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Countries and Regions Country Partnership Strategies Document
III. Portofolio Management IssuesA. Portfolio Performance25. Since Kiribati joined ADB in 1974, ADB has approved six loans totaling $15.14 million and 34 TAs totaling $8.7 million to the country. Of these, one loan is ongoing and two, Betio Shipyard Rehabilitation and Tarawa Power, have been postevaluated (Appendix 4). The Betio Shipyard Rehabilitation was rated unsuccessful and the Tarawa Power was rated as generally successful. In particular, the ADB postevaluation mission for the Tarawa Power Project emphasized how the project’s sustainability depends on PUB’s ability to provide efficient and cost effective service, which hinges on its institutional framework and its capacity to deal effectively with the operational and management problems of a growing utility company. This issue is still a concern. The ongoing portfolio includes one loan and six TAs. 26. Loan 1648-KIR (SF) Sanitation, Public Health and Environment (SAPHE). The SAPHE (footnote 3), the first loan for Kiribati since 1990, became effective on 15 September 1999. It is expected to improve the health and well being of the population of South Tarawa through a sustained program of improvements in water supply, sewerage, solid waste disposal, and environment conservation. More specifically the project will (i) implement institutional reforms in the management of PUB, (ii) improve the quality and availability of safe drinking water, (iii) rehabilitate and expand sewerage and sanitation systems, and (iv) promote hygiene and sanitation through better solid waste management. The project is about 12 months behind schedule. This delay was caused by delays in effectiveness of the loan and in appointment of the design and supervision consultants. However, the project has recently made significant progress. The project management office and implementation unit have been established and the design and supervision consultants have produced draft reports. The progress in implementation and achievement of the objectives of the project is satisfactory. 27. TA 3108-KIR: Management and Financial Advisory Services for Restructuring the Public Utilities Board (PUB1). This TA (footnote 6) was approved associated with the SAPHE loan. The TA’s objective is to strengthen the institutional base needed for sustainable management of water and sanitation services. More specifically, the TA is expected to (i) support the restructuring of PUB; (ii) provide advisory support to improve the management, finance, accounting, administration, operation, and maintenance capacity of the restructured PUB; and (iii) assist PUB in preparing and implementing a human resource development program for their management and staff. The TA is proceeding satisfactorily. A fully computerized accounting system has been developed, and staff are being trained in its use. The TA will be completed by the end of December 2001. The Government requested that the TA be extended to cover additional work for developing operational methods of inspecting water, sewerage, and solid waste management facilities for an input of about 14 person-months that would entail a cost of US$350,000. Consequently, ADB has programmed a new TA (PUB2) for such assistance in 2002. 28. TA 3109-KIR: Community Development and Participation Initiatives (CDP1). This TA (footnote 4) is associated with the SAPHE loan. The objective is to strengthen beneficiary participation and enhance community awareness and understanding of the aims and objectives of the SAPHE project. Specifically, the TA will (i) promote water conservation; (ii) promote participation in the construction and use of complementary water supply systems; (iii) promote good sanitation practices; and (iv) support effective environmental, sanitation, and health education. The TA is proceeding satisfactorily. Community information and education materials covering the water cycle, sanitation, and composting toilets have been prepared, and community consultations have begun. The TA is expected to be completed by the end of June 2001. The Government requested that the TA be extended to cover additional work to enhance the well-being of individuals and communities through improved knowledge of water and environment management, increased availability of water, improved sanitation, expansion of gardening, use of groundwater, and disposal of waste products. A new TA (CDP2) has been programmed for ADB assistance in 2001. The expected cost is US$540,000. The request for Japan Fund for Poverty Reduction financing is under preparation. 29. TA 3159-KIR: Strengthening Capacity for Financial and Economic Management, Phase II (FEM2). FEM2 (footnote 8) commenced in September 1999. While the first phase of the TA has been instrumental in assisting the Government to articulate its medium-term strategy (MTS), the TA’s impact on implementation of the Government's policy was limited. The second phase of FEM has expanded and worked on the implementation of the recommendations of the MTS. It has also addressed the issues of skills transfer and ownership. The main targeted TA outputs are (i) an annual updating process for the development planning framework including the MTS, annual economic statements, and three-year department strategic plans already in place; (ii) an institutional policy implementation mechanism between the National Economic Planning Office and the ministries through a forum for high level decision makers; and (iii) an institutionalized performance monitoring system for public expenditure management and oversight of the next budgets. The TA is proceeding satisfactorily. The Macroeconomist and the Sector Planning Specialist have given considerable emphasis on establishing and implementing a program of interactive training seminars. The National Development Strategy 2000-2003 has been prepared, widely discussed, and approved in October 2000. The Strategy includes a section on poverty reduction. This is the first time the Government has explicitly acknowledged the existence of poverty and poverty issues in Kiribati. 30. TA 3404-KIR: Public Service Reform. The objective of the TA (footnote 7) was to assist the MFEP and the Public Service Office (PSO) to undertake a public service review. The task involved advising members of the Government’s public sector reform task force on the appropriate methodology to be used to achieve public sector reform. The aim of the review was to lay the foundation for improving the Government’s efficiency and effectiveness in achieving the outputs, objectives and goals specified in the NDS and the budget. A key component in each task was the involvement of, and transfer of skills to, counterpart staff. In addition, the consultant was to formulate a presentation to Cabinet, Parliament, and the wider community on the purposes and benefits of public sector reform. It was hoped that, if successful, this TA would lay the groundwork for a program loan for public sector reform. The individual consultant could not deliver part of the requested output and devoted most of the time to training PSO staff. In particular, the consultant was unable to assist MFEP and PSO in the review of MFEP’s organizational structure and institutional capacity and was not able to formulate a presentation to Cabinet, Parliament, and the wider community of the nature, purpose, and benefit of the PSR. However, PSO staff feels confident that, with the training received through the TA and if so requested, they could perform these two tasks. ADB will monitor whether there is political commitment to proceed with the reform process and will be available to provide assistance, as required. 31. TA 3593-KIR: Preparing an Outer Islands Development Program. This TA (footnote 5) is expected to reduce inequalities in income, gender, and access to basic services. The primary objective of the assistance is to support the process of decentralization and earmark part of the trust fund earnings to reduce the disadvantages of the people living in the outer islands. B. Counterpart Funding32. Under the ADB’s new Graduation Policy, Kiribati remains a Group A country, and as such, continues to be eligible to borrow from ADB’s Asian Development Fund (ADF). Despite its status as least developed country, Kiribati has access to significant financial resources through revenue from its RERF. The Government should be encouraged to gradually increase its own expenditure on projects, particularly those that generate revenue. C. Monitoring and Evaluation33. Under the TA for public sector reform a method for reviewing the public service was designed, as assistance to MFEP and PSO, aiming at efficiency gains in public service and assisting Government in achieving the objectives as specified in the NDS and the budget. The FEM2 TA is strengthening MFEP’s economic and financial capacity and is helping the Government to improve its resource allocation processes and procedures.
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