Tonga : Tonga-Fiji Submarine Cable Project

Sovereign Project | 44172-022

The Tonga-Fiji Submarine Cable Project will provide a submarine fiber optic cable system linking Tonga to Fiji where an existing international submarine cable system will provide onward cost-effective access to the rest of the world. This will provide substantially higher initial capacity of 10 Gpbs and reduce international connectivity costs by at least 50%. The submarine cable system will stimulate increased take-up of broadband internet, and lower the cost of telecommunications services. The infrastructure development under the project will be complemented by regulatory capacity development technical assistance from the Pacific Regional Connectivity Program (PRCP) of the World Bank.

Project Details

  • Project Officer
    Cerelala, Albert
    Pacific Department
    Request for information
  • Country/Economy
    Tonga
  • Modality
  • Sector
    • Information and communication technology

Related Projects

Project Name
Tonga-Fiji Submarine Cable Project
Project Number
44172-022
Country / Economy
  • Tonga
Project Status
Closed
Project Type / Modality of Assistance
  • Grant
Source of Funding / Amount
Grant 0256-TON: Tonga-Fiji Submarine Cable Project
Source Amount
Asian Development Fund US$ 9.70 million
Grant: Tonga-Fiji Submarine Cable Project
Source Amount
World Bank US$ 16.50 million
Strategic Agendas
  • Inclusive economic growth
  • Regional integration
Drivers of Change
  • Partnerships
  • Private sector development
Sector / Subsector
  • Information and communication technology / ICT infrastructure

Gender
No gender elements
Description

The Tonga-Fiji Submarine Cable Project will provide a submarine fiber optic cable system linking Tonga to Fiji where an existing international submarine cable system will provide onward cost-effective access to the rest of the world. This will provide substantially higher initial capacity of 10 Gpbs and reduce international connectivity costs by at least 50%. The submarine cable system will stimulate increased take-up of broadband internet, and lower the cost of telecommunications services. The infrastructure development under the project will be complemented by regulatory capacity development technical assistance from the Pacific Regional Connectivity Program (PRCP) of the World Bank.

Project Rationale and Linkage to Country/Regional Strategy

Tonga is far away from large economies in the region (Australia and New Zealand) and has a small population of 102,000 spread across 48 inhabited islands out of 171 islands. About 70% of the population is in Tongatapu where the capital city of Nuku'alofa is located. Main economic activities include fishery, agriculture, and tourism. Tonga's small size and distance from large markets do not allow the people to exploit economies of scale. A narrow resource base and small market have resulted in a highly undiversified economy. Remittances from about 100,000 Tongans overseas account for an estimated 30% of the gross domestic product. As the global economic slowdown affected the principal remittance-sending countries (Australia, New Zealand, and the United States), remittances are expected to fall by an estimated 18% in FY2010, following a decline of 12.5% in FY2009. Lack of economic opportunity within the country resulted in migration from rural to urban areas, and overseas.

Tonga's isolation and other constraints to economic development may be mitigated in part by improved access to and more affordable telecommunications, especially high-speed (broadband) internet, which offers new economic opportunities both domestically and internationally and new avenues for delivery of services. A recent World Bank study indicates that a 10% increase in broadband penetration results in a 1.38% increase in gross domestic product growth in low and middle income countries. Such impacts result from (i) reduced transaction costs for business, government, and household communications; (ii) new business opportunities such as investments in e-commerce and business process outsourcing facilities; and (iii) improved public service delivery, in particular to support e-education and e-health services. Affordable high speed internet services will also help Tongans maintain social cohesion with their relatives residing abroad.

Tonga was the first country in the Pacific to liberalize its telecommunications sector. Since 2002, access to basic telecommunications has increased significantly. Mobile teledensity , at about 60%, is among the highest in the region; and local and international call tariffs are among the lowest in the Pacific. Internet penetration, however, remains low with about 2,500 subscribed broadband internet users. This is because of the high cost and limited availability of international bandwidth, resulting in congestion. Internet service is also open for competition and five internet service providers (ISPs) have been licensed. However, because of the high cost of satellite infrastructure and capacity leases, only two telecommunications operators are operational ISPs. The limited capacity and high cost of international bandwidth is the principal constraint to higher internet penetration, the introduction of new telecommunications services, and new market entrants. This is due to Tonga's total dependence on satellite connectivity. The current market price for two-way satellite capacity is about $3,600 per megabit per second per month. With normal growth, Tonga's bandwidth demand is projected to increase to 1.243 gigabits per second by 2032. With the current satellite capacity and price, it would be impossible to meet the growing demand.

In addition to the positive economic and social impact in Tonga, the submarine cable system will contribute to regional integration. It will increase the frequency and quality of communications among the countries in the region, thus increasing trade in services (tourism and back-office functions) and allowing the region to form a sizable market for digital products and services. It will also strengthen the existing regional public goods and encourage new ones by allowing countries to share the limited knowledge and human resources available in the Pacific.

Impact

Widely available and affordable ICT services improve Tonga's economic performance and public service delivery.

Project Outcome

Description of Outcome

The population of Tonga has access to good quality broadband internet services at an affordable price

Progress Toward Outcome
The submarine fiber optic cable system linking Tonga to Fiji where an existing international submarine cable system provides onward cost-effective access to the rest of the world has already been completed and commissioned in August 2013. People of Tongatapu have since been able to enjoy faster internet services. The government intended to extend the cable to other islands of Ha'apai and Va'avau as well using the project savings and some additional financing to be provided by the Government/TCL. A final option for Government's source of financing for the additional costs for extension of cable to outer islands was agreed to in December 2016 between the Government/ADB/WB. World Bank and ADB approved the required scope change and changes in implementation arrangements. Single source procurement action has been completed and contract signed in Qtr1 2017. Grant closing date has been extended to allow for the cable extension work to be completed by early 2018. Construction of landing stations in Va'avau and Ha'apai are complete with the necessary equipment installation progressing in December 2017. Cable laying from Tongatapu to Vavau via Ha'apai also started after Christmas 2017 and was completed by 9 January 2017. Remaining electronic connections and testing was undertaken between January and March 2018 and submarine cable connection to Ha'apai and Vava'u commissioned in early April 2018.

Implementation Progress

Description of Project Outputs

Establishment and efficient operation of the Tonga submarine cable system by TCL

Efficient and effective project management services by TCL

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

Completed by Qtr 3 2013.

TCL has been managing the project effectively.

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Geographical Location
Nuku'alofa, Tongatapu

Safeguard Categories

Environment
B
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Cable laying and the minor civil works proposed will not result in any significant adverse environmental impact, and all potential environmental impacts can be adequately mitigated and monitored
Involuntary Resettlement
The project does not involve any land acquisition
Indigenous Peoples
No indigenous peoples' issues have been identified

Stakeholder Communication, Participation, and Consultation

During Project Design
Undertaken
During Project Implementation
Undertaken during review missions.

Business Opportunities

Consulting Services
Consulting services included in the procurement package.
Procurement
Evaluation of the bidding documents for procurement of plant design, supply and installation (LIB No. TC 2011/1) is on-going.

Contact

Responsible ADB Officer
Cerelala, Albert
Responsible ADB Department
Pacific Department
Responsible ADB Division
Pacific Subregional Office in Suva, Fiji (SPSO)
Executing Agencies
Ministry of Finance

Timetable

Concept Clearance
07 Jul 2010
Fact Finding
12 Sep 2010 to 24 Sep 2010
MRM
16 Mar 2011
Approval
23 Aug 2011
Last Review Mission
-
Last PDS Update
06 Sep 2018

Funding

Grant 0256-TON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Aug 2011 09 Sep 2011 21 Dec 2011 31 Dec 2016 31 Dec 2018 25 Jun 2018
Financing Plan
  Total (Amount in US$ million)
Project Cost 16.30
ADB 9.70
Counterpart 6.60
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2022 9.70 0.00 100%
Cumulative Disbursements 17 Jun 2022 9.70 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory - 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
Tonga-Fiji Submarine Cable Project: Completion Report Project/Program Completion Reports Dec 2020
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (July 2017-September 2018) Audited Project Financial Statements Oct 2019
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (July 2016-June 2017) Audited Project Financial Statements Jan 2018
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (July 2015-June 2016) Audited Project Financial Statements Mar 2017
Amendment to the Grant Agreement for Grant 0256-TON: Tonga-Fiji Submarine Cable Project Grant Agreement Mar 2017
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (July 2014-June 2015) Audited Project Financial Statements Feb 2016
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (July 2013-June 2014) Audited Project Financial Statements May 2015
Tonga-Fiji Submarine Cable Project: Audited Project Financial Statements (June 2012-June 2013) Audited Project Financial Statements Feb 2014
Tonga-Fiji Submarine Cable Project Procurement Plans Jan 2013
Grant Agreement for Tonga-Fiji Submarine Cable Project between Kingdom of Tonga and Asian Development Bank dated 9 September 2011 Grant Agreement Sep 2011
Project Agreement for Tonga - Fiji Submarine Cable Project between Asian Development Bank and Tonga Cable Limited dated 9 September 2011 Project/Program Agreements Sep 2011
Tonga-Fiji Submarine Cable Project Summary Poverty Reduction and Social Strategies Jul 2011
Tonga-Fiji Submarine Cable Project Reports and Recommendations of the President Jul 2011
Tonga-Fiji Submarine Cable Project Project/Program Administration Manual Jun 2011
Tonga-Fiji Submarine Cable Project Design and Monitoring Frameworks Jul 2010
Tonga-Fiji Submarine Cable Project Initial Poverty and Social Analysis May 2010

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.

Title Document Type Document Date
Tonga-Fiji Submarine Cable Project: Tonga Cable Extension Initial Environmental Examination Initial Environmental Examination Apr 2016
Tonga-Fiji Submarine Cable Project Initial Environmental Examination Mar 2011
Tonga-Fiji Submarine Cable Project: Resettlement Framework Resettlement Frameworks Mar 2011

Evaluation Documents See also: Independent Evaluation

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.

  • 10 Aug 2016 | Project Result / Case Study

    Tonga’s High-Speed Revolution

    An undersea fiber-optic cable network is banishing Tonga’s long-standing isolation and ushering in the wired world of the 21st century.
  • 21 Aug 2013 | News Release

    High Speed Broadband Goes Live in Tonga

    The Asian Development Bank (ADB), Tonga Cable Corporation (TCC), and World Bank Group joined the Government of Tonga at a ceremony today to celebrate the arrival of high speed internet in Tonga.
  • 11 Jun 2013 | News Release

    High-Speed Broadband One Step Closer with the Arrival of the Submarine Cable

    The World Bank Group, the Asian Development Bank (ADB), and Tonga Cable Limited (TCL), media, and others joined the Government of the Kingdom of Tonga at a ceremony today to celebrate the landing of the fiber optic cable in Tongatapu.
  • 24 Jan 2012 | News Release

    Launch of Cable Project to Boost Tonga's International Connectivity

    The Government of the Kingdom of Tonga, the Asian Development Bank and the World Bank have launched a $34 million project which will allow Tonga to gain high-speed internet access by financing the development of a submarine cable system.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Tonga-Fiji Submarine Cable Project Procurement Plans Jan 2013