Vanuatu: Interisland Shipping Support Project (Second Additional Financing)

Sovereign Project | 42392-015

Original project. On 30 November 2011, Asian Development Bank (ADB) approved the Loan 2820 for SDR6.71 million from ADB's concessional ordinary capital resources lending, and Grant 0273 for $12.60 million cofinanced by the Government of New Zealand through the Ministry of Foreign Affairs and Trade (MFAT). The government will provide $3.42 million in counterpart funds.

Project Details

  • Project Officer
    Haider, Syed Hussain
    Pacific Department
    Request for information
  • Country/Economy
    Vanuatu
  • Sector
    • Transport
Project Name Interisland Shipping Support Project (Second Additional Financing)
Project Number 42392-015
Country / Economy Vanuatu
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant: Interisland Shipping Support Project (Second Additional Financing)
Asian Development Fund US$ 5.00 million
Loan: Interisland Shipping Support Project (Second Additional Financing)
Concessional ordinary capital resources lending US$ 55.00 million
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

Original project. On 30 November 2011, Asian Development Bank (ADB) approved the Loan 2820 for SDR6.71 million from ADB's concessional ordinary capital resources lending, and Grant 0273 for $12.60 million cofinanced by the Government of New Zealand through the Ministry of Foreign Affairs and Trade (MFAT). The government will provide $3.42 million in counterpart funds. The original project aims to (i) build a new interisland domestic shipping terminal in Port Vila, with sufficient berthing capacity to handle conventional vessels and landing crafts in the Vanuatu fleet simultaneously, and improve rural access by constructing one outer island wharf and three jetties, rehabilitating or repairing three existing outer island wharves, and ensuring all sites will have ancillary infrastructure, as appropriate for each location, to cater to the transit of passengers (including shelters, toilets and separate facilities for women, children, and men) ; (ii) establish shipping support and coordination schemes to improve frequent and reliable shipping services to remote areas by providing subsidies on commercially unviable routes; (iii) ensure efficient and effective project implementation; and (iv) create the Office of the Maritime Regulator. The grant, partially administered by ADB, was closed on 20 September 2019 whereas the original loan's closing date was extended to 31 December 2024.

First additional financing. On 27 February 2015, ADB approved the first additional financing of (i) SDR12.60 million from ADB's concessional ordinary capital resources (Loan 3249), and (ii) $4.65 million (Grant 0427) cofinanced by the Government of New Zealand through MFAT and government's contribution of $1.67 million. The project was not performing well at the time of the first additional financing processing. The first additional financing results from; (i) change in the design specifications to address unforeseen conditions underneath the seabed resulting in an increased length of piles for Lolowai, Loltong, Port Sandwich, Port Vila, and Simonsen wharves; (ii) increase in scope for (a) the repairs of Lenakel and Litzlitz wharves, and (b) government's request to change the project scope from rehabilitation to full reconstruction of Simonsen wharf, and (c) dredging of a channel in South Paray bay for easier access to domestic Port Villa domestic wharf; and (iii) additional consulting services. The construction of wharf at Waisisi Bay was deleted from project's scope on request by the government, leaving behind seven wharves and jestties in the scope of the project . The overall project costs increased by $24.80 million from $26.82 million in 2011 to $51.62 million in 2015.

The original and first additional financing amount is not sufficient to fund all the five wharves and allied facilities in the ongoing project scope. The proposed second additional financing will cover cost overruns for constructing two new wharves at Port Sandwich and Simonsen areas, public shelters at Lenakel, Litzlitz, and South Paray wharves, a new ramp at Litzlitz wharf, and construction supervision services. The ongoing project (original project and first additional financing) aims to improve Vanuatu's shipping services by upgrading domestic wharves infrastructure in the national capital of Port Vila and four outer islands, and supporting private shipping operators to service remote noncommercial destinations. The project was complemented by an associated technical assistance to improve sector governance, and safety regulation and enforcement through institutional strengthening and legal and regulatory reforms. The additional financing is consistent with the project rationale, extending the socioeconomic benefits to the outer islands of Vanuatu.

Project Rationale and Linkage to Country/Regional Strategy The government has requested from ADB a second additional financing to complete the full scope of the project: (i) construction of new Port Sandwich and Simonsen wharves with support facilities; (ii) construction of passenger shelters with allied facilities at Lenakel, Litzlitz, and South Paray wharves; (iii) construction of a new ramp at Litzlitz wharf; (iv) supervision consultants to supervise the construction activities of Port Sandwich, Simonsen, and South Paray wharves; and (v) to cover cost overruns in ongoing loans. No additional scope has been added in proposed second additional financing. Previous design of wharves were completed in 2014 but due to flaws in original designs, all five wharves under the project are redesigned as per international standards which increased the cost of the overall project from $51.62 million in 2015 to $112.05 million in 2021, a 117% increase. Total increase of $60.43 million constitutes 86% in civil works whereas the remaining 14% in contingencies, supervision consultants and project management.
Impact
Outcome
Outputs
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
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 Retroactive financing will be applied to advance the start of the consulting services for the supervision consultants. The government has been informed that all expenditures must be incurred not more than 12 months before the signing of the grant agreement and that the maximum amount of retroactive financing permitted is 20% of the grant amount under the second additional financing.
Procurement Advance contracting shall be undertaken for the following project components: (i) construction of Port Sandwich and Simonsen wharves, and construction of ramp at Litzlitz; (ii) construction of sheds at Lenakel and Litzlitz; and (iii) construction supervision consultants. All advance contracting (i) will follow the ADB Procurement Policy (2017, as amended from time to time) and its associated staff instructions; and (ii) will be subject to ADB approval.
Responsible ADB Officer Haider, Syed Hussain
Responsible ADB Department Pacific Department
Responsible ADB Division PATC
Executing Agencies
Ministry of Finance & Economic Management
Timetable
Concept Clearance 16 Apr 2021
Fact Finding 19 Apr 2021 to 28 Apr 2021
MRM 14 Apr 2023
Approval -
Last Review Mission -
Last PDS Update 04 May 2021

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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

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Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
Loan 42392-015: Vanuatu Interisland Shipping Support Project (Second Additional Financing) ( Invitation for Bids Closed 02 Jun 2022 13 Jul 2022

Contracts Awarded

No contracts awarded for this project were found


Procurement Plan

None currently available.