MANILA, PHILIPPINES (28 June 2005) - ADB will help improve the efficiency and effectiveness of interisland sea transport services in Solomon Islands, through a technical assistance grant approved for US$495,000.
The TA will promote institutional and financial reforms, support private sector development, and train stakeholders to facilitate participation.
The poor state of interisland transport services - characterized by long distances, infrequent and unreliable schedules, and unsafe vessels - poses considerable barriers to market access and impedes the growth of rural production.
This contributes to Solomon Islands being one of the least developed among ADB's Pacific developing member countries, with wide social and economic disparities between the capital of Honiara and the provinces.
Yet, the vast majority of the population lives on rural subsistence and the national economy relies on forestry, fisheries, and cocoa and copra production - industries that are all conducted in rural areas.
"Pro-poor economic growth in Solomon Islands depends on increased productivity in rural areas," says Indu Bhushan, Director for ADB's Pacific Operations Division.
"Improved interisland transport is key to restarting and building rural economics, reducing the demand for migration to the capital, and addressing the challenge of restoring basic social services in rural areas."
The TA will review policies and regulations governing the sector to remove constraints to its development. It will also help improve the financial viability of operators and regulatory agencies by, among other things, providing demand data to assist commercial planning and reviewing maritime fees.
Targeted support will be provided for existing and new operations in the shipping sector in order to support private sector development. Privatization of selected public sector operators will also be supported.
Last, training will be given to transport operators and relevant Government staff to enable them to work effectively within a reformed and liberalized environment.
"By supporting rural economic growth and access to health and education, this TA will make a positive contribution to moving Solomon Islands closer to meeting the Millennium Development Goal on poverty," adds Mr. Bhushan.
The Government will contribute $105,000 toward the TA's total cost of $600,000. The Ministry of Finance, National Reform, and Planning is the executing agency for the TA, which is due for completion in April 2006.