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. 2. Country Status ................................................................................. 9 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. 4.
Status of Project Site...................................................................... 18 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. 3.
Project Execution and Cooperation System................................. 38 Experience in Similar Projects...................................................... 39
Chapter IV. Project Execution Plan......................................................... 41 1. 2. Outline............................................................................................ 41 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 1.2 Integrated Trade System.........................................................................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. 4.
Technical Feasibility .................................................................... 164 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. 7.
Strategic Feasibility ..................................................................... 210 Environmental Impact Assessment............................................. 211
Chapter VII. F/S Items for EDCF Evaluation ...................................... 214 1. 2. Capabilities of Project Executing Agency .................................. 214 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. 4. 5. 6.
Probability to provide Korean materials & service ................... 217 The effect of Foreign Currency Earning .................................... 218 Responses against Risk Factors .................................................. 219 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. 8.
Performance Evaluation Indicators ........................................... 222 Similar ODA projects in Dominica ............................................. 224
9. Analysis on the International Competitiveness of Korean Companies .................................................................................................... 225

9.1 Construction of Trade Center .................................................................225 9.2 Integrated Trade System.........................................................................226
For reference: Introduction of Koreas 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 UNs 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 Dominicas 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
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 (Lneas de Accin) through a discussion with relevant ministries in a bid to present the blueprints on the nations future. They announced the 2010~2030 National Development Strategy (Estrategia Nacional de Desarrollo de la Repblica 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 Koreas 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 countrys economy through the KSP project, the Dominican Republics strategies were reset. By
See details of 2010~2030 National Development Strategy on the 6. Strategic Feasibility in Chapter VI.
Feasibility Study of the Establishment of the CIBAO Trade Center in the DR
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 Koreas 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 Koreas export-oriented economic development experiences. The Dominican Republics view of the project was very positive, and this was a great opportunity to raise Koreas 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 CIBAO 2 , 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.
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 Koreas success in achieving rapid economic growth and building a knowledge-based economy, the lack of Dominicas human resources is holding their economy back, limiting the nations 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
EDCF documents
Evaluate proposal and support contract negotiations 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 EDCF
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 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

Dominican Republic
Construction of the trade center infrastructure (road, electricity, gas, water) Deliver furniture and office automation equipment for the trade center 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 Exportacin e Inversin de la Repblica Dominicana CEI-RD) under the direct command of DRs 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 nations 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 countrys export products are produced here, taking up 14 percent of the countrys 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)
EDCF Item ForeignCurrency Portion Korea 1. Trade C enter Construction

1) Land Ac quisition & Infrastructure 2) Architecture 3) Mechnic al 4) Electric
Local Currency Portion 3rd Countries 1,481,240 186,200 611,040 684,000 430,636 430,636 1,911,876 207, 794 95,594 112, 200 147,000 9,635,440 1, 064, 565 481,772 582, 793 724,500 8,763,940 7,253,060 712,880 798,000 724,500
EDCF Total 19,000,000 13,604,000 2,546,000 2,850,000 5,586,904 735,182 4,358,390 493,332 87,882 1,969,266 345,506 174,616 170,890 26,989,558 2, 980, 471 1,349,478 1, 630, 993 29, 970
Gov. of Dom inican Republic 25,474,318 25,474,318 -
Total
8,754,820 6,164,740 1,222,080 1,368,000 4,431,767 304,545 3,633,890 493,332 87,882 1,822,266 345,506 174,616 170,890 15,442,242 1, 708, 112 772,112 936, 000 29, 970 17,180,324 57. 30% 27. 50%
44,474,318 25,474,318 13,604,000 2,546,000 2,850,000 5,586,904 735,182 4,358,390 493,332 87,882 1,969,266 345,506 174,616 170,890
2. Integrated Trade Data System

1) Equipmen t 2) S /W D evelopment 3) Installation & Test
3. Trade Academy 4. Consulting Services 5. Training

1) Local Training 2) Overseas Training
Base Cost 6. Taxes & Duties 7. Contingencies

1) P hysical Contingency 2) P rice Contingency
25,474,318 1,349,478 4, 570, 530 1,273,716 3, 296, 814 1,049,278 32,443,604 52. 00%
52,463,877 1,349,478 7, 551, 001 2,623,194 4, 927, 807 1,049,278 29, 970 62,443,604 100%
8. PMO(2%of base cost) 9. ServiceCharge(0.1%of EDCF) Total Percentage(%) of EDCF Percentage(%) of Total
2,119,670 7. 10% 3. 40%
10,700,005 35. 70% 17. 10%
30,000,000 100% 48. 00%
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
Select Consultant
PMO
Project Management (Schedule Mgt, Administrative Support, Leading PIU, Mediation & Approval, etc.) Secure & Survey Site Procurement Support Elec./Water/Sewage Proposal Evaluation & Contract Sup. Anal. Pre. Design & Build Exec. Drawing Location Survey & Set-up Environment Analysis & Planning Analysis & Planning Civil construction & Foundation Order material Order material Structure construction Finishing & Building Equipment construction Test Test Server room Setup Road Widening Supervision
Organize PIU
Consulting Service
Execution Drawing
Trade Center Constructn
Construction Work Mechanical Work Electric Work
Air conditioner & Equipment installatiom Switchgear equipment & Power plant,,Power trunk
Analysis Construction Test & Design & Deploy

ITS
Phase I
Construction & Deploy Test
Order Install equipment -ation

Trade Aca demy Overseas Tra ining Loca l Tra ining
Analysis & Design
Phase II
Consultancy Service
IT
*I T :I nf orm at i on T echnol ogy T A : T rade A cadem y C onst .: C onst ruct i on
IT
TA Const.
IT
Period of selecting professional consultant: 3 months Bidding process will be led by the project execution agencys 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 Hispaola 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 nations 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 Duarte Hermanas Mirabal Cibao Oriental Mara Trinidad Snchez Saman Cibao Norcentral Cibao Central Santiago Espaillat Puerto Plata La Vega Snchez Ramrez Monseor Nouel Valverde Monte Cristi Santiago Rodrguez Dajabn Provincial capital San Francisco de Macors Salcedo Nagua Saman Santiago de los Caballeros Moca San Felipe de Puerto Plata Concepcin de La Vega Cotu Bonao Santa Cruz de Mao San Fernando de Monte Cristi San Ignacio de Sabaneta Dajabn
El Cibao
Cibao
Cibao Occidental
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Regions
Geographic regions
Sub-regions
Provinces Azua San Juan Elas Pia Barahona Baoruco Independencia Pedernales Distrito Nacional Santo Domingo San Cristbal Monte Plata Peravia San Jos de Ocoa La Romana San Pedro de Macors Hato Mayor El Seibo La Altagracia
Provincial capital Azua de Compostela San Juan de la Maguana Comendador Santa Cruz de Barahona Neiba Jiman Pedernales Santo Domingo de Guzmn Santo Domingo Este San Cristbal Monte Plata Ban San Jos de Ocoa La Romana San Pedro de Macors Hato Mayor del Rey Santa Cruz de El Seibo Salvalen de Higey
El Valle Sur Occidental Enriquillo
Metropolitana Sur Valdesia Sur Oriental
Yuma
The report presented by the World Economic Forum (WEF) in 2009 showed that out of the 133 countries surveyed worldwide, the Dominican Republics 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 >
Name Costa Rica Brazil Panama Mexico Columbia El Salvador Peru Argentina Jamaica Global Competitiveness Ranking (2009~2010) 55 56 59 60 69 77 78 85 91 Category Basic Requirements 62 91 55 59 83 66 88 84 101 Efficiency Enhancers 58 42 70 55 64 83 59 84 73 Innovation and Sophistication Factors 37 38 54 67 62 87 85 76 83
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Dominican Republic Ecuador Venezuela Paraguay
95 105 113 124
98 93 104 122
88 113 108 115
82 123 130 131
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 >
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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
13
growth rate within a couple of years. < Table 2-3 Major Economic Indicators of Dominican Republic >
Classification GDP(US$100 Million) GDP(US$100 Million) Economic Growth(%) Inflation (%) Unemployment (%) Foreign Exchange Holding (US$100 Million) Foreign Bond (US$100 Million) Yearly average currency (Compared to US$) D. S. R. Balance on current account (US$100 Million) Export (US$ Million /FOB) Import (US$ Million /FOB) 2005 293.3 3,247 9.3 7.4 17.9 10 70 30.14 6.1 -4.8 6,145 9.614 2006 318.0 3,468 10.7 5.0 16.2 17.9 79 33.36 9.3 -11 6,610 9,559 2007 412.2 4,404 8.5 8.8 15.5 29.4 89 33.26 9.8 -22.3 6,270 13,820 2008 457.1 4,797 5.0 10.6 14.0 28.1 93 34.41 11.3 -26 6,949 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.
14
< Figure 2-3 2007 Industry Ratio in Dominican Republic's Zona Franca >
Industrial Component Ratio in DR Component Ratio by the types of business in Free Trade Zone
industry
Th e manufacturing
Clo th es
16% 31% 11% 7% 12% 13% 11%
Distribution in dustry
Construction industry Teleco mmunication industry Ag riculture and fish eries industry Th e tourist industry The oth ers
6% 15% 29%
Footwear Electronic products Tobacco products
18% 9% 17%
6%
Medical products Jewelry The o th ers
Reference: 2007 KOTRA and CNZFE Data
< Table 2-4 Major Import/Export Goods and Import/Export Countries >
Classification Export Ferro nickel Ratio of 3 major products (%) Steel Rum USA Ratio of 3 major import/export countries (%) Haiti Spain 25 8.1 4.8 20.9 12.7 8.4 Import Petroleum Gasoline Fuel USA Venezuela Taiwan 9.3 6.3 4.5 30.2 10.4 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 presidents 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
15
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 nations 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 PR via press External supportive activities Details PR activities regarding nations 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. 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
16
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 Country USA Spain Canada Others Total 2004 176.6 126.6 274.2 331.6 909.0
Commu nication 283.1 15.0
Foreign Investment Status 2005 254.6 220.6 194.9 352.9 1,023.0

Manufa cturing 703.6 20.2
Scope of Foreign Investments (2004~ 2008)
2006 671.5 178.0 90.5 243.3 1,183.3

Free trading zone 66.5 5.0
2007 796.1 258.3 163.3 479.9 1,698
2008 497.4 190.0 587.1 1,610.2 2,884.7

Real estate 656.0 14.5
% 28.1 17.5 15.7 38.7 100.0
Investment in different Areas
Year 08 Ratio
Mineral 299.6 6.5
Energy 51.7 10.6
Finance 237.3 5.4
Travel 236.9 19.0
Total 2,884 100
Reference: 2008 Statistics from Central Bank of Dominican Republic
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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 Jos de las Matas, Tamboril, Villa Bison, Villa Gonzlez). Scope : Total area(2,839), Urban Area(612), City Area(75) City expansion trend
18
< Figure 2-5 Santiago City expansion trend (1800~1994) >
Reference: Santiago City Development Society (CDES)
19
< Figure 2-6 Growth trend of major industries (2002~2008) >
Reference : Central Bank of the Dominican Republic
As shown in table above, President Fernandezs 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 >
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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 >
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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 Communication Wireless Communication Total

Reference: OPTIC
2004
2005
2006
2007
2008
2009(1~9)
902,258 2,534,063 3,436,321
896,252 3,623,289 4,519,541
897,026 4,605,659 5,502,685
906,485 5,512,859 6,419,344
985,711 7,210,483 8,196,194
962,432 8,374,077 9,336,509
22
< 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 >
Reference: OPTIC
23
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 Tricom Market introduction Number of employees Number of wireless members Service area
1988
n/a
n/a 2. million (Wireless Service brand name is Claro> 2.2 million
Codetel Orange
1987 2000
1500 n/a
Fixed telephone, wireless telephone, internet, TV cable Fixed telephone, wireless telephone, internet
Reference: KOTRA
< Table 2-9 Cell phone market share per communication company >
Name Market Share Codetel Orange Tricom Viva Others
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 Number of lines Internet usage rate
2004 106 9.2
2005 134 11.9
2006 183 15.4
2007 264 17.7
2008 2009(1-9) 340 399 22.6 25.8
24
< Figure 2-11 Number of internet users >
Reference: OPTIC
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.
25
< Table 2-11 PC distribution rate in major countries >

Country name Argentina Brazil Chile Dominican Republic Mexico Republic of Korea United States
Reference: ITU
2002 27.0 14.2 20.5 5.5 15.2 78.6 59.0
2007 36.4 20.8 36.4 12.5 22.1 80.0 70.2
Growth rate compared to 2002(%) 34.8 46.4 77.5 127.2 45.3 1.7 18.9
< Table 2-12 Annual PC distribution rate >

(Unit: Number)
Classification Number of PC Number of homes PC distribution rate (%)

Reference: CEI-RD
2004 159,432 2,182,764 7.3
2005 177,147 2,182,764 8.1
2006 196,830 2,182,764 9.0
2007 218,700 2,182,764 10.0
2008 243,000 2,182,764 11.1
2009(1-9) 270,000 2,182,764 12.3
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 Representative Telephone E-mail Homepage CAM Informatica, S.A. Marcos Mejia Vice-President Ejecutivo 809.331.7000 Ext.309 marcos_mejia@caminf.com www.caminf.com 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
Major business area
26
Name Telephone Telephone Major business area
SINERgIT 809.368.4000 www.sinergit.com.do Software development : - BPM - ERP - CRM Distribution of PC and related accessories MERCASEND Felix Diaz 809.531.2676 www.mercasend.com Software called Delphos, Apoyo, Matrix, Funciona, Simes, and ICG have been provided to more than 200 companies.
Name Representative Telephone Homepage Major business area
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.
27
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 Government Intranet Feasibility Investigation (Estudio de Factibilidad) Intranet for Public Security Offices (IESP, Interconexion Estatal por la Seguridad publica) Government Intranet (Intranet Gubernamental) Management System for Social Assistance (SIGAS, Sistema de gestion de Ayuda Social) Import/Export Portal (Portal del Exportador) Virtual Government Directory (Proyecto Directorio Virtual) Emergency 911 System Single Window for Business Establishment (Ventanilla Unica para la Creacion de Empresa) Electronic Complaint Management Center (Centro de Gestion y Atencion al Ciudadno) Reference: KOTRA Budget US$ 100,000 Use Feasibility study for the construction of government intranet Information share within 17 public safety offices (Ministry of Communication, Internal Affair, Police, National Security, Construction, Immigration and others) Construction of government intranet G2G System to process social fund cooperation and adjustments Remarks In progress/G2G Opened in 2006.10
N/A
In progress/G2G
US$ 3 million
Executed after feasibility report/G2G Opened in 2006.10 G2G/G2C
US$ 55,000
US$ 30,000 US$ 31,000 N/A
Portal site for Opened in 2006.10 import/export companies G2B Construction of Opened in 2006.9 government address book G2G/G2C Construction of emergency 911 system Planning Stage
US$ 570,000
Integration of systemized Opened in 2006.11 portal for business G2B establishment Electronic process of civil Opened in 2006.12 complaints toward public G2C services
N/A
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,
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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.
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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 Economic Growth (%) Inflation (%) Export Growth (%)
Reference: EU
2009 4.5 10.5 3.1 3.8 8.2 1.1
2010 4.5 6.1 0.2
2011 4.5 5.4 4.0
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)
Export Import
2003 5,470 7,626
2004 5,935 7,888
2005 6,144 9,869
2006 6,610 12,174
2007 7,160 13,597
2008 6,949 16,080
2009 5,765 12,449
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Reference: EU
< Table 2-17 Five Major Export Countries >

(Unit: Million USD)
Rank 1 2 3 4 5
Country USA Netherlands China Haiti Korea
2007 Export scope 597 355 190 155 135
Share(%) 26.4 15.7 8.4 6.8 5.9
Country USA Haiti Spain Netherlands Belgium
2008 Export scope 388 235 156 143 118
Share(%) 20.9 12.7 8.47 7.7 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$)
Rank 1 2 3 4 5
Origin country + FOB standard Country USA Venezuela Taiwan Mexico Columbia Exporting scope 4,034 1,397 895 836 723 Share (%) 30.2 10.4 6.7 6.2 5.4
Shipping country + FOB standard Country USA Venezuela Mexico Columbia Taiwan Exporting scope 4,423 1,397 781 712 612 Share (%) 33.1 10.4 5.8 5.3 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
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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 Sugar Coffee Cigarettes Cacao Ferro Nickel Free Trade Zone Total
2003 97.0 16.5 13.3 77.0 238.7 4,398 4,840.5
2004 93.5 5.8 37.4 59.4 390.0 4,416 5,002.1
2005 73.1 4.1 11.5 26.8 289.1 4,545 4,949.6
2006 104.9 8.79 6.2 57.9 709.9 4,507 5,394.6
2007 98.0 6.37 14 81.0 1,098 4,525 5,822.3
2008 84.8 8.3 11.1 92.6 492 4,544 5,232.8
Reference: Central Bank of Dominican Republic
< Table 2-20 Import Status of Major Trading Goods >

(Unit: Million US$)
Category Consumer Goods Raw material Capital goods Total
2003 2,009 1,072 815 3,896
2004 2,750 1,350 870 4,970
2005 3,086 1,560 1,060 5,706
2006 4,437 2,963 1,345 8,745
2007 5,915 3,561 1,812 11,288
2008 6,856 4,570 2,143 13,569
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
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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 Fabric Electronics Jewels Medical goods Shoes Tobacco Others Total
2003 (Jan) 2,196,435.8 577,590.4 466,820.7 320,725.3 202,547.3 287,620.8 355,018.3 4,406,758.4
2004 (Jan) 2,120,564.7 630,522.6 600,949.9 288,338.6 234,728.7 308,607.4 501,528.9 4,685,240.8
2005 (Jan) 1,904,637.7 700,330.0 602,893.5 284,107.0 315,321.5 334,073.2 608,287.4 4,749,650.3
2006 (Jan) 1,596,319.0 666,415.5 631,498.8 294,127.8 287,852.8 364,529.3 665,905.8 4,506,649.0
2007 (Jan) 173,998.5 89,521.6 76,113.8 38,857.0 36,797.0 51,971.5 98,685.1 565,944.5
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.
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< Table 2-22 Number of Exporting Companies Based on Their Scope >
Scope More than 100 million More than 10 million More than million More than ten thousand Less than ten thousand Total
Reference : CEI-RD
Number of Companies 2005 7 70 255 542 1,994 2,868 2006 9 72 246 481 1,675 2,483 2007 7 81 257 699 2,133 3,177 2008 8 77 293 666 2,041 3,085 2009 8 78 249 563 2,043 2,941
< Table 2-23 Exporting Amount Per Scope >

Scope More than 100 million More than 10 million More than million More than ten thousand Less than ten thousand Total
Reference : CEI-RD
Exporting Amount (Total: FOB US$10,000) 2005 1,310.63 2,185.46 776.37 188.60 34.64 4,495.70 2006 1,684.88 2,397.18 765.47 169.13 30.92 5,047.58 2007 2,341.20 2,259.38 849.46 241.90 37.00 5,728.94 2008 1,846.47 2,624.34 883.83 225.27 38.00 5,617.91 2009 1,218.15 2,442.57 799.51 194.98 41.17 4,696.38
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 Export Import Trade balance

Reference : KOTIS
2003 81,526 71,844 9,682
2004 73,867 121,849 -47,982
2005 120,437 68,544 51,893
2006 108,864 87,216 21,648
2007 120,362 126,158 -5,796
2008 125,500 90,200 35,300
First half of 2009 37,000 11,000 26,000
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< Table 2-25 Major exporting goods to Dominican Republic in 2008 >
(Unit: 10,000 US$)
Classification Scope
Automobile 2,592
Truck 860
Zinc plate 656
Automobile parts 469
Tire 412
Fabric 355
Steel plate 353
Reference : KOTRA
< Table 2-26 Products that showed significant growth in 2008 >
(Unit: 10,000 US$)
Category Zinc plate (35.9%) Medical goods(33.9%)
2007 4,826 2,105
2008 6,560 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$)
Category Automobile(-55.4%) Tire (-13.3%)
2007 46,749 -
2008 25,920 -
Products that were above 1 million USD IN MT14Unit are included Reference : KOTIS
The main product imported from Dominica to Korea was steel alloy (ferro nickel). Imports have increased from 53 million USD (61% of total imports) in 2006 to 114.65 million USD (91%) in 2007. Even though the importation amount has been decreased to 47.77 million USD (-58.3%) in 2008, it is still being ranked as number one product that is being imported to Korea (52.9% of total amount). On the other hand, imports of ferro nickel have decreased in 2008, while imports of used batteries were increasing rapidly along with copper scrap, steel scrap and sanitized medical goods. However, the total import amount has decreased by 28.5%. < Table 2-28 Major import products from Dominican Republic in 2008>
(Unit: Million US$)
Classification Cost Increase rate(%)

Reference : KOTRA
Steel alloy 48 -58.3
Steel scrap 17 2,668.9
Used batteries 8 4,118.9
Sanitized medical goods 4 24.0
Aluminum and steel scrap 2 4,895.9
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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 Exportacin e Inversin de la Repblica 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 Republics export industry, various policies are being implemented to increase nations competitiveness in the global market and to entice company investments into the Dominican Republic. Organization (242 employees) Directly under the presidents 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
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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
Construction Team
Management of construction inspection Support construction certification/ 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
Trade System 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 Academy Team

Management of education course development Operation of academy and establishment of strategies Establishment of training program for teachers Cooperate with other education offices
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)
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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 >
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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 Fund Cost JICA Fund Total cost :USD 7,000,000 - Free credit : USD 6,000,000 - Material donation : USD 1,000,000 3 Floors Total area: 3,065 - 1st floor : 1,075 - 2nd floor: 978 - 3rd floor: 1,012 Provide basic business education to foster human resources required to promote international exports. Construct a center focusing on supporting companies and providing basic business education to foster human resources required to promote international exports. 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. 2007~2008 Next to the CEI-RD Headquarters in Santo Domingo City Private investments composed of middle sized companies Train professionals in international trading 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. Contents
Project Scope
Project goal
Project details
Major training program
Project period Location Beneficiary Expected effect
Result
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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 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
Weak point
Application to this The training program that will be provided in our project will be project upgraded version from I*CEi education program.
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Chapter IV. 1. Outline
Project Execution Plan
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-RDs command. Construction of a trade center, which is a physical requirement Construction of a trade academy for human resources, which is a personnel requirement
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Construction of an integrated data system for operation purposes, which is an operational requirement
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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
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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 >
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< 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 sites 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.
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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)
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Infrastructure 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. 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. 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. 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. Wireless Communication System
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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 Site Tasks Boundary and topographic survey, and land facilities survey Geological survey and earth strength test Road expansion work, arrangement of back-side area Electricity extension work Figure out sewage treatment plant capacity Purpose Figure out boundary of site and facilities underground Building arrangement data Make decision on structure of construction Facilitate transportation system surrounding the site Secure electric capacity Decide sewage treatment method
Soil
Road Electricity Water
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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 Structure Exterior
Residential building (apartment) RC Painting
Commercial building (shopping center) SRC Curtain wall + AL panel + steel
Features
Commercial buildings use SRC structure In order to avoid sunlight, terrace and to form a long span space within the sun blind louver figures at the front building part of the building are being used Since the size of steel structure in the major functional/design factors building is not big, the ceiling Roof insulation constructions are construction is very complex being commonly installed to protect New construction methods and materials the building from the solar heat are being used Detailed constructions are being done Strong colors and open inner/outer space Recently, construction of residential Opened elevation buildings with more than 10 story high has been increased Closed space
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.
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2.1.3 Status of Major Exhibitions

< Table 4-2 Schedules of Dominicas major exhibitions >
Name International Energy Santo Domingo International Steel Exhibition Santo Domingo International Furniture Exhibition Puerto Plata Integrated Exhibition City Santo Domingo Period Annually Time in year October Location Hotel Renaissance Jaragua Hotel Dominican Fiesta Hotel Dominican Fiesta Polideportivo General Gregorio Luperon Teatro Nacional Hotel Dominican Fiesta Estadio Quisqueya Hotel Dominican Fiesta Complejo Deportivo La Barranquita Puerto San Souci Remarks
Santo Domingo
Annually
09.03.12~15
Santo Domingo
Annually
Mid March
Puerto Plata
Annually
Late March
Santo Domingo International Book Exhibition
Santo Domingo
Annually
Late April
Santo Domingo Santo Domingo Construction Exhibition Santo Domingo Automobile Exhibition Santo Domingo Hotel and Restaurant Exhibition Cibao Exhibition Santo Domingo IT Exhibition Constatucion Exhibition Santo Domingo
Every other year Annually
09.05.14~17
Late July
Santo Domingo
Annually
Late August
Santiago
Annually Every other year Annually
09.09.16~20
Santo Domingo San Cristobal
10.10.20~24 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.
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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 Republics 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.
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< Figure 4-4 Building exterior >
< Figure 4-5 Building interior >
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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 Dominicas main products. There is no exclusive exhibition center for export goods. Current exhibition goods: agricultural goods, dairy goods, light industry goods
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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 85rooms 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
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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-RDs main auditorium CEI-RD representatives also understand the need for modern conference facilities.
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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 Dominicas 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 50,000is needed based on the space program given by CEI-RD. By applying USD800/ of construction, total of 40 million USD of construction budget is
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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 Citys 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 Asias 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

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< Table 4-3 Facilities for Major Exhibition Centers >

Classification Location Area Main purpose Aboveground Area Underground Total Scope Structure SONGDO CONVENSIA Incheon Songdo 102,166.20m2 Exhibition center, international convention 37,396.87 m2 19,770.99 m2 57,167.86 m2 1 underground, 4 ground floors Steel reinforced concrete, steel structure CECO Gyungnam Changwon 39,817 m2 Exhibition center, international convention 46,714 m2 46,714 m2 6 floors Steel reinforced concrete, steel structure 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)
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)
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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 countrys 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.
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Name Area Composition Operation
COEX Exhibition Center (Trade Market) Approximately 8,900m2 155 offices with sizes 27~40m2 Professional trading companies exhibit and sell their products Synergistic effect from nearby international meeting center
Name Area Composition
Gyungsangnamdo Tourism Goods Exhibition Center 690m2 Exhibition center, high quality good exhibition center, advertisement center, experience center, sales center
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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.
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2.3 Design Goal 2.3.1 Scope of Trade center and Major Facilities
A. Birds 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 nations 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 >
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<Gallery from Exhibition Center to Export Goods Exhibition Center>
<Insides of trade center that is connected to the outside>
<Front view of the trade center with clear glasses>

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B. Area Per floor

< Table 4-4 Calculation of trade center scope per floor >
Classification Function EXHIBITION GRAND BALLROOM AUDITORIUM 1st FLOOR SHOW ROOM IDC / OFFICE PUBLIC (CIRCULATION) SUB TOTAL CONVENTION HALL CONFERENCE ROOM BUSINESS CENTER / OFFICE LECTURE ROOM PUBLIC (CIRCULATION) SUB TOTAL LECTURE ROOM 3rd FLOOR PUBLIC (CIRCULATION) SUB TOTAL TOTAL 300m2 900m2 3,425m2 15,675m2 900m2 1,000 people, auto screens, battens 140 ~ 450 people, A/V system, translation booths, stage, auto screen, batten partitions into 5 sections, 15 management offices 70 seats x 3 rooms, 40 seats x 1 rooms stair, escalator, elevator, restroom, storage etc Area(m2) 8,600m2 1,050m2 1,400m2 Remarks 480 booths (3mx3m) : Partitions into 4 sections 54 exhibit booths (3mx2m), 1,000 people 540 seats , A/V system , auto screen, translation booths video conference, stage, auto screen CEI-RD regional office concourse, stair, escalator, elevator, restroom, storage etc
750m2
2nd FLOOR
600m2
450m2 750m2 3,450m2 700m2 175m2 875m2 20,000m2
70 seats x 4 rooms, 40 seats x 1 rooms, 25 ~35 seats x 2 rooms stair, elevator, restroom, storage etc
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C. Area Per Use

< Table 4-5 Calculation of the trade center scope per usage >
Classification Function HALL EXHIBITION SHOW ROOM SUBTOTAL CONVENTION HALL CONFERENCE ROOM AUDITORIUM CONVENTION GRAND BALLROOM IDC / OFFICE SUBTOTAL LECTURE ROOM BUSINESS CENTER OFFICE SUBTOTAL PUBLIC SPACE TOTAL / Area(m2) 8,600m2 300m2 8,900m2 900m2 750m2 1,400m2 1,050m2 900m2 5,000m2 1,150m2 computer, documentation center, video conference, flexible spaces management office seminars, banquets, exhibitions, large events, etc flexible spaces modular divisions Int'l conferences, video conference Int'l meetings, banquets, various events, etc Computer server management center, management office Remarks exhibition space, meetings, events, trade shows etc video conference
TRAINING CENTER (TRADE ACADEMY)
600m2 1,750m2 4,350m2 20,000m2
elevator, escalator, machine room etc
stair,
restroom,
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.
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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 buildings 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 buildings 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 Centers 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
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< 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
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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. 68
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 Dominicas 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 >
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Certifying Origin of Goods In order to certify the origin of goods, it requires authorization from DGA and CEIRD 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 >
Pu rch ase a fo rm b y vi si ti ng D G A A ppl i cati on f or i ssu i ng C. O . o f p referen ti al ag reem en t Issu i n g p ro cess
A ppl i cati on of seal i ng & si gni ng
Trad e C o m p any Exp o rt o f

p ro d u cts
D GA
Su b m i ssi on of C. O. A p p ro val o f taki ng out Seal i n g & Si gni ng C EI -R D
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
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- 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 Dominicas 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.
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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-RDs SIVUCEX system and DGAs 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-RDs 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 DGAs SIGA system and only supports small portions of export works. As shown in <Figure 4-11>, SIVUCEX systems functions are Submit integrated export report Review and authorize various documents Final shipment authorization from the shipment site. < Figure 4-11 SIVUCEX Function map >
Major contents of SIVUCEX system are as shown in <Table 4-6>
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< Table 4-6 Major contents of SIVUCEX >

Classification Developer Development Tool Provided service Innovatica.com.do ASP.NET C# - Provide documents needed for exporting goods - Export statistics (Provided to companies who signed up> - 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 VeriSign (Private certification) - 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. - 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. None Three Technical Support (H/W-Network, server, PC management), One secretary Major contents
Major function
Certification Tool
Differences between DGAs SIGA system
Connected office
Service cost Operation organization
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.
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< 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.
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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 Developer Development Tool Major Contents Auto Ever Systems- Interdev .NET * Major system language in Dominica .NET based C#, Java, Oracle, ASP - On-line documents of all import/export documents - 24 hour report, electronic signing - 13 other functions including management, law and storage management functions VeriSign (Private certification) - Connected with SIVUCEX None 60 employees
Major function
Certification Tool Connected office Service cost Operation Organization
< Figure 4-13 SIGA system conceptual Diagram >
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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 Dominicas ITS, international electronic trading trends as well as Koreas 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 eTrade Single Window by making survey into best practices, etc.
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< Figure 4-14 Trend of Global e-Trade >
B. Construction of step-wise electronic trading system based on national development status

UNs 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.
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< Figure 4-15 UNs 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.
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< Figure 4-16 e-Trade development status in each country >
Phi l i ppi nes R ussi a Peru Vi etnam
M al aysi a M exi co C hi na Thai l and I nd o nesi a
Jap an C anad a N ew Zeal and C hi l e
U SA A ustral i a Tai w an
So uth Ko rea Si ng ap o re H o ng Ko ng
Level5 Level 4 Level 3

Starti ng Po i nt ( 81 ~ 100) Starti ng Po i nt ( 71 ~ 80) Starti ng Po i nt ( 61 ~ 70)
Level 2 Level 1
Starti ng Po i nt ( 36 ~ 60) Starti ng Po i nt ( 0 ~ 35)
* D ata :A PEC A ssessm ent Report on A PEC paperl ess Tradi ng D evel opm 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 >
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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 1995 1996
A n n o u n cem en t o f i n teg rated eTrad e m an ag em en t task fo rce
Leg al p o l i cy estab l i sh ed to p ro m o te d evel o p m en t o f eTrad e system 2005 2006
Start eTrad e servi ce
Start el ectro n i c Start el ectro n i c tran sacti o n servi ce frei g h t servi ce
2003
2004
2007
2008
2009
B PR /ISP fo r co n stru cti on of si ngl ewi ndow
1 co n stru cti o n 2 nd co n stru cti on p ro j ect fo r eTrad ep ro j ect fo r eTrad e servi ce servi ce
st
3 rd co n stru cti on p ro j ect fo r eTrad e servi ce
ISP u n d er p ro g ress fo r fu tu re el ectro n i c trad i ng Current 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.
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< 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 eTrade 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 longterm master plan must be established before starting system construction.
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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 Dominicas 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 freightrelated services to its users.
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< Figure 4-21 To-be system conceptual diagram >
C) Composition of Target System

< Figure 4-22 Hardware and Network Configuration >
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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
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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 contractrelated 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
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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
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websites. < Table 4-8 Work Scope and Details >

Trade Information e-Marketplace eMarketing Portal Basic Functions Trade statistics, trend, practical data, trade support, logistical data Offer data, company info, buyer info, exhibition info, credit info 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. 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 Management of linked sites and spec Functions to collect contents and metadata and categorize the contents are available Dead Link, prevention of data redundancy Provide directory categories by data provider
Integrated Search System
Link, collect, and manage contents
Establish a comprehensive search category
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 etransactions between nations and provide exporters and importers with functions to save, read, and search the information.
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< 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
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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 p roducts, finding Buyers via Tel. Fax.
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 A package
(overall) collection o f marketing info rmation such Buyer as o ffer info., seller in fo.
Buyer
Request o f help like market Trade survey Company In vestigation in dividual fo r fin ding buyers, exhibition in formation, tradin g in formation
ITS
(e-Marketing A package Portal) Trade (overall) Company collection o f marketing Registration of info rmation such all kin ds of as finding buyers, marketin g info. o ffer info., an d exp ort exhibition info., supp ort trad ing info.
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
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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
Contract
Sales Order Master L/C T/T Contract D/A Contract

Export License
To issue Certificate of Origin To issue Agricultural Product License etc

Shipping Doc.
Delivery Order Commercial Invoice Packing List Insurance Policy Shipping Request Bill of Lading
Clearance
Request for Customs Clearance License

Negotiation
Bill of Exchange Negotiation Export Expense
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.
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< Figure 4-29 e-Trade Portal Objectives >

To increase business efficiency and trade activation To contribute to trade activation through provision of inform ation for the trade companies and convenient business environments
Simplified workplace
To implem ent user-oriented workplace rather than service-oriented to identify work progress in real time
To realize visualized process base To reinforce collaboration between organizations, To provide good quality services To prevent duplicated document submission /To simplify distribution
To improve business processing speed and capability, allowing real time monitoring of civil appeals and process identification/analysis of problems
To secure flexibility between partners utilizing XML Document To increase business quality of trade companies by providing them with good quality services To increase trade competence by reducing business cost (trade, system investm ent of trade companies To reduce offline businesses for trade partners such as financial institute 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 >
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< 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 Manage the definition and changes of trade service processes Process Monitoring and reporting Process repository management e-Trade Sales Order management (L/C/non-L/C data) Services 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 Sales Order Contract Receipt of export L/C D/A, T/T Approval Request for export approval Approval of export Trade Company Relevant agencies Relevant agencies Trade Company Relevant agencies : MA, CODOCAFE, CNZFE Bank From To Trade Company Trade Company Remark Signed contracts would be linked to e-Marketing Portal
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Request for certificate of origin Issue of certificate of origin Create Invoice, P/L Create Delivery Order Transportation order Shipping B/L or AWB management Management of freight settlement Request for export declaration Approval of export declaration Management of payment for collection, transmission, and L/C types
Trade Company DGA, CEI-RD
DGA, CEI-RD Trade Company
System I/F for DGA
Trade Company Shipping company, Forwarder
Shipping company, Forwarder Trade Company
Customs Clearanc e
Trade Company DGA
DGA Trade Company System I/F for DGA
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 nonelectronic 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.
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< 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
Purchasing a form by DGA Application for issuing Trade preferential agreement C.O. Company Issuing process Export of products Application for signing and sealing Subm ission of C.O. Approval of taking out Signing and sealing
Application of C.O. Trade Company Issuing C.O.
ITS (e-Trade Portal)
DGA
Receiving and DGA processing SIGA Request for signing & sealing
Export of products CEI-RD
Processin g of signing & sealing
CEIRD
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 etrade 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.
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< 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 Delivery of document Management of e-certificate User management & manager functions Security functions Registration of e-trade documents Setting the authority for registered documents Registered documents are available by users at other services Establishing the system that complies with DVCS Issue, disposal, and transfer of e-certificates Acquisition of consolidated user data Manager functions on history and statistics Safe storage of the original and converted copies DVCS-based system for the issue of certificates
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< 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 edocuments, 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
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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 edocuments 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 XMLXML, XMLEDI, and XMLFlat 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.
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< Figure 4-34 Overview of e-Document Relay System >

e-Document Relay System
To implement streamlined business process environments through interconnection with external partners
e-Document Relay & Conversion
To implement connection base in the future

To imp lement infra to p lay a ro le of co re trade n ode in Latin America Reg ion To imp lement saleable system so as to allo w in terconnection with systems in the future
To imp lement infra fo r activation of eDo cumen t To eliminate the existing offline Do cumen t Tx/Rx To p rovide relay an d co nversion services th rough ap plication o f stand ard techn ologies
Partners Interconnection
To pursue User convenience
To imp lement in frastructure available for real time message Tx/Rx th ro ugh in terconnection with d isconnected p artn ers To sug gest in terconnection metho d to fully utilize th e existing in fra
To implement intern et based Document Tx/Rx fo r user familiarity To pursue user co nvenience th rough fault to leran t system with redundancy
< Figure 4-35 Key Factors of the System >
e-Document Relay
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
Message Conversion
To convert standard/non-standard documents such as XML, EDI, Flat File, etc. To support creation of conversion rule through Mapping Tool
Internal Connection
To realize seamless business process through interconnection with e-Trade Portal and e-Trade Document Repository. To provide single view f or the entire e-Trade services through interconnection
Connection with Partners
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
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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 demonbased 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
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XML Messaging Processing XML Conversion
XML data management XML Parsing & Generation Security control of e-documents 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 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
XML communicatio n
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.
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< 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
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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 Main Server Backup Server Main SAN Backup SAN SAN/L2 Router 42U Rack Total Model R710 R710 PS6000E PS6000E 2960 3845 Qty 3 1 1 1 4 1 1 Unit capacity 870W 870W 550W 1,650W 30W 100W 100W Total capacity 2,610W 870W 550W 1,650W 120W 100W 100W 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.
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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)
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< Figure 4-39 TBB(Technical Building Block) Hierarchy Diagram >
Information on Applied Technologies < Table 4-14 TBB(Technical Building Block) Hierarchy Descriptions >
TBB Structure CUI/GUI Substances 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. The technology provides a service of displaying a usercustomized screen and is applied to offer proper screen menu for each trading company. It is an internationally-used web-development environment, especially for recipient countries. CBD (Component based Development) is a comprehensive concept of SW engineering process, methodology, and technology that supports development, assembly, and maintenance of component unit.
User Interface Personalization
Development Environment
.NET CBD
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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. It is the most common methodology of development environment 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 SSO (Single Sign On) is an integrated certification system in which users need only one log-in to use different systems A service to effectively manage web applications a XML-based international standard for document exchange Compared to the existing RDBMS, higher availability and expandability are applied. Extensible Markup Language, the internet language of the next generation with remarkably improved HTML It refers to a system whose internal structure is open and developed according to the standards. Linux is a typical example. 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 (High Availability System) is a technology for business continuity and high availability and used to duplex linked servers. ECC (Error Checking and Correction) can detect and correct errors by adding certain redundancy to the inputted data. 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. 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. Giga networks consists of the internal LAN environment. It is applied to reduce the internal data traffic. IPS(Intrusion Prevention System) is a security solution that
Information engineering methodology EP
Application SSO Application Support Service Data Service External Interface WAS ebXML RDBMS XML Open System 64Bit Computing HA System ECC RAID
System Platform
CAS
Network Security &
Gigabit Network IPS
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can find attached signature in the network and take automatic actions to stop abnormal traffic. Firewall PKI Encryption Secure OS NMS Backup & BRS Hardware and software that can set up measures against unexpected external intrusion. As a verification technology in the Internet-based transactions, it is used for user verification and data encryption. The technology prevents illegal attacks to servers and is used for this project in which security is important. NMS(Network Management System) is a system to effectively manage a large amount of servers and network equipment Backup & BRS(Business Recovery System) is a system to protect the data in the case of system failure.
System Management
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 >
Trade Company BANK
Contract, settlem ent of incidental expenses, paym ents Shipping, transport Inspection of minerals Duty
MSPAS
Export approval
Forwarder
INTABACO
Approval for tobacco products export Approval for CODOCAFE coffee products export Certificate of inspection for animals and plants
DGM
ITS (Integrated Trade System)
DGII
Clearance for export
MA
Certification of legal effect
DGA CEI-RD
CNZFE
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.
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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.
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< Figure 4-41 Work Flow of Export Customs Clearance with Linked Systems >
T rad e C o m p an y IT S S IG A
D raw i ng up a d ecl arati on
Exp o rt d ecl arati on
System I/F
Exp o rt d ecl arati on
V eri f yi n g erro r o f d ecl arati on D esi g n ati ng m eth o d o f eval u ati on D esi g n ati on of a revi ew er
No
O bj ect of i nspecti on?
Yes A ssi gni n g an i n sp ecto r
R ecei vi n g p ro cess o f d ecl arati on
C o n fi rm i ng a d ecl arati o n /Pri nt i t out
Details of export declaration
System I/F
Details of 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 >
[ Step1] U se of I TS system [ Step2] M aki ng BPR/I SP f or rel ated organi zati ons [ Step3] Building its own system of related organizations [Step4] ITS and system I/F
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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
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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 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.
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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 bachelors 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 UASD (Universidad Autnoma de Santo Domingo) PUCMM (Pontificia Universidad Catlica Madrey Maestra) Introduction The first university to be established in the modern history, with the largest numbers of curriculums and students Private School The main campus is located in Santiago de los Caballeros with another campus in Santo Domingo (Distrito Nacional). Name of the related courses Master: International Business Management and Economic Relations Master: Business Management, Marketing, and Economy Doctor: Business Economy Master: Logistics Management Master: Marketing Diploma: Creation and Management of SMEs Master: International Trade Master: E-Commerce Professional Course: CEO Professional Course: International trade laws and etc. International Master: Business Administration (MBA) Diploma: E-commerce and Digital Enterprises Workshop: Management Planning and Export Strategy
UNAPEC (Universidad APEC)
Private School It has 4-year regular undergraduate courses as well as 2-year technical training course. Private School UNIBE provides courses, workshops, seminars and certificates through the graduate school's lifetime education department to educate professionals, and corporate
UNIBE (Universidad Iberoamericana)
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executives. 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. It is a national center run by INTEC to support small and medium sized enterprises. As a recently-established institution, it developed its own education program called Management Development for CEOs. 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 Diverse educational programs are provided to improve business administration capabilities for increased productivity and competitiveness Master: Business Administration (MBA) Management Development Program (PDE)
INTEC (Instituto Tecnolgico de Santo Domingo)
CAMPEINTEC
BARNA Business School
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.
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< Table 4-16 2010 I*CEi Curriculums >

Course Name Lecture "Basics of Overseas Trade" Seminar "Business Plan for Export" Seminar Workshop "DUA" Seminar "Exports to EU" Seminar "Safeguard" Seminar Workshop "TBIS Compensation" Location Santo Domingo, Santiago, La Vega Santo Domingo, Santiago Santiago Santo Domingo, Santiago Santo Domingo, Santiago Santiago Santiago, Puerto Plata, San Pedro Macoris, San Francisco Macoris Santo Domingo, Santiago
Introduction of the Article 84-99 "Export Procedure"
Seminar "Establishment of Export Ministry"
Seminar "Beauty-labeled products of US and the Caribbean Santo Domingo, Santiago countries" Seminar "Labeling Regulations in EU Market" Seminar "Export to the Caribbean Countries" Seminar Business Opportunities in EU Food Market" Seminar "Business Opportunities in EU Aliment Market" Seminar "Establishing trade relationship with Haiti" Seminar "Package in EU Market & International Logistics" Seminar "Sales Contracts and Payment Vehicles" Seminar "Euro Gap" Seminar "Customs Management and Production Activities" Santo Domingo, Santiago Santo Domingo, Santiago Santo Domingo Santiago Santo Domingo, Santiago Santo Domingo, Santiago Santo Domingo, Santiago Santo Domingo, Santiago Santo Domingo, Santiago
Seminar "Regulations for the application of best practices in Santo Domingo, Santiago agriculture and manufacturing" Seminar "Effective Proceeding of Export Offers" Seminar "Quality and Flawlessness of Exporting Plants" Seminar "Export PR and Advertising" Santo Domingo, Santiago Santo Domingo, Santiago Santo Domingo, Santiago
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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 Education for trading companie s Specialist Programs by sector Name of Course 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 Transportation insurance risk management strategies
Note
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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 CEO Program Trade practices, International Marketing, Foreign languages for business, Foreign Exchange and Finance, ITOA Global Leadership 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
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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

Establish Education System Develop Education course
Develop e-Trade prof essional education curriculum Analyze education curriculum and education course matrix Commence electronic trade education by stage Assign e-Trade prof essional education exclusive agency
Operate Commence Education Practice Practicing education organization
Produce e-Trade professionals
Educate electronic trade prof essionals
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,
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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 >
t r a d e E l e c t r o n i c r k e t i n g r e s e a r c h / m a M a r k e t N e g o t i a t i o n c o n t r a c t T r a d e f o r m a t T r a d e n a n c i a l e x c h a n g e / f i F o r e i g n c r e d i t P a y m e n t /
t r a n s p o r t a t i o n D i s t r i b u t i o n /
C u s t o m s
i n s u r a n c e
F r e i g h t
m e d i a t i o n
C l a i m /
r e s e a r c h
C r e d i t
e x a m p l e s
T r a d e
E n g l i s h
T r a d e
t a x e t c )
O t h e r ( l a w /
Ex/import distribution professional G eneral trade practice Ex/import fee payment business Educate international business negotiation/contract professional T rade 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 Koreas Trade Academy), higher quality curriculum can be developed.
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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 Koreas 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.
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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 >
P ro j ect Executi ng A g ency (C EI -R D )
R eq u est o f p ro m o ti ng l o an acq u i ri n g p ro ced u res R eq u est o f p ro m o ti ng l o an acq u i ri n g p ro ced u res
M EPyD
A n al ysi s on th e p ro j ect an d tech n i cal revi ew
M OF
DGI P
C on su l tati on w i th M O F and rel evan t m i ni stri es R egi strati on i n the P N PI P Li st
D rafti n g a rep o rt on l o an co n d i ti o n s an d n ecessi ty revi ew
R eq u est o f ap p ro val to M O F
M OF
R eq u est o f l o an
G overn m ent of th e l en der co untry

Presen tati o n o f A /R , L/A (D raft)
I n ter-cou ntry neg oti ati on

R eq u est o f ap p ro val fo r L/A (D raft)
N ati onalA ssem b l y of D om i ni can R epu bl i c

A p p ro val b y th e N ati o n al A ssem b l y
En teri ng i n to L/A
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.
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< 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 Economa, Planificacin y Desarrollo), relevant authorities, and MOF(Ministry of Finance), the project was registered on
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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 IMFrecommended 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.
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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.
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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.
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< Table 4-18 Work scope and duration of Consulting Service >
Phase Activities Period Analysis of the Feasibility Study report Basic design of the trade center and trade information system Support for writing a bidding document under theGuidelines Basic Design for Procurement under the EDCF Loan Cooperation in the procedure for approval of the bidding document 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 shortlisted supplier 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
5 months
Bidding Support
3months
Supervision
- 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 nonresident. Local supervising consultants will be employed for each sector.
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6.4 Grounds to calculate the consultant input

< Table 4-19 Consultant Structure of Each Phase >
Phase Category Project Manager (PM) Architecture Consultant Basic Design Level of staff Over principal engineer Over senior engineer including architect # of Staff
Foreign 14, 50M/M Business Process Re-engineering(BPR) Over principal engineer Local 3, Consultant 15M/M ITS engineering consultant Over senior engineer ITS Application Development consultant Project Manager (PM) Architecture Consultant Over senior engineer Over principal engineer Architect
Bidding Support
Foreign 5, Business Process Re-engineering(BPR) Over principal engineer 13M/M Consultant ITS engineering consultant ITS Application Development consultant Project Manager (PM) Over senior engineer Over senior engineer Over principal engineer
Supervision
Architecture Consultant IT engineering consultant Application Development consultant
Foreign 7, 31M/M Architect Local 7, Over principal engineer 38M/M Over senior engineer
6.5 Calculation of Consulting Costs

Consulting costs for each phase were calculated based onAppendix 2. Specifications of Project Cost Estimates.
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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
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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
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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
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Access to the newest IT trend The introduction of Koreas 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 Koreas 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 Koreas 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
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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.
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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 rch i tectu ralU n i t A rch i tectu ralm ai n ten ance/stru cture,i n teri o r, exteri o r fi ni sh es M ech an i calm ai ntenance/stab l e eq u i p m ent op erati on El ectri calm ai n ten an ce/eff ecti ve o p erati on of el ectri caleq u i p m ent Disaster prevention, elevator maintenance /equipment maintenance
M ech an i calU n i t Faci l i ty M ai n ten ance T eam El ectri calU n i t Di saster P reven ti on U ni t
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.
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< Figure 4-48 Example of Maintenance Structure at the Similar Facility in Korea >
Tech ni calSup po rt Team H ead (1)
Di recto r of Techn i cal Sup port Team and C onstructi on U ni t H ead (C oncurrent posi ti on)
C o n stru ctio n U n i t(5 )

I n-charg e/A d m i ni strati o n: 1
M ach i n ery U n i t(3 ) Uni t H ead : 1

Electri city U n i t(3 ) U ni t H ead : 1

Fire-p ro o f U n it(3 ) U ni t H ead : 1 Li ft/A d m i ni strati o n: 1 Fi rep ro o f/C o n stru cti on: 1
C o n stru ctio n M g m t U ni t (5 ) Uni t H ead : 1

C onstructi o n M gm t : 3
D esi g n: 1 C o n stru cti on : 1
C o n stru cti on : 1
Adm i ni strati ve Su p p o rt : 1
R ecei p t/G u i de : 1
M ai ntenance of
constructi on C onstructi o n w ork order pl acem ent Trade C en ter space m anagem ent Bl uepri n t(C A D ) m anagem ent Statutory i nspecti on m anagem ent Perm i ssi on/approval m anagem ent N ew constructi on pl an establ i shm ent
M ai ntenance o f
m achi nery M achi nery w o rk o rd er pl acem ent M anag em ent o f faci l i tyrel ated o utsourci ng co m p any Puri fyi ng tank o utso urci ng m anag em ent Po w er faci l i ty o utso urci ng m anag em ent A utho ri ti es-rel ated b usi ness( K O G A S) Statuto ry i nsp ecti on m anag em ent
M ai ntenance o f el ectri ci t y
El ectri c w o rk o rd er pl acem ent U PS o utso urci ng m anag em ent W ater sp arkl i ng faci l i t y o utso urci ng m anagem ent El ectri c b reaker m anag em ent A utho ri ti es-rel ated b usi ness( K ESC O ) Statuto ry i nsp ecti on m anag em ent
M aintenance o f fi re-proof
w o rks Fi re-p ro of/l i ft w o rks o rd er pl acem ent Li ft o utso urci ng m anag em ent M anag em ent o f reso urces o f the Trad e C enter A utho ri ti es-rel ated b usi ness( Fi re Stat i on) Statuto ry i nsp ecti on m anag em ent
O rd er-p l aci ng ,
co nstructi o n m anagem ent C o nstructi on recei p t/A p p r o val C o nstructi o n w rap -up m anag em ent Land scap e co nstructi on m anag em ent Ci vi l p eti ti o n m anag em ent C o nstructi o n d raw i ng revi ew FM S i np ut m anag em ent
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.
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< Figure 4-49 Overview of System Operation >
Optimal System Operation

Constant System Monitoring Centralized Management & User-oriented Operation Remote Tx/Rx Management Standardization of Operation Procedures
Operation Support from Developer

Operation Plan
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
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.
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< Figure 4-50 Strategy of Maintenance >
< Table 4-20 Maintenance Details by Category >

Category H/W, N/W equipment to be introduced Scope of Support Warranty against defects Repair support Details 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
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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 Errors in design and program Change in hardware platform with the same number of users
S/W to be developed and applied
Correction of defective parts
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 Organization Period The number of staff Setting System developer Two years upon the completion of final review (24 months) 2 Person 1st year : 2 experts will reside in Dominica 2nd year : 1 will reside in Dominica, 1 for remote support - 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) Details
Scope
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
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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 >
Trade Academy
Instructor Pool
Consultation Committee
Strategy Planning Team

Establishment of business strategies Management of Academy Hire of instructors Development of textbooks and management Development of certificate and operation
Trade Training Team

Development of education course Operation of education course Management of trainee Operation of On-line education
Business Cooperation Team

Support of corporate training Industry-academic cooperation Project Overseas internship project
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
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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.
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9. Project Period and Schedule

9.1 Construction of Trade Center 9.1.1 Construction Period
Pl an Item D esi gn
M 1 M 2 M 3 M 4 M 5 M 6 M 7 M 8 M 9 M 1 0 M 1 1 M 1 2 M 1 3 M 1 4 M 1 5 M 1 6 M 1 7 M 1 8
Basi c d esig n anal ysi s and d etaild esi gn
M easuri ng / p rep ar ati o n for start-up Ci vi l en g in eeri n g / b asic co n stru ctio Fram n ew o rks( St eel -fram ed co ncrete/steel -f am e) Fi ni sh in g an d su p p lem entary w o rks
n o i t c u r t Status anal ysi s/co nst ructi on p l an establ ishm s M ach i n ery n o eq ui p m ent C
B ui l di ng
ent O rd er fo r m ateri als
Ai r-co nd i ti oni ng p i pi ng w o rks,ai r-co ndi ti o ni ng d uct w o rks,ai r-cond i ti oni ng i nstal lati on,eq ui p m ent i nstal l ati on
Test run
Status anal ysi s/co nst ructi on p l an establ ishm ent O rd er fo r m ateri als El ectri c eq ui p m ent
Sw i tchb o ard ,p ow er g ener ati o n eq ui pm ent,el ectro ni c co m m o n li ne i nstal l at ion
Test run
O n -si te trai ni ng
6p erso ns/4w eeks/ o ne tim e
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
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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.
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9.2 Integrated Trade System 9.2.1 Period for Establishment

e-M arketi ng Po rtal e-Trade D o cu m ent R epo si to ry M 1 M 2 M 3 M 4 D evel o p m en t M 5 M 6
Test & I m pl em entati on ed ucati on
M 7
M 8
M 9
M 10
M 11
M 12
A nal ysi s an d D esi gn
Step 1
Analysis and Design
D evelop m ent Implementation

education Test & Implementation education Test & Implementation educa tion
Test &
Analysis and Design e-Trad e Po rtal Step 2 e-Trad e R el ay System ICT O verseas Trai ni ng H /W , N /W , S/W I n stal l ati on 5p erso n s/2w eeks /on e ti me Analysis and Design
Development
Development
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
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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
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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.
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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.
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< Figure 5-1 Total Costs >

(Unit: USD)
EDCF Item Foreign Currency Portion Korea 1. Trade Center Construction

1) Land Acquisition & Infrastructure 2) Architecture 3) Mechnical 4) Electric
Local Currency Portion 3rd Countries 1,481,240 186,200 611,040 684,000 430,636 430,636 1,911,876 207, 794 95,594 112, 200 147,000 9,635,440 1, 064, 565 481,772 582, 793 724,500 8,763,940 7,253,060 712,880 798,000 724,500
EDCFTotal 19,000,000 13,604,000 2,546,000 2,850,000 5,586,904 735,182 4,358,390 493,332 87,882 1,969,266 345,506 174,616 170,890 26,989,558 2, 980, 471 1,349,478 1, 630, 993 29, 970
Gov. of Dominican Republic 25,474,318 25,474,318 -
Total
8,754,820 6,164,740 1,222,080 1,368,000 4,431,767 304,545 3,633,890 493,332 87,882 1,822,266 345,506 174,616 170,890 15,442,242 1, 708, 112 772,112 936, 000 29, 970 17,180,324 57. 30% 27. 50%
44,474,318 25,474,318 13,604,000 2,546,000 2,850,000 5,586,904 735,182 4,358,390 493,332 87,882 1,969,266 345,506 174,616 170,890 52,463,877 1,349,478 7, 551, 001 2,623,194 4, 927, 807 1,049,278 29, 970 62,443,604 100%
2. Integrated Trade Data System

1) Equipm en t 2) S/WDevelopm ent 3) Installation &Test
3. Trade Academy 4. Consulting Services 5. Training

1) Local Training 2) Overseas Training
Base Cost 6. Taxes &Duties 7. Contingencies

1) Physical C ontingency 2) Price Contingency
25,474,318 1,349,478 4, 570, 530 1,273,716 3, 296, 814 1,049,278 32,443,604 52. 00%
8. PM O(2%of base cost) 9. Service Charge(0.1%of EDCF) Total Percentage(%) of EDCF Percentage(%) of Total
2,119,670 7. 10% 3. 40%
10,700,005 35. 70% 17. 10%
30,000,000 100% 48. 00%
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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$)
Category EDCF Recipient Total Out of EDCF (%) Out of Total (%)
Foreign Currency Korea 17,180,324 17,180,324 57.3% 27.5% 3rd country 2,119,670 2,119,670 7.1% 3.4%
Local 10,700,005 32,443,604 43,143,609 35.7% 69.1%
Total 30,000,000 32,443,604 62,443,604 100% 100%
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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 Land Acquisition
Amount(USD) US$18,750,000
Description/Precondition
High Voltage Cable Construction
Road Infrastruc Widening ture Construction Water and Sewage Construction Soil/Undergro und Utility Survey
The building-to-land ratio - 40%, floorage - 15,000 square meters, price of land per square meters - 500 USD * Based on Approx. 7,500KVA Transformer Installation for Capacity of 22.9KV/380-220V (Korean Standard) * Construction Range : Assuming 600m (perimeter of property line abuts US$545,455 onto roads) * Material Cost : 360,000,000 (US$ 327,000) Labor Cost : 120,000,000 (US$ 109,000) Overhead Cost : 120,000,000 (US$ 109,000) * Based on Unit cost for Korean Road Widening Construction US$ 8,180/meter (Based on 2008 Korean Procurement Service Data) US$4,909,091 * Widening Construction Range : assuming 600m (perimeter of property line abuts onto roads) * Expansion Construction Range : assuming 600m US$218,182 * not including additional Sewage Treatment Plant construction cost due to insufficient capacity of existing plan US$54,545 US$5,727,273 * Grand Balloom: Banquet Table 36 EA Banquet Chair 360 EA * Convention Hall: Conference Table 4 SET Conference Chair 320 EA US$818,182 * Conference Room: Conference Table 117 SET Conference Chair 351 EA * Office Desk & Chair: 108 EA * Computer Classroom Desk & Chair: 72EA * Miscellaneous * Office Computer : 109 EA US$178,864 * Office Combination (printer, scanner & fax Machine): 35 EA * Computer for computer Classroom :36EA US$997,045 * Soil Test: 10 Boring Hole per each Building * Proposed Building Location Underground Utility
Furniture & OA
Office Furniture & Equipment
OA Equipment
Total
US$25,474,318
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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.
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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.
Floor Concrete floor/ Exhibition hall epoxy coating Convention Vinyl tile related Auditorium Offices/Lec ture rooms Wooden flooring Vinyl tile Category Wall Vinyl paint Vinyl paint Partial painting / partial wood Vinyl paint Ceiling Exposed steel structure sound absorption tex Patterned wood on gypsum board / sound absorption tex sound absorption tex Note
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) Rooftop Units 30RT(air conditioning) 50RT(air conditioning) Water tank Water pump Ventilator PACair conditioner Fire pump Pipes and ducts Others For freezer For circulating cold water For circulating cooling water Room air conditioning For water supply
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<Main materials(electric) specification >

Item High pressure Switchgear Low pressure transformer(1000KVA):lighting/heating transformer(2000KVA):power/for events use Power generator UPS equipment Feeder Power equipment Video/sound equipment pipes/wires and tools others 3.3m x 1.5 million won 1000KVA 160KVA parallel (including battery) Power distribution unit exhibition power/lighting/heating lights MCC sub-equipment Specification
The total costs of architecture, mechanical, and electric works are as follows.
(Unit: US$)
Item Architecture Mechanical Electric Total Cost
Amount 13,604,000 2,546,000 2,850,000 19,000,000
Materials 7,926,800 1,527,600 1,710,000 11,164,400
Labor 5,677,200 1,018,400 1,140,000 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.
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1. Hardware
Item Main Server Backup Server Main SAN Storage Backup SAN Storage Total Specification/Usage 2way 4core, 32GB, 146GB*2 2way 4core, 8GB, 146GB*2 500GB*16 units (8TB) 500GB*48units (24TB) Qty 3 1 1 1 6
2. Network
Item SAN/L2 Switch Router Total Specification/Usage 24Port 2Port 10/100/1000, 4Port Serial, Over 4Slot, Redundant power supply Qty 4 1 5
3. Software
Item Vmware Firewall / VPN Web Server Web Appl. Server Database EDMS Other Utilities Total Specification/Usage VMware vSphere 4 Enterprise Plus for 1 processor 2Gb firewall, 1Gb 3DES VPN Web to B JEUS SQL Enterprise EDM Engine Backup, SMS/NMS, etc. Qty 1 1 3 3 2 2 1 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.
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[Phase 1]
Category e-Marketing Portal Electronic Document Repository Direct Costs Total Period 6M 5M Amount(US$) $462,834 $322,158 $459,000 $1,243,992
[Phase 2] 3. Trade Portal Establishment

Category e-Trade Portal Electronic Document Relay System Direct Costs Total Period 8M 6M Amount(US$) $1,593,393 $909,205 $611,800 $3,114,398
Estimate of Operating Costs: Two developers are supposed to stay in Dominica for a year to support the system maintenance and one will provide remote support for a subsequent year. Accordingly, operation costs cover maintenance labor and direct costs.
Category Maintenance Outsourcing Cost Direct Costs Total Period 24M Amount(US$) $385,532 $107,800 $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 Labor costs for expert dispatch Direct costs Total Period 2M Amount(US$) US$58,282 US$29,600 US$87,882
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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 1. Phase I: basic design, drafting RFP 2. Phase II: Evaluation of proposal/Contract support 3. Phase III: Supervision Total US$775,764 US$1,969,266 Foreign: 7, total 31MM Local: 7, total 38MM Amount(US$) US$951,227 Note Foreign: 14, total 50MM Local: 3, total 15MM 13MM
US$242,275 Foreign: 5, total,
2.5 Training
According to consultations with CEI-RD, the training costs cover on-site education (dispatch of experts) and overseas training (invitation to Korea for training). On-site education will be provided by architecture and IT experts. One architect and two IT experts (1 for hardware and 1 for software) are contracted to conduct education for 6 months and 1.5 months, respectively.
Category Cost for architectural expert dispatch Cost for IT expert dispatch Direct costs Total Period 6M 3M Amount(US$) US$67,320 US$30,596 US$76,700 US$174,616
Overseas training will be implemented in Korea for two weeks, targeting 20 trainees(10 for trade academy, 10 for IT).
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Category The number of trainees Period housing food Daily cost Basic Costs insurance Air fare Sub total Professional Education costs Others Education costs Sub total Program management cost Total Allowance Material costs Orientation, etc Teaching Korean Completion Ceremony
Amount(US$) 20 13 days US$50 US$20 US$20 US$40 US$2,500 US$74,200 US$7,800 US$2,400 US$4,800 US$1,290 US$2,400 US$92,890 US$78,000 US$170,890 Per day Per day Per day
Note
Per business trip Per business trip
30$ per day
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
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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$8.4 mil., but it was regarded that this might lead to the overestimates of the price reserve fund, so it was adjusted to 89.23%.
2007 Dominica Korea World
source: IMF
2008 10.64 4.67 5.98
2009 1.44 2.60 2.54
CPI (2007~2009) 6.01 3.26 4.17
6.14 2.53 4.00
2011 Dominica Korea World 5.903 3.269 4.179
2012 12.140 6.700 8.570
2013 18.760 10.230 13.130
CPI for the project period 12.268 6.733 8.626
Compound interest is applied to CPI for the project period: (1+r)n
Contingency The following is quantity and price contingency calculated based on the above.
(Unit: US$)
EDCF Item Foreign Korea

1. Direct costs 2. Qty contingency Total(1+2) Price contingency 15,442,242 772,112 16,214,354 936,000
3rd country
1,911,876 95,594 2,007,470 112,200
Local
9,635,440 481,772 10,117,212 582,793
Sub total
26,989,558 1,349,478 28,339,036 1,630,993
GOD
Total
25,474,318 1,273,716 26,748,034 3,296,814
52,463,877 2,623194 55,087,070 4,927,807
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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"
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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 Consulting Architecture Construction Mechanical Electric Introduction of equipment The first phase development The second phase Development Maintenance Consulting
Y1
1,181,560 2,040,600 381,900 427,500 735,182 624,403 42,723 6,034 5,439,902
Y2
393,853 9,522,800 1,782,200 1,995,000 416,269 3,317,718 123,333 87,882 85,445 54,496 42,722 19,700 17,841,508
Y3
393,853 2,040,600 381,900 427,500 246,666 120,120 2,980,471 4,009 6,595,120
Y4
123,333 137 123,470
Total
1,969,266 13,604,000 2,546,000 2,850,000 735,182 1,040,672 3,317,718 493,332 87,882 85,445 174,616 85,445 2,980,471 29,970 30,000,000
Note
System
Overseas training Expert dispatch Education Overseas training Contingency Loan commission Total
Trade Academy
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< Table 5-3 Annual Spending Plan-DR >

(Unit: US$)
Category Site acquisition Infra building Trade center furniture works Taxes and utilities Contingency Project management Total
Y1
18,750,000 5,727,273
Y2
-
Y3
-
Total
18,750,000 5,727,273
Note
997,045 1,349,478 4,391,643 178,887 1,049,278 28,868,916 1,175,932 2,398,756
997,045 1,349,478 4,570,530 1,049,278 32,443,604
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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
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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.
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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 PEA Constructora Teddy, S.A Mera,Munoz Fondeur, S.A Grupo P Average Residence Factory Commercial Bldg.(Including Convention) 900~1,000 Construction Enterprise in Santiago Construction Enterprise in Santiago Construction Enterprise in Santo Domingo Remarks
700~900
1,100
500~600
180
900~1,200
800~1,000 750
250~300 230
1,000~1,200 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
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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 Gov. Office Building Sports Complex Exhibition Hall Average Construction 63.71 75.50 66.96 67.24 Mechanical Work 21.16 10.67 14.43 17.90 Electric Work 9.95 10.49 14.67 10.59 Communication Work 5.08 3.34 3.94 4.28 Total 100 100 100 100
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
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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 System Name Transaction Function Function Internal External External Input External External Point Logical Interface Addition Modification Deletion Output Inquiry File File
ITS (Integrated Trade System)
159
147
146
146
108
260
4,562
When assuming the required man-hour per 1FP as 11.0MH/FP, the estimated manhours 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,
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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.
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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.
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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
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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 Inflation Rate Wage Increase Rate5
2007 6.14 11.3
2008 10.64 3.8
2009 1.44 2.8
Average 6.01 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. Feasibility Study of the Establishment of the CIBAO Trade Center in the DR
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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 Construction of the trade center - Securing land, approval, construction works, machinery works, and electrical works Integrated Trade System - Equipment, R&D cost, installation, test-run Trade academy Consulting service Training - Local training, overseas training Contingency Loan Commission Total
Dominican Republic US$19,000K Land acquisition and infrastructure Taxes and duties US$25,474K US$1,349K
US$5,587K Contingency
US$4,570K
US$88K US$1,969K US$346K Project management cost US$1.049K
US$2,980K US$30K 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.
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< Table 6-6 Investment Plan by Years-EDCF >

Category Consulting Construction Construction Machinery Electricity Equipment 1 stage development 2nd stage development Maintenance & repair Consulting Overseas training Dispatch of an expert Overseas training
st
Y1 1,181,560 2,040,600 381,900 427,500 735,182 624,403 42,723 6,034 5,439,902
Y2 393,853 9,522,800 1,782,200 1,995,000 416,269 3,317,718 123,333 87,882 85,445 54,496 42,722 19,790 17,841,508
Y3 393,853 2,040,600 381,900 427,500 246,666 120,120 2,980,471 4,009 6,595,120
Y4 123,333 137 123,470
Total 1,969,266 13,604,000 2,546,000 2,850,000 735,182 1,040,672 3,317,718 493,332 87,882 85,445 174,616 85,445 2,980,471 29,970 30,000,000
Remarks
System
Trade Academy
Training Contingency
Loan Commission Grand Total
< Table 6-7 Investment Plan by Years-DR >

Category Land Acquisition Infrastructure Cost Cost for furniture of the trade center Taxes and duties Contingency Project management cost Grand Total 28,868,916 1,175,932 Y1 18,750,000 5,727,273 997,045 1,349,478 4,391,643 178,887 1,049,278 2,398,756 Y2 Y3 Total 18,750,000 5,727,273 997,045 1,349,478 4,570,530 1,049,278 32,443,604 Remarks
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< Figure 6-1 Details of the Project Cost >

Project Cost
50,000,000 40,000,000
Cost (Unit:$)
) $ :
30,000,000
20,000,000 Fo urth-year

10,000,000 Thi rd-year 0 Second-year Fi rst-year
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.
1. Tr ad 2. e In C te en gr te at r C ed on Tr str ad uc eD tio at n a 3. Sy Tr s te ad m eA 4. C ca on de su m lti y ng Se rv 5. ic e Tr ai ni 6. ng Ta xe s& D 7. ut 8. Co ie Pr s nt oj in ec g en tM c ies an ag em en tC 9. os t Se rv ice Ch ar ge
Cost Item
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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 >
Maintenance Cost for Trade Center
Annual Cost (unit: $)
Present Value
Year
Future Value
) Detailed operation cost of COEX is the internal data, and is not subject to disclosure.
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< Figure 6-3 Annual Trade Center Maintenance Costs (Present Value) >
Maintenance Cost for Trade Center (PV)
Year
Present Value
< Table 6-8 Trade Center Maintenance Costs >

(Unit : US$)
Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value
2013 2,872,513 2,289,950 2018 4,614,352 2,087,299 2023 6,177,009 1,585,484 2028 8,268,862 1,204,313 2033 11,069,123
2014 3,654,069 2,600,894 2019 4,891,525 1,975,605 2024 6,548,046 1,500,643 2029 8,765,551 1,139,869 2034 11,734,017
2015 3,873,560 2,461,717 2020 5,185,346 1,869,888 2025 6,941,371 1,420,342 2030 9,292,075 1,078,873 2035 12,438,849
2016 4,106,235 2,329,988 2021 5,496,817 1,769,828 2026 7,358,321 1,344,338 2031 9,850,227 1,021,141 2036 13,186,019
2017 4,352,886 2,205,307 2022 5,826,996 1,675,122 2027 7,800,317 1,272,401 2032 10,441,905 966,499 2037 13,978,070
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Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Total
914,780 2038 14,817,697 694,855 2043 19,835,730 527,803 2048 26,553,127 400,912 Future Value Present Value
865,829 2039 15,707,758 657,672 2044 21,027,211 499,559 2049 28,148,105 379,459 533,797,554 45,203,706
819,498 2040 16,651,283 622,479 2045 22,290,262 472,827 2050 29,838,890 359,153
775,645 2041 17,651,483 589,170 2046 23,629,181 447,526 2051 31,631,236 339,935
734,140 2042 18,711,762 557,643 2047 25,048,526 423,578 2052 33,531,243 321,744
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%. Feasibility Study of the Establishment of the CIBAO Trade Center in the DR
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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 Future Value Present Value Year Future Value Present Value Total
2012 313,912 280,279 2016 1,189,223 674,797 Future Value Present Value
2013 998,304 795,842 2017 1,260,657 638,688 8,695,240 5,032,484
2014 1,058,270 753,256 2018 1,336,381 604,511
2015 1,121,837 712,948 2019 1,416,654 572,163
Discount rate=12%, inflation rate=6.01%
< Figure 6-4 Annual Maintenance Cost for the Integrated Trade System >
Maintenance Cost for Integrated Trade System
Present Value
Year
Future Value
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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>.
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< Table 6-10 Annual Cost Flow (Future Value) >

(Unit : US$) Category 2011 2012 2013 2,850,000 246,666 0 393,853 120,120 1,349,478 2,980,471 1,049,278 4,009 2,872,513 2014 0 123,333 0 0 0 0 0 0 137 3,654,069 2015 0 0 0 0 0 0 0 0 0 3,873,560 Annual Cost 2016 2017 0 0 0 0 0 0 0 0 0 4,106,235 0 0 0 0 0 0 0 0 0 2018 0 0 0 0 0 0 0 0 0 2019 0 0 0 0 0 0 0 0 0 2020 0 0 0 0 0 0 0 0 0 2021~2052 0 0 0 0 0 0 0 0 0 Total 44,474,318 5,586,904 173,327 1,969,266 260,061 1,349,478 7,551,001 1,049,278 29,970
Trade Center 27,327,273 14,297,045 Construction System 1,359,585 3,857,320 Development Trade Academy 0 173,327 Consulting 1,181,560 393,853 Service Training 42,723 97,218 Taxes and 0 0 Duties Contingency 4,391,643 178,887 Project Management 0 0 Cost Loan 6,034 19,790 Commission Trade Center Maintenance 0 0 Expense System Maintenance 0 313,912 Expense Total Inflation rate=6.01%
4,352,886 4,614,352 4,891,525 5,185,346 500,247,068 533,797,554
998,304
1,058,270 4,835,809
1,121,837 4,995,397
1,189,223 5,295,458
1,260,657 1,336,381 1,416,654
8,695,240
34,308,818 19,331,352 12,864,693
5,613,543 5,950,734 6,308,179 5,185,346 500,247,068 604,936,398
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< Table 6-11 Annual Cost Flow (Based on Present Value)>

(Unit : US$) Category Trade Center Construction System Development Trade Academy Consulting Service Training Taxes and Duties Contingency Project Management Cost Loan Commission Trade Center Maintenance Expense System Maintenance Expense Total 2011 27,327,273 1,359,585 0 1,181,560 42,723 0 4,391,643 0 6,034 0 2012 12,756,219 3,444,036 154,756 351,655 86,802 0 159,721 0 17,669 0 2013 2,272,003 196,641 0 313,977 95,759 1,075,796 2,376,013 836,478 3,196 2,289,950 2014 0 87,876 0 0 0 0 0 0 98 2,600,894 2015 0 0 0 0 0 0 0 0 0 2,461,717 Annual Cost 2016 2017 0 0 0 0 0 0 0 0 0 2,329,988 0 0 0 0 0 0 0 0 0 2,205,307 2018 0 0 0 0 0 0 0 0 0 2,087,299 2019 0 0 0 0 0 0 0 0 0 1,975,605 2020 0 0 0 0 0 0 0 0 0 1,869,888 2021~2052 0 0 0 0 0 0 0 0 0 27,383,058 Total 42,364,494 5,088,047 154,756 1,847,284 225,284 1,075,796 6,927,377 836,478 26,997 45,203,706
0 34,308,818
280,279 17,260,136
795,842 10,255,655
753,256 3,442,033
712,948 3,174,665
674,797 3,004,785
638,688 2,843,995
604,511 2,691,810
572,163 2,547,768
0 1,869,888
0 27,383,058
5,032,484 108,782,610
Discount rate=12
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Cost flow during the period between 2011 and 2052 is as shown in <Figure 6-5>. < Figure 6-5 Annual Cost Flow >
( ) Cost Flow (Present Value)
40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052
Annual Cost (Unit:$) ( :$)
Present Value
Year
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.
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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.
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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 >
Office Space / Lecture Room (Present Value)
Year
Present Value
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< Table 6-12 Income Benefit from Lending of Office Space/Lecture Room >
(Unit : US$)
Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Total
2013 537,749 428,690 2018 1,039,261 470,109 2023 1,673,740 429,607 2028 2,695,575 392,595 2033 4,341,250 358,772 2038 6,991,627 327,862 2043 11,260,084 299,616 2048 18,134,479 273,803 Future Value Present Value
2014 709,829 505,242 2019 1,143,187 461,714 2024 1,841,114 421,936 2029 2,965,132 385,585 2034 4,775,375 352,365 2039 7,690,789 322,008 2044 12,386,093 294,266 2049 19,947,926 268,914
2015 780,812 496,220 2020 1,257,505 453,469 2025 2,025,225 414,401 2030 3,261,645 378,699 2035 5,252,912 346,073 2040 8,459,868 316,258 2045 13,624,702 289,011 2050 21,942,719 264,112 285,497,049 14,710,277
2016 858,893 487,359 2021 1,383,256 445,371 2026 2,227,748 407,001 2031 3,587,810 371,937 2036 5,778,204 339,893 2041 9,305,855 310,610 2046 14,987,172 283,850 2051 24,136,991 259,395
2017 944,782 478,656 2022 1,521,582 437,418 2027 2,450,522 399,733 2032 3,946,591 365,295 2037 6,356,024 333,824 2042 10,236,440 305,064 2047 16,485,890 278,781 2052 26,550,690 254,763
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, 180
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)
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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 >
Exhibition hall / Conference Room (Present Value)
Year
Present Value
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< Table 6-13 Income Benefit Lending Exhibition Hall and Meeting Room >
(Unit : US$)
Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Year Future Value Present Value Total
2013 1,865,572 1,487,222 2018 4,807,234 2,174,549 2023 7,742,099 1,987,204 2028 12,468,728 1,816,000 2033 20,081,011 1,659,545 2038 32,340,670 1,516,570 2043 52,084,972 1,385,912 2048 83,883,368 1,266,511 Future Value Present Value
2014 2,626,725 1,869,651 2019 5,287,958 2,135,718 2024 8,516,309 1,951,718 2029 13,715,601 1,783,571 2034 22,089,113 1,629,910 2039 35,574,737 1,489,488 2044 57,293,469 1,361,164 2049 92,271,705 1,243,895
2015 3,069,984 1,951,031 2020 5,816,754 2,097,580 2025 9,367,940 1,916,866 2030 15,087,161 1,751,722 2035 24,298,024 1,600,805 2040 39,132,210 1,462,890 2045 63,022,816 1,336,857 2050 101,498,876 1,221,682 1,318,167,305 66,400,694
2016 3,575,629 2,028,908 2021 6,398,429 2,060,123 2026 10,304,734 1,882,636 2031 16,595,877 1,720,441 2036 26,727,826 1,572,219 2041 43,045,432 1,436,767 2046 69,325,098 1,312,985 2051 111,648,763 1,199,867
2017 4,151,703 2,103,382 2022 7,038,272 2,023,335 2027 11,335,207 1,849,018 2032 18,255,465 1,689,719 2037 29,400,609 1,544,144 2042 47,349,975 1,411,111 2047 76,257,608 1,289,539 2052 122,813,640 1,178,441
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 183
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.
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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$)
2012 335,836 299,854 2016 1,640,965 931,127 Future Value Present Value
2014 1,381,699 1,101,482 2017 1,737,778 880,413 11,898,223 6,858,708
2016 1,463,217 1,041,489 2018 1,840,304 832,460
2017 1,549,544 984,763 2019 1,948,879 787,119
Discount rate=12%, increase rate in rent=5.90%
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< Figure 6-8 Annual Benefit on the Use of the System >
Benefit on the Use of ITS
Present Value Future Value
Year
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 eTrade 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
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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 Feasibility Study of the Establishment of the CIBAO Trade Center in the DR
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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)
2012 2,574,900 2,299,018 2016 21,179,659 12,017,907 Future Value Present Value
2014 10,593,674 8,445,212 2017 25,464,367 12,901,041 156,426,550 84,393,481
2016 13,774,288 9,804,266 2018 30,180,933 13,652,321
2017 17,293,329 10,990,223 2019 35,365,400 14,283,492
Discount rate=12%, wage increase rate=5.90%
< Figure 6-9 Annual Benefit from the Utilization of the Trade Portal >
Benefit from the Utilization of Trade Portal
Annual benefits (unit:$)
Present Value Future Value
Year
Other Benefits Residual value of the trade center building as of termination of benefit analysis (at the
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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)
Rental I ncome by Offic e S pace Income from lending Exhibition Hall & Conference Room
Income generated f rom an administr ative fee for Exhibition H.& Confer ence R.
Benefit on the Use of ITS Be nefit from the Utiliza tion of Tra de 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.
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< Figure 6-11 Total Annual Benefit Flow (based on Present Value)(Residual Benefit of Land Included) >
Total Annual Benefit Flow (Present Value)
Total Annual benefi ts
Year
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< Table 6-16 Annual Benefit Flow (Based on Future Value) >
(Unit : US$) Category 2012 Income from Lending of Office Space Income from Lending of Exhibition Hall and Meeting Room Income from Administrative Fee on Exhibition Hall and Meeting Room Benefit from the Use of the System Benefit from the Utilization of the Trade Portal Total
0
Annual Benefit 2013

537,749
2014
709,829
2015
780,812
2016
858,893
2017
944,782
2018
1,039,261
2019
2020
2021
1,383,256
2022~2052
276,841,774
Total
285,497,049
1,143,187 1,257,505
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
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
335,836
1,381,699
1,463,217
1,549,544
1,640,965
1,737,778
1,840,304
1,948,879
11,898,223
2,574,900
10,593,674
13,774,288
17,293,329
21,179,659
25,464,367
30,180,933
35,365,400
156,426,550
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.
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< Table 6-17 Annual Benefit Flow(Based on Present Value) >

(Unit : US$) Category 2012 Income from Lending of Office Space Income from Lending of Exhibition Hall and Meeting Room Income from Administrative Fee on Exhibition Hall and Meeting Room Benefit on the Use of the System Benefit on the Utilization of the Trade Portal Total 0 2013 428,690 2014 505,242 2015 496,220 2016 487,359 Annual Benefit 2017 478,656 2018 470,109 2019 461,714 2020 453,469 2021 2022~2052 Total
445,371 10,483,446 14,710,277
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
247,870
373,930
390,206
405,782
420,676
434,910
427,144
419,516
412,025
9,698,506 13,230,565
299,854
1,101,482
1,041,489
984,763
931,127
880,413
832,460
787,119
6,858,708
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 2,970,565
0 84,393,481
2,598,871 11,710,477 13,594,579 14,812,444 15,871,083 16,784,168 17,564,349 18,095,186
2,917,519 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.
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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 = Projects 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 doesnt 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)=
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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 of Internal Rate of Return(EIRR)=R satisfying the condition
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 Benefit /Cost Ratio (B/C) Judgment Merits Demerits Hard to clearly divide benefit from Easy to understand, consideration cost of project scale is available Error can occur by selecting Consider hours of benefit/cost mutually-exclusive alternatives incurrence Figure out social discount rate 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
B/C1
Economic Internal Rate of EIRRr Return (EIRR)
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Net Present NPV0 Value (NPV)
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 97,811(USD K) B/C Ratio 1.90 IRR 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 >

Annual Benefit and Cost
40,000,000 35,000,000 30,000,000
( :$) Amount (Unit:$)
25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0
Benefit (Present V.) ()

() Cost
(Present V.)
Year
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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 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0%
PV of Benefit 293,794,374 257,861,822 229,416,529 206,593,725 188,036,161 172,748,256 159,993,853
PV of Cost 135,605,498 124,710,803 115,935,180 108,782,610 102,883,004 97,960,197 93,806,400
NPV 158,184,876 133,151,019 113,481,349 97,811,114 85,153,157 74,788,060 66,187,452
B/C Ratio 2.17 2.07 1.98 1.90 1.83 1.76 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.
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< Figure 6-13 Changes in NPV in Accordance with the Discount Rate >
Changes in NPV according with Discount Rate
NPV (Unit: USD)
Di sco unt R ate(% )
< Figure 6-14 Changes in B/C Ratio in Accordance with the Discount Rate >
Changes in B/C Ratio according with Discount Rate
B/C Ratio
B/C Ratio
Di sco unt R ate(% )
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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 Unchanged cost, unchanged benefit Increased cost(10%), unchanged benefit Increased cost(20%), unchanged benefit Decreased cost(10%), unchanged benefit Decreased cost(20%), unchanged benefit Unchanged cost, increased benefit (10%) Unchanged cost, increased benefit (20%) Unchanged cost, decreased benefit (10%) Unchanged cost, decreased benefit (20%) Increased cost (10%), decreased benefit (10%) Increased cost (20%), decreased benefit (20%) Decreased cost (10%), increased benefit (10%) Decreased cost (20%), increased benefit (20%) B/C Ratio 1.90 1.73 1.58 2.11 2.38 2.09 2.28 1.71 1.52 1.55 1.27 2.32 2.85 IRR(%) 25.53% 22.73% 20.42% 25.53% 32.94% 28.56% 31.50% 22.46% 19.41% 19.96% 15.60% 32.14% 39.79% NPV 97,811,114 87,932,853 76,054,592 97,811,114 119,567,636 118,470,487 139,193,397 77,151,742 56,492,369 66,273,481 34,735,847 129,348,748 160,886,381
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.
198
< Figure 6-15 Changes in B/C Ratio in Accordance with Changes in Cost >
Changes in B/C Ratio in accordance with Changes in Cost
B/C Ratio
B/C Ratio
Change in Cost (%)
< Figure 6-16 Changes in IRR in Accordance with Changes in Cost >
Changes in IRR in accordance with Changes in Cost
Change in Cost (%)
< Figure 6-17 Changes in NPV in Accordance with Changes in Cost >
Changes in NPV in according with Changes in Cost
NPV (Unit:$)
C hange i n C ost
199
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 >
Changes in B/C Ratio in accordance with Changes in Benefit
B/C Ratio
B/C Ratio
Change in Benefit (%)
< Figure 6-19 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 >
Changes in NPV in accordance with Changes in Benefit
NPV (unit: $)
200
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 B/C Ratio in accordance with Changes in (Cost :Benefit)
B/C Ratio
B/C Ratio
Changes in (Cost : Benefit) (unit : %)
< Figure 6-22 Changes in IRR in Accordance with Changes in Cost/Benefit >
Changes in IRR in accordance with Changes in (Cost :Benefit)
201
< Figure 6-23 Changes in NPV in Accordance with Changes in Cost/Benefit >
Changes in NPV in accordance with Changes in (Cost :Benefit)
NPV (unit: $)
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.
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< Table 6-22 Benefit/Cost Analysis Results >

NPV 97,811(USD K) B/C Ratio 1.90 IRR 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.
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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.
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< Table 6-23 Income and Expenditure(Based on Future Value) >

(Unit : US$) Category Income from Lending of Exhibition Hall and Meeting Room Income Income from Administrative Fee on Exhibition Hall and Meeting Room Total Income Maintenance Cost for the Trade Center Expenditure Maintenance Cost for the Integrated Trade System Total Expenditure Total Annual Cash Flow 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total
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
279,836
472,810
552,597
643,613
747,306
865,302
951,832
1,047,016
1,151,717
6,712,031
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
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
313,912 313,912
998,304 3,870,818
1,058,270 4,712,339
1,121,837 4,995,397
1,189,223 5,295,458
1,260,657 5,613,543
1,336,381 5,950,734 (758,921)
1,416,654 6,308,179 (597,185)
1,501,749 6,687,095 (405,001)
1,591,956 11,788,945 7,088,772 50,836,248 (178,469) (10,284,229)
(313,912) (1,911,967) (1,875,477) (1,679,814) (1,433,779) (1,129,704)
Evidence for calculation of individual items of income and expenditure is same as that of economic feasibility analysis.
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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.
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< Table 6-24 Income and Expenditure in Case of Not Charging Membership Fee for the Trade Information System(Based on Future Value) >
(Unit: US$) Category Income from Lending of Exhibition Hall and Meeting Room Income from Administrative Fee on Exhibition Hall and Meeting Room Membership Fee for the Integrated Trade System Total Income Maintenance Cost for the Trade Center Expenditure Membership Fee for the Integrated Trade System Total Expenditure Total Annual Cash Flow 2012 0 2013 1,679,014 2014 2,364,052 2015 2,762,986 2016 3,218,066 2017 3,736,532 2018 4,326,511 2019 4,759,162 2020 5,235,078 2021 Total
5,758,586 33,839,989
Income
279,836
472,810
552,597
643,613
747,306
865,302
951,832
1,047,016
1,151,717
6,712,031
335,836 335,836 0
1,381,699 3,340,549 2,872,513
1,463,217 4,300,080 3,654,069
1,549,544 4,865,128 3,873,560
1,640,965 5,502,644 4,106,235
1,737,778 6,221,617 4,352,886
1,840,304 7,032,117 4,614,352
1,948,879 7,659,873 4,891,525
2,063,863 8,345,957 5,185,346
2,185,631 16,147,716 9,095,934 56,699,735 5,496,817 39,047,303
313,912 313,912 21,924
998,304 3,870,818 (530,268)
1,058,270 4,712,339 (412,259)
1,121,837 4,995,397 (130,270)
1,189,223 5,295,458 207,186
1,260,657 5,613,543 608,074
1,336,381 5,950,734 1,081,384
1,416,654 6,308,179 1,351,694
1,501,749 6,687,095 1,658,861
1,591,956 11,788,945 7,088,772 50,836,248 2,007,162 5,863,488
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< Table 6-25 Income and Expenditure in Case of Consideration of the Trade Center Building(Based on Future Value)>
(Unit: US$) Category 2012 Income from Lending of Exhibition Hall and Meeting Room Income Income from Administrative Fee on Exhibition Hall and Meeting Room Total Income Maintenance Cost for the Trade Center Total Expenditure Total 0 2013 1,679,014 2014 2,364,052 2015 2,762,986 2016 3,218,066 Annual Cash Flow 2017 3,736,532 2018 4,326,511 2019 4,759,162 2020 5,235,078 2021 Total
5,758,586 33,839,989
279,836
472,810
552,597
643,613
747,306
865,302
951,832
1,047,016
1,151,717
6,712,031
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
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
Expenditure
0 0
2,872,513 (913,663)
3,654,069 (817,207)
3,873,560 (557,977)
4,106,235 (244,555)
4,352,886 130,953
4,614,352 577,461
4,891,525 819,470
5,185,346 1,096,748
5,496,817 39,047,303 1,413,487 1,504,717
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< Table 6-26 Income and Expenditure in Case of Charging each Use of e-document on Export/Import(Based on Future Value) >
(Unit: US$) Category Income from Lending of Exhibition Hall and Meeting Room Income Income from Administrative Fee on Exhibition Hall and Meeting Room Fee for use of the Trade Portal Total Income Maintenance Cost for the Trade Center Expenditure Integrated Trade system Membership Fee Total Expenditure Total Annual Cash Flow 2012 0 2013 1,679,014 2014 2,364,052 2015 2,762,986 2016 3,218,066 2017 3,736,532 2018 4,326,511 2019 4,759,162 2020 5,235,078 2021 Total
5,758,586 33,839,989
279,836
472,810
552,597
643,613
747,306
865,302
951,832
1,047,016
1,151,717
6,712,031
2,152 2,152 0
3,319 1,962,169 2,872,513
4,320 2,841,183 3,654,069
5,430 3,321,013 3,873,560
6,656 3,868,336 4,106,235
8,011 4,491,850 4,352,886
9,505 5,201,318 4,614,352
11,149 5,722,143 4,891,525
0 6,282,094 5,185,346
50,542
6,910,303 40,602,561 5,496,817 39,047,303
313,912 313,912
998,304 3,870,818
1,058,270 4,712,339
1,121,837 4,995,397
1,189,223 5,295,458
1,260,657 5,613,543
1,336,381 5,950,734 (749,416)
1,416,654 6,308,179 (586,036)
1,501,749 6,687,095 (405,001)
1,591,956 11,788,945 7,088,772 50,836,248 (178,469) (10,233,687)
(311,760) (1,908,648) (1,871,156) (1,674,385) (1,427,122) (1,121,693)
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6. Strategic Feasibility
The incumbent government of the Dominican Republic with President Leonel Fernandezs reelection in 2008 has established 4 core strategies, 51 detailed objectives (Objetivos Especificos), and 274 action lines (Lneas de Accin) through discussions among relevant ministries in a bid to present blueprints on the nations future, and announced the 2010~2030 Dominican Republic Development Strategy (Estrategia Nacional de Desarrollo de la Repblica Dominica 2010~2030) in November 2009. Major goals of the development strategy are as shown below.
Core Strategies 1. Government Serving the People Details Securing the peoples safety by the government through providing responsible services for the people Building society with equal opportunities, low poverty rates, and an inequality index. Boosting participation in global growth by providing high quality jobs and a production structure with the potential for sustainable growth Implementing continuous environment policies and taking countermeasures against the impact of climate changes
2. Social Pact 3. Building Dynamic Economy through Employment Creation 4. Environment Preservation and Climate Change Countermeasures
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 nations development strategy; as such a project can serve as momentum to support the governments goal of gaining a global competitive edge.
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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 Group A (Category A) Group B (Category B) Group C (Category C) Details of Groups Projects that could have significant adverse environmental impacts on broad area 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. 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 fourlane 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.
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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 Santiagos 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.
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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 organizations 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.
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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
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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
P h ase 1
D rafti ng standards for bi ddi ng Subm i tti ng the draft to BA I Recei vi ng opi ni ons of BA I Fi nal i zi ng standards for bi ddi ng A ttai ni ng si gnature by the governor of the C ustom s Servi ce Publ i shi ng i n the governm ent gazette and m aj or dai l y m agazi nes (1st) Sel l i ng bi ddi ng docum ents C ol l ecti ng obj ecti ons and questi ons from bi dders Publ i shi ng i n the governm ent gazette and m aj or dai l y m agazi nes (2nd) H ol di ng A ssessm ent C om m i ttee A nal yzi ng bi ddi ng resul ts Enacti ng pri ce and techni cal assessm ent standards A nal yzi ng l egal i ssues Prel i mi nary approval Sel ecti ng the successful bi dder by the Bi ddi ng C om m i ttee (Tentati ve) Subm i tti ng the bi ddi ng assessm ent and Resul ts to BA I and Procurem ent Servi ce D eci di ng the successful bi dder (Fi nal ) M aki ng announcem ent (G overnor of The C ustom s Servi ce) Publ i shi ng i n the governm ent gazette
P h ase 2
Phase 3
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2.3 Approval Process of Construction Permit

Sub m i t docum ents rel ati ng l and + schem ati c d raw i ng
Dept. of Urban planning, city of Santiago (Takes 15 days)
Land use p erm i t (S i te vi si t & check)

Subm i t to D ept. of A rchi tecture, ci ty of Santi ago MDMAyRN (Takes 15 days) M O PC (Takes 15 days)
A rchi tecturalperm i t
Starti ng o f co nstructi on
M O PC ? P eriodical Supervision
C o m p letio n o f co n stru ctio n ~ M o ve-in to th e b u ild in g
The entire construction permit process should be done within three months at most, and the local registered architects 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.
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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.
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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 Category 1. Trade Center 2. Integrated Trade System 3. Trade Academy 4. Consulting Service 5. Training Direct Costs 6. Contingency 7. Loan Commission Total Costs Percentage to EDCF (%) Foreign Currency Korea 3rd Country 8,754,820 4,431,767 87,882 1,822,266 345,506 15,442,242 1,708,112 29,970 17,180,324 57.3% 1,481,240 430,636 1,911,876 207,794 2,119,670 7.1% Local Currency 8,763,940 724,500 147,000 9,635,440 1,064,565 10,700,005 35.7% Sub-total 19,000,000 5,586,710 87,882 1,969,266 345,506 26,989,558 2,980,471 29,970 30,000,000 100%
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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 Technological aspect Risk Factors Quality concerns caused by unskilled local manpower Responses For more effective training, select skilled workers in advance. Implementing a thorough preliminary education & establishing a review system The government-led PR is required to maintain the effect of the project through the establishment of trade center and system
Social aspect
Limited effects of the project in case when training is delivered to some targets due to lack of publicity Concerns over low participation rate in case where trainees pay relatively high costs for trade academy after completion Environmental contamination from poorly-recycled old computers
Economic aspect
The government's financial support/benefiting participants in their individual work evaluation Seeking appropriate measures to handle industrial wastes by establishing a close cooperative system with relevant authorities
Environmental aspect
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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.
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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.
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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
Opportunities - 2010~2030 National WEF Development Strategies (World Economy - The Dominican Forum), government's commitment to Central Bank of the project Dominica 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
Opportunities - Advanced ICT infrastructure among Latin CEI-RD Data & countries Site Survey Risks - Poor exports and low economic growth rate at the time of project completion
Building CIBAO trade center - Comprising exhibition hall, banquet hall, convention hall, and trade academy with the floor area of
3. Outcome22) (Outcome)
20,000 Establishing ITS - Marketing Portal system - Trade Portal system - Electronic document repository - Trade Relay system Trade Academy - Operation plan & curriculums
Opportunities - Continuous PR targeting the government agencies and trade companies Risks - Possible delays in the Project Completion government budget allocation Report 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) 21)
Targets expected to be met 3 to 5 years after completion Physical outcome or services resulting from the implementation of the project 22) Targets expected to be met at the time of completion Feasibility Study of the Establishment of the CIBAO Trade Center in the DR
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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)
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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.
Total Cost (USD) Project Year
Project Name
Funded by
Contents Making customs clearance on-line, establishing an electronic customs system for 24-hour export declaration & electronic settlement e-Biz for e-Learning SMEs IT policy advice patent administration
Nature
The Export(DGA) Import Bank 20 million Computerization of Korea Project EDCF
2007~ 2009
The first EDCF-funded and IT project in Dominica
Providing advices on IT policies
Korea International Cooperation Grant Agency (KOICA) Japan International Cooperation 7 million Agency (JICA)
2006~ 2007
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
2007~ 2008
Establishing a center to provide education on The official agency to overseas trade and basic innovate overseas business to individuals trading companies and companies in (ICEi) Dominica
Apart from the above, "Feasibility Study for the Project to Establish the Dominican eDocument System" is currently underway with the EDCF fund of the Export-Import Bank of Korea.
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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)
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
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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 Region Amount Total Middle East Asia Latin America Africa Others
Expected Type Amount Total Plant Civil Architecture Others 74,000 42,000 13,000 17,000 2,000 Ratio (%) 100.0 56.7 17.6 23.0 2.7 -
Ratio (%) 100.0 64.9 16.2 4.1 13.5 1.3
74,000 48,000 12,000 3,000 10,000 1,000
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.
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< Table 7-4 Trade-related capabilities of domestic companies >

Period 2001.02 2003.03 2003.03 2005.10 2006.07 2008.03 Participant Korea & Japan USA EU Kazakhstan Mongolia, Azerbaijan Kyrgyzstan Project Contents u-Trade Hub Building Project between Korea & Japan AMS Service for US Customs CSI Support e-Trade Network Building Project between Korea & EU First Phase BPR/ISP Project for Advanced Customs Administration Consulting Project for Advanced Customs Administration for Mongolia & Azerbaijan 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.
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For reference: Introduction of Koreas 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 2000s, 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
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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 'etrade service' as an e-governments 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
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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 Pilot creation of e-trade document repository Main substances Develop the service for users and operators of e-trade document repository Link with the message relay system & 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 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
The first-phase establishment of e-L/C distribution management system
Improving key infrastructure for e-trade
Project Name: e-Trade Service, the second phase (05.12~ 06.9, 10 months) <Main contents of the second projects of e-Trade Service>
Projects Building a single window for e-trade users The first-phase establishment of e-L/C distribution management system Improving key infrastructure for e-trade Main substances Building an e-trade portal for trading companies (Web service-based) Link with the message relay system & 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 Enhanced e-trade document repository Expand the repository's functions into delivery and disposal of documents, issue of electronic certificates, and distribution of trade
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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>
Projects Building the integrated portal of uTradeHub Main substances 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 Loading list service e-D/O Management of bonded warehouses Management of cargo data ASP service of distribution of e-L/C for foreign banks 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 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) Simplify the procedure to check requirements and collective management of related information Easy transfer of data to post-management system & provision of inquired data Store the certificates of origin in the e-trade document repository through link to the Chamber of Commerce 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
Establishing a logistical portal service Enhanced e-L/C service
Pilot establishment of eNego system
Developing a user solution for trading companies Building an integrated information system for requirement check Link to the Chamber of Commerce Marketing Data
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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 publicprivate '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) Dedicated Institute National Information Society Agency
Council of Related Institutes
Managing Institute (e-Trade Service Business Group) Ministry of Knowledge & Economy / Customs office
Dedicated Support/Management Institute e-Trade Promotion Cetner
Contractor System construction and technical support
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.
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<Organization of e-Trade Promotion & Roles>

Category Presidential Special Committee of e-Government Dedicated Agency Main Roles -Coordinate direction and policies -Check the progress -Coordinate with other e-government tasks National Computerization Agency -Ministry of Commerce, Industry, and Energy Trade and Distribution Deliberation Bureau (Trade Policy Dept.) -Customs Office, Information Cooperation Division (Information Management Dept.) The head of Trade and Distribution Deliberation Bureau at the Ministry of Knowledge and Economy (Chair) Comprising the director-generals at related agencies. -Government side: deputy director level at the e-trade service leading agencies (Ministry of Knowledge and Economy, Customs Office) -Private side: KITA, KOTRA, KTNET, DACOM, Korea Financial Telecommunications & Clearings Institute, and Korea Federation of Banks -SI & IT consultants Organization
-Select the contractor and sign the contract -Manage project implementation and evaluate the results -Major decision-making for implementation -Coordinate roles between major interested parties Lead Agency -Coordinate basic implementing direction and (e-Trade issues Service Project -Set up the project plan and select contractors Group) -Sign the contract (Jointly with the dedicated agency) -Manage progress and review the results -Manage inspection, review, and take-over Consultative body of relevant authorities -A consultative body between relevant authorities for e-trade promotion and coordination
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 -Build the e-trade platform -Educate users and managers -Technical support and maintenance
Contractors
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.
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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 234
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 Foreign Trade Act Main contents the basic concept of electronic trade e-trade intermediaries intangible items in an electronic form 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 Expansion of and support for e-trade transactions for SMEs Serving as a ground to regulate rights and duties among the parties of electronic messages Data fabrication & Private information protection Security of trade information Serving as a ground to regulate rights and duties among the parties of electronic messages
Act on the Promotion of Office Automation for Trade (Act on the Promotion of Electronic Trade) Ministry of Knowledge and Economy Act on the Establishment of Foundations for Trade Transactions Act on Electronic Transactions Act on the Promotion of Information and Communication Utilization & Information Protection Ministry of Public Administration & Security Act on Electronic Signature
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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.
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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.
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Abbreviation Table
Abbreviation ACE AMS APEC ATA AWB B/C Ratio B/L BEXCO BP BPM BPR BRS C/O CACM CARICOM CAS CAV CBD CBTPA Description Automated Commercial Environment Automated Manifest System Asia-Pacific Economic Cooperation AT attachment Air Waybill Benefit-Cost Ratio Bill of Lading Busan Exhibition & Convention Center Business Process Business Process Management Business Process Reengineering Business Recovery System Certificate of Origin Central America Common Market Caribbean Community and Common Market Content Addressed Storage Constant Air Volume System Component Based Development Caribbean Basin Trade Partnership Act Consejo para el Desarrollo Estratgico de la Ciudad y el Municipio de Santiago Conformity European
CDES CE
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CECO
Changwon Exhibition Convention Center Centro Dominicano de Promocin de Exportaciones / Dominican Export Promotion Centre Centro de Exportacin e Inversin de la Repblica Dominicana / Dominican Republic Export and Investment Center Chief Information Officer Convention on International Trade in Endangered Species of Wild Fauna and Flora Comisin Nacional para la Sociedad de la Informacin y Conocimiento Consejo Nacional de Zonas Francas de Exportacin Consejo Dominicano Del Caf Convention & Exhibition Consumer Price Index Central Processing Unit Container Security Initiative Cyber Trade Campus Character-Based User Interface Documents Against Acceptance Database Direccin General de Aduanas Direccin General de Impuestos Internos
CEDOPEX
CEI-RD
CIO CITES CNSIC CNZFE CODOCAFE COEX CPI CPU CSI CTC CUI D/A DB DGA DGII
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DGIP DGM DIGENOR DNCD DR-CAFTA D.S.R DUA DVCS
General Directorate of Public Investment Direccin General de Minera Direccin General de Normas y Sistemas de Calidad Direccin Nacional de Control de Drogas Dominican Republic Central America Free Trade Agreement Debt Service (to income) Ratio Declaracin nica Aduanera Data Validation and Certification Server
eD/O
e-Delivery Order
eL/C
e-Letter of Credit
EA ebMS ebXML ECC EDCF EDI EDMS
Electronic Arts ebXML Messaging Service e-business Extensible Markup Language Error Checking and Correction Economic Development Cooperation Fund Electronic Data Interchange Electronic Document Management System
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EIU EP ERD ERP EU F/S FAQ FDI FOB FP FTA FTP FTZs GDP GLMP GLP GNP GOD GUI H/W HSM HTML ICC ICEi
Economist Intelligent Unit Enterprise Portal Entity-Relationship Diagram Enterprise Resource Planning European Union Feasibility Study Frequently Asked Questions Foreign Direct Investment. Free On Board Function Point Free Trade Agreement File Transfer Protocol Foreign Trade Zones Gross Domestic Product Global Logistics Management Program Global Leadership Program Gross National Product Government of Dominican Republic Graphical User Interface Hardware Hardware Security Module Hyper Text Markup Language International Convention Center Instituto Capacitacin e Innovacin
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ICO ICT IDB IDC IDE IDI IESP IMF INAZUCAR INTEC IP IPS IRR (EIRR) ISO ISP IT ITDS ITLA ITS JICA ITU KBC
International Coffee Organization Information & Communication Technology Inter-American Development Bank Internet Data Center Intelligent Drive Electronics ICT Development Index Interconexin Estatal por la Seguridad Pblica International Monetary Fund Instituto Azucarero Dominicano Instituto Tecnolgico de Santo Domingo Internet Protocol Intrusion Prevention System Internal Rate of Return (Economic Internal Rate of Return) International Organization for Standardization Information Strategy Planning Information Technology International Trade Data System Las Americas Institute of Technology Integrated Trade System Japan International Cooperation Agency International Telecommunication Union Korea Business Center
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KDI KOICA KOTIS KOTRA KSP KTNET L/A L/A L/C LAN LAVECEN MA MA MBA MCC MMARENA MSPAS MEPyD MFN MOF MOPC N/W NEIS NMS
Korea Development Institute Korea International Cooperation Agency Korea Trade Information Services Korea Trade-Investment Promotion Agency Knowledge Sharing Program Korea Trade Network Letter of Authority Loan Agreement Letter of Credit Local Area Network Laboratorio Veterinario Central Maintenance Ministerio de Agricultura Master of Business Administration Multiplex Catalyst Converter Ministerio de Medio Ambiente y Recursos Naturales Ministerio de Salud Pblica y Asistencia Social Ministerio de Economia, Planificacin y Desarrollo Most-Favored Nation Ministry of Finance Ministerio de Obras Pblicas y Comunicaciones Network National Education Information System Network Management System
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NPV INTABACO OA OAS ODA OP OPI-RD
Net Present Value Instituto del Tabaco de la Repblica Dominicana Office Automation Organization of American States Official Development Assistance (System) Operation Office for the Promotion of Investments of the Dominican Republic Presidential Office of Information and Communications Technologies (Dominican Republic) Operating System Packing List Portable Document Format Project Executing Agency Project Implementation Unit Partido de la Liberacin Dominicana / Liberal Party of the Dominican Republic Project Management Project Management Office National Plan of Public Investment Pontificia Universidad Catlica Madre y Maestra Present Value Polyvinyl chloride Questions and Answers Redundant Array of Independent Disks
OPTIC OS P/L PDF PEA PIU PLD PM PMO PNPIP PUCMM PV PVC Q/A RAID
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RC RDBMS RFP S/W SAN SARS SCSI SD SERI SI SICA SIGA SIGAS SIVUCEX SMS SNIP SRC SSO T/T TBB TBIS TCO
Reinforced Concrete Relational DataBase Management System Request for proposal Software Storage Area Network Severe Acute Respiratory Syndrome Small Computer System Interface System Development Samsung Economic Research Institute System Integration Sistema de la Integracin Centroamericana / Central American Integration System Sistema Integrado de Gestin Aduanera Sistema de Gestin de Ayuda Social Sistema Integrado de Ventanilla Unica de Comercio Exterior System Management System National Public Investment System Steel Framed Reinforced Concrete Structure Single Sign On Telegraphic Transfer Technical Building Block Tourism and Business Information Systems Total Cost of Ownership
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TCP TP UASD UML UNAPEC UNIBE UIT USB VAN VAV VE VIP VoIP VPN WAS WB WEF WiMAX WTO XML ZF
Transmission Control Protocol Trade Partner Universidad Autnoma de Santo Domingo Unified Modeling Language Universidad APEC Universidad Iberoamericana Union Internationale de Telecomunicaciones Universal Serial Bus Value Added Network Variable Air Volume Value Engineering Very Important Person Voice Over Internet Protocol Virtual Private Network Web Application Server World Bank World Economy Forum World Interoperability for Microwave Access World Trade Organization Extensible Markup Language Free Zone / Zona Franca
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Feasibility Study of the Establishment of the CIBAO Trade Center in the Dominican Republic

Feasibility Study Report

EC Plaza / MAXTRAT / DATEC Consotium

Status of Project Site...................................................................... 18 Information Technology Area ....................................................... 22

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

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

Project Execution and Cooperation System................................. 38 Experience in Similar Projects...................................................... 39

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

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

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

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

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

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

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

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

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

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

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

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

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

Education ..................................................................................... 126

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

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

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

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

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

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

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

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

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

Technical Feasibility .................................................................... 164 Economic Feasibility.................................................................... 165

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

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

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

Strategic Feasibility ..................................................................... 210 Environmental Impact Assessment............................................. 211

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

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

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

Feasibility Study Report

1. Background and Objective

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

Feasibility Study Report

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

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

Feasibility Study Report

CEI-RD in order to foster trade experts in CIBAO.

Feasibility Study Report

provide a one-stop trading service

quality of future human resources.

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

Feasibility Study Report

Design and land work for cconstruction of a 20,000 m2 CIBAO construction

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

Perform soil tests and underground utility surveys

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

Feasibility Study Report

2.2 Project Executing Agency

2.3 Region to Execute the Project

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

Feasibility Study Report

2.4 Estimated Budget

EDCF Item ForeignCurrency Portion Korea 1. Trade C enter Construction

Gov. of Dom inican Republic 25,474,318 25,474,318 -