Feasibility Study Report

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Feasibility Study of the Establishment of the CIBAO Trade

Center in the Dominican Republic

Feasibility Study Report

Ver. 1.0

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Chapter I.

Project Overview ... 1

1. Background and Objective... 1

1.1 Background...1

1.2 Objective...3

2. Project Summary... 5

2.1 Project Scope ...5

2.2 Project Executing Agency ...6

2.3 Region to Execute the Project ...6

2.4 Estimated Budget ...7

2.5 Project Period...7

Chapter II.

Current Status ... 9

1. Country Status ... 9

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

2.1 Politics · Society Status ...13

2.2 Economy · Industry Status...13

2.2.1 Current Economic Trend...13

2.2.2 Industry and Export Trend ...14

2.2.3 Foreign Investment Status...16

3. Status of Project Site... 18

4. Information Technology Area ... 22

4.1 National Information Technology Status ...22

4.1.1 ICT Industry Status...22

4.1.2 Wireless/Wired Communications Status...22

4.1.3 Internet Status...24

4.1.4 PC Distribution Status ...25

4.1.5 S/W Developing Company Status ...26

4.1.6 Discussion Point ...27

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5.1.1 Export Status ...30

5.1.2 Export Status ...30

5.1.3 Import Status ...31

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

5.3 Export Status of Free Trade Zone ...32

5.4 Status of Exporting Companies ...33

5.5 Trading Scope with Korea ...34

Chapter III.

Project Executing Agency and System ... 36

1. PEA and PMO ... 36

1.1 Project Executing Agency (PEA) ...36

1.2 Project Management Office...37

2. Project Execution and Cooperation System... 38

3. Experience in Similar Projects... 39

Chapter IV.

Project Execution Plan... 41

1. Outline... 41

2. Construction of Trade Center ... 43

2.1 Status Analysis ...43

2.1.1 Research on Land and Infrastructure...43

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

2.1.3 Status of Major Exhibitions ...50

2.1.4 Exhibition Center Status ...51

2.1.5 Requests from Project Executing Agency ...56

2.2 Best Practice ...57

2.2.1 Cases of Trade center...57

2.2.2 Exhibition Center Cases...59

2.2.3 Discussion Points ...61

2.3 Design Goal ...62

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

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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

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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

10. Procurement Plan ... 142

Chapter V.

Project Budget Estimation ... 143

1. Estimated Costs & Funding Plan... 143

1.1 Estimated Costs...143

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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

2. Feasibility in Project Cost ... 160

2.1 Construction of the Trade Center...160

2.2 Integrated Trade System(ITS) ...162

3. Technical Feasibility ... 164

4. Economic Feasibility... 165

4.1 Outline ...165

4.2 Preconditions for Feasibility Analysis ...165

4.2.1 Exchange Rate...165

4.2.2 Discount Rate ...165

4.2.3 Analysis Period ...165

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4.3.2 Investment Plan by Years...167

4.4 Maintenance Costs ...169

4.4.1 Maintenance Costs of the Trade Center...169

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

4.4.3 Other Operation Cost...174

4.4.4 Cost Flow ...174

4.4.5 Estimated Profit ...177

4.4.6 Benefit Flow...189

4.4.7 Benefit/Cost Analysis ...193

4.4.8 Sensitivity Analysis ...196

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

5. Financial Feasibility ... 204

5.1 Review on Financial Feasibility ...204

5.2 Sensitivity Analysis on Financial Feasibility ...206

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

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

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

6. Strategic Feasibility ... 210

7. Environmental Impact Assessment... 211

Chapter VII.

F/S Items for EDCF Evaluation ... 214

1. Capabilities of Project Executing Agency ... 214

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

2.1 Approval Process for Loan ...214

2.2 Approval Process for Procurement & Consulting ...214

2.3 Approval Process of Construction Permit...216

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

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

5. Responses against Risk Factors ... 219

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

6.1.3 Interrelation in conducting the project...220

6.2 Korea ...220

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

6.2.2 Improvement of Bilateral Cooperation...221

7. Performance Evaluation Indicators ... 222

8. Similar ODA projects in Dominica ... 224

9. Analysis on the International Competitiveness of Korean

Companies ... 225

9.1 Construction of Trade Center ...225

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

Abbreviation Table ... 238

List of Figures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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< 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

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< 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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

< Table 4-13 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

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< 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

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

Chapter I.

Project Overview

The name of this project is “The Establishment of the CIBAO Trade Center in the Dominican Republic.”

1. Background and Objective

1.1 Background

 In a bid to achieve a dynamic economy through creating employment, one of the four core strategies of the “2010~2030 National Development Plan”1

announced in November 2009, routes to boost exports(plan and system, etc.) must be strengthened and plans to develop export financing must be made.

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

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

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

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

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

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

 Need to build the trade center in Santiago, a central city of CIBAO

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

The CIBAO region has established and managed a Free Trade Zone based on its ample human and physical resources, being the main region that produces export goods with more trade activities than other regions. But it does not have a permanent exhibition hall to support exports, and consequently the lobby in the 1st floor of the CEI-RD located in Santo Domingo 180km southeast of Santiago, has been used instead. Also, EXPO CIBAO2_{, the largest trading exhibition held every year, is hosted by borrowing a}

gymnasium located far away from the suburban area of Santiago.

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

 Need to build the Integrated Trade System(ITS)

The Dominican Republic enjoyed the most rapid economic growth (average 9.5%) among countries in Latin America, but the annual export increase rate was below 6% during 2005-2007, significantly lower than the average annual export increase rate of DR-CAFTA member countries, 11%. The number of exporters stood at about 3,000 as of 2009, out of which about 98% were SMEs recording annual revenues less than USD1 million. Therefore coming up with supportive measures for such SMEs is essential.

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

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

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

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

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

1.2 Objective

In order to strengthen exports and revolutionize the business environment of Santiago, the second largest city of Dominican Republic, through corporate innovation and business continuity;

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

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provide a one-stop trading service

 Improve management and education courses of the trade academy to raise the quality of future human resources.

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2. Project Summary

2.1 Project Scope

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

 Consulting Service

Scope Contents

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

 Provide bidding documents including Technical Assistance reports for bidding

documents

 Evaluate proposal and support contract negotiations

EDCF

 Supervise the trade center construction and trade system implementation

 Construction Project

Scope Contents

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

center that can host the ‘EXPO CIBAO’ as well as hold an exhibition and training center for export purposes. (Construction, electricity, mechanical work)

 Detail design work and implementation for marketing portal, trading business

portal, electronic document storage, and relay system

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

N/W, S/W)

 Development of a curriculum and education materials

 Consulting service for the operation of the trade academy

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

EDCF

 Support maintenance efforts of ITS for 2 years

 Obtain and confirm the construction site (obtaining permission for a construction

license and land-use)

 Perform soil tests and underground utility surveys

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

 Deliver furniture and office automation equipment for the trade center

Dominican Republic

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2.2 Project Executing Agency

The project executing agency is the Export and Investment Center of the Dominican Republic (Centro de Exportación e Inversión de la República Dominicana – CEI-RD) under the direct command of DR’s president.

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

2.3 Region to Execute the Project

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

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

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

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

In Santiago, an international airport linking it to major cities abroad has been operated since 2002 and more than 20 percent of the country’s export products are produced here, taking up 14 percent of the country’s Gross Domestic Product (GDP). It is in dire need of the construction of trade center that can support active industries of the Santiago City. Santo Domingo City, where ITS will be constructed holds 30% of the Dominican population. It is estimated that 3 million Dominicans reside within the city. It is the capital of education and economy in the Dominican Republic. ITS will not only support companies within the CIBAO region but it will continue to support the entire exporting industry of Dominican Republic. In order to support the entire nation, the ITS system will be located along the main system of the Ministry of Export Investment.

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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.

(Uni t: USD)

EDCF Foreign Currency Portion

Korea 3rd Countries

1. Trade Center Construction 8,754,820 1,481,240 8,763,940 19,000,000 25,474,318 44,474,318

1) Land Acquisition & Infrastructure _{- - - - 25,474,318 25,474,318} 2) Architecture 6,164,740 186,200 7,253,060 13,604,000 13,604,000

3) Mechnical 1,222,080 611,040 712,880 2,546,000 - 2,546,000

4) Electric _{1,368,000 684,000 798,000 2,850,000 - 2,850,000}

2. Integrated Trade Data System 4,431,767 430,636 724,500 5,586,904 - 5,586,904

1) Equipment 304,545 430,636 735,182 - 735,182

2) S/W Development _{3,633,890 - 724,500 4,358,390 - 4,358,390} 3) Installation & Test 493,332 - 493,332 - 493,332 3. Trade Academy 87,882 - 87,882 - 87,882 4. Consulting Services _{1,822,266 - 147,000 1,969,266 - 1,969,266} 5. Training 345,506 - - 345,506 - 345,506 1) Local Training 174,616 - - 174,616 174,616 2) Overseas Training 170,890 - - 170,890 170,890 Base Cost 15,442,242 1,911,876 9,635,440 26,989,558 25,474,318 52,463,877

6. Taxes & Duties - - - - 1,349,478 1,349,478

7. Contingencies 1,708,112 207,794 1,064,565 2,980,471 4,570,530 7,551,001

1) Physical Contingency _{772,112 95,594 481,772 1,349,478 1,273,716 2,623,194} 2) Price Contingency 936,000 112,200 582,793 1,630,993 3,296,814 4,927,807

8. PMO(2% of base cost) - 1,049,278 1,049,278

9. Service Charge(0.1% of EDCF) 29,970 29,970 29,970

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

Portion EDCF Total

2.5 Project Period

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

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Feasibility Study of the Establishment of the CIBAO Trade Center in the DR 8 ITEM 1M 2M 3M 4M 5M 6M 7M 8M 9M 10M 11M 12M 13M 14M 15M 16M 17M 18M 19M 20M 21M 22M 23M 24M 25M 26M 27M 28M 29M PMO Consulting Service Trade Center Construct’n ITS Trade Aca demy Overseas Tra ining Loca l Tra ining Const. TA IT IT IT Select Consultant

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

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

* IT : Inform ation T echnology T A : T rade A cadem y C onst.: C onstruction Execution Drawing Construction Work Mechanical Work Electric Work Procurement Support Proposal Evaluation & Contract Sup. Supervision

Anal. Pre. Design & Build Exec. Drawing

Analysis & Planning Analysis & Planning Location Survey & Set-up Environment

Civil construction & Foundation

Finishing & Building Equipment construction Structure

construction Order

material Air conditioner & Equipment installatiom

Switchgear equipment & Power plant,,Power trunk Test Order material Test Analysis & Design Construction & Deploy Test

Analysis & Design

Construction & Deploy Test Order equipment Install -ation Phase I Phase II Consultancy Service

 Period of selecting professional consultant: 3 months

 Bidding process will be led by the project execution agency’s PMO.

 Consulting service period: 26 Months

 Basic design for the first 3 months and bidding support for 2 months are carried out.

 Proposal evaluation and negotiation of a contract supporting work are done for three months.

 During the 18 months and 12 months allocated for trade center construction and trading information system implementation respectively, three inspections should be performed at the inception, interim, and the final stage of each process.

 Construction project period: 18 months

 The trade center construction process will take a total of 18 months. During that time, design, construction, mechanical work, and electric work will be performed.

 The first phase of the integrated trading data system construction will take 6 months and the second phase will take 8 months.

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

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Chapter II.

Current Status

1. Country Status

 The Dominican Republic takes up 2/3 of the Hispañola Island in the Caribbean. A total of 9.9 million citizens reside within the country with a GDP of 4,930 US dollars per individual.

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

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

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

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

Regions Geographic

regions Sub-regions Provinces Provincial capital

Duarte San Francisco de Macorís

Hermanas Mirabal Salcedo

María Trinidad

Sánchez Nagua

Cibao Oriental

Samaná Samaná

Santiago Santiago de los Caballeros

Espaillat Moca

Cibao Norcentral

Puerto Plata San Felipe de Puerto Plata

La Vega Concepción de La Vega

Sánchez Ramírez Cotuí

Cibao Central

Monseñor Nouel Bonao

Valverde Santa Cruz de Mao

Monte Cristi San Fernando de Monte Cristi

Santiago Rodríguez San Ignacio de Sabaneta

El Cibao Cibao

Cibao Occidental

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Regions Geographic

regions Sub-regions Provinces Provincial capital

Azua Azua de Compostela

San Juan San Juan de la Maguana

El Valle

Elías Piña Comendador

Barahona Santa Cruz de Barahona

Baoruco Neiba

Independencia Jimaní

Sur Occidental

Enriquillo

Pedernales Pedernales

Distrito Nacional Santo Domingo de Guzmán

Metropolitana

Santo Domingo Santo Domingo Este

San Cristóbal San Cristóbal

Monte Plata Monte Plata

Peravia Baní

Valdesia

San José de Ocoa San José de Ocoa

La Romana La Romana

San Pedro de

Macorís San Pedro de Macorís

Hato Mayor Hato Mayor del Rey

El Seibo Santa Cruz de El Seibo

Sur

Sur Oriental

Yuma

La Altagracia Salvaleón de Higüey

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

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

Category Name Global Competitiveness Ranking (2009~2010) Basic Requirements Efficiency Enhancers Innovation and Sophistication Factors Costa Rica 55 62 58 37 Brazil 56 91 42 38 Panama 59 55 70 54 Mexico 60 59 55 67 Columbia 69 83 64 62 El Salvador 77 66 83 87 Peru 78 88 59 85 Argentina 85 84 84 76 Jamaica 91 101 73 83

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Dominican Republic 95 98 88 82

Ecuador 105 93 113 123

Venezuela 113 104 108 130

Paraguay 124 122 115 131

※ Reference: WEF(2009-2010 Global Competitiveness Ranking)

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

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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

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growth rate within a couple of years.

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

Classification 2005 2006 2007 2008 GDP(US$100 Million) 293.3 318.0 412.2 457.1 GDP(US$100 Million) 3,247 3,468 4,404 4,797 Economic Growth(%) 9.3 10.7 8.5 5.0 Inflation (%) 7.4 5.0 8.8 10.6 Unemployment (%) 17.9 16.2 15.5 14.0

Foreign Exchange Holding (US$100 Million) 10 17.9 29.4 28.1

Foreign Bond (US$100 Million) 70 79 89 93

Yearly average currency (Compared to US$) 30.14 33.36 33.26 34.41

D. S. R. 6.1 9.3 9.8 11.3

Balance on current account (US$100 Million) -4.8 -11 -22.3 -26

Export (US$ Million /FOB) 6,145 6,610 6,270 6,949

Import (US$ Million /FOB) 9.614 9,559 13,820 13,569

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

2.2.2 Industry and Export Trend

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

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

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

16% 11% 11% 13% 12% 7% 31% 도미니카공화국 산업비중 제조업 유통업 건설업 통신업 농수산업 관광업 기타 29% 6% 17% 9% 18% 15% 6% 도미니카공화국 자유무역지대 업종 비중 의류 신발 전자제품 담배 의료제품 보석류 기타

Industrial Component Ratio in DR Component Ratio by the types of business in _{Free Trade Zone}

Th e manufacturing industry Distribution in dustry Construction industry Teleco mmunication industry Ag riculture and fish eries industry Th e tourist industry The oth ers

Clo th es Footwear Electronic products Tobacco products 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 Import

Ferro nickel 25 Petroleum 9.3

Steel 8.1 Gasoline 6.3

Ratio of 3 major products (%)

Rum 4.8 Fuel 4.5

USA 20.9 USA 30.2

Haiti 12.7 Venezuela 10.4

Ratio of 3 major import/export countries (%)

Spain 8.4 Taiwan 6.7

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

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

The major details are shown below.

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

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

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

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

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

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

2.2.3 Foreign Investment Status

Since DR-CAFTA in March 2007, FDI influx has increased significantly. In order to promote direct foreign investments and exporting markets in the free trade zone, CEI-RD has focused its efforts on implementing various policies to entice foreign investments. CEI-RD has surveyed FDI scale and tendency, roles of multi-national companies and their influence over the Dominican Republic, set a direction for boosts in export and export solicitation, and establish and make PR activities on “National brand” through PR program. For PR activities of the nation’s brand, the nation has prepared the plan as shown below in <Table 2-5>.

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

Target Details

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

internet, etc.

▪ In order to promote brand PR campaign in the global market, hold international

forums and workshops for study, analysis, and definition of proposed strategies. External

supportive activities

▪ In collaboration with the overseas offices of CEI-RD, promote PR activities by

visiting Europe(Spain, Germany, France, Swiss), US(Miami, New York, New Jersey), Caribbean countries(Puerto Rico, Jamaica), Latin America(Columbia, Peru, Argentina, Brazil) and holding international road shows

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

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Feasibility Study of the Establishment of the CIBAO Trade Center in the DR 17 Others (National image improvement activities)

▪ Plans to start a reality show called 'Beisbol Republic' to strengthen the symbol

and value of Dominican Republic baseball

▪ Plans to make documentary named “Caribbean Sun” to introduce mass culture

▪ Plans to publish ‘National brand’ covering noble image of Dominican Republic

▪ Plans to promote PR activities for Dominican Republic fashion through an event

called ‘Dominicana Moda’

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

< Table 2-6 Foreign Investments in Dominican Republic >

Classification Foreign Investment Status

Scope of Foreign Investments (2004~ 2008) Country 2004 2005 2006 2007 2008 % USA 176.6 254.6 671.5 796.1 497.4 28.1 Spain 126.6 220.6 178.0 258.3 190.0 17.5 Canada 274.2 194.9 90.5 163.3 587.1 15.7 Others 331.6 352.9 243.3 479.9 1,610.2 38.7 Total 909.0 1,023.0 1,183.3 1,698 2,884.7 100.0 Investment in different Areas

Year Mineral Commu_nication Energy Manufa_cturing Free trading

zone Finance Travel Real

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

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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 José de las Matas, Tamboril, Villa Bisonó, Villa González).

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

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

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

※ Reference : Central Bank of the Dominican Republic

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

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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 2004 2005 2006 2007 2008 2009(1~9) Communication 902,258 896,252 897,026 906,485 985,711 962,432 Wireless Communication 2,534,063 3,623,289 4,605,659 5,512,859 7,210,483 8,374,077 Total 3,436,321 4,519,541 5,502,685 6,419,344 8,196,194 9,336,509 Reference: OPTIC

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< 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 >

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

< Table 2-8 Comparison of Major Communication Companies >

Company Market

introduction

Number of

employees Number of wireless members Service area

Tricom 1988 n/a n/a

Fixed telephone, wireless telephone, internet, TV cable

Codetel 1987 1500 2. million (Wireless Service

brand name is Claro>

Fixed telephone, wireless telephone, internet

Orange 2000 n/a 2.2 million

Reference: KOTRA

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

Name Codetel Orange Tricom Viva Others

Market Share 57% 21% 11% 7% 4%

Reference: KOTRA Santo Domingo KBC

4.1.3 Internet Status

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

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

(Unite: Thousand lines, %)

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

Number of lines 106 134 183 264 340 399

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< 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.

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

Country name 2002 2007 Growth rate compared to

2002(%) Argentina 27.0 36.4 34.8 Brazil 14.2 20.8 46.4 Chile 20.5 36.4 77.5 Dominican Republic 5.5 12.5 127.2 Mexico 15.2 22.1 45.3 Republic of Korea 78.6 80.0 1.7 United States 59.0 70.2 18.9 Reference: ITU

< Table 2-12 Annual PC distribution rate >

(Unit: Number) Classification 2004 2005 2006 2007 2008 2009(1-9) Number of PC 159,432 177,147 196,830 218,700 243,000 270,000 Number of homes 2,182,764 2,182,764 2,182,764 2,182,764 2,182,764 2,182,764 PC distribution rate (%) 7.3 8.1 9.0 10.0 11.1 12.3 Reference: CEI-RD

4.1.5 S/W Developing Company Status

 After interviews with CEI-RD, the main S/W developers are as shown below. < Table 2-13 Status of major S/W developing companies >

Name CAM Informatica, S.A.

Representative Marcos Mejia Vice-President Ejecutivo

Telephone 809.331.7000 Ext.309

E-mail [email protected]

Homepage www.caminf.com

Major business area

 Software development and BAS solution (accounting ERP)

 Work with CODETEL

- Development/application of CLL - Development/application of IDW - Development/application of STR - Development/application of SGC - Development/application of SDP - Development/application of UNICO

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Feasibility Study of the Establishment of the CIBAO Trade Center in the DR 27 Name SINERgIT Telephone 809.368.4000 Telephone www.sinergit.com.do Major business area  Software development : - BPM - ERP - CRM

 Distribution of PC and related accessories

Name MERCASEND

Representative Felix Diaz

Telephone 809.531.2676

Homepage www.mercasend.com

Major business area

 Software called Delphos, Apoyo, Matrix, Funciona, Simes, and ICG have been

provided to more than 200 companies.

Reference: CEI-RD

4.1.6 Discussion Point

 Central American internet users make up 5% of total Internet users around the world. In the last two years, the increase of Internet users in the Central American region has been increased significantly. According to the World Bank and the International Electronic Communication Association, the distribution rate of cell phones in the Dominican Republic has already exceeded the distribution rate in Mexico. The rapid growth can be explained by the increase of foreign investments into the nation after introducing competition in the communications market.

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

4.2 Government Information Status

 Every September, electronic government strategy is established by OPTIC and CNSIC to construct e-Dominicana (updated annually).

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

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

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

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

Project Budget Use Remarks

Government Intranet Feasibility Investigation (Estudio de Factibilidad)

US$ 100,000

Feasibility study for the construction of

government intranet

In progress/G2G Opened in 2006.10

Intranet for Public Security Offices

(IESP, Interconexion Estatal por la Seguridad publica)

N/A

Information share within 17 public safety offices (Ministry of

Communication, Internal Affair, Police, National Security, Construction, Immigration and others)

In progress/G2G

Government Intranet

(Intranet Gubernamental) US$ 3 million

Construction of

government intranet G2G

Executed after feasibility report/G2G Management System for

Social Assistance (SIGAS, Sistema de gestion

de Ayuda Social)

US$ 55,000

System to process social fund cooperation and adjustments

Opened in 2006.10 G2G/G2C Import/Export Portal

(Portal del Exportador) US$ 30,000

Portal site for

import/export companies

Opened in 2006.10 G2B

Virtual Government Directory

(Proyecto Directorio Virtual)

US$ 31,000 Construction of

government address book

Opened in 2006.9 G2G/G2C

Emergency 911 System N/A Construction of

emergency 911 system Planning Stage

Single Window for Business Establishment (Ventanilla Unica para la

Creacion de Empresa)

US$ 570,000

Integration of systemized portal for business establishment Opened in 2006.11 G2B Electronic Complaint Management Center (Centro de Gestion y Atencion al Ciudadno) N/A

Electronic process of civil complaints toward public services

Opened in 2006.12 G2C

Reference: KOTRA

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

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

Feasibility Study Report

Feasibility Study of the Establishment of the CIBAO Trade

Center in the Dominican Republic