Timor-Leste: Road Network Upgrading Sector Project

Sovereign Project | 46260-002 Status: Approved


ADB is helping Timor-Leste upgrade priority sections of the national road network and make them more climate-resilient. The project will upgrade the trans-island road from Manatuto to Natarbora, which will improve national connectivity and support the governments' petroleum and gas developments on the south coast. The project will also establish systems and practices for road maintenance. 

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Project Name Road Network Upgrading Sector Project
Project Number 46260-002
Country Timor-Leste
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Loan 3020-TIM: Road Network Upgrading Sector Project
Ordinary capital resources US$ 40.00 million
Loan 3021-TIM: Road Network Upgrading Sector Project
Asian Development Fund US$ 10.00 million
Grant 0404-TIM: Road Network Upgrading Sector Project (additional financing)
GEF/Least Developed Countries Fund US$ 4.50 million
Loan: Road Network Upgrading Sector Project
Ordinary capital resources US$ 28.22 million
Asian Development Fund US$ 23.22 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Transport - Road transport (non-urban)

Gender Equity and Mainstreaming Effective gender mainstreaming
Project Rationale and Linkage to Country/Regional Strategy

From 1975 until 1999, a struggle for independence led to prolonged violent conflict. After a brief period under United Nations administration, Timor-Leste gained formal independence in 2002. However, it had suffered massive loss of livelihoods, social capital and basic social services. Public infrastructure had been destroyed or was otherwise dilapidated. International assistance was provided to start building government institutional capacity and state authority from scratch. However, from 2006 until 2008, internal factionalism, which resulted in temporary displacement of nearly a quarter of the population, disrupted recovery efforts and international support for maintaining law and order was again required until 2012. While considerable progress has been made, Timor-Leste remains fragile and its performance remains weak in many respects. ADB's approach to achieving development effectiveness is relevant to the design of any development intervention.

Timor-Leste has, since 2005, derived income from offshore oil and gas. Its sovereign wealth fund had accumulated over $11billion by the end of 2012. Government spending has generated strong economic momentum with gross domestic product (excluding the petroleum sector and the contribution from the United Nations) growing at an average annual rate of 11.7% since 2008 and forecast to continue at 10% in 2013 and 2014. While withdrawals from the fund are prudently managed, Timor-Leste is well placed financially to invest in development.

In 2011, the government published its Strategic Development Plan (SDP), 2011-2030 which aims to sustain economic growth and fast track economic development to achieve a modern and diversified economy with high-quality infrastructure. The SDP envisages three pillars for development - social capital development, infrastructure development, and economic development. Public investment (including in roads) over the first 5 years of the SDP is intended to create the conditions to attract private investment and ensure a private sector-led economy by 2030. An efficient and safe transport system is essential to achieving the three developmental pillars. Upgrading of roads is emphasized in the SDP and the operational plans of the current government.

Alignment with country owned strategies is an important element of engagement in fragile and conflict affected situations (FCAS). Additionally, engagement in FCAS should promote inclusive growth. Economic expansion in Dili is encouraging rural-urban migration, a high rate of youth unemployment and high demands on basic services. Diversification of economic activity beyond Dili is needed to help stem these pressures and share the benefits of petroleum wealth more widely. An efficient transport network is central to economic diversification and national integration.

The currently poor condition of roads results in high costs and unreliable services. The core network comprises 1,426 km of national roads and 869 km of district roads. Rural roads, about 3,000 km in length, provide access to villages and more remote areas. Almost the entire core road network cannot be economically maintained. Only about 8% of the core road network is assessed to be in fair condition and about 70% in very poor condition. This is a constraining the country's efforts to emerge from fragility. Support is essential to bring about "quick wins" and transformational changes to the road network to underpin economic progress and social stability.

The MPW, assisted by ADB, has developed the Medium-Term Road Network Development Program, the implementation of which started in 2010. The Road Network Development Sector Project (RNDSP), the Road Network Upgrading Project (RNUP) and projects supported by Japan International Cooperation Agency and World Bank for the upgrading are under implementation and will upgrade about 356km of road. These development partner supported projects are closely coordinated and are piloting performance based road maintenance by including two-year post construction maintenance in the construction contracts. Performance based maintenance will help alleviate capacity issues that currently constrain effective road maintenance. Local contractors now have the capacity for such maintenance contracts but do not have capacity for major upgrading work. International contractors will be needed in the short and medium term. A sector assessment is in Appendix 2.

Road safety is a related emerging issue. Lack of enforcement of regulations, lack of road safety awareness, and poor road conditions contribute to high accident rates. In 2012, 76 people died according to traffic police data. However the recent WHO 2013 Global Status Report on Road Safety suggests significant under reporting of fatalities and gives a likely "point estimate" of 190 deaths or 19.5 per 100,000 population. The vehicle fleet is expanding rapidly, especially motorcycles, with a threefold increase between 2005 and 2009.

MPW is responsible for planning, developing, and maintaining roads. In common with many FCAS, human capacity is a major constraint. The MPW's Directorate of Roads, Bridges, and Flood Control (DRBFC) has only 12 engineers severely limiting its capacity to manage the road infrastructure. More professional staff, particularly new graduates, are required so that capacity development efforts can be effective. ADB supports the preparation of a medium term capacity development framework for the MPW. Ongoing TA supports scholarships and a technical upgrading program. Twinning arrangements with Indonesia and the Philippine Department of Public Works and Highways are being developed. A project management unit (PMU) will continue to be essential for management of development-partner financed projects. In line with FCAS principles, this will be gradually integrated with the line ministry.

Since 1999, ADB has been the lead development agency in the road sector. It has provided six TA projects, three project grants, one sector grant, and two loans to the road sector. The country partnership strategy (CPS), 2011-2015 continues ADB's strategic directions by concentrating on infrastructure development and management. ADB plans to provide complementary assistance in the core specializations of finance, regional cooperation and integration, and education, and will support the private sector as a key driver of change to help make the transition from a public sector-led economy. ADB support for infrastructure, financial services, and skills training will help meet the needs of a growing economy. An emphasis on the provision of services outside the capital will support growth of the rural economy. Poverty will be alleviated, particularly in rural areas, by connecting the poor to markets and increasing the availability of basic public services.

The emphasis in the CPS on infrastructure reflects its importance to the achievement of the government's development priorities for 2011 2017 and ADB's established presence and comparative strength in infrastructure. ADB will help to coordinate capacity development and investment programming across infrastructure sectors (particularly road transport and water and sanitation), and help to mobilize financial resources for infrastructure investment.

The project will support upgrading of priority sections of the national road network. In particular, the project will finance the upgrading of the trans-island road from Manatuto to Natarbora, which, in addition to greatly improving national connectivity, will directly support the governments' petroleum and gas developments on the south coast. The project will also finance the preparation of other high-priority road links.

Impact Increased and more efficient movement of people and goods
Project Outcome
Description of Outcome Ministy of Public Works (MPW) provides a more reliable and safer road network
Progress Toward Outcome

Construction of Manatuto to Natarbora road commenced in February 2015and is expected to be completed by February 2018

Design of a further 169 km of national road is completed.

Implementation Progress
Description of Project Outputs

National roads will be upgraded and climate proofed by the MOI

Feasibility study and detailed design for the future upgrading of priority road links are prepared

Expand performance-based road maintenance

Generate awareness of road safety and transport-related social issues

Provide efficient project management support services

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

To be assessed later.

To be assessed later.

To be assessed later.

To be assessed later.

To be assessed later.

To be assessed later.

To be assessed later.

To be assessed later.

Recruitment of other PMU staff still ongoing

To be assessed later.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The project is classified as category B for the environment. An environmental assessment and review framework (EARF) has been prepared to ensure that the project will comply with ADB's Safeguard Policy Statement (2009) and Timor-Leste laws. An initial environmental examination (IEE) has been prepared for the core subproject based on the detailed design. This has been publicly disclosed, along with the EARF on the government and ADB websites. IEEs of five candidate subprojects have also been undertaken, and these will be updated based on the detailed design. The environmental impacts of road upgrading works during construction and operation have been assessed, and can be mitigated to acceptable levels.

The Environmental Management Plan (EMP) from the updated IEE for each subproject will be incorporated in civil works contracts. The EMP will guide the PMU, supervision consultants, and contractors in managing, monitoring, and reporting environmental impact mitigations and compliance. Civil works will not start until (i) the contractor has received training on environmental management and has submitted the site-specific EMP; (ii) the site-specific EMP has been reviewed and cleared by the PMU and supervision consultant; and (iii) an

environment license has been obtained from the National Directorate for Environment. During implementation, the environmental management capacity of the DRBFC and PMU will be strengthened through environment specialists who will provide training.

Involuntary Resettlement

The project has been classified as category B for resettlement. The improvement of roads is expected to be mostly within the existing road corridor, but will require some resettlement involving small areas of land, some houses and shops, and roadside stalls and kiosks. A

resettlement framework has been prepared, providing guidelines on screening, assessment, and the preparation of resettlement plans for road subprojects. A draft resettlement plan has been prepared for the core subproject. This has been disclosed, along with the resettlement

framework on the government and ADB websites. Resettlement plans for other subprojects will be prepared during implementation following the resettlement framework. The MPW will endorse and publicly disclose the resettlement framework and draft resettlement plan, and

disseminate relevant information in local languages in subproject areas.

The MPW will finalize the resettlement plan for each subproject after the detailed design is prepared, and ensure that affected persons receive compensation following the resettlement framework. The MPW will (i) appoint a focal person for land issues; (ii) set up an environmental and social unit within PMU, including social safeguard specialists; (iii) coordinate with the Department of Land, Property and Cadastral Services and other relevant agencies; and (iv) set up national and district committees to implement resettlement activities. The project will strengthen the MPW's social safeguard capacity by providing resettlement specialists (30 person-months) and by conducting training.

Indigenous Peoples The project has been classified as category C for indigenous people.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Richard Phelps
Responsible ADB Department Pacific Department
Responsible ADB Division Transport, Energy and Natural Resources Division, PARD
Executing Agencies
Ministry of Transport and Communication
Telecommunication Building
Av. Bispo de Medeiros No. 8 Caicoli
Dili, Timor-Leste
Conselho de Administracao do Fundo Infraestrutura
Palacio do Governo,Ministry of Finance
Edificio 5, 1 Andar Dili, Timor-Leste
Concept Clearance 29 Aug 2012
Fact Finding 25 Apr 2013 to 10 May 2013
MRM 31 May 2013
Approval 19 Sep 2013
Last Review Mission -
Last PDS Update 22 Sep 2015

Grant 0404-TIM

Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Sep 2014 03 Dec 2015 18 Dec 2015 30 Jun 2020 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.50 Cumulative Contract Awards
ADB 0.00 11 Sep 2014 0.00 2.93 65%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 4.50 11 Sep 2014 0.00 0.00 0%

Loan 3020-TIM

Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Sep 2013 18 Nov 2013 03 Mar 2014 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 108.75 Cumulative Contract Awards
ADB 40.00 19 Sep 2013 37.41 0.00 94%
Counterpart 68.75 Cumulative Disbursements
Cofinancing 0.00 19 Sep 2013 5.06 0.00 13%

Loan 3021-TIM

Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Sep 2013 18 Nov 2013 03 Mar 2014 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 19 Sep 2013 7.69 0.00 82%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 19 Sep 2013 3.79 0.00 41%

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.

Evaluation Documents

See also: Independent Evaluation

None currently available.

Related Publications

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