Progresses and Challenges of Infrastructure Spending in Timor-Leste

By: Antonio Vitor

The 2013 Timor-Leste Update - ANU

ADB Consultant & MPW Adviser

Outline:

1. Background

2. The Targets in Strategic Development Plan

3. Some Progresses

4. The Challenges

Background

• The status of infrastructure : inadequate and inefficient

• Source of Financing : Self + co-financing

• Implementation issues

• Low execution

• High budget diversion

Timor-Leste’s Strategic Development Plan 2011-2030

• SDP Goal: achieving a middle income country by 2030.

• Infrastructure Tasks : building & maintaining core and productive infrastructures to support growth, increase productivity, create jobs, and national private sector development

• Targets for:

• Roads: - rural roads are fully rehabilitated by 2015

- district roads fully rehabilitated by 2020

- national roads fully upgrade by 2020

- comprehensive maintenance program

- national ring road highway (2 + 2 lanes) by 2030 (to start with Suai-Beaco)

• Water: - by 2030, all citizens will have access to clean water and improved sanitation

• Power/ Electricity: by 2015 everyone in Timor-Leste will have access ( 24/7); and by 2020 reduce fuel dependency by half.

• Ports: Tibar - by 2020 - new, fully operational and efficient major port Suai – by 2015, fully operational and efficient

• Airports: Dili: extension of the runway and a new terminal building

Progresses:

National roads:

• upgraded Liquica-Maubara (Dec 2013) – 14 km

• by 2017 will upgrade about 600 km out of 1,426 kilometers (40%)

• Key links (Dili to Motain; Tibar-Gleno, Dili-Baucau, Baucau-Viqueque, Baucau-Loapalos (Com), Dili-Ainaro, and Manatuto-Natarbora

Rural roads: 240 kilometres out of 3,025 km of rural roads rehabilitated & maintained (70% of the population living in rural areas)

Pilot National Roads Upgrading (Liquica-Maubara)

Progresses (continued)

Electricity :

• 2 new power plants with 250 mgws capacity in place

• 9 Sub-stations,

• connection of 506 km of transmission lines out of 603 km

• June 2013, ---106.072 hhs access to electricity,

• 97,072 hhs connected to the grid -- 9,000 hhs renovable energy.

Tibar Port (PPP) at procurement stage

• Reform the current system, practices and institutional arrangement?

• lacks capacities (human resources & institutions) to deliver SDP targets

• under-developed national private sector (construction, design, supervision)

• still low performance in public investment management and public finance management

• relative small market for private investment low participation – lack competition- high cost)

Challenges

• under-developed financial markets, high-cost in doing business, weak macro-economy environment, poor governance (led to low return on capital)

• political economy influences investment logics

• institutional arrangement in delivering infrastructure (overlapping responsibilities , coordination issues)

• Ineffective investments prioritization

• political interference and of multiple, changing and competing stakeholders.

• clear separation of political and technical responsibilities

Challenges (continued):

MPW 5-year Action Plan

“100% of Dili households with safe 24-hr supply by 2017 ~4000 new connections / year?

2012 2013 2014 2015 2016 20170

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000Dili households with pipe connections

Target Current Trend? 4000 / yr

Year

Ho

us

ho

lds

Figure 2: Dili Water Supply System zoning showing estimated supply continuity level of service (source: ADB TA-7981 in consultation with DNSA)