Papua New Guinea: Improving Road User Charges and Private Sector Participation in Road Development

Sovereign Project | 43060-012

Summary

Development and sustainability of infrastructure is a key pillar of the Papua New Guinea Government's Medium-Term Development Strategy. Roads are an important link connecting the country's natural resources to its people, markets and ports, and thus play a critical role in economic development and in reducing poverty. PNG's 8,700 kilometers (km) of national roads constitute the primary network linking the provincial capitals and main population and economic centers. Provincial and district roads (totaling about 10,000 km) provide the secondary and tertiary links. Two major constraints impede improvement and sustainability of the road network. The first is lack of maintenance. About half of the roads in PNG and 70% of the roads in the Highlands region remain in poor condition due to the absence of regular maintenance.

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Project Name Improving Road User Charges and Private Sector Participation in Road Development
Project Number 43060-012
Country Papua New Guinea
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7420-PNG: Improving Road User Charges and Private Sector Participation in Road Development
Japan Special Fund US$ 800,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Transport - Road transport (non-urban) - Transport policies and institutional development
Gender Equity and Mainstreaming
Description Development and sustainability of infrastructure is a key pillar of the Papua New Guinea Government's Medium-Term Development Strategy. Roads are an important link connecting the country's natural resources to its people, markets and ports, and thus play a critical role in economic development and in reducing poverty. PNG's 8,700 kilometers (km) of national roads constitute the primary network linking the provincial capitals and main population and economic centers. Provincial and district roads (totaling about 10,000 km) provide the secondary and tertiary links. Two major constraints impede improvement and sustainability of the road network. The first is lack of maintenance. About half of the roads in PNG and 70% of the roads in the Highlands region remain in poor condition due to the absence of regular maintenance. Without routine maintenance, improved roads quickly fall into disrepair, leading to poor road conditions, longer journey times, higher vehicle operating costs and isolation of rural communities. Consequently, significant national income from export of agricultural products and other businesses is lost and social conditions worsen, exacerbating the problems of social unrest and lack of security. Under the National Road Authority Act of 2003, a national road authority (NRA) was established to manage and maintain the national road network, using revenues from road user charges. The Government is committed to expand maintenance financing through road user charges as provided for under the NRA Act. The second impediment to the improvement and sustainability of the road network is the lack of skilled national and international contractors to undertake road improvement and maintenance works. This TA has been designed to address both these constraints.
Project Rationale and Linkage to Country/Regional Strategy The impact of the TA will be sustainable financing for road maintenance that will facilitate improved access to ports, markets and livelihood opportunities. This will improve road conditions, reduce travel time and transport costs, and will contribute to overall economic development. The outcome of the TA will be the establishment of a functioning system for collection of road user charges to finance road maintenance needs. Another outcome will be increased competition and increasing predictability in road infrastructure contracts.
Impact Sustainable financing of road maintenance
Project Outcome
Description of Outcome

(i) Functioning system of road user charges (RUCs) established for road maintenance financing

(ii) Competitive procurement of road development and maintenance contracts

Progress Toward Outcome The recommendations for increase in road user charges will support establishment of a well functioning road maintenance system.
Implementation Progress
Description of Project Outputs

1. Expansion of the existing RUCs to improve resources for the road fund

2. Increase in the number of contractors interested in bidding on road improvement and maintenance contracts

Status of Implementation Progress (Outputs, Activities, and Issues) Potential sources for road maintenance financing have been identified, recommendation prepared to enhance road user charges, draft legislation and detailed implementation plan have been prepared for increasing road user charges.
Geographical Location Papua New Guinea
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 Consulting Services yet to be determined.
Responsible ADB Officer Sarosh I. Khan
Responsible ADB Department Pacific Department
Responsible ADB Division Transport, Energy and Natural Resources Division, PARD
Executing Agencies
National Road Authority (NRA)Mogoro Motu Building, P.O. Box 1530
Port Moresby, Papua New Guinea
Timetable
Concept Clearance 15 Apr 2009
Fact Finding 21 Apr 2009 to 30 Apr 2009
MRM -
Approval 08 Dec 2009
Last Review Mission -
PDS Creation Date 16 Apr 2009
Last PDS Update 30 Sep 2013

TA 7420-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Dec 2009 13 Jan 2010 13 Jan 2010 31 Dec 2011 30 Nov 2013 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 200,000.00 0.00 0.00 0.00 1,000,000.00 08 Dec 2009 675,031.55

Safeguard Documents

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Evaluation Documents

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