Vanuatu: Interisland Shipping Support Project

Sovereign Project | 42392-013

Summary

The aim of project is to improve the efficiency and effectiveness of interisland shipping services through provision of an integrated package of assistance. It comprises two major components:

(a) infrastructure investments in the capital of Port Vila and five outer islands, and

(b) establishment of a shipping support scheme to catalyze the provision of services to remote noncommercial destinations using an output-based aid approach.

The Project is complemented by associated TA to improve sector governance through institutional strengthening and legal and regulatory reforms, and by project management services.

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Interisland Shipping Support Project
Project Number 42392-013
Country Vanuatu
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2820-VAN: Interisland Shipping Support Project
Asian Development Fund US$ 10.82 million
TA 7938-VAN: Establishment of the Maritime Safety Administration
Technical Assistance Special Fund US$ 500,000.00
ATF - New Zealand TA Grant US$ 1.00 million
Loan 3249-VAN: Interisland Shipping Support Project (additional financing)
Asian Development Fund US$ 18.48 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector Transport - Transport policies and institutional development - Water transport (non-urban)
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The aim of project is to improve the efficiency and effectiveness of interisland shipping services through provision of an integrated package of assistance. It comprises two major components:

(a) infrastructure investments in the capital of Port Vila and five outer islands, and

(b) establishment of a shipping support scheme to catalyze the provision of services to remote noncommercial destinations using an output-based aid approach.

The Project is complemented by associated TA to improve sector governance through institutional strengthening and legal and regulatory reforms, and by project management services.

Project Rationale and Linkage to Country/Regional Strategy

Vanuatu is dependent on maritime transport as its population of 240,000 is spread over an archipelago of over 60 populated islands. However, a number of sector constraints hold back economic growth and service delivery in Vanuatu, as inadequate infrastructure limits cargo and passenger movement and in some cases prevents vessels from reaching rural areas, and unfavorable geography and poorly functioning markets make some services commercially unviable. The Government's Priorities and Action Agenda 2006-2015 and ADB's Country Partnership Strategy 2009-2014 call for critical constraints to rural accessibility to be alleviated through improved transport infrastructure and services.

In terms of infrastructure, a new domestic terminal in Port Vila, which is the hub of the network, will eliminate a binding constraint on shipping services. A lack of berths causes long waiting times and increased costs, so a new facility will increase efficiency and facilitate growth of the sector. New rural jetties will improve access to disconnected communities and facilitate commodity exports. This improved infrastructure will allow more frequent services. The safety aspect is particularly important for people needing health care, children travelling for education, and women who usually bear the responsibility to assist them.

With respect to service provision, interisland transport is infrequent and unreliable due to a mismatch between supply and demand caused by information asymmetry. Rural producers will be more likely to ready their produce for market once voyages are guaranteed, while vessel operators will be more willing to undertake voyages when cargo and passenger volumes are known. Subsides are justified to correct this market failure and trigger positive externalities, as support for noncommercial destinations will catalyze rural production and increase reliability.

Project's direct benefits are frequent and more reliable shipping services at lower cost. Induced benefits are increased agricultural production and better terms of trade for remote communities. The project will spur economic growth and reduce poverty by facilitating access to markets and social services, and enabling rural populations to market their produce and derive income from natural resources,

Impact People everywhere in Vanuatu have enhanced access to socio-economic opportunities.
Project Outcome
Description of Outcome Private sector operators provide interisland shipping services that are reliable, safe, and adequately frequent
Progress Toward Outcome The project implementation is assessed at 25% complete. Additional financing of $18.48 million and parallel grant from NZMFAT of NZ$6 million was approved by the Board on 27 February 2015. The required additional financing results from (i) a change in technical and design specifications and an increase in the bill of quantities (BOQ); (ii) the government's request for a change in project scope for (a) reconstruction of Simonsen wharf instead of rehabilitation, and (b) dredging of a channel in South Paray bay for asier access to the Port Vila domestic wharf; and (iii) additional consulting services in connection with the foregoing including an IEE for (a) Simonsen wharf and (b) proposed dredged channel in South Paray Bay.
Implementation Progress
Description of Project Outputs

Improved maritime infrastructure is provided in the capital and rural areas

Shipping support and coordination schemes have been established

Project management services ensure efficient and effective project implementation

The Vanuatu Maritime Safety Administration is established

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

Pre-construction activities of civil works are underway, with detailed engineering designs for the wharves complete. An invitation for bids was issued on 3 December 2014 and closed on 11 February 2015. Bids are currently being evaluated.

The SSS has been established. Shipping services routes have been designed and a contract has been awarded, with voyages to the southern group and northern group of islands having commenced. Contract for two more routes are in the process of being awarded.

Geographical Location Vanuatu
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Environment, involuntary resettlement, and indigenous peoples were all assessed in accordance with ADB's Safeguard Policy Statement (2009). Civil works as proposed will not result in any significant adverse environmental impact, and all potential environmental impacts can be adequately mitigated and monitored. An initial environmental examination (IEE) incorporating an environmental management and monitoring plan has been prepared for each of the sites. The Government's assessment procedure is compatible with the environmental impact assessment requirements of ADB.
Involuntary Resettlement The Project is not expected to require involuntary resettlement or involuntary land acquisition, as nearly all works will be undertaken at the same locations as existing facilities, or for new works in sites where the minimal land required has been documented to be owned by the Government. It is possible that minor voluntary land acquisition may be required at one or two sites. If land acquisition is required, the Government will inform ADB and prepare a resettlement plan according to relevant laws and regulations. A Resettlement Framework has been prepared.
Indigenous Peoples The Project is not expected to have a negative impact on indigenous peoples that would trigger ADB's Policy on Indigenous Peoples (1998).
Stakeholder Communication, Participation, and Consultation
During Project Design

Stakeholders in project implementation include MFEM; MIPU and its departments of maritime affairs, ports and harbors, and public works; other government departments concerned with rural development; transport services users, including passengers and freight shippers; the private sector; the New Zealand Ministry of Foreign Affairs and Trade (NZMFAT); ADB; and other development partners.

The MFEM established Vanuatu Project Management Unit (VPMU) as a dedicated unit for managing significant projects, responsible for day-to-day project implementation. The government formed a project steering committee to oversee and monitor project implementation, including policy guidance and coordination, technical design and tendering, progress reports, and audited accounts.

A partner harmonization framework will guide coordination between ADB and NZMFAT.

During Project Implementation
Business Opportunities
Consulting Services An estimated 330 person-months (104 international, 226 national) of consulting services are required to (i) facilitate project management and implementation, (ii) undertake the shipping services scheme and (iii) strengthen the institutional and operational capacity of the executing agency. Consulting firms will be engaged using the QCBS method with a standard quality:cost ratio of 80:20.
Procurement

For civil works, one contract will be procured by international competitive bidding procedures (ICB). With respect to the shipping services scheme, shipping routes will be procured under 5 contract packages by NCB procedures.

ICB procedures will be used for civil works contracts estimated to cost $9.0 million (ADB financing only) but the total estimate is $21.0 million including financing from other donors and Government. The goods contracts valued at $400,000 or higher.

Responsible ADB Officer Rishi Ram Adhar
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Ministry of Finance & Economic ManagementP.M.B. 058
Port Vila
Vanuatu
Timetable
Concept Clearance 30 Mar 2010
Fact Finding 19 Apr 2010 to 28 Apr 2010
MRM 20 Sep 2010
Approval 30 Nov 2011
Last Review Mission -
PDS Creation Date 06 Oct 2010
Last PDS Update 18 Mar 2015

Grant 0273-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Nov 2011 31 Aug 2012 06 Sep 2012 31 Dec 2016 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.00 Cumulative Contract Awards
ADB 0.00 30 Nov 2011 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 30 Nov 2011 0.00 0.00 0%

Grant 0427-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Feb 2015 13 Apr 2015 13 Apr 2015 30 Jun 2017 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.00 Cumulative Contract Awards
ADB 0.00 27 Feb 2015 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Feb 2015 0.00 0.00 0%

Loan 2820-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Nov 2011 31 Aug 2012 06 Sep 2012 30 Jun 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 14.22 Cumulative Contract Awards
ADB 10.82 30 Nov 2011 0.14 0.00 2%
Counterpart 3.40 Cumulative Disbursements
Cofinancing 0.00 30 Nov 2011 0.09 0.00 1%

Loan 3249-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Feb 2015 20 Mar 2015 14 May 2015 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.15 Cumulative Contract Awards
ADB 18.48 27 Feb 2015 0.00 0.00 0%
Counterpart 1.67 Cumulative Disbursements
Cofinancing 0.00 27 Feb 2015 0.00 0.00 0%

TA 7938-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Nov 2011 02 Mar 2012 02 Mar 2012 31 Dec 2014 30 Sep 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 1,000,000.00 498,000.00 0.00 0.00 0.00 1,998,000.00 30 Nov 2011 633,188.58

Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

No documents found.


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