Annual Report 2006

ADB is intensifying its focus on infrastructure support in Timor-Leste. Reversing the decline in infrastructure assets and services is a high priority for the country. Meanwhile, capacity constraints restrict the Government’s ability to fully utilize the capital development budget allocations. ADB and the Australian Agency for International Development are preparing a $25 million 5-year joint technical assistance program to help infrastructure ministries execute their capital programs.

Political crises and violence affected ADB operations in Timor-Leste. Work was suspended on an ADB-supported road rehabilitation project and the start of a follow-on project was delayed. Technical assistance for preparing a proposed water supply and sanitation project for Dili under the Japan Special Fund was also suspended.

Work on preparing the water supply and sanitation project did not recommence in 2006 but resumed on the road rehabilitation project ahead of any other Government- or donor-funded project. By year-end, road works under the Second Emergency Infrastructure Rehabilitation Project were 95% complete and road connectivity had been maintained in very difficult terrain on several critical north–south routes.

A Path to Progress in Timor-Leste

In one of the world’s poorest countries, roads provide poor farming communities with a way to get their produce to market and the Government with the means to deliver essential services to rural communities. Timor-Leste has an extensive road network of about 6,000 km, but lack of maintenance during years of conflict, combined with torrential rains and difficult geological conditions in the mountainous country, has resulted in rapid deterioration of the roads. Only 24% of national roads and 11% of district roads are in good condition, leading to high operating and repair costs for providers of public transport. This means high passenger fares, creating particular difficulties for the poor.

The ADB-supported Emergency Infrastructure Rehabilitation Project (Phase 2), in operation since 2002, has helped provide much-needed work to the poorest of the poor while improving access to markets and to education, health, and other basic services.

Project implementation since September 2004 has mostly kept pace with the revised schedule. In 2006, the country experienced extreme difficulties because of civil unrest, which began in the capital, Dili, in April and continued until September, with further occasional disturbances reported until the end of the year. As a result, public and private sectors companies based in Dili faced severe operational difficulties for a significant part of 2006. The ADB team remained in the country during the crisis and was able to remobilize several contractors in June 2006 and recommence works—the first works anywhere in the country to restart. By the end of December 2006, overall construction progress for the seven road contracts and Cassa Bridge had been 93% completed.

The project continues to create jobs, inject money into poor communities, connect them to services, and reduce economic costs.

The Emergency Infrastructure Rehabilitation Project has provided much-needed work to the poorest of the poor while improving access to markets and to education, health, and other basic services