, and etc. In



case of COEX, it takes about 20% of the entire rent. Accordingly, about 20% of income from lending the exhibition and meeting room is added to the aforementioned benefit. The formula used to calculate benefit on income from administrative expenses for exhibition hall and meeting room is as shown below.

Benefit from management of exhibition hall and meeting room Base year + n = Income from lending of exhibition hall and meeting room Base year + n x 0.2

▪ n = 2, ......, 41(For 40 years)

Benefit from the Use of the Integrated Trade System

In the Integrated Trade System that will be built through this project, an integrated search system for marketing information will be built. Those engaged in export/import businesses can have access to various information needed for trade such as information on enterprises, products, catalogues, export/import, purchasers, exhibitions, and conferences. This integrated search system helps exporter/importers to reduce efforts to collect information. In Korea, a similar service is being provided as a part of e-Trade service. We assume benefit from the use such Integrated Trade System as shown below.

▪ It is assumed that the benefit will be generated for seven (7) years (2012~2019) from the set-up of the system. Provided, however, the system will be completed at the end of August, 2012, and thereby the data for four (4) months from September will be used for 2012.

▪ In Korea, a similar service has been provided with the annual fee valued at KRW360,000 as of 2000. In consideration of the comparative rent rate (74.27%) mentioned above, exchange rate, and inflation rate of Korea (10-year average 4.65%), we estimate potential value of the similar service in Dominican Republic as USD383.07. However, the service will be provided for four months only in 2012, 1/3 of the membership fee is considered.

▪ As to the number of members, we assume that about 20% of the entire export/import companies (11,726 companies: 2,688 exporters and 9,038 importers) of the Dominican Republic will become members at the earlier stage, and the number of such members will increase by 5.9% per annum(Refer to the increase rate of Korea).

Formula used to calculate benefit on the use of the Integrated Trade System by years is as shown below.



▪ n = 1, ......, 8(For 8 years),

▪ Membership fee is calculated as USD383.07 in view of membership fee of Korea(KRW360,000) and comparative difference between Korea and Dominican Republic(0.7427), etc. In case of n=1(2012), the service will be provided for four months only, and thereby 1/3 of such amount is considered.

▪ As to the number of members, we assume that about 20% of the entire export/import companies(11,726 companies) of the Dominican Republic will become members at an earlier stage, and the number of such members will increase by 5.9% per annum.

▪ In terms of annual benefit increase rate, average wage increase rate of the last three years in the Dominican Republic is considered.

Formula used to calculate benefit on the use of the Integrated Trade System by years is as shown below.

< Table 6-14 Benefit on the Use of the Integrated Trade System > (Unit : US$)

Year 2012 2014 2016 2017

Future Value 335,836 1,381,699 1,463,217 1,549,544

Present Value 299,854 1,101,482 1,041,489 984,763

Year 2016 2017 2018 2019

Future Value 1,640,965 1,737,778 1,840,304 1,948,879

Present Value 931,127 880,413 832,460 787,119


Present Value 6,858,708 ※ Discount rate=12%, increase rate in rent=5.90%



< Figure 6-8 Annual Benefit on the Use of the System >

Year

Ann

ual C

ost (

unit:

$)

Benefit on the Use of ITS

Present Value

Future Value

Year

Ann

ual C

ost (

unit:

$)

Benefit on the Use of ITS

Present Value

Future Value

Benefit from the Use of the Trade Portal

By utilizing the trade portal system that will be built, export/import companies can have benefits such as improvement of productivity, savings of additional costs, and savings of duplicate IT costs, and etc. Calculation of estimated benefits from utilization of the trade portal is based on the “Joint Project on e-Trade ISP of Ministry of Knowledge Economy, Ministry of Land, Transport and Maritime Affairs, and Customs Service” drafted in 2009 by the e-Trade Promotion Center. Related assumptions are as shown below.

▪ In the reference material, economic effects of the e-Trade service are classified into (1) Improvement of productivity, (2) Saving of additional cost, (3) Saving of duplicate IT cost. And such effect is estimated to some KRW2 trillion and KRW980.4 billion(USD2,709,454,545) per annum in total. Improvement of productivity includes KRW263.3 billion for savings of personnel costs, KRW19.1 billion for savings of document print-out expenses, and KRW271.9 billion for document circulation and storage expenses; Savings of additional costs include KRW1,353.5 billion for saving of freight storage expenses and KRW754.3 billion for saving of inventory management expense; Savings of duplicate IT costs are estimated



as KRW318.3 billion per annum 17).

▪ Based on the above estimate, we estimate the benefits from the introduction of the trade portal in the Dominican Republic. First of all, as the average wage per capita of Dominican Republic is USD8022.1 per annum (As of 2008), and that of Korea is KRW3.12 million per month (As of 2008), we assume the comparative wage rate of Dominican Republic as 23.57%. In Dominican Republic, there are 2,688 exporters and 9,083 importers, and in Korea, there are 80,831 exporters and 136,597 importers, and therefore we assume comparative numbers of exporters/importers of the Dominican Republic as 5.39%. The usage rate in the earlier stage (2012) is assumed to be 20%, and it is expected to increase by 5.9% every year. By multiplying domestic estimates with comparative wage rates, comparative number of exporters/importers, and usage rates, we assume the benefits of utilization of the trade portal of the Dominican Republic.

▪ The portal can be utilized from September in 2012, 1/3 of annual benefit is considered as to 2012.

Formula used to calculate the benefit on utilization of the trade portal by years is as shown below.

▪ n = 1, ......, 8(For 8 years),

▪ Base value of utilization of Korean trade portal, comparative wage rate, comparative number of exporters/importers is estimated as mentioned above.

▪ The usage rate is assumed to be 20% in the earlier stage(n=1, 2012), and it is projected to increase by 5.9% every year.

▪ In terms of annual benefit increase rate, average wage increase rate is considered.

17) ‘Joint project on e-Trade ISP of Ministry of Knowledge Economy, Ministry of Land, Transport and Maritime Affairs, and Customs Service’, e-Trade Promotion Center, September, YR2009



Benefit calculated from the formula used to calculate the benefit from the utilization of the trade portal is as shown below.

< Table 6-15 Benefit on Utilization of the Trade Portal > (Unit : USD)

Year 2012 2014 2016 2017

Future Value 2,574,900 10,593,674 13,774,288 17,293,329

Present Value 2,299,018 8,445,212 9,804,266 10,990,223

Year 2016 2017 2018 2019

Future Value 21,179,659 25,464,367 30,180,933 35,365,400

Present Value 12,017,907 12,901,041 13,652,321 14,283,492


Present Value 84,393,481 ※ Discount rate=12%, wage increase rate=5.90%

< Figure 6-9 Annual Benefit from the Utilization of the Trade Portal >

Annu

al b

enef

its (u

nit:$

)

Year

Benefit from the Utilization of Trade Portal

Present Value

Future Value

Annu

al b

enef

its (u

nit:$

)

Year

Benefit from the Utilization of Trade Portal

Present Value

Future Value

Other Benefits

Residual value of the trade center building as of termination of benefit analysis (at the



end of 2052) is assumed to be 0, but the land will remain. Therefore, present value of land standing at USD18,750,000 is included in the total benefit estimate (based on present value) as of the end of 2052.18)

4.4.6 Benefit Flow Benefit flow for the five benefits estimated above is indicated in <Table 6-16> and <Table

6-17>. Figure showing benefit flow by items during the period between 2012 and 2052 is as shown below in <Figure 6-10>.

< Figure 6-10 Annual Benefit Flow by Items (Based on Present Value) (Residual Benefit of Land Excluded) >

Annual Benefit Flow (Present Value)

Annu

al b

enef

its (u

nit:$

)

Rental I ncome by Offic e SpaceIncome from lending Exhibition Hall & Conference RoomIncome generated f rom an administr ative fee for Exhibition H.& Confer ence R.Benefit on the Use of ITSBenefit from the Utiliza tion of Trade Portal

Year

Annual Benefit Flow (Present Value)

Annu

al b

enef

its (u

nit:$

)

Rental I ncome by Offic e SpaceIncome from lending Exhibition Hall & Conference RoomIncome generated f rom an administr ative fee for Exhibition H.& Confer ence R.Benefit on the Use of ITSBenefit from the Utiliza tion of Trade Portal

Year

Figure exhibiting total annual benefit flow during the period between 2012 and 2052 is as the <Figure 6-11>. The reason why benefit from 2013 to 2019 is high is because the benefit from the utilization of the trade portal and trade information system is reflected until 2019. Also, the reason why benefit in 2052 is at a high level is because that land inputted in the earlier stage is reflected on the benefit calculation.

18) For accurate calculation, future value should be calculated in reflection of annual land price increase rate, and this should be converted into present value by using discount rate. However, valuation of future value on land is not that meaningful in this project, and thereby land price increase rate is not considered separately.



< Figure 6-11 Total Annual Benefit Flow (based on Present Value)(Residual Benefit of Land Included) >

Year

Annu

al b

enef

its (u

nit:$

)

Total Annual benefi ts

Total Annual Benefit Flow (Present Value)

Year

Annu

al b

enef

its (u

nit:$

)

Total Annual benefi ts

Total Annual Benefit Flow (Present Value)



< Table 6-16 Annual Benefit Flow (Based on Future Value) > (Unit : US$)

Annual Benefit Category

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022~2052 Total

Income from Lending of Office Space

0 537,749 709,829 780,812 858,893 944,782 1,039,261 1,143,187 1,257,505 1,383,256 276,841,774 285,497,049

Income from Lending of Exhibition Hall and Meeting Room

0 1,865,572 2,626,725 3,069,984 3,575,629 4,151,703 4,807,234 5,287,958 5,816,754 6,398,429 1,280,567,318 1,318,167,305

Income from Administrative Fee on Exhibition Hall and Meeting Room

0 310,929 525,345 613,997 715,126 830,341 961,447 1,057,592 1,163,351 1,279,686 256,113,464 263,571,275

Benefit from the Use of the System

335,836 1,381,699 1,463,217 1,549,544 1,640,965 1,737,778 1,840,304 1,948,879 0 0 0 11,898,223

Benefit from the Utilization of the Trade Portal

2,574,900 10,593,674 13,774,288 17,293,329 21,179,659 25,464,367 30,180,933 35,365,400 0 0 0 156,426,550

Total 2,910,736 14,689,623 19,099,404 23,307,667 27,970,271 33,128,971 38,829,179 44,803,015 8,237,610 9,061,371 4,002,081,380 4,224,119,227

※Inflation rate=6.01%, wage increase rate=5.90%, rent increase rate=10.0%, In total and grand total during the period between YR2022 and YR2251, future residual value of land worth USD2,188,558,825 is included.



< Table 6-17 Annual Benefit Flow(Based on Present Value) >

(Unit : US$)

Annual Benefit Category

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022~2052 Total

Income from Lending of Office Space

0 428,690 505,242 496,220 487,359 478,656 470,109 461,714 453,469 445,371 10,483,446 14,710,277


0 1,487,222 1,869,651 1,951,031 2,028,908 2,103,382 2,174,549 2,135,718 2,097,580 2,060,123 48,492,532 66,400,694


0 247,870 373,930 390,206 405,782 420,676 434,910 427,144 419,516 412,025 9,698,506 13,230,565

Benefit on the Use of the System

299,854 1,101,482 1,041,489 984,763 931,127 880,413 832,460 787,119 0 0 0 6,858,708

Benefit on the Utilization of the Trade Portal

2,299,018 8,445,212 9,804,266 10,990,223 12,017,907 12,901,041 13,652,321 14,283,492 0 0 0 84,393,481

Total 2,598,871 11,710,477 13,594,579 14,812,444 15,871,083 16,784,168 17,564,349 18,095,186 2,970,565 2,917,519 89,674,484 206,593,725

※ Discount rate = 12%, In total during the period between YR2022 and YR2251, present residual value of land worth USD18,750,000 is included.



4.4.7 Benefit/Cost Analysis A. Benefit/Cost Analysis Method

In benefit/cost analysis, methods such as Net Present Value (NPV), Internal Rate of Return (IRR), Benefit/Cost Ratio, and Payback Period (PBP) are mainly used. In this feasibility analysis, we evaluated economic feasibility by using various indicators, each of which has its own merits and demerits. The summary of each method is as follows.

Net Present Value (NPV)

Net Present Value (NPV) is the most widely used method, which is calculated by subtracting PV of cash inflows by PV of cash outflows. If current year is “0” and the last year is “n”, the formula used to calculate the NPV is as shown below.

Net Present Value(NPV)=

Here, BT = Present value of the benefit

CT = Present value of cost

r = Discount rate(Interest rate)

n = Project’s sustained year(Analysis period)

Decision-making on NPV is: the bigger the NPV, the more desirable the investment is. However, NPV should be greater than 0, in cases when NPV is less than 0; this indicates that the investment lacks absolute economic feasibility.

Benefit/Cost Ratio

Benefit/Cost Ratio(B/C Ratio) is an indicator to summarize the overall value for investment of a project. That is, bigger NPV doesn’t always mean that the investment is worthwhile. If two investment schemes having different sizes of investment suggest the same NPV, the scheme whose investment size is smaller would be better, but its hard to tell with NPV only. Meanwhile, B/C ratio, which is calculated as shown below, shows efficiency in the investment.

Benefit/Cost Ratio(B/C Ratio)=



If the B/C Ratio is greater than “1”, the NPV is positive, meaning that the investment is worthwhile; and less than “1”, the NPV is negative, meaning that the investment is not worthwhile. The bigger the B/C Ratio, the better the investment scheme is.

Internal Rate of Return

Internal Rate of Return(IRR) or Economic Internal Rate of Return(EIRR) is the supplementary method used when deciding the discount rate for NPV is difficult. That is, IRR means the discount rate that makes the present value of all cash inflows equal to the present value of all cash outflows, i.e., IRR plays a role as a return on investment. For example, when the IRR is 20%, it indicates that a return of about 20% will be incurred. Formula for IRR is as follows.

Economic Internal Rate of Return(EIRR)=”R” satisfying the condition

of

A project with a higher IRR would provide a better chance for strong growth; it is interpreted that when IRR is greater than the social discount ratio, it would be absolutely economical.

Looking into Benefit/Cost analysis methods, they are as shown below.

< Table 6-18 Comparison of Benefit/Cost Analysis Methods > Category Judgment Merits Demerits

Benefit /Cost Ratio (B/C)

B/C≥1

∙Easy to understand, consideration of project scale is available ∙Consider hours of benefit/cost incurrence

∙Hard to clearly divide benefit from cost ∙Error can occur by selecting mutually-exclusive alternatives ∙Figure out social discount rate

Economic Internal Rate of Return (EIRR)

EIRR≥r

∙Able to estimate profitability of a project ∙Easy to compare with other alternatives ∙Easy to understand evaluation process and results

∙Not consider absolute scale of a project ∙Several EIRRs can be drawn at the same time



Net Present Value (NPV)

NPV≥0

∙Able to present clear standards for selecting alternatives ∙Able to show present value of benefit to be incurred in the future ∙Consider the marginal NPV ∙Able to be used for other analysis

∙Find out discount rate clearly ∙Difficult to understand ∙Error can be incurring when deciding priorities in alternatives

B. Benefit/Cost Analysis Results

NPV, B/C ratio, and IRR are calculated based on the benefit and cost estimate above, as shown below.

< Table 6-19 Benefit/Cost Analysis Results >

NPV B/C Ratio IRR

97,811(USD K) 1.90 25.53%

※ Discount rate = 12%, inflation rate = 6.01%, wage increase rate = 5.90%, rent increase rate = 10.0%

NPV > 0, B/C ratio > 1.0, IRR > Social discount ratio(12.0%). Therefore, this project is deemed economically feasible. Yearly benefits and costs during the period between 2011 and 2052 based on the present value are as shown below.

< Figure 6-12 Annual Benefit/Cost Flow >

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

금액

(단위

:$)

연도

연도별편익과 비용

편익(현가)

비용(현가)

Annual Benefit and Cost

Am

ount

(Uni

t:$)

Year

Benefit(Present V.)Cost (Present V.)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

금액

(단위

:$)

연도

연도별편익과 비용

편익(현가)

비용(현가)

Annual Benefit and Cost

Am

ount

(Uni

t:$)

Year

Benefit(Present V.)Cost (Present V.)



4.4.8 Sensitivity Analysis A. Sensitivity Analysis in Accordance with Discount Rate

Changes in present value of benefit, present value of cost, NPV, B/C ratio in accordance with discount rate are as follows:

< Table 6-20 Sensitivity Analysis Results According to Discount Rate > (Unit : US$)

Discount Rate PV of Benefit PV of Cost NPV B/C Ratio

9.0% 293,794,374 135,605,498 158,184,876 2.17

10.0% 257,861,822 124,710,803 133,151,019 2.07

11.0% 229,416,529 115,935,180 113,481,349 1.98

12.0% 206,593,725 108,782,610 97,811,114 1.90

13.0% 188,036,161 102,883,004 85,153,157 1.83

14.0% 172,748,256 97,960,197 74,788,060 1.76

15.0% 159,993,853 93,806,400 66,187,452 1.71

Even in cases where the discount rate changes from 9% to 15%, NPV > 0, B/C Ratio > 1 is maintained, and thereby we can verify that this project is economically worthwhile when the discount rate changes within this scope. Also, we can notice that the bigger the discount rate, the smaller the NPV and B/C Ratio are. Figures showing changes in NPV and B/C ratio in accordance with the discount rate are shown below.



< Figure 6-13 Changes in NPV in Accordance with the Discount Rate >

Changes in NPV according with Discount Rate

NPV

(Uni

t: U

SD)

D iscount Rate(% )

Changes in NPV according with Discount Rate

NPV

(Uni

t: U

SD)

D iscount Rate(% )

< Figure 6-14 Changes in B/C Ratio in Accordance with the Discount Rate >

D iscount Rate(% )

B/C

Rat

io

Changes in B/C Ratio according with Discount Rate

B/C Ratio

D iscount Rate(% )

B/C

Rat

io

Changes in B/C Ratio according with Discount Rate

B/C Ratio



B. Sensitivity Analysis in Accordance with variation in Benefit/Cost

Sensitivity analysis results in accordance with increase/decrease in benefit and cost are as follows:

< Table 6-21 Sensitivity Analysis Results in Accordance with variation in Benefit/Cost > (Discount Rate = 12%)

Sensitivity Analysis Items B/C Ratio IRR(%) NPV

Unchanged cost, unchanged benefit 1.90 25.53% 97,811,114

Increased cost(10%), unchanged benefit 1.73 22.73% 87,932,853

Increased cost(20%), unchanged benefit 1.58 20.42% 76,054,592

Decreased cost(10%), unchanged benefit 2.11 25.53% 97,811,114

Decreased cost(20%), unchanged benefit 2.38 32.94% 119,567,636

Unchanged cost, increased benefit (10%) 2.09 28.56% 118,470,487

Unchanged cost, increased benefit (20%) 2.28 31.50% 139,193,397

Unchanged cost, decreased benefit (10%) 1.71 22.46% 77,151,742

Unchanged cost, decreased benefit (20%) 1.52 19.41% 56,492,369

Increased cost (10%), decreased benefit (10%) 1.55 19.96% 66,273,481

Increased cost (20%), decreased benefit (20%) 1.27 15.60% 34,735,847

Decreased cost (10%), increased benefit (10%) 2.32 32.14% 129,348,748

Decreased cost (20%), increased benefit (20%) 2.85 39.79% 160,886,381

As indicated in <Table 6-21>, when benefit remains unchanged and cost increases, it results in decreases in B/C ratio, NPV, and IRR. Also, when cost remains unchanged, but benefit increases, it causes increases in B/C ratio, NPV, and IRR. In the worst scenario of the sensitivity analysis where cost increases by 20%, but benefit decreases by 20%, B/C ratio is calculated as 1.27, IRR = 15.60%, NPV = 34,736 (USD K), which means that it shows comparatively less economic feasibility compared to others, but is still economically feasible in terms of absolute standards (B/C Ratio > 1, IRR> social discount rate, NPV>0). When benefit remains unchanged, changes in B/C ratio, IRR, and NPV in accordance with increase/decrease in cost are as shown below.



< Figure 6-15 Changes in B/C Ratio in Accordance with Changes in Cost >

B/C Ratio

B/C

Rat

io

Change in Cost (%)

Changes in B/C Ratio in accordance with Changes in Cost

B/C Ratio

B/C

Rat

io

Change in Cost (%)

Changes in B/C Ratio in accordance with Changes in Cost

< Figure 6-16 Changes in IRR in Accordance with Changes in Cost >

Change in Cost (%)

Changes in IRR in accordance with Changes in Cost

Change in Cost (%)

Changes in IRR in accordance with Changes in Cost

< Figure 6-17 Changes in NPV in Accordance with Changes in Cost >

Change in C ost

NPV

(Uni

t:$)

Changes in NPV in according with Changes in Cost

Change in C ost

NPV

(Uni

t:$)

Changes in NPV in according with Changes in Cost



When cost remains unchanged, changes in B/C ratio, IRR, and NPV in accordance with increase/decrease in benefit are as shown below.

< Figure 6-18 Changes in B/C Ratio in Accordance with Changes in Benefit >

Change in Benefit (%)

B/C Ratio

B/C

Rat

io

Changes in B/C Ratio in accordance with Changes in Benefit


B/C Ratio

B/C

Rat

io

Changes in B/C Ratio in accordance with Changes in Benefit

< Figure 6-19 Changes in IRR in Accordance with Changes in Benefit >


Changes in IRR in accordance with Changes in Benefit


Changes in IRR in accordance with Changes in Benefit

< Figure 6-20 Changes in NPV in Accordance with Changes in Benefit >


NP

V (u

nit:

$)

Changes in NPV in accordance with Changes in Benefit


NP

V (u

nit:

$)

Changes in NPV in accordance with Changes in Benefit



When both cost and benefit increases/decreases simultaneously, changes in B/C ratio, IRR, and NPV are as shown below.

< Figure 6-21 Changes in B/C Ratio in Accordance with Changes in Cost/Benefit >

Changes in (Cost : Benefit) (unit : %)

B/C

Rat

io

B/C Ratio

Changes in B/C Ratio in accordance with Changes in (Cost :Benefit)


B/C

Rat

io

B/C Ratio

Changes in B/C Ratio in accordance with Changes in (Cost :Benefit)

< Figure 6-22 Changes in IRR in Accordance with Changes in Cost/Benefit >


Changes in IRR in accordance with Changes in (Cost :Benefit)


Changes in IRR in accordance with Changes in (Cost :Benefit)



< Figure 6-23 Changes in NPV in Accordance with Changes in Cost/Benefit > N

PV (u

nit:

$)


Changes in NPV in accordance with Changes in (Cost :Benefit)

NPV

(uni

t: $

)


Changes in NPV in accordance with Changes in (Cost :Benefit)

4.4.9 Summary of the Economic Feasibility Analysis result We performed the economic feasibility analysis on the EDCF investment project on

construction of the trade center in Dominican Republic by using the Cost-Benefit Model, which is most widely used out of the Economic Value Models. In other words, centering on social benefit and social cost, we analyzed economic feasibility and performed sensitivity analysis by figuring out Benefit/Cost Ratio(B/C Ratio), Net Present Value(NPV), and Internal Rate of Return(IRR).

The project cost stands at US$62,443,604 including loans from EDCF totaling US$30,000,000(48.06% of the entire project cost) and expenditures of the Dominican Republic totaling US$32,443,604(52.0% of the entire project cost).

As for costs, EDCF borrowings, expenditure of the Dominican Republic, and operation and maintenance costs of the Dominican Republic after completion of the project are considered. Maintenance costs are estimated based on division of costs into (1) Maintenance costs for the trade center, (2) Maintenance costs for the Integrated Trade System.

Benefit is calculated based on division of benefits into (1)Benefits on income from lending office space, (2)Benefits on income from lending exhibition hall and meeting room, (3)Benefits on administrative fees for exhibition hall and meeting room, (4)Benefits on the use of the Integrated Trade System, and (5)Benefits on the use of the trade portal.

NPV, B/C ratio, and IRR calculated through cost/benefit analysis are as shown below.



< Table 6-22 Benefit/Cost Analysis Results >

NPV B/C Ratio IRR

97,811(USD K) 1.90 25.53%

※ Discount rate = 12%, inflation rate = 6.01%, wage increase rate = 5.90%, rent increase rate = 10.0%

In consideration of the facts that NPV is 97,875(USD K), which is greater than 0, that B/C ratio is 1.90, which is greater than 1.0, and that IRR is 25.57%, which is greater than the social discount rate(12%), it is verified that we can be benefit economically from this project.

In relation to changes in discount rate(9~15%), operation costs(-20%~+20%), and benefits(-20%~+20%), we performed the sensitivity analysis. As a result, it was determined that when the discount rate moves from 9% to 15%, NPV > 0, B/C ratio > 1.0, IRR > social discount rate(12%) is maintained, and thereby it is economically efficient. In cases when cost changes by -20% ~ +20%, and benefit changes by -20% ~ +20%, NPV, B/C ratio, and IRR satisfy the afore-mentioned standards, and thereby it is confirmed that the project is economically feasible. Finally, even in case when cost increases by 20%, but benefit decreases by 20% simultaneously, NPV, B/C ratio, and IRR satisfy the above standards, and consequently we can verify that the project has absolute economic feasibility.



5. Financial Feasibility 5.1 Review on Financial Feasibility

Operation of the CIBAO trade center of Dominican Republic will be performed by the Centro De Exportacion e Inversion de la Republica Dominicana(CEI-RD). In this financial feasibility analysis, we reviewed cash flow centering on income and expenditures relating to operation of the trade center and Integrated Trade System from the standpoint of the CEI-RD.

In expenditure items, maintenance costs for the trade center and the Integrated Trade System, which has been used in the economic feasibility analysis, are included. Income is divided into (1)Income from lending the exhibition hall and meeting room, (2)Income from administrative fee for exhibition hall and meeting room. It is assumed that offices, lecture room, and IDC will be utilized internally, and therefore there will be no income accrued. We also assume that we will internally use the exhibition hall and meeting room or use them for the purpose of public interest by about 10%, and therefore there will be no income accrued. The analysis period for the financial feasibility analysis is for 10 years during the period between 2012 when maintenance costs occur and 2021 when income and expenditures can become stabilized. In relation to the maintenance costs for the Integrated Trade System, it is assumed in the economic feasibility analysis that the life cycle of the system is to end in 2019, but in this report it is assumed that the system will be renewed in 2019, and therefore maintenance costs will be incurred continuously. Cash flow based on these assumptions is as indicated in the <Table 6-21>. During the period of financial feasibility analysis(2012 ~ 2021), deficits totaling US$ 313 K ~US$1,912 K is estimated to be incurred.



< Table 6-23 Income and Expenditure(Based on Future Value) > (Unit : US$)

Annual Cash Flow Category

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total


0 1,679,014 2,364,052 2,762,986 3,218,066 3,736,532 4,326,511 4,759,162 5,235,078 5,758,586 33,839,989


0 279,836 472,810 552,597 643,613 747,306 865,302 951,832 1,047,016 1,151,717 6,712,031 Income

Total Income 0 1,958,850 2,836,863 3,315,583 3,861,679 4,483,839 5,191,813 5,710,995 6,282,094 6,910,303 40,552,019

Maintenance Cost for the Trade Center

0 2,872,513 3,654,069 3,873,560 4,106,235 4,352,886 4,614,352 4,891,525 5,185,346 5,496,817 39,047,303

Maintenance Cost for the Integrated Trade System

313,912 998,304 1,058,270 1,121,837 1,189,223 1,260,657 1,336,381 1,416,654 1,501,749 1,591,956 11,788,945 Expenditure

Total Expenditure 313,912 3,870,818 4,712,339 4,995,397 5,295,458 5,613,543 5,950,734 6,308,179 6,687,095 7,088,772 50,836,248

Total (313,912) (1,911,967) (1,875,477) (1,679,814) (1,433,779) (1,129,704) (758,921) (597,185) (405,001) (178,469) (10,284,229)

※ Evidence for calculation of individual items of income and expenditure is same as that of economic feasibility analysis.


Feasibility Study of the Establishment of the CIBAO Trade Center in the DR

206

5.2 Sensitivity Analysis on Financial Feasibility We reviewed financial feasibility concerning scenarios as shown below.

5.2.1 In case of charging membership fee for the Integrated Trade System

When charging a membership fee(USD383.07/Year) for the Integrated Trade System as shown in the economic feasibility analysis, cash flow is as specified in the <Table 6-22>, where deficits will be incurred by 2015.

5.2.2 In case of operating the trade center only Cash flow in the case of operating the trade center building aside from operation of the

Integrated Trade System is as indicated in the <Table 6-23>; the deficit will be incurred by 2016.

5.2.3 In case of charging fees on each use of e-document of the trade portal

We can also consider the plan to charge fees on each use of the e-document in the Integrated Trade System, without charging membership fees. Currently, a basic fee totaling KRW350 is charged in Korea, and KRW200 is additionally charged per use of e-document on export/import (KB). It is based on annual use of e-document on export/import, 59,173, by referring to the estimated domestic use of e-documents on export/import per annum totaling 1,097,200, and in consideration of the number of exporters/importers of the Dominican Republic (5.39% of Korea). It is estimated that 20% of the above mentioned use (2012) will be handled through the trade portal, and it is projected to increase by 5.9% every year. Fees per case are assumed to be USD0.18 in view of domestic fees and exchange rates. Cash flow in this case is as shown in the <Table 6-24>. We can notice that a deficit is incurred during the period of financial feasibility analysis (2012 ~2021). Accordingly, such deficit can be made up for by government aid or through charging a higher basic fee for the use of the system.



< Table 6-24 Income and Expenditure in Case of Not Charging Membership Fee for the Trade Information System(Based on Future Value) > (Unit: US$)


2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total


0 1,679,014 2,364,052 2,762,986 3,218,066 3,736,532 4,326,511 4,759,162 5,235,078 5,758,586 33,839,989


0 279,836 472,810 552,597 643,613 747,306 865,302 951,832 1,047,016 1,151,717 6,712,031

Membership Fee for the Integrated Trade System

335,836 1,381,699 1,463,217 1,549,544 1,640,965 1,737,778 1,840,304 1,948,879 2,063,863 2,185,631 16,147,716

Income

Total Income 335,836 3,340,549 4,300,080 4,865,128 5,502,644 6,221,617 7,032,117 7,659,873 8,345,957 9,095,934 56,699,735

Maintenance Cost for the Trade Center 0 2,872,513 3,654,069 3,873,560 4,106,235 4,352,886 4,614,352 4,891,525 5,185,346 5,496,817 39,047,303

Membership Fee for the Integrated Trade System

313,912 998,304 1,058,270 1,121,837 1,189,223 1,260,657 1,336,381 1,416,654 1,501,749 1,591,956 11,788,945 Expenditure


Total 21,924 (530,268) (412,259) (130,270) 207,186 608,074 1,081,384 1,351,694 1,658,861 2,007,162 5,863,488




< Table 6-25 Income and Expenditure in Case of Consideration of the Trade Center Building(Based on Future Value)> (Unit: US$)


2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total


0 1,679,014 2,364,052 2,762,986 3,218,066 3,736,532 4,326,511 4,759,162 5,235,078 5,758,586 33,839,989


0 279,836 472,810 552,597 643,613 747,306 865,302 951,832 1,047,016 1,151,717 6,712,031 Income

Total Income 0 1,958,850 2,836,863 3,315,583 3,861,679 4,483,839 5,191,813 5,710,995 6,282,094 6,910,303 40,552,019


Expenditure

Total Expenditure 0 2,872,513 3,654,069 3,873,560 4,106,235 4,352,886 4,614,352 4,891,525 5,185,346 5,496,817 39,047,303

Total 0 (913,663) (817,207) (557,977) (244,555) 130,953 577,461 819,470 1,096,748 1,413,487 1,504,717




< Table 6-26 Income and Expenditure in Case of Charging each Use of e-document on Export/Import(Based on Future Value) >

(Unit: US$) Annual Cash Flow

Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total


0 1,679,014 2,364,052 2,762,986 3,218,066 3,736,532 4,326,511 4,759,162 5,235,078 5,758,586 33,839,989


0 279,836 472,810 552,597 643,613 747,306 865,302 951,832 1,047,016 1,151,717 6,712,031

Fee for use of the Trade Portal 2,152 3,319 4,320 5,430 6,656 8,011 9,505 11,149 0 0 50,542

Income

Total Income 2,152 1,962,169 2,841,183 3,321,013 3,868,336 4,491,850 5,201,318 5,722,143 6,282,094 6,910,303 40,602,561


Integrated Trade system Membership Fee

313,912 998,304 1,058,270 1,121,837 1,189,223 1,260,657 1,336,381 1,416,654 1,501,749 1,591,956 11,788,945 Expenditure


Total (311,760) (1,908,648) (1,871,156) (1,674,385) (1,427,122) (1,121,693) (749,416) (586,036) (405,001) (178,469) (10,233,687)




6. Strategic Feasibility The incumbent government of the Dominican Republic with President Leonel Fernandez’s

reelection in 2008 has established 4 core strategies, 51 detailed objectives (Objetivos Especificos), and 274 action lines (Líneas de Acción) through discussions among relevant ministries in a bid to present blueprints on the nation’s future, and announced the “2010~2030 Dominican Republic Development Strategy (Estrategia Nacional de Desarrollo de la República Dominica 2010~2030)” in November 2009.

Major goals of the development strategy are as shown below.

Core Strategies Details

1. Government Serving the People

Securing the people’s safety by the government through providing responsible services for the people

2. Social Pact Building society with equal opportunities, low poverty rates, and an inequality index.

3. Building Dynamic Economy through Employment Creation

Boosting participation in global growth by providing high quality jobs and a production structure with the potential for sustainable growth

4. Environment Preservation and Climate Change Countermeasures

Implementing continuous environment policies and taking countermeasures against the impact of climate changes

In order to achieve the 3rd development goal - continuous high growth of the Dominican Republic- the infrastructure must be strengthened to boost exports (Plans and systems) and come up with a plan for the development of export financing.

In this aspect, this project is deemed appropriate for the nation’s development strategy; as such a project can serve as momentum to support the government’s goal of gaining a global competitive edge.



7. Environmental Impact Assessment As a result of the first and second surveys, it was found out that there are no separate

laws on environment and sanitation stipulated by the Dominican Republic and relevant authorities, and therefore it is not required to conduct preliminary reviews including environment impact assessments for promoting permission and approval for the construction in the project. However, in the process of acquiring construction permission and approval, an application for construction permission should be filed, and the applicant should file relevant documents to the Ministry of Environment to attain permission. And, the permission should be delivered to the Bureau of Road of Dominican Republic (MOPC) to wrap up relevant permission procedures.

It is determined that the Ministry of Environment focuses its preliminary review of construction permission on damage of trees only, and the quantity of trees in the land for this project is small, and therefore there is no need for transplantations. Therefore, there is no issue of concern to obtain construction permission, and it is determined that this project has little impact on the surrounding environment.

Therefore, this project strives to determine negative impacts on the environment and build an environment-friendly image, is categorized as the C group (Category C) based on the environment impact assessment analysis on the EDCF project; The CIBAO trade center construction project is expected to have little or no negative impact on environment, causing no harm to the environment.

Grade Details of Groups

Group A (Category A)

Projects that could have significant adverse environmental impacts on broad area

Group B (Category B)

Projects that could have some adverse environmental impacts, but of a lesser degree or significance than those for category A projects, and measures to mitigate or recover the impacts would be easier.

Group C (Category C) Projects that are unlikely to have adverse environmental impacts.

Analysis on Land and Surrounding Environment

▪ The land for this project is 2km away from the downtown of Santiago, where a four-lane road in the direction of east-north will be used as an access road to the land, and the remaining three directions are adjacent to residential areas.

▪ This land was used as an airport in the past, so there are paved runways and some green zones, in addition to small waterways and residential sites in the west-north, but they are far from the site where the building will be constructed. Therefore any concerns for the construction of the trade center has not been detected.



▪ Rather, in the wake of the construction of the trade center, it can be a good opportunity to improve the poor environment, and this project is in line with Santiago’s plan to build a park, which was established a few years ago. Therefore, this project can generate efficiency in development by avoiding duplicate investments.

▪ According to the field survey, sewage flowing into the land and neighboring places is treated at the sewage treatment plant of a designated area. After construction of the trade center, a decision to expand the treatment plant due to additionally-generated sewage and broaden the access road are issues requiring thorough review. We have emphasized the necessity for these in local institutions.

Review of the Impact on Surrounding Environment of Construction/Operation of the Trade Center

▪ Stage of Construction

As mentioned above, the land was used as an airport, and it is located far from other buildings. Also, building density is not high, and therefore normal concerns such as dust and noise are not deemed significant. However, a host of construction materials would be delivered to the site, which may cause traffic congestion, and therefore it is required to take follow-up actions to prevent safety accidents and the possibility of environmental pollution by installing temporary fences and managing the construction site on a daily basis, among others.

▪ Stage of Operation

It is determined that the impact of the CIBAO trade center on the environment would be at a far lower level compared to that of sales organizations such as a department store. However, when many exhibitions and expositions are held in this building, there would be many people and vehicles, causing a chronic traffic jam. In order to iron out this issue, if improvement measures are taken such as expansion of existing roads and improvement of the transportation system, and etc., we can minimize damage to the environment caused by traffic jams.

Minimization of Environmental Impact and Management Plan

▪ As mentioned above, this land is important in terms of the environment, as evidenced by the fact that Santiago city established a plan to construct a park in this location several times, and therefore a detailed review of direction in line with the existing plan should be made prior to coming up with a more detailed plan on construction of the trade center.

▪ From the design stage, environment-friendly designs and materials should be used, and measures to save maintenance costs should also be fully considered.



▪ When operating various facilities, operation methods and precautions should be taught through preliminary training. Continuing education is required so that a high level of operation techniques can be maintained.

▪ There is a need to come up with a detailed plan considering not only construction of the trade center but also extensions of the building; it is necessary to draft a checklist on environment impact and accumulate a database of various information through regular inspection, which will be helpful in maintaining a desirable level of operation technique.

Conditions for Project Performance, Analysis of Risk Factors and Countermeasures

Surrounding conditions for the construction of the trade center are seen as comparatively positive, thanks to combined efforts (e.g., the CEI-RD, the authorities promoting the project, shows strong will toward this project, those engaged in commerce industry of Santiago show strong entrepreneurship, and relevant institutions exert efforts to create new vision for the nation through boosting exports, etc.). In addition to this, when detailed guidelines corresponding to the construction plan are established and supplementary preparations of each area of this project are reflected, we can fully achieve our own goal.

It is very important to figure out the shape and status of land where the building will be located. Especially, results of the geotechnical survey including stratigraphic distribution, physical characteristics of ground, distribution of ground water, etc., may cause significant hindrance on the large-scaled construction such as the trade center. Therefore, geotechnical survey should be conducted on the land before the project start-up, and report on the result, which will become important data for design of the construction and progress of such construction, should be provided.

If the ICT equipment required to build the system is not prepared, development is not possible, and thereby it should be purchased immediately after the project start-up. Installation of entire equipment should be finished by completion of analysis/design and beginning of development at the latest. Hence, it is deemed essential to compute detailed list of equipment required based on accurate analysis in the consulting stage.

By the construction of the trade center, administrative procedures such as obtaining construction permission and physical period requiring more than 26 months are required, so organic cooperation among relevant divisions should be established in advance, to iron out many trials and errors that can occur in the midst of the construction process. As to the Integrated Trade System, which is designed to handle export businesses of relevant organizations in one system, each organization’s business process update and cooperation are essentially required. Hence, it is deemed necessary to form a consultative body in a bid to promote this project in a smooth manner.



Chapter VII. F/S Items for EDCF Evaluation

1. Capabilities of Project Executing Agency CEI-RD, the project executing agency, was founded by the acquisition of CEDOPEX

and OPI-RD in June of 2003 to facilitate overseas trade and FDI. By combining the accumulated know-how of the two groups, the agency has established a solid foundation for effective project performance in both sectors.

The agency will be able to achieve successful performance with its systemic organization management under the consultant's support. The agency consists of the department of administration, strategic advisory, legal counseling, and professional consultants, who are involved in the project in the detailed phase, focusing on CEDOPEX and OPI-RD.

Furthermore, the agency can maximize support by consultants and its experience of training professional trade people, which the agency has built, while its education and development team (I* CEi) was funded by JICA in 2008, and now manages the education program for overseas trade talent.

2. Approval Process for Loan and important documents 2.1 Approval Process for Loan Details of loans from overseas by the Dominican Republic are stipulated in Ley de

Relativo al Registro, Control y Gestion de la Deuda Publica, Decree No. 1523-04 as well as Executive Decree 1092-04. In general, the Ministry of Finance becomes a borrower and it has the authority to sign contracts in overseas loan.

To approve loans for its government, MEPyD has already registered this project in a top priority list for 2010 PNPIP, and now is preparing for MOF approval process.

2.2 Approval Process for Procurement & Consulting In the Procurement process of the Dominican Republic, we have to obey Decree No.

262-98 for bidding, as stipulated in Reglamento de Compras y Contrataciones de Bienes y Servicios de la Administracion Publica. When it comes to consultant recruitment, the bidding should be classified in three ways; Public Bidding, Invitation Bidding, and Direct Contracting. In addition, all public projects with a funding scale of more than 3 million pesos(US$ 100,000) should be purchased by Public Bidding.

Regarding this project, Comite de Licitacion, consisting of National Customs Office, Ministry of Legislation, etc, must be established to pursue transparency in Public Bidding according to the legislation of Public Procurement. The Comite de Licitacion



will be in charge of approval bidding standards, result evaluation methods, provider selections, among others.

Moreover, the agency should submit the report on the bidding process and its evaluation prior to the final bidder selection to the Direccion General de Aprovisionamiento and Contraloria General de la Republica.

Bidding Process of the Dominican Republic

Phase 3Phase 2Phase 1

M aking announcem ent (G overnor of

The Custom s Service)

Publishing in the governm ent

gazette

H olding A ssessm ent C om m ittee

A nalyzing bidding results

Enacting price and technical

assessm ent standards

Analyzing legal issues

Prelim inary approval

Selecting the successful bidder by the

Bidding C om m ittee (Tentative)

Subm itting the bidding assessm ent and

Results to BA I and Procurem ent Service

D eciding the successful bidder (Final)

D rafting standards for bidding

Subm itting the draft to BA I

Receiving opinions of BA I

Finalizing standards for bidding

A ttaining signature by the governor

of the C ustom s Service

Publishing in the governm ent gazette

and m ajor daily m agazines (1st)

Selling bidding docum ents

C ollecting objections and questions

from bidders

Publishing in the governm ent gazette

and m ajor daily m agazines

(2nd)



2.3 Approval Process of Construction Permit

Dept. of Urban planning, city of Santiago (Takes 15 days)

Subm it docum ents relating land + schem atic draw ing

Land use perm it(Site visit & check)

A rchitectural perm it

Starting of construction

Com pletion of construction~ M ove-in to the building

Subm it to D ept. of A rchitecture, city of Santiago

M O PC(Takes 15 days)

M O PC ? Periodical Supervision

MDMAyRN(Takes 15 days)

The entire construction permit process should be done within three months at most, and the local registered architect’s stamp is mandatory to apply for a construction permit.

There is no obligation to begin construction within a year after getting the construction permit, and there is no limitation on time after construction starts.

Pre-evaluation requirements such as evaluation of influence on the environment before applying for the construction permit do not exist, but MDMAyRN will review damages to existing trees from the construction.



3. Probability to provide Korean materials & service According to a CEO interview of a local construction company during the first on-site

research by the F/S project team, construction companies in the Dominican Republic import most construction finishing materials due to the lack of self-sufficiency. Recently, they tend to use Korean ceiling materials. In terms of construction materials ranging from interior/exterior finishing materials, electronic equipment, to certain audio equipment, Korean products enjoy a competitive edge against neighboring countries in spite of the freight and logistics costs. Therefore, more than 60% of materials, which are put in most construction processes, except for blocks used for specialized masonry and plastering work on the site, can be provided by Korean construction materials.

Regarding IT system, most Hardware, Network, and Software equipment is made in third party countries, considering its nature, however, certain Web Server, Web Application Server, EDMS Engine, Backup, SMS/NMS can be used by Korean products. Therefore, it would be desirable to purchase the equipment made in third party countries, except for those that can be used by Korean equipment for this project.

Furthermore, given the nature of construction in need of a great number of workers during the whole construction period, we will be able to promote economic efficiency by hiring 80% of labor workers, which makes up most of the labor force compared to the minimal skilled workers, and recruiting 70% of machinery/electric equipment workers from local labor forces.

Experts to provide on-site Trade Academy advice will be dispatched from Korea. In addition, regarding input labor forces for system development, the participation of local workers was quite high. For example, the proportion of Koreans to Dominicans will be 43% to 57% in work forces, as well as 72% to 28% in input costs in order to smoothly manage the system, and to contribute to the e-Trade expansion throughout the Dominican Republic.

Consulting services, including preparing necessary bidding application form, placing orders, evaluating bidding proposals, supporting contracts, and supervising the construction will be performed by Korean companies according to the “EDCF Consultant Recruitment Guidelines”.



4. The effect of Foreign Currency Earning EDCF is a "Tied Aid" that restricts procurement eligibility to Korea. Suppliers of

goods and services required in the project should also be selected from Korean companies.

Therefore, equipment and materials for construction, air conditioners, sound equipment, web-server, EDMS as well as consulting services will be provided from Korean suppliers. Network and hardware equipment that are not produced in Korea and cost-effective construction equipment will be procured from third party countries.

In addition, it would be appropriate to spend local currency on construction materials easily supplied from locals and also on construction manpower that costs less, but provides competent designing and operating skills.

If the above procurement and service plans are employed, the effect would be as shown in <Table 7-1>. Out of the total EDCF of $30 million, Korean, third party countries, and local currencies will take up 57.4%, 7.0%, and 35.6%, respectively. That indicates foreign currency earning effects from exports of Korean equipment.

< Table 7-1 Project Budget of Eligible Source Country(EDCF)> (Unit:US$)

EDCF Foreign Currency Category

Korea 3rd Country Local Currency Sub-total

1. Trade Center 8,754,820 1,481,240 8,763,940 19,000,000

2. Integrated Trade System 4,431,767 430,636 724,500 5,586,710

3. Trade Academy 87,882 - - 87,882

4. Consulting Service 1,822,266 - 147,000 1,969,266

5. Training 345,506 - - 345,506

Direct Costs 15,442,242 1,911,876 9,635,440 26,989,558

6. Contingency 1,708,112 207,794 1,064,565 2,980,471

7. Loan Commission 29,970 - - 29,970

Total Costs 17,180,324 2,119,670 10,700,005 30,000,000

Percentage to EDCF (%) 57.3% 7.1% 35.7% 100%



5. Responses against Risk Factors <Table 7-2> shows situational, technical, social, economic, and environmental risk factors

expected in conducting the project and their countermeasures.

< Table 7-2 Risk Factors and Responses > Category Risk Factors Responses

Technological aspect

● Quality concerns caused by unskilled local manpower

● For more effective training, select skilled workers in advance.

● Implementing a thorough preliminary education & establishing a review system

Social aspect

● Limited effects of the project in case when training is delivered to some targets due to lack of publicity

● The government-led PR is required to maintain the effect of the project through the establishment of trade center and system

Economic aspect

● Concerns over low participation rate in case where trainees pay relatively high costs for trade academy after completion

● The government's financial support/benefiting participants in their individual work evaluation

Environmental aspect

● Environmental contamination from poorly-recycled old computers

● Seeking appropriate measures to handle industrial wastes by establishing a close cooperative system with relevant authorities



6. Expected Effects 6.1 Dominican Republic

6.1.1 Laying the foundation for export growth It is expected that the successful completion of the project will improve the trade system in

the DR and create an advanced export environment, thereby achieving an effective export system for export growth. The increase in exports would in turn reduce the unemployment rate, playing a major role in the economic growth of the country.

6.1.2 Contribution to acquiring technologies and establishing policies By dispatching experts to the field and inviting Dominican operators to Korea for training,

the country will be given an opportunity to nurture trade experts who will contribute to the government-led projects or policies in the future.

6.1.3 Interrelation in conducting the project Following DGA Computerization Project, which was completed in 2009 under the EDCF

of the Export-Import Bank of Korea, the project will be linked to customs clearance, a major pillar of electronic trade, while adding an e-marketing portal and e-trade portal to create the Integrated Trade System(ITS). This interrelation with the existing project will maximize the effects of export increases.

6.2 Korea 6.2.1 Korean companies' advance into the Dominican Republic

By supplying equipment to establish the trade center and system as well as related training programs, the project can provide opportunities for Korean companies to increase their exports, spread their advanced trade system technology and transfer the Korean trade system model to the Dominican Republic. Domestic H/W and S/W providers will also see export growth. In addition, Korean companies may have a competitive edge in receiving orders for future projects in Dominica, such as the establishment of an e-government.



6.2.2 Improvement of Bilateral Cooperation The Dominican Republic is recently recording high economic growth rates in Latin

America and showing the potential to grow as a stronghold in the region. Therefore, continued economic cooperation in various sectors would contribute not only to bilateral diplomatic relations, but also cooperation with other Latin American countries.



7. Performance Evaluation Indicators

Performance Project Targets/Indicators Source Opportunity/Risk Factors

1. Mid & long term perfomance20) (Impact)

● Improving national competitiveness - Now: rank 96th out of 133 countries - Target: 60th ● Increase in exports - Now: $ 6,949 million (2008) - Target: 200% increase

WEF (World Economy

Forum), Central Bank of

Dominica

● Opportunities - 2010~2030 National Development Strategies - The Dominican government's commitment to the project ● Risks - Effective operation & management

2. Short-term performance21) (Outcome)

● The number of companies using trade center - Now: 0, Target: 5,804 ● The number of export declaration using trade system - Now: 0, Target: 59,173 ● Reducing the time to handle export declarations (per item) - Now: 2~3 days, Target: 2~3 hours

CEI-RD Data & Site Survey

● Opportunities - Advanced ICT infrastructure among Latin countries ● Risks - Poor exports and low economic growth rate at the time of project completion

3. Outcome22) (Outcome)

● Building CIBAO trade center - Comprising exhibition hall, banquet hall, convention hall, and trade academy with the floor area of 20,000 ㎡ ● Establishing ITS - Marketing Portal system - Trade Portal system - Electronic document repository - Trade Relay system ● Trade Academy - Operation plan & curriculums

Project Completion Report

● Opportunities - Continuous PR targeting the government agencies and trade companies ● Risks - Possible delays in the government budget allocation and L/A approval at the Congress - Delays in local construction and supply of equipment - Increase in the equipment and material prices resulting from price hike

20) Targets expected to be met 3 to 5 years after completion 21) Physical outcome or services resulting from the implementation of the project 22) Targets expected to be met at the time of completion



4. Activities with Milestones 1) Employment of consultant (3 months after signing L/A) 2) Drafting the design and bidding documents (5 months) 3) Evaluation of bidding proposals and selection of procurement contractor (3 months after completing bidding documents) 4) Construction of the trade center building (18 months after commencement) 5) Establishment of the trade system (12 months after commencement) 6) Training officials from the executing agency and government in Korea 7) Training practitioners involving trade center and system in Dominica

5. Inputs - EDCF: $ 30 million (48.0% of the total cost) - The Dominican government: $ 32,444,000 (52.0% of the total)



8. Similar ODA projects in Dominica World Bank and Inter-American Development Bank (IDB) have funded most ODA

projects in Dominica for the past 3 years. However, the money goes mainly to power, waterworks, and other SOCs with almost no investment into ICT. Therefore, most ODA projects are financed by Korea.

Project Name Funded by Total Cost

(USD)

Project Year

Contents Nature

(DGA) Computerization Project

The Export-Import Bank of Korea EDCF

20 million 2007~ 2009

Making customs clearance on-line, establishing an electronic customs system for 24-hour export declaration & electronic settlement

The first EDCF-funded and IT project in Dominica

Providing advices on IT policies

Korea International Cooperation Agency (KOICA)

Grant 2006~ 2007

e-Biz for e-Learning SMEs IT policy advice patent administration

Invitation of trainees for free, dispatch of aid groups, experts and other human resources

Project to establish a talent-nurturing agency for the development of overseas trade

Japan International Cooperation Agency (JICA)

7 million 2007~ 2008

Establishing a center to provide education on overseas trade and basic business to individuals and companies in Dominica

The official agency to innovate overseas trading companies (ICEi)

Apart from the above, "Feasibility Study for the Project to Establish the Dominican e-Document System" is currently underway with the EDCF fund of the Export-Import Bank of Korea.



9. Analysis on the International Competitiveness of Korean Companies

9.1 Construction of Trade Center Since the Asian financial crisis in 1997, overseas construction had remained stagnant.

However, the sector has been setting new records for four consecutive years since 2005. This achievement is especially remarkable, given the global economic crisis of last year, with market instability from Dubai, the last place where global construction had retained business.

In particular, last year's outstanding record is all the more meaningful, considering the fact that the global economic crisis is still going on.

That means global clients are recognizing our technological capabilities and competitiveness, which have been accumulated from increased participation in the plant market of the Middle East since the mid-2000s.

< Figure 7-1 Annual Overseas Construction Orders >

(Unit:$1,000,000/Number of cases)(Unit:$1,000,000/Number of cases)

※ Source: Data from Overseas Construction Association (2009)

In general, the upward trend resumed in the second half of 2009 is expected to continue in 2010. The Korean overseas construction, which focused mostly on Middle East and Asia, is entering more various markets. Among them, Latin American and African markets are increasingly attracting interest as an alternative emerging market with abundant resources and great demand for infrastructure.

Especially in Latin America, many bidding schedules for large-scale projects were



delayed or cancelled due to the global financial crisis in 2008. However, there have been increases in refinery and petrochemical project orders from Venezuela, Mexico, Ecuador, Columbia, and in power plant orders from Chile, Peru, and Brazil. Although most projects in the region still center on civil works such as construction of roads and bridges or power plants; countries are expanding their investments in infrastructure for economic stimulus. Therefore, if their investment is extended to housing or public projects, Korea would have a competitive edge as a construction powerhouse with long-time experience in the global market. This project holds great significance in this regard.

< Table 7-3 Expected Amount of Overseas Construction Orders for 2010 > (Unit: $ million)

Expected Expected Region

Amount Ratio (%) Type

Amount Ratio (%)

Total 74,000 100.0 Total 74,000 100.0

Middle East 48,000 64.9 Plant 42,000 56.7

Asia 12,000 16.2 Civil 13,000 17.6

Latin America 3,000 4.1 Architecture 17,000 23.0

Africa 10,000 13.5 Others 2,000 2.7

Others 1,000 1.3 - - -

※ Source: Data from Overseas Construction Association (2009)

9.2 Integrated Trade System Since 1990s, Korea has made “u-Trade Hub” as a national strategic challenge, and

succeeded in automating import/export processes with EDI and the Internet. Moreover, Korea has connected all the trade-related institutions in network, and has come up with a trade-automation net to open an era of E-trade.

Since the 2000s, Korea has been the leader in this field, spreading advanced trade system technology as well as related trade solutions.



< Table 7-4 Trade-related capabilities of domestic companies > Period Participant Project Contents

2001.02 Korea & Japan u-Trade Hub Building Project between Korea & Japan 2003.03 USA AMS Service for US Customs CSI Support 2003.03 EU e-Trade Network Building Project between Korea & EU 2005.10 Kazakhstan First Phase BPR/ISP Project for Advanced Customs

Administration 2006.07 Mongolia,

Azerbaijan Consulting Project for Advanced Customs Administration for Mongolia & Azerbaijan

2008.03 Kyrgyzstan Consulting Project for Advanced Customs Administration

As confirmed in <Table 7-4>, Korean companies have accumulated experience with similar overseas projects, and performed the DGA Computerization Project for the Dominican Republic in 2007-2009. We believe Korea can have comparative competitiveness if we can make the most out of our local project expertise.



For reference: Introduction of Korea’s uTradeHub A. Background

Increased necessity to strengthen export competitiveness

Trade has driven Korea's economic growth for the last 40 years, and the economy's dependence on trade has continued to increase (the ratio of trade amount to GDP in 2000: 65%). Against this backdrop, Korea was in dire need to improve its export competitiveness. What's more, with increasing global competition, Korea's exports were facing weakened price competitiveness due to high labor, land, and logistical costs (the ratio of trade-related costs to GDP in 2000 was 12.8% for Korea, compared to 9.6% of Japan).

Increased interest and demand for electronic trade

In the 2000’s, the cargo strike in Korea led to greater demand for overall improvements of the existing trade process. As for international trade, there was an increased need for non face-to-face trade because of the 9/11 terrorist attack and SARS outbreak in East Asia. In addition, dramatic changes in the IT environment required an overhaul of trade processes. There was a need to advance the existing VAN/EDI-based trade automation network into an internet and electronic document repository based trade platform. Introduction of a new e-trade system and enormous improvements of the process were required through systematic links to already established trade networks.

Global competition in promoting paperless trade

The US formed ITDS, a dedicated agency for Internet-based e-trade and pushed ahead with the establishment of ACE, a single window system. Australia and Singapore were leading pilot projects including e-quarantine documents and e-certificates of origin at APEC. In particular, Singapore, Hong Kong, and Taiwan, which were the competitors of Korea, were competing to take the lead as an e-trade hub. Even China, Indonesia, and Malaysia with less sophisticated IT levels were actively promoting e-trade policies.

B. Objectives and Targets

E-trade service project was a roadmap task of e-government to complete the future model of the national e-trade. With the vision of "Realizing u-Trade KOREA, a trade powerhouse in the 21st century", the project aimed to establish a single window-based e-trade platform, innovative e-trade process, and complete the national e-trade hub for global e-trade links. By doing so, the project was expected to provide a single window platform where trade companies can do one-stop trade business from market surveys to customs clearance and settlement through the Internet anytime and anywhere. In



addition, the system was to offer an infrastructure that allows trade-related players to do collaboration commerce.

C. Implementation Progress

Formed a public-private joint committee on e-trade, as a nationwide consultative body for effective promotion of national e-trade (Chairman: prime minister) (‘03.7)

Presidential Committee on Government Innovation and Decentralization selected 'e-trade service' as an e-government’s roadmap task (‘03.8)

Established and confirmed '3-year Plan for e-Trade Promotion' as a comprehensive plan to implement national e-trade (‘03.12, the first National Committee on e-Trade)

Mapped out concrete implementing measures on the future e-trade model and improvement challenges through BPR/ISP projects (‘03.12- ‘04.6)

The second round of the National Committee on e-Trade (Chairman: prime minister) set four innovations to innovate the trade process

Confirmed "The e-Trade Innovation Plan", focusing on the strategic 33 tasks (‘04. 9. 8)

D. Major Projects

Project Name: Trade Business Process BPR/ISP (’03.11~ ‘04.6, 7 months)

▪ Conduct trade business BPR

∙ Executed research and analysis on the existing trade business process and analyzed the detailed work flow and relevance between trade companies and related agencies to come up with improvement measures

∙ Designed a one-stop trade process by employing analysis and improvement measures and set the direction for support

∙ Conducted research and analysis on laws and regulation and established a plan to implement the BPR results.

▪ Established an information strategic plan to build an integrated e-trade platform ` (ISP)

∙ Set up measures to create institutions and standards to realize the integrated e-trade platform

∙ Set up measures to create and link various new systems such as trade and financial



networks in order to materialize the trade business process

∙ Set up budgets and implementing plans to establish the e-trade platform step-by-step

Project Name: e-Trade Service, the 1st phase (‘04.12~ ‘05.6, 6 months)

Projects Main substances

Pilot creation of e-trade document repository

● Develop the service for users and operators of e-trade document repository

● Link with the message relay system & e-L/C distribution management system

The first-phase establishment of e-L/C

distribution management system

● Electronic collection and distribution of L/C ● Notification of L/C for banks, inquiry/renewal and other history

management, request for purchase, storage and certification of the original copies, management of e-L/C limits, such as the remaining limit

● Link with the e-L/C limit management system

Improving key infrastructure for e-trade

● Enhanced e-trade document repository ● Expand the repository's functions into delivery and disposal of

documents, issue of electronic certificates, and distribution of trade documents

● Draw concrete measures for operation, including e-trade operating organization, costs, and charges

Project Name: e-Trade Service, the second phase (‘05.12~ ‘06.9, 10 months)

<Main contents of the second projects of e-Trade Service>


Building a single window for e-trade users

● Building an e-trade portal for trading companies (Web service-based) ● Link with the message relay system & e-L/C distribution management system

The first-phase establishment of e-L/C

distribution management system

● Expand work scope into notification of defects, development of special L/C, and notification of fees ● Establish foundations to distribute documents that should be mandatorily stored in e-trade document repository

Improving key infrastructure for e-trade

● Enhanced e-trade document repository ● Expand the repository's functions into delivery and disposal of documents, issue of electronic certificates, and distribution of trade



documents ● Draw concrete measures for operation, including e-trade operating organization, costs, and charges

Project Name: e-Trade Service, the third phase (‘07.7~ ‘08.2, 10 months)

<Main contents of the third projects of e-Trade Service>


Building the integrated portal of uTradeHub

● Through the gateway of the integrated portal, access to sub-portals can be provided by users (trading companies, logistics companies, banks, marketers) ● Unify the user access window

Establishing a logistical portal service

● Loading list service ● e-D/O ● Management of bonded warehouses ● Management of cargo data

Enhanced e-L/C service ● ASP service of distribution of e-L/C for foreign banks

Pilot establishment of e-Nego system

● Making prior and post process of B/L issue electronic ● Create Title Registry ● Store the nego-related e-documents in the e-trade document repository ● Select a few target agencies (shipping company, forwarder, bank) for pilot system

Developing a user solution for trading

companies

● Develop e-trade standard solution for trading companies ● Link uTradeHub to the user system of trading companies ● Develop a user solution for the integration of e-trade infrastructure (e-trade document repository, uTradeHub portal, certification center)

Building an integrated information system for

requirement check

● Simplify the procedure to check requirements and collective management of related information ● Easy transfer of data to post-management system & provision of inquired data

Link to the Chamber of Commerce

● Store the certificates of origin in the e-trade document repository through link to the Chamber of Commerce

Marketing Data

● Gather the specialized marketing meta data for search ● Provision of trade data that integrates the public and private sectors ● Information sharing with companies with expertise in marketing data ● Provide the related data for each data type



E. Implementing Organization

In light of mid- and long-term needs for the national e-trade business and expertise, the Ministry of Knowledge and Economy and Customs Office took charge of the project under the Presidential Committee on Government Innovation and Decentralization. The public-private 'e-Trade Promotion Center' was a dedicated agency for support and project management. (In accordance with e-Trade Promotion Act).

<e-Trade Promotion Center Diagram>

The Presidential Committee on Government Innovation and

Decentralization (Special Committee of e-Government)

Ministry of Knowledge & Economy / Customs office

Managing Institute(e-Trade Service Business Group)

National Information Society Agency

Dedicated Institute

Council of Related Institutes

e-Trade Promotion Cetner

Dedicated Support/Management Institute

System construction and technical support

Contractor

The e-Trade Promotion Center was installed and operated at the Korea Investors and Traders Association by the staff from the Ministry of Knowledge and Economy, Customs Office, KITA, KOTRA, KTNET, DACOM, Korea Financial Telecommunications & Clearings Institute, and Korea Federation of Banks. In order to discuss measures to link the project to the national logistical data service and G4B project, a working-level consultative body was formed and operated.



<Organization of e-Trade Promotion & Roles>

Category Main Roles Organization

Presidential Special

Committee of e-Government

-Coordinate direction and policies -Check the progress -Coordinate with other e-government tasks

Dedicated Agency

-Select the contractor and sign the contract -Manage project implementation and evaluate the results

National Computerization Agency

Lead Agency (e-Trade

Service Project Group)

-Major decision-making for implementation -Coordinate roles between major interested parties -Coordinate basic implementing direction and issues -Set up the project plan and select contractors -Sign the contract (Jointly with the dedicated agency) -Manage progress and review the results -Manage inspection, review, and take-over

-Ministry of Commerce, Industry, and Energy Trade and Distribution Deliberation Bureau (Trade Policy Dept.) -Customs Office, Information Cooperation Division (Information Management Dept.)

Consultative body of relevant

authorities

-A consultative body between relevant authorities for e-trade promotion and coordination

The head of Trade and Distribution Deliberation Bureau at the Ministry of Knowledge and Economy (Chair) Comprising the director-generals at related agencies.

Dedicated support and managing

agency (e-Trade

Promotion Center)

-Implement e-trade promotion tasks and manage overall project (PMO) -Create conditions to use e-trade -PR and expansion of e-trade to relevant agencies and users -Support for establishing project plans and drafting RFP -Support for contractor selection -Working-level implementation of system-building

-Government side: deputy director level at the e-trade service leading agencies (Ministry of Knowledge and Economy, Customs Office) -Private side: KITA, KOT- RA, KTNET, DACOM, Korea Financial Telecommunications & Clearings Institute, and Korea Federation of Banks

Contractors -Build the e-trade platform -Educate users and managers -Technical support and maintenance

-SI & IT consultants

F. Revision of Laws for Promotion of e-Trade

Foreign Trade Act

▪ The concept of e-trade in the Foreign Trade Act was defined in December, 29, 2000, when Act No. 6316 (the main substances of the 14th revision) was announced.



▪ Foreign Trade Act was enacted to prescribe requirements for e-trade, thereby responding to rapid changes in the trade environment at home and abroad, and improving efficiency in trade transactions.

▪ As the development of IT has led to a surge in exports and imports from online transactions through IT network, online transactions were added to the scope of trade in the 14th amendment. The revised act also designated e-trade intermediaries to support and nurture e-trade.

▪ In the 17th amendment, the exclusive trade automation network was made public as well as an internet-based e-trade infrastructure to solve the repeated submission of trade documents and reduce time and costs for business processes.

Enforcement Decree of Foreign Trade Act

▪ In the Enforcement Decree, the concept of e-trade was revised through Presidential Decree No. 17186 (the 23rd revision) in March, 31, 2001.

▪ Enforcement Decree of Foreign Trade Act is the Presidential Decree No. 19118 (the 30th revision) and was partially revised according to the revision of Enforcement Decree of Electronic Transaction Law in December, 18, 2002. The Decree was then revised into the Presidential Decree No. 19619 (the 34th revision) according to the amendment of the Act on Promotion of Electronic Trade in July, 21, 2006.

▪ The 23rd amendment set the standards to designate e-trade intermediaries prescribed in Foreign Trade Act, and stated a request for designations and their procedures. Also, the act prescribed the organization of the e-trade intermediary committee and the grounds for the meetings of the committee.

▪ The 34th amendment aimed to determine requirements for the organization and operation of national e-trade committee, the standards and procedures to designate contractors for e-trade infrastructure, and registration requirements for e-trade service providers.

Act on Promotion of Electronic Trade

▪ The Act on the Promotion of Office Automation for Trade was enacted in 1991 to effectively promote automation of trade businesses and improve international competitiveness, thereby contributing to the development of the national economy. The name of the Act was changed into Act No. 7551 (the 6th revision) on the Promotion of Electronic Trade in December, 23, 2005, in order to address some operational flaws.

Act on the Establishment of Foundations for Trade Transactions

▪ The Act on the Establishment of Foundations for Trade Transactions was enacted in



January, 28, 2000, as Act No. 6227, for the purpose of establishing transaction foundations efficiently and systematically, expanding balanced trade transactions, and contributing to the development of the national economy.

▪ To effectively create foundations such as the trade convention center, e-trade and trade experts, the Minister of Knowledge and Economy should establish a plan. To implement such plans, the Act encourages nurturing of the trade exhibition industry, enhancing foundations for e-trade transactions, promoting the distribution of trade data, and educating trade experts.

Major Electronic Trade-Related Laws in Korea

< Summary of Trade-related Laws in Korea> Relevant Agency Name of Law Main contents

Foreign Trade Act ● the basic concept of electronic trade ● e-trade intermediaries ● intangible items in an electronic form

Act on the Promotion of Office Automation for Trade (Act on the Promotion of Electronic Trade)

● Set the scope of automation ● Prescribe the effects of electronic document forms, electronic signature, the timing of delivery of e-documents, and the substance of e-documents ● Standards and procedures to designate providers of e-trade infrastructure ● Standards and procedures for registration of e-trade service providers ● Procedures to issue certificates of e-trade documents ● Requirements and procedures for the disclosure of e-trade documents/trade data

Act on the Establishment of Foundations for Trade Transactions

● Expansion of and support for e-trade transactions for SMEs

Act on Electronic Transactions

● Serving as a ground to regulate rights and duties among the parties of electronic messages

Ministry of Knowledge and

Economy

Act on the Promotion of Information and Communication Utilization & Information Protection

● Data fabrication & Private information protection ● Security of trade information

Ministry of Public

Administration & Security

Act on Electronic Signature ● Serving as a ground to regulate rights and duties among the parties of electronic messages



G. Implications

For Project Implementation

Korea's strategies for e-trade have the following features in terms of project implementation:

First, the project was led by the government in order to establish a comprehensive plan throughout e-trade businesses.

Second, an e-trade promotion center involving all relevant government agencies was organized for consistent implementation after considering mid- and long-term needs to implement the project and expertise.

Third, we simultaneously established systematic and institutional foundations to realize Internet-based trade.

Fourth, we established a systematic cooperation scheme by encouraging active participation of public and private institutions.

Fifth, a separate plan was created for public infrastructure, other than system building.

Sixth, priority was given to establishing environmental foundations, such as improving laws to simplify trade businesses.

For User Interface

The analysis of Korea's e-trade system in terms of user interface can be summarized as follows.

First, we were committed to simplifying trade businesses by exempting attached documents from submission and improving efficiency through standardization and unification of trade documents.

Second, Korea's e-trade system is designed as a one-stop service system from marketing to settlement.

Third, the Internet-based system carries out businesses 24/7.

Fourth, an integrated e-trade platform is based on Single Window and SSO (Single Sign On) to support a convenient user interface.

Fifth, seamless process is available through electronic trade document repository.

Sixth, the design of services was user-oriented and priority was given to the most effective services for trading companies.



Seventh, we developed and supplied e-trade S/W for users to support close links between corporate e-business and the national e-trade infrastructure.

For the establishment of the System

In terms of system building, the features of Korea's e-trade system are as follows.

First, it is an internationally recognized ebXML-based system.

Second, the system supports a web-based structure with openness and scalability.

Third, the system is aimed at systematic links with relevant agencies with various standards, and integration between functions.

Fourth, we continuously promoted interlinks with e-trade networks and related agencies including the national logistics information sharing project and the portal of the Customs Office.

Fifth, we established a flexible and compatible system with future scalability in mind.

Sixth, we introduced large-scale servers, instead of servers with limited capacity, for consolidated management of the system, thereby minimizing the cost of TCO (Total Cost of Ownership).

Seventh, we used VAN/EDI and other existing equipment to minimize investments, while building a system that can adopt the newest IT.



Abbreviation Table

Abbreviation Description

ACE Automated Commercial Environment

AMS Automated Manifest System

APEC Asia-Pacific Economic Cooperation

ATA AT attachment

AWB Air Waybill

B/C Ratio Benefit-Cost Ratio

B/L Bill of Lading

BEXCO Busan Exhibition & Convention Center

BP Business Process

BPM Business Process Management

BPR Business Process Reengineering

BRS Business Recovery System

C/O Certificate of Origin

CACM Central America Common Market

CARICOM Caribbean Community and Common Market

CAS Content Addressed Storage

CAV Constant Air Volume System

CBD Component Based Development

CBTPA Caribbean Basin Trade Partnership Act

CDES Consejo para el Desarrollo Estratégico de la Ciudad y el Municipio de Santiago

CE Conformity European



CECO Changwon Exhibition Convention Center

CEDOPEX Centro Dominicano de Promoción de Exportaciones / Dominican Export Promotion Centre

CEI-RD Centro de Exportación e Inversión de la República Dominicana / Dominican Republic Export and Investment Center

CIO Chief Information Officer

CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora

CNSIC Comisión Nacional para la Sociedad de la Información y Conocimiento

CNZFE Consejo Nacional de Zonas Francas de Exportación

CODOCAFE Consejo Dominicano Del Café

COEX Convention & Exhibition

CPI Consumer Price Index

CPU Central Processing Unit

CSI Container Security Initiative

CTC Cyber Trade Campus

CUI Character-Based User Interface

D/A Documents Against Acceptance

DB Database

DGA Dirección General de Aduanas

DGII Dirección General de Impuestos Internos



DGIP General Directorate of Public Investment

DGM Dirección General de Minería

DIGENOR Dirección General de Normas y Sistemas de Calidad

DNCD Dirección Nacional de Control de Drogas

DR-CAFTA Dominican Republic – Central America Free Trade Agreement

D.S.R Debt Service (to income) Ratio

DUA Declaración Única Aduanera

DVCS Data Validation and Certification Server

e‐D/O e-Delivery Order

e‐L/C e-Letter of Credit

EA Electronic Arts

ebMS ebXML Messaging Service

ebXML e-business Extensible Markup Language

ECC Error Checking and Correction

EDCF Economic Development Cooperation Fund

EDI Electronic Data Interchange

EDMS Electronic Document Management System



EIU Economist Intelligent Unit

EP Enterprise Portal

ERD Entity-Relationship Diagram

ERP Enterprise Resource Planning

EU European Union

F/S Feasibility Study

FAQ Frequently Asked Questions

FDI Foreign Direct Investment.

FOB Free On Board

FP Function Point

FTA Free Trade Agreement

FTP File Transfer Protocol

FTZs Foreign Trade Zones

GDP Gross Domestic Product

GLMP Global Logistics Management Program

GLP Global Leadership Program

GNP Gross National Product

GOD Government of Dominican Republic

GUI Graphical User Interface

H/W Hardware

HSM Hardware Security Module

HTML Hyper Text Markup Language

ICC International Convention Center

ICEi Instituto Capacitación e Innovación



ICO International Coffee Organization

ICT Information & Communication Technology

IDB Inter-American Development Bank

IDC Internet Data Center

IDE Intelligent Drive Electronics

IDI ICT Development Index

IESP Interconexión Estatal por la Seguridad Pública

IMF International Monetary Fund

INAZUCAR Instituto Azucarero Dominicano

INTEC Instituto Tecnológico de Santo Domingo

IP Internet Protocol

IPS Intrusion Prevention System

IRR (EIRR) Internal Rate of Return (Economic Internal Rate of Return)

ISO International Organization for Standardization

ISP Information Strategy Planning

IT Information Technology

ITDS International Trade Data System

ITLA Las Americas Institute of Technology

ITS Integrated Trade System

JICA Japan International Cooperation Agency

ITU International Telecommunication Union

KBC Korea Business Center



KDI Korea Development Institute

KOICA Korea International Cooperation Agency

KOTIS Korea Trade Information Services

KOTRA Korea Trade-Investment Promotion Agency

KSP Knowledge Sharing Program

KTNET Korea Trade Network

L/A Letter of Authority

L/A Loan Agreement

L/C Letter of Credit

LAN Local Area Network

LAVECEN Laboratorio Veterinario Central

MA Maintenance

MA Ministerio de Agricultura

MBA Master of Business Administration

MCC Multiplex Catalyst Converter

MMARENA Ministerio de Medio Ambiente y Recursos Naturales

MSPAS Ministerio de Salud Pública y Asistencia Social

MEPyD Ministerio de Economia, Planificación y Desarrollo

MFN Most-Favored Nation

MOF Ministry of Finance

MOPC Ministerio de Obras Públicas y Comunicaciones

N/W Network

NEIS National Education Information System

NMS Network Management System



NPV Net Present Value

INTABACO Instituto del Tabaco de la República Dominicana

OA Office Automation

OAS Organization of American States

ODA Official Development Assistance

OP (System) Operation

OPI-RD Office for the Promotion of Investments of the Dominican Republic

OPTIC Presidential Office of Information and Communications Technologies (Dominican Republic)

OS Operating System

P/L Packing List

PDF Portable Document Format

PEA Project Executing Agency

PIU Project Implementation Unit

PLD Partido de la Liberación Dominicana / Liberal Party of the Dominican Republic

PM Project Management

PMO Project Management Office

PNPIP National Plan of Public Investment

PUCMM Pontificia Universidad Católica Madre y Maestra

PV Present Value

PVC Polyvinyl chloride

Q/A Questions and Answers

RAID Redundant Array of Independent Disks



RC Reinforced Concrete

RDBMS Relational DataBase Management System

RFP Request for proposal

S/W Software

SAN Storage Area Network

SARS Severe Acute Respiratory Syndrome

SCSI Small Computer System Interface

SD System Development

SERI Samsung Economic Research Institute

SI System Integration

SICA Sistema de la Integración Centroamericana / Central American Integration System

SIGA Sistema Integrado de Gestión Aduanera

SIGAS Sistema de Gestión de Ayuda Social

SIVUCEX Sistema Integrado de Ventanilla Unica de Comercio Exterior

SMS System Management System

SNIP National Public Investment System

SRC Steel Framed Reinforced Concrete Structure

SSO Single Sign On

T/T Telegraphic Transfer

TBB Technical Building Block

TBIS Tourism and Business Information Systems

TCO Total Cost of Ownership



TCP Transmission Control Protocol

TP Trade Partner

UASD Universidad Autónoma de Santo Domingo

UML Unified Modeling Language

UNAPEC Universidad APEC

UNIBE Universidad Iberoamericana

UIT Union Internationale de Telecomunicaciones

USB Universal Serial Bus

VAN Value Added Network

VAV Variable Air Volume

VE Value Engineering

VIP Very Important Person

VoIP Voice Over Internet Protocol

VPN Virtual Private Network

WAS Web Application Server

WB World Bank

WEF World Economy Forum

WiMAX World Interoperability for Microwave Access

WTO World Trade Organization

XML Extensible Markup Language

ZF Free Zone / Zona Franca

Dr Cibao Changed Project Budget

Documents

Transcript of Dr Cibao Changed Project Budget