Papua New Guinea: Community Water Transport Project

Sovereign Project | 34121-013 Status: Closed

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Project Name Community Water Transport Project
Project Number 34121-013
Country Papua New Guinea
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2079-PNG: Community Water Transport Project
Asian Development Fund US$ 19.01 million
Loan 8211-PNG: Community Water Transport Project
OPEC Fund for International Development US$ 4.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Transport - Water transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Description The Project is to: (i) directly reduce poverty of the marginalized and remote maritime and river-based communities by eliminating the constraints to delivery of affordable transport systems and by releasing the potential of community water transport through reinforcing the linkages between transport and poverty reduction, and (ii) support implementation of effective sector governance through establishment of the NMSA. The Project scope includes (i) establishing a Community Water Transport Fund (CWTF) that finances the required water transport subsidy; (ii) restoring water transport infrastructure; (iii) improving small-craft safety; (iv) maximizing utilization of water transport through community support services; (v) implementing maritime sector reforms and establishing the NMSA; and (vi) providing project management services.
Project Rationale and Linkage to Country/Regional Strategy

The living standards of the PNG's remote maritime and river-based communities are nearing absolute poverty. These communities experience extremely constrained transport conditions and lack adequate supplies, staple food, and access to educational and health services. They only occasionally trade in primary goods in small quantities due to the unaffordable transport prices. The Government, the private sector, and the civil society as a whole have recognized the need to improve maritime and river-route transport mechanisms. PNG is implementing a maritime sector reform program that focuses on improving sector effectiveness, efficiency, safety, and delivery of services to the rural communities. The sector reforms will establish an appropriate maritime safety service functions, sustainable cost recovery, and a statutory MSA with the effective tools to support sector development and its contribution to poverty reduction.

The Project supports the Government's Expenditure Priority Area (EPA) of transportation under the strategy for implementing the Medium Term Development Strategy (MTDS). The Project is also in line with the Bank's priority area of transport/infrastructure under the PNG Country Strategy and Programs 2006-2010.

Impact Reduce poverty among PNG's marginalized maritime and river-based communities through enhanced access to markets and social services.

Project Outcome

Description of Outcome

1. Provide affordable water transport services to marginalized communities

2. Induce linkages between remote maritime and river-based communities with rural development programs

3. Improve vessel efficiency and safety and reverse the current reduction in shipping services to marginally viable routes,

4. Develop a safety mentality among community water transport users and operators

5. Reduce Incidence of small-craft distress, loss of life and value of goods,

6. Establish an accountable sector agency (NMSA) with tools, staff, funding, and systems to effectively regulate and manage sector operations.

Progress Toward Outcome Delays were experienced in the initiation of the Project. PIU was mobilized in early February 2008. All activities are now occurring at the planned rate of physical completion. The physical completion as of this date is approximately 81%.
Implementation Progress
Description of Project Outputs

1. Deliver water transport services through minimum subsidy contracts with private sector operators.

2. Provide a sustainable funding mechanism for the shipping subsidy through establishment of a trust with funds invested internationally under prudent management. Maximise use of transport through community development program

3. Restore 40 small coastal and river landings, jetties, and wharves to support the water transport services.

4. Establish umbrella maintenance contracts and subcontract routine maintenance to local communities. Finance maintenance from NMSA revenues

5. Improvement of community water transport safety to reduce loss of life at sea and to develop a safety-oriented mentality.

6. Development of linkages with multsector development programs to optimized access of disadvantaged communities currently reach of these opportunities.

7. Establishment of a functional NMSA. Finance retrenchment package for redundant maritime staff of Dept. of Works and Transport.

8. Establishment of NMSA's systems and facilities.

9. Clearance of NMSA of backlog land claims.

10. Project Management

Status of Implementation Progress (Outputs, Activities, and Issues)

1. Under the project, the Department of Transport (DoT) has established a mechanism for a route franchise scheme. Four shipping franchise routes (Sepik River, Huon-Oro, New Britain and New Ireland) were operating in April 2011. However in May 2011, two routes Sepik River and Huon-Oro were suspended due to major damage to the vessel and due to operator not providing a back-up vessel within a reasonable time frame.

2. The DoT has established a Community Water Transport Trust Fund (CWTTF) to generate income for shipping subsidies and for financing construction, rehabilitation and maintenance of small water transport infrastructure. Community Development prgram underway to maximize synergies.

3. Rebidding of a contract package for 4 jetties and 2 pontoons in East Sepik Province is complete.The Government's National Executive Council (NEC) approved contract award in early September 2012 and contract was signed on 7 November, 2012. PNG Government is expected to fund the balance jetty program, possibly with additional donor funding.

4. The Government has approved the establishment of a Rural Transport Infrastructure Development Division (RTIDD) in June 2012. DoT is currently recruiting staff to these positions. The RTIDD will improve the governance of transport infrastructure and services to remote regions in PNG.

5. "Sea Safe" manual re-published in 2008. The parliament of PNG passed the Small Craft Act in June 2011. Nationwide radio communication coverage and search and rescue guidelines to be effective by 2012. The marine radio communication system installation is 99% completed.

6. 280 persons in target communities per franchise route provided with capacity development training to make use of increased water transport services provided by the project by end 2011.

Geographical Location Papua New Guinea

Safeguard Categories

Environment B
Involuntary Resettlement
Indigenous Peoples

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

Business Opportunities

Consulting Services

International and domestic consulting services will be required for (i) project administration, (ii) community development, (iii) small craft safety, and (iv) civil engineering and supervision. Consultant services will be engaged in accordance with the ADB's Guidelines on the Use of Consultants and other procedures acceptable to ADB for the selection of domestic consultants.

a. Project Administration.

The proposed Project will be administered by a PMU that will (i) program, administer, and coordinate daily project activities, manage contracts including those for consultants and contractors, convene the steering committee, liaise with other Governmental and outside agencies, (ii) develop and manage the community water transport shipping franchise routes; and support establishment and operation of CWTF and issue payment instructions for the water transport franchise subsidy from the investment income of the CWTF. Project administration and the Project Manager will be supported by international consulting expertise in the fields of project management, administration, procurement, and contract management, shipping and franchising, civil engineering of marine structures, maritime safety, search and rescue operations, financial market operations, and training. The Project administration is estimated to require about a total of 312 local and 113 international consultant person-months. Quality-based tender process is justified for the selection of these services due to the complexity of the terms of reference and amalgamation of skills requirements within the team.

b. Community Development.

The community development will require international and local consulting expertise in the fields of (i) community development and entrepreneurial training, (ii) community health and distance education, (iii) rural income generation, and (iv) community awareness and communication strategies. These consultants will launch innovative community schemes for in the marginalized and vulnerable communities affected by the proposed Project and pilot outreach activities in micro-business, health, and capacity building for these communities to benefit from economic advancement opportunities opening to these communities with the improved water transport services and manage the proposed JFPR-project. Community development is estimated to require about a total of 108 local and 40 international consultant person-months.

c. Small Craft Safety.

The small craft safety component will require international and local consulting expertise in the fields of public administration of small craft, small craft safety equipment and policing, radio networks, public information dissemination, and development of school curriculum on sea safety. Sea safety is estimated to require about a total of 100 local and 50 international consultant person-months.

d. Civil Engineering.

The pre-construction activities for the small water transport infrastructure restoration require international consulting expertise in the fields of marine civil engineering, civil works, and contract management. These consultants will support the preparation of detailed specifications for the civil works contracts, contract documents, base-line benefit monitoring indicators, tender processes, and supervise the works. Civil engineering is estimated to require about a total of 40 local and 20 international consultant person-months.

Procurement The proceeds of the loan will finance (i) a fund that will be invested in the international capital markets; (ii) staff retrenchment; (iii) minimum subsidy tenders for community transport services; (iv) restoration of small water transport infrastructure; (v) communication equipment; and (vi) local competitive bidding (LCB) for office facilities of MSA. These will be awarded through international and local competitive bidding in accordance with ADB's Guidelines for Procurement.

Responsible Staff

Responsible ADB Officer Muhammad Amir Ingratubun
Responsible ADB Department Pacific Department
Responsible ADB Division Papua New Guinea Resident Mission
Executing Agencies
Department of Transport
Mr. Robert Kaul
PMU, Department of Transport, PO Box 1489, Port Moresby


Concept Clearance 08 Mar 2001
Fact Finding 12 Mar 2002 to 25 Mar 2002
MRM 16 May 2002
Approval 25 Mar 2004
Last Review Mission -
PDS Creation Date 01 Dec 2006
Last PDS Update 21 Mar 2013

Loan 2079-PNG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Mar 2004 31 May 2004 23 Nov 2004 30 Jun 2012 30 Jun 2013 20 Jan 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 24.14 Cumulative Contract Awards
ADB 19.01 25 Mar 2004 18.85 0.00 99%
Counterpart 5.14 Cumulative Disbursements
Cofinancing 0.00 25 Mar 2004 19.10 0.00 100%

Loan 8211-PNG

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.00 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 4.00 - 0.00 0.00 %
Title Document Type Document Date
Community Water Transport Project: Project Completion Report Project/Program Completion Reports Aug 2014
Community Water Transport Project Project Procurement-Related Reviews Feb 2010
Community Water Transport Project: Summary Initial Poverty and Social Assessment Initial Poverty and Social Analysis Aug 2004
Community Water Transport Project Reports and Recommendations of the President Feb 2004
Community Water Transport Project Technical Assistance Reports Jan 2001

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

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