The TA will contribute to reducing drain on the fiscal position of the government from underperforming SOEs. Of the six priority areas in the Kiribati Development Plan (KDP) 2012 2015, this TA will support Government efforts on economic growth and poverty reduction priority area. With the government providing substantial resources to subsidies and bailout underperforming SOEs, strengthening these SOEs will result in the effective allocation of resources leading to economic growth and achieving of national priorities. Economic growth and poverty reduction are also ADB's core specializations, as set out in Strategy 2020. The proposed TA will also address priority actions identified in the joint policy matrix
|Project Name||Enhancing Economic Competitiveness through State-Owned Enterprise Reform|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Public sector management / Economic affairs management - Reforms of state owned enterprises
|Gender Equity and Mainstreaming||No gender elements|
|Project Rationale and Linkage to Country/Regional Strategy||The TA will contribute to reducing drain on the fiscal position of the government from underperforming SOEs. Of the six priority areas in the Kiribati Development Plan (KDP) 2012 2015, this TA will support Government efforts on economic growth and poverty reduction priority area. With the government providing substantial resources to subsidies and bailout underperforming SOEs, strengthening these SOEs will result in the effective allocation of resources leading to economic growth and achieving of national priorities. Economic growth and poverty reduction are also ADB's core specializations, as set out in Strategy 2020. The proposed TA will also address priority actions identified in the joint policy matrix|
|Impact||Reduced drain on the fiscal position of the government from underperforming SOEs|
|Description of Outcome||Improved financial, operational and governance performance of SOEs|
|Progress Toward Outcome||Substantial progress has been made in improving SOE performance and reducing large and ad hoc subsidies. As a result, Kiribati is recognized as a regional leader in SOE reform. Most notable reforms include the reduction in operational SOEs from twenty-five to currently sixteen by 2016, the merger of the two SOEs in the copra sector, and the privatization of the telecom company. The government also plans to further reduce the number of SOEs to twelve over the next five years.|
|Description of Project Outputs||
1. Rationalization strategies for at least three SOEs Implemented
2. At least four training courses on SOE governance and monitoring
3. Director performance evaluation system developed and implemented
|Status of Implementation Progress (Outputs, Activities, and Issues)||
March 2017 progress:
1. Captain Cook Hotel Concession. The TA team will support the sale of CCHL to the private sector.
2. Shipping Reform. The TA will continue to assist with the process of improving outer island shipping services including assisting with the establishment of an operational shipping franchise scheme that is bid for by the private sector.
3. Otintaai Hotel Concession. The current concession holder is having difficulty meeting the requirements of the concession deed. The TA team could be requested to assist with establishment of the new concession.
4. Airline Reform. There is a strong possibility that GOK will be gifted a passenger jet. The TA team will undertake a preliminary review of Air Kiribati Limited (an SOE) establish its readiness to take on a passenger jet and its suitability for engaging a private sector partner.
5. Community Service Obligations (CSOs). The TA team will work with the Cabinet and Ministries to ensure the concept of CSOs is fully understood and the process of applying for and acceptance of CSOs is fully embedded and operational.
June 2017 Progress:
1. Betio Shipyards Limited (BSL): A concession deed for the shipyard joint venture was signed on 31 May 2017.
2. Kiribati Shipping Services Limited (KSSL): The government indicated its intention to revive KSSL and place it under international management by closing and liquidate loss-making KSSL and outsourcing its remaining vessel.
3. Plant and Vehicle Unit (PVU): Cabinet approved reducing the scope of PVU's operations so that, a) PVU could focus solely on the provision and maintenance of heavy plant, equipment and vehicles; b) All activities that are not related to Government be ceased; c) PVU rental rates be reviewed with a view to reduce exorbitant commercial rates based on the 5-year life-cycle of the vehicle; d) Ministry of Public Works and Utilities review its activities that overlap with PVU and to ensure that they are streamlined with overlaps mitigated; e) PVU Branch in Kiritimati to be absorbed as a division of Ministry of Line and Phoenix Islands Development.
4. Merger of Kiribati Copra Cooperative Society (KCCS) and Kiribati Copra Millers Limited (KCML): The new coconut sector SOE, now known as Kiribati Coconut Development Ltd will absorb the functions of the two-existing copra SOEs and is near completion.
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||During Project Design, ADB consulted the Ministry of Finance and the SOE Monitoring Unit, the SOE Reform Steering Committee and Kiribati Development Partners.|
|During Project Implementation||The review missions will consult the different stakeholders to update members on progress of the TA.|
Consulting services will support the three outputs of this technical assistance (TA).
The team leader, who will be a state-owned enterprise (SOE) reform specialist, will supervise the TA. The consultants will work closely together to ensure the TA is in line with the proposed scope. The TA will work closely with 3 SOEs, which the government will select from the 23 SOEs.
Consulting services will include:
i) SOE reform specialist and team leader (international, 10 person-months, intermittent);
ii) SOE legal specialist (international, 4 person-months, intermittent);
iii) SOE accounting specialist (international, 3 person-months, intermittent);
iv) Capacity building specialist (international, 3 person-months, intermittent); and
v) SOE specialist (national, 10 person-months, intermittent).
|Procurement||Financed by Japan Fund for Poverty Reduction-US$800,000.|
|Responsible ADB Officer||Tora, Laisiasa Natakubu|
|Responsible ADB Department||Pacific Department|
|Responsible ADB Division||Pacific Subregional Office in Suva, Fiji|
Ministry of Finance and Economic Development
P.O. Box 67
|Concept Clearance||10 Jun 2013|
|Fact Finding||29 Jul 2013 to 01 Aug 2013|
|Approval||08 Oct 2013|
|Last Review Mission||-|
|Last PDS Update||21 Sep 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|08 Oct 2013||21 Oct 2013||21 Oct 2013||31 Dec 2016||31 Oct 2018||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|222,000.00||1,230,000.00||80,000.00||0.00||0.00||0.00||1,532,000.00||08 Oct 2013||1,065,004.44|
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.
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|Title||Document Type||Document Date|
|Enhancing Economic Competitiveness through State-Owned Enterprise Reform||Technical Assistance Reports||Oct 2013|
Safeguard Documents See also: Safeguards
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Evaluation Documents See also: Independent Evaluation
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