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Vanuatu: Interisland Shipping Support Project

Sovereign (Public) Project | 42392-013 Status: Active

ADB is helping Vanuatu upgrade its port facilities and expand shipping services to remote islands. The project will finance a new interisland shipping terminal in the capital, Port Vila, with improved berthing facilities, along with new and upgraded jetties on five outer islands. It will also establish a safe and reliable shipping support scheme to develop services to non-commercial destinations.

Project Details

Project Officer
Haider, Syed Hussain Pacific Department Request for information
Country
  • Vanuatu
Sector
  • Transport
 
Project Name Interisland Shipping Support Project
Project Number 42392-013
Country Vanuatu
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant 0273-VAN: Interisland Shipping Support Project
Government of New Zealand US$ 12.60 million
Loan 2820-VAN: Interisland Shipping Support Project
concessional ordinary capital resources lending / Asian Development Fund US$ 10.82 million
TA 7938-VAN: Establishment of the Maritime Safety Administration
Technical Assistance Special Fund US$ 500,000.00
New Zealand Cooperation Fund for Technical Assistance US$ 1.00 million
Grant 0427-VAN: Interisland Shipping Support Project (additional financing)
Government of New Zealand US$ 4.65 million
Loan 3249-VAN: Interisland Shipping Support Project (additional financing)
concessional ordinary capital resources lending / Asian Development Fund US$ 18.48 million
TA 7938-VAN: Establishment of the Maritime Safety Administration (Supplementary)
Technical Assistance Special Fund US$ 150,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
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 original loan was approved in November 2011. The Design Supervision Consultants (DSC) contract was awarded in January 2013 and DSC mobilized in February 2013. Upon expiry of the DSC contract in 2017 the Government engaged individual consultants for construction supervision and project management. A third party consultant was engaged to review designs. The findings of a third party consultant confirmed that designs are either faulty or inadequate. Redesign of all wharves is needed, with priority on South Paray. ADB and its cofinancier New Zealand are taking actions to support the government in completing the project.

The civil works contract was awarded in August 2015. Works on South Paray wharf have been able to be carried out up to about 70% completion. Due to concerns of wharf stability and faulty designs, the contractor was issued with a Taking-Over Certificate in May 2018. Works on Simonsen and outerisland wharves have been suspended. The contractor has also demobilized from the South Paray wharf site.

The Office of Maritime Regulator has been established in July 2017. The Regulator was appointed in July 2018. However, due to government changes the regulator moved to another position within the government. An acting regulator has been appointed in January 2019. Additional TA support has been provided by ADB to assist in the implementation of reforms and strengthening of the OMR. The capacity building consultant's contract was extended and the consultant has completed its assignment and submitted all reports in end 2018. The process for the TA closing is ongoing.

Four shipping routes are operational and one is being procured.

The project is estimated as 52.3% complete.

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)

After a competitive recruitment process, the contract for design and construction supervision of all 7 wharves under the Project was signed between the consulting firm and the Government in January 2013. Subsequently, the Government awarded the contract for the repair and reconstruction of all wharves to the successful bidder in August 2015 through a competitive procurement process. Upon expiry of the consulting services contract in 2017 the Government engaged individual consultants for construction supervision and project management. ADB has provided further financial support to the Government to ensure sufficient project management capacity of the Vanuatu Project Management Unit (VPMU) that is responsible for the day-to-day administration of the Project.

Works on South Paray wharf in Port Vila are currently about 70% complete but works on Simonsen Wharf in Santo and the outerisland wharves are yet to commence. Due to technical concerns further designs are still needed before works on the wharves can continue. As such, the infrastructure component of the Project is currently estimated about 52% complete.

The SSS and Maritime Safety Administrator components of the project have been very successful, with 4 routes operational, one additional route being procured and over 60 voyages under the SSS completed. The Office of the Maritime Regulator (OMR) has been established. The Regulator was appointed in July 2018. However, due to government changes the regulator moved to another position within the government. An acting regulator has been appointed in January 2019. ADB approved $150,000 additional financing for the TA to ensure capacity support to the OMR. The capacity building consultant's contract was extended and the consultant has completed its assignment and submitted all reports in end 2018. The process for the TA closing is ongoing.

Geographical Location Lenakel, Litzlitz, Lolowai, Loltong, Port Sandwich, Port Vila, Waesisi
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 during project appraisal 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. Environmental and Social Safeguards Monitoring is being timely conducted and Monitoring Reports are being prepared and disclosed on the ADB web.
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. Environmental and Social Safeguards Monitoring is being timely conducted and Monitoring Reports are being prepared and disclosed on the ADB web.
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 Haider, Syed Hussain
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Ministry of Finance & Economic Management
P.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 29 Mar 2019

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 31 Dec 2018 20 Sep 2019
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.60 Cumulative Contract Awards
ADB 0.00 30 Nov 2011 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 12.60 30 Nov 2011 0.00 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

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 31 Dec 2018 20 Sep 2019
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.65 Cumulative Contract Awards
ADB 0.00 27 Feb 2015 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 4.65 27 Feb 2015 0.00 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

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 31 Dec 2021 -
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 8.82 0.00 95%
Counterpart 3.40 Cumulative Disbursements
Cofinancing 0.00 30 Nov 2011 8.70 0.00 94%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

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 31 Dec 2021 -
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 3.61 0.00 21%
Counterpart 1.67 Cumulative Disbursements
Cofinancing 0.00 27 Feb 2015 3.61 0.00 21%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

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 31 Dec 2018 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
650,000.00 1,000,000.00 498,000.00 0.00 0.00 0.00 2,148,000.00 30 Nov 2011 1,581,696.96
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Interisland Shipping Support Project: Audited Project Financial Statements (January-December 2017) Audited Project Financial Statements Sep 2019
Establishment of the Maritime Safety Administration: Technical Assistance Completion Report TA Completion Reports Jul 2019
Interisland Shipping Support Project: Procurement Plan Procurement Plans Mar 2019
Interisland Shipping Support Project: Audited Project Financial Statements (January-December 2016) Audited Project Financial Statements Nov 2017
Amendment to the Loan Agreements for Loans 2820 and 3249 (Additional Financing)-VAN: Interisland Shipping Support Project Loan Agreement (Ordinary Resources) Apr 2017
Interisland Shipping Support Project: Audited Project Financial Statements (January-December 2015) Audited Project Financial Statements Nov 2016
Loan Agreement (Special Operations) for Interisland Shipping Support Project - Additional Financing Loan Agreement (Special Operations) Mar 2015
Interisland Shipping Support Project (Additional Financing): Report and Recommendation of the President Reports and Recommendations of the President Feb 2015
Interisland Shipping Support Project (Additional Financing): Procurement Plan Procurement Plans Feb 2015
Interisland Shipping Support Project (Additional Financing): Project Administration Manual Project/Program Administration Manual Feb 2015
Interisland Shipping Support Project (Additional Financing): Gender Action Plan Gender Action Plans Feb 2015
Loan Agreement (Special Operations) for Interisland Shipping Support Project Loan Agreement (Special Operations) Aug 2012
Interisland Shipping Support Project Project/Program Administration Manual Nov 2011
Interisland Shipping Support Project: Gender Action Plan Gender Action Plans Nov 2011
Interisland Shipping Support Project Reports and Recommendations of the President Nov 2011

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

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Loan No. 3249-VAN: Interisland Shipping Support Project [VPMU/VISSP/W/17/001 (Rev 2)] Invitation for Bids Closed 02 Oct 2017 21 Nov 2017
Shipping Support Scheme Individual - Consulting Closed 07 Sep 2017 13 Sep 2017
Site Inspector/Field Superintendent (2) Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Resident Engineer Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Contract Administrator Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Team Leader/Contract Engineer Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Environment/Social and Poverty Specialist Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Maritime Operations Specialist Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Project Accountant/Office Support Individual - Consulting Closed 20 Apr 2017 29 Apr 2017
Feasibility Study, Designs, Procurement and Construction Supervision Firm - Consulting Closed 01 Apr 2017 30 Apr 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
LEGAL ADVISOR TO GOV ON DISPUTE BOARD PROCESS (POST-FACTO APPROVED) Loan 3249 23 Aug 2019 DLA PIPER AUSTRALIA LEVEL 9, 480 QUEEN STREET BRISBANE, QLD 4000 AUSTRALIA Ministry of Finance & Economic Management CONSULTANCY 162,168.89 162,168.89
CONSTRUCTION AND REHABILITATION OF WHARVES AND JET TIES Loan 3249 26 Oct 2017 HAWKING INFRASTRUCTURE LIMITED LEVEL 2, 70 STANLEY ST PARNELL, AUCKLAND 1100 NEW ZEALAND Ministry of Finance & Economic Management CONSTRUCTION 17,900,227.00 1,674,521.00