the world bank for official use onlydocuments.worldbank.org/curated/en/723181468173392… · ·...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: PAD613

PROJECT PAPER

ON A

PROPOSED ADDITIONAL FINANCING

IN THE AMOUNT OF SDR 4.0 MILLION (US$ 6.06 MILLION EQUIVALENT)

TO

TUVALU

FOR THE

TUVALU AVIATION INVESTMENT PROJECT

September 30, 2013

Timor-Leste, Papua New Guinea & the Pacific Islands Sustainable Development Department East Asia and Pacific Region

This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective August 31, 2013)

Currency Unit = Australian Dollar (AUD) US$1 = AUD 1.1183 US$1 = SDR 0.6599

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AusAID Australian Agency for International Development AF Additional Financing AUD Australian Dollar DoE Department of Environment EMP Environmental Management Plan EIRR Economic Internal Rate of Return FM Financial Management GoTv Government of Tuvalu IDA International Development Association NGO Non-Governmental Organization ORAF Operational Risk Assessment Framework PAIP Pacific Aviation Investment Program PDO Project Development Objective PST Project Support Team RAP Resettlement Action Plan RPF Resettlement Policy Framework SDR Special Drawing Rights TFSU Technical and Fiduciary Services Unit TvAIP Tuvalu Aviation Investment Project US$ United States Dollar

Vice President: Axel van Trotsenburg

Country Director: Franz Drees-Gross Sector Manager: Michel Kerf Sector Director: John Roome

Task Team Leader: Christopher R. Bennett

TUVALU


CONTENTS

Project Paper Data Sheet ............................................................................................ i

Introduction ............................................................................................................... 1

Background and Rationale for Additional Financing ............................................... 1

Proposed Changes ..................................................................................................... 3

Appraisal Summary .................................................................................................. 5

Annex 1: Revised Results Framework and Monitoring Indicators ........................... 9

Annex 2: Operational Risk Assessment Framework .............................................. 18

i

TUVALU


ADDITIONAL FINANCING DATA SHEET

Tuvalu

Tuvalu Aviation Investment Project - Additional Financing ( P145310 )

EAST ASIA AND PACIFIC

EASNS .

Basic Information – Parent

Parent Project ID: P128940 Original EA Category: B - Partial Assessment

Revised Closing Date: 31-Dec-2016 Current EA Category:

Basic Information – Additional Financing (AF)

Project ID: P145310 Additional Financing Type (from AUS):

Scale Up

Regional Vice President: Axel van Trotsenburg Proposed EA Category: B - Partial Assessment

Country Director: Franz R. Drees-Gross Expected Effectiveness Date:

1-Dec-2013

Sector Director: John A. Roome Expected Closing Date: 31-Dec-2016

Sector Manager: Michel Kerf Report No: PAD613

Team Leader: Christopher R. Bennett

Borrower

Organization Name Contact Title Telephone Email

Ministry of Finance and Economic Development (688) 20-202 Ext.

[email protected]

Project Financing Data – Parent (in USD Million)

Key Dates

Project Ln/Cr/TF Status Approval Date Signing Date Effectiveness

DateOriginal Closing Date

Revised Closing Date

P128940 IDA-H7490 Effective

13-Dec-2011 17-Feb-2012 20-Mar-2012 31-Dec-2016 31-Dec-2016

P128940 TF-12703 Effective

30-Jul-2012 27-Aug-2012 27-Nov-2012 31-Dec-2016 31-Dec-2016

Disbursements

ii

Project Ln/Cr/TF Status Currency Original Revised Cancelled

Disbursed

Undisbursed

% Disbursed

P128940 IDA-H7490 Effective

USD 11.85 11.85 0.00 0.89 10.47 7.53

P128940 TF-12703 Effective

USD 0.17 0.17 0.00 0.07 0.10 42.49

Project Financing Data – Additional Financing (AF) (in USD Million)

[ ] Loan [X] Grant [ ] Other

[ ] Credit [ ] Guarantee

Total Project Cost: 6.06 Total Bank Financing: 6.06

Total Cofinancing: Financing Gap: 0.00

Financing Source – Additional Financing (AF) Amount

BORROWER/RECIPIENT 0.00

IDA Grant 6.06

Total 6.06

Expected Disbursements (in USD Million) – Additional Financing (AF)

Fiscal Year 2014 2015 2016 2017

Annual 1.50 3.00 1.56 0.00

Cumulative 1.50 4.50 6.06 6.06

Policy Waivers

Does the project depart from the CAS in content or in other significant respects? No

Explanation

Does the project require any policy waiver(s)? No

Explanation

Team Composition

Bank Staff

Name Title Specialization Unit

Christopher R. Bennett Sr. Transport. Spec. Team Leader EASNS

Christopher J. De Serio Operations Analyst Co-Task Team Leader EASIN

Alex Theo Visser Consultant Pavement Engineer EASNS

iii

Beverly Ann McLean Consultant Social Specialist EASNS

Binyam Reja Lead Transport Specialist

Peer Reviewer EASCS

Charles E. Schlumberger Lead Air Transport Specialist

Lead Air Transport Specialist

TWITR

Cristiano Costa e Silva Nunes

Senior Procurement Specialist

Senior Procurement Specialist

EASR1

Lucy Pan Research Analyst Research Analyst EASPN

Marjorie Mpundu Senior Counsel Senior Counsel LEGES

Megan Rose Schlotjes Consultant Engineer EASNS

Nora Weisskopf Junior Professional Associate

Aviation Specialist TWITR

Penelope Ruth Ferguson Consultant Environmental Specialist EASWE

Pierre Graftieaux Lead Transport Specialist

Peer Reviewer AFTTR

Richard Martin Humphreys

Senior Transport Economist

Peer Reviewer AFTTR

Rodrigo Archondo-Callao

Sr Highway Engineer Economic Analysis ECSTR

Stephen Paul Hartung Financial Management Specialist

Financial Management Specialist

EASFM

MacKenzie Fillow Consultant Legal LEGES

Non Bank Staff

Name Title Office Phone City

Locations

Country First Administrative Division

Tuvalu Funafuti

Institutional Data

Parent ( Pacific Aviation Investment - Tuvalu-P128940 )

Sector Board

Transport

Sectors / Climate Change

Sector (Maximum 5 and total % must equal 100)

Major Sector Sector % Adaptation Co-benefits %

Mitigation Co-benefits %

iv

Transportation Aviation 87

Public Administration, Law, and Justice

Public administration- Transportation

13

Total 100

I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project.

Themes

Theme (Maximum 5 and total % must equal 100)

Major theme Theme %

Environment and natural resources management

Climate change 23

Trade and integration Regional integration 46

Social protection and risk management Natural disaster management 23

Public sector governance Administrative and civil service reform 8

Total 100

Additional Financing Tuvalu Aviation Investment Project - Additional Financing ( P145310 )

Sector Board

Transport

Sectors / Climate Change

Sector (Maximum 5 and total % must equal 100)

Major Sector Sector % Adaptation Co-benefits %

Mitigation Co-benefits %

Transportation Rural and Inter-Urban Roads and Highways

100 10

Total 100

I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project.

Themes

Theme (Maximum 5 and total % must equal 100)

Major theme Theme %

Trade and integration Regional integration 46

Environment and natural resources Climate change 23

v

management

Social protection and risk management Natural disaster management 23

Public sector governance Administrative and civil service reform 8

Total 100

Summary of Proposed Changes

The project will be provided with additional financing to cover the cost of resurfacing the roads on Fongafale Island which provide access to the Funafuti airport and key services. The project is also being restructured to reflect changes in project activities and eliminate investments that are no longer required.

Change in Implementing Agency Yes [ ] No [ X ]

Change in Project's Development Objectives Yes [ X ] No [ ]

Change in Results Framework Yes [ X ] No [ ]

Change in Safeguard Policies Triggered Yes [ X ] No [ ]

Change of EA category Yes [ ] No [ X ]

Other Changes to Safeguards Yes [ ] No [ X ]

Change in Legal Covenants Yes [ X ] No [ ]

Change in Loan Closing Date(s) Yes [X] No []

Cancellations Proposed Yes [ ] No [ X ]

Change in Disbursement Arrangements Yes [ ] No [ X ]

Reallocation between Disbursement Categories Yes [ ] No [ X ]

Change in Disbursement Estimates Yes [X] No []

Change to Components and Cost Yes [ X ] No [ ]

Change in Institutional Arrangements Yes [ ] No [ X ]

Change in Financial Management Yes [ ] No [ X ]

Change in Procurement Yes [ ] No [ X ]

Change in Implementation Schedule Yes [ X ] No [ ]

Other Change(s) Yes [ ] No [ X ]

Development Objective/Results PHHHDO

Project’s Development Objectives PHHCPDO

Original PDO - Parent

The project development objective is to improve operational safety and oversight of international air transport infrastructure.

Current PDO - Parent

vi

Change in Project's Development Objectives

Explanation:

More clearly accounts for including roads providing access or support to aviation infrastructure.

Proposed New PDO - Additional Financing (AF)

To improve the safety and security of air transport and associated infrastructure.

Change in Results Framework PHHCRF

Explanation:

Additional indicators included to cover the IDA Core Indicator requirements.

Compliance PHHHCompl

Change in Safeguard Policies Triggered PHHCSPT

Explanation:

OP/BP 4.12 is being triggered to address the potential for: (i) temporary land acquisition for drainage easements; and (ii) the cutting down of trees to ensure safe access to the airport.

Current and Proposed Safeguard Policies Triggered:

Current Proposed

Environmental Assessment (OP) (BP 4.01) Yes Yes

Natural Habitats (OP) (BP 4.04) No No

Forests (OP) (BP 4.36) No No

Pest Management (OP 4.09) No No

Physical Cultural Resources (OP) (BP 4.11) No No

Indigenous Peoples (OP) (BP 4.10) No No

Involuntary Resettlement (OP) (BP 4.12) No Yes

Safety of Dams (OP) (BP 4.37) No No

Projects on International Waterways (OP) (BP 7.50)

No No

Projects in Disputed Areas (OP) (BP 7.60) No No

Components PHHHCompo

Change to Components and Cost PHHCCC

Explanation:

The cost of Component A: Aviation Infrastructure Investments increased to cover: (i) proposed new investments; (ii) potential exporting of solid waste; and, (iii) reallocations from deleted study. Component C is canceled as the study into options for managing Funafuti airport isn't needed.

Current Component Name

Proposed Component Name

Current Cost (US$M)

Proposed Cost (US$M) Action

vii

Aviation Infrastructure Investments

Aviation Infrastructure Investments 11.76 18.78 Revised

Aviation Sector Reform

Aviation Sector Reform 0.72 0.70 Revised

Strengthening Airport Operations and Management Capacity

Strengthening Airport Operations and Management Capacity

0.25 0 Marked for Deletion

Project Support and Training

Project Support and Training 1.10 1.32 Revised

Total: 13.83 20.79

Other Change(s) PHHHOthC

Change in Implementation Schedule PHHCISch

Explanation:

Due to delays in completing design process, construction will start later than anticipated. The closing date has been extended to reflect this.

Appraisal Summary PHHHAppS

Economic and Financial Analysis PHHASEFA

Explanation:

The project has an Economic Internal Rate of Return (EIRR) of 15% and a Net Present Value (NPV) of US$ 0.81 million. Even when the costs are increased by 10%, and the benefits are decreased by 10%, the project is still economically viable with an EIRR of 12% and an NPV of US$ 0.12 million.

Technical Analysis PHHASTA

Explanation:

Please refer to the project paper

Social Analysis PHHASSA

Explanation:


Environmental Analysis PHHASEnvA

Explanation:


Risk PHHASRisk

Explanation:


1

Additional Financing to the Tuvalu Aviation Investment Project

I. Introduction 1. In accordance with Bank OP 10.00, this Project Paper seeks approval for (i) an additional IDA grant in an amount of US$ 6.06 million equivalent for the Tuvalu Aviation Investment Project (TvAIP) (Grant No. IDA-H7490 and TF-12703); and (ii) and a restructuring including a change to the Project Development Objective (PDO) and associated indicators to reflect this proposed additional financing (AF).

2. AF has been requested by the Government of Tuvalu (GoTv) to scale up the ongoing project to support the resurfacing the roads on Fongafale Island which provide access to the Funafuti airport and key services. The project is also being restructured to reflect changes in project activities and eliminate investments that are no longer required.

II. Background and Rationale for Additional Financing in the amount of US$ 6.06 million.

3. The project is the Bank’s first ever IDA financed investment in Tuvalu, and is part of the ‘Pacific Aviation Investment Program’ (PAIP). The PAIP project development objective (PDO) is “to improve operational safety and oversight of international air transport infrastructure.” The original TvAIP financing was US$ 11.85 million, approved on December 13, 2011, as part of a regional, horizontal Adaptable Program Loan (APL). The project became effective on March 20, 2012 and it has disbursed close to 10% of its resources.

4. Tuvalu is a unique country. The main island of Fongafale on Funafuti atoll, home to the capital and just under 50 percent of the country’s population of some 10,000 people, is at its widest point only 650 m wide, with much of this wider section aken up by the runway for the international airport. Much of Fongafale is less than 75 m wide. According to the South Pacific Commission, after Nauru, Tuvalu’s population density is the second highest in the Pacific, with 431 persons/km2—and the density is higher in Fongafale given the limited land area. Fongafale is home to the country’s hospital, high schools, a branch campus of the University of the South Pacific, radio station, main port, as well as most of the businesses.

5. The 15.4 km road network in Fongafale was paved in 2002 and is reaching the end of its service life. Since the TvAIP project was appraised in August 2011, the deterioration of the road has markedly increased and the heavily trafficked section adjacent to the airport is now starting to pothole, with edge break accelerating on many roads. Some 25 percent of the 41 speed humps are in need of repair. Other sections are also potholing, and unless the less trafficked, better performing sections receive treatment soon, they will also begin to fail.

6. The GoTv requested that the repair and resurfacing of the roads be done at the same time as the proposed runway resurfacing. The same technology would be used, and having a single contractor to repair both the roads and runway at the same time will offer significant economies of scale. The GoTv has no option but to undertake the works within the next few years. Packaging the road and runway works offers a number of major advantages for the GoTv:

2

i. the roads will be repaired before they deteriorate further, resulting in less expensive and more durable works thereby minimizing future maintenance expenditure;

ii. the aggregate for the road and runway works need to be imported from Fiji and it will be easier for the GoTv to manage the environmental impact with a single contract;

iii. delaying the road works would require a second overseas contractor, incurring very high mobilization costs relative to smaller scale works, a structural problem facing small, remote islands states such as Tuvalu;

iv. it will be necessary to procure a new supervision consultant rather than have the supervision done by the same consultant supervising the runway works.

7. A good road network providing access to the international airport is an essential element of aviation safety. The International Civil Aviation Organization’s (ICAO’s) Standards and Recommended Practices call for roads with the ability to support the heaviest vehicles in order to ensure minimum response time in case of aircraft accidents. Particular attention is to be given to the provision of ready access to approach areas up to one kilometer from the runway thresholds (i.e. the end of the runway). Having the road network in good condition ensures that: (i) fire vehicles reach any accident site quickly; (ii) ambulances can reach the hospital or clinic rapidly from any accident site; and, (iii) regular and voluntary fire fighters and emergency personnel reach the airport or remote crash site quickly.

8. Alternatives Considered. The alternatives to AF considered included:

i. Using GoTv’s own funds: The GoTv does not have sufficient funds to finance the proposed investment. They are relying on donors to provide budget support to meet ongoing expenditures.

ii. Reducing the standards of the works: Letting some of the lower trafficked roads revert to gravel is an option, however, there are only some 2,000 m3 of coral gravel available in the entire atoll so ongoing maintenance of gravel roads is impossible without regularly importing materials from overseas. As these would require fumigation with each delivery, this would prove to be financially unviable. Alternative forms of bituminous paving were considered, but are not cost effective. Economies of scale and efficiency considerations dictate that the same type of pavement application be used as on the runway.

9. Project Performance. Progress towards achievement of the development objective is considered Satisfactory and implementation progress is considered Moderately Satisfactory. The detailed design of the runway resurfacing (estimated cost US$ 5 million) and navigation aids (estimated cost US$ 1.2 million) are complete. Regional procurement arrangements are in place1, and contract tendering is expected in the fourth quarter of 2013.

1 The procurement plan calls for the runways at Fua’amotu and Vava’u in Tonga to be bid at the same time as the Funafuti runway. This is being done so as to maximize the interests of contractors in the works. For navigation aids, a single package for Kiribati, Tuvalu and Tonga is planned.

3

III. Proposed Changes 10. Project Development Objective (PDO): The original PDO is “to improve operational safety and oversight of international air transport infrastructure”. The PDO will be modified to reflect the investment in road infrastructure2; and changed “to improve the safety and security of air transport and associated infrastructure”.

11. Project Outcome Indicators: Table 1 below summarizes the changes to the PDO Level Results Indicators. Details are provided in Annex 1.

Table 1: Changes to the PDO Level Results Indicators

Indicator Original Target Changes with AF Revised Target Implementation of a regional safety and security levy for departing international passengers

31 December 2012 Deadline extended since the process of implementing the levy has been delayed due to the need to introduce the necessary legislation and arrange for the levy to be collected as part of the ticket purchase price, both of which are now in progress.

30 June 2014

Rural roads rehabilitated N/A

New IDA core indicator. 8 km by 2014

Non-rural roads rehabilitated

N/A New IDA core indicator. 7.4 km by 2014

Roads in good and fair condition as a share of total classified roads

N/A New IDA core indicator. 100% by 2014

12. Project Financing: The financing is increased by US$ 6.06 million. Table 2 shows the original and revised financing plans. Table 3 gives the costs and financing, by components, of the original project and the additional financing. Further details on the individual activities are on the project files.

Table 2: Project Financing Plan

Source

Original With AF Amount

(US$ million)

Share of Total (%)

Amount (US$

million)

Share of Total (%)

IDA (grant) 11.85 86 17.91 86 Government of Australia through PRIF (grant) 0.17 1 0.17 1 Government of Tuvalu1/ 1.80 13 2.71 13

Total 13.82 100 20.79 100 Note: 1/ The GoTv counterpart contribution is through foregone taxes

2 It should be noted that under the PAIP road infrastructure had already been included—in Kiribati, the project finances the resurfacing of the main road from Cassidy International Airport to London. However, since the Tuvalu project includes additional roads which are indirectly linked to the airport it was decided to revise the PDO.

4

Table 3: Revised Costs by Component

Component Cost in US$ million

Original Cost Changes with AF Change

A - Aviation Infrastructure Investments 9.44 15.40 5.96

B - Aviation Sector Reform 0.58 0.58 0.00

C - Strengthening Airport Operations and Management Capacity

0.20 0.00 -0.20

D - Project Support 0.88 1.08 0.20

Contingencies 0.92 1.03 0.10

Taxes 1.80 2.71 0.91

Total $13.82 $20.79 6.97

13. Project Activities: The following changes will be made to the project’s activities:

Component A: Aviation Infrastructure Investments (US$16.33 million including contingencies).

i. There is a new activity ‘Resurfacing Funafuti Roads’. This activity will finance the road resurfacing, solar street lighting, a road safety awareness campaign, and where appropriate small maintenance equipment.

ii. There is a new activity ‘Water Cistern under the Terminal’. This will hold some 800,000 liters, and provide an important drinking water supply for local residents given the frequent droughts.

iii. Acquisition of new fire tender is being cancelled. The GoTv is arranging for a refurbished fire tender to be donated by the Government of New Zealand, saving some US$800,000.

iv. The ‘Obstacle Limitation Survey’ was included within the scope of the Design and Supervision Consultant’s contract rather than a separate activity.

v. The control tower will no longer be part of the terminal as originally planned, but will be a separate structure that also houses the ‘Fire Tender Shelter’. Funding for this new activity will come from the savings from cancelling the fire tender procurement.

vi. There is provisionally a new activity ‘Removal of Solid Waste from Funafuti’ to export recyclable and other waste materials (see below under Environment and Social).

Component C: Strengthening Airport Operations and Management Capacity. The only activity planned under this component was a study into the options for managing Funafuti International Airport. After considering options it was found that a restructuring of the existing positions and lines of reporting within government would achieve the goal of separating management from regulation of the airport. The study is therefore no longer necessary.

5

Component D: Project Support (US$ 1.14 million including contingencies). Additional funding of US$200,000 is provided for project support costs.

14. Implementation Arrangements: There are no changes to the implementation arrangements. The Tuvalu ‘Project Support Team’ (PST), with the support of the PAIP Technical and Fiduciary Services Unit (TFSU) in Tonga, is effectively managing the project. The Ministry of Works will coordinate closely with the contractor and the PST during execution of the road works.

15. Covenants. A dated legal covenant for collecting the safety and security levy of AU$5 equivalent is revised, extending the deadline from 31 December 2012 to 30 June 2014. The GoTv has made recent progress towards instituting the mechanisms for collecting the levy but more time is required. Covenants are also provided with regard to the potential exporting of solid waste that: (i) all solid waste generated by Project activities shall be disposed of in accordance with acceptable environmental practices as further stipulated in the EMP; and, (ii) no exporting of solid waste shall be done unless the measures required under the EMP have been taken, and the Association has confirmed that said activities may be commenced.

16. Indicators: The PDO Level Results Indicators are being modified to: (i) make the descriptions consistent with IDA core indicator requirements (both road sector and project beneficiary data); and, (ii) update the target deadlines to reflect changes to the implementation timing. Details of the changes are provided in Annex 1.

IV. Appraisal Summary

17. Economic Justification: The World Bank’s Roads Economic Decision (RED) model, developed for the economic evaluation of low volume roads, was used to undertake the economic analysis. The analysis consisted of a life cycle comparison of the project alternatives including road agency costs, road user costs and maintenance costs. The benefits of completing the road resurfacing works in conjunction with the runway works were compared against the “Do nothing” scenario in which the road network would be left to deteriorate with associated costs for full rehabilitation estimated at the end of the return period.

18. The main economic benefits of resurfacing the paved roads of Tuvalu include: (i) a reduction in the road user costs, comprised of vehicle operating costs and travel time costs, due to the improved ride quality and travel time across the network; and, (ii) preservation of the structural integrity of the network to reduce greater network investment costs in the future3. The analysis showed that the project had an Economic Internal Rate of Return (EIRR) of 15 percent4 and a Net Present Value (NPV) of US$ 0.81 million. As shown in Table 4, even when the costs are increased by 10 percent, and the benefits are decreased by 10 percent, the project is still economically viable with an EIRR of 12 percent and an NPV of US$ 0.12 million.

3 An additional benefit was associated with the savings of mobilization costs. Due to its remoteness, the cost of mobilizing the contractor to Tuvalu is estimated to be more than US$ 1 million. By undertaking the road maintenance works in conjunction with the runway resurfacing, this mobilization cost is allocated between these two activities. 4 The discount rate used in the analysis was 12 %.

6

Table 4: Sensitivity Analysis on Economic Analysis Results

EIRR and NPV by Variation in Costs EIRR (%) NPV (US$ million) -10% 0% +10% -10% 0% +10%

% Variation in Benefits

-10% 15 14 12 0.78 0.45 0.12 0 17 15 14 1.14 0.81 0.48 +10% 18 16 15 1.50 1.17 0.84

19. Technical: Due to the scarcity of borrow pits, all seal chip and construction aggregate will be imported. A Grade 3/5 (nominal stone size 13mm/7mm) two coat chip seal is proposed on all main routes and a Grade 5 (nominal stone size 7mm) single coat seal or fog seal is proposed on the other links in the road network.

20. Road safety is not a major issue in Tuvalu, with on average less than one fatality and twelve injuries a year, and a ranking of 147 in the world for accident rates. With its small size, speeds are very low, and traffic is about 75 percent motor cycles. Due to the shortage of land and density of housing, there are no footpaths. The project will look at opportunities to improve road safety though solar street lighting, and repairing existing speed humps, but few other road safety improvements are viable.

21. Drainage is of particular concern. Fongafale is flat with the maximum elevation on the order of three meters above sea level. All roads in Fongafale are close to the ocean, and flooding can be problematic, particularly during king tides. In some areas the island is so narrow that during storms waves can cross over the road from the ocean to the lagoon. The paving will help protect the roads by ensuring that the surface is waterproof5. The project will also look at localized drainage improvements such as pipes to the lagoon and sump pits to help improve removal of water from the road reserve and runway.

22. The long-term sustainability of the road investment shall be addressed by ensuring that there are the necessary skills, equipment and materials at the Ministry of Works to perform routine maintenance. This is also required for the runway. In the past, the Ministry of Works has conducted repairs with limited resources, for example repairing edge breaks with concrete patches, so it has the capacity to undertake this work.

23. Environment and Social Safeguards: The island of Fongafale is highly affected by human habitation and densely populated. The road network traverses residential and commercial land uses. Most dwellings and businesses are located immediately adjacent the road. Physical interventions are limited to the resurfacing of the existing road and the provision of improved drainage within the current right-of-way. The resurfacing activities are located within the existing footprint of the road network. Drainage discharges may occur to coastal marine environments in places, but the discharges will not cause significant degradation (i.e. low volumes of storm water that would have entered the lagoon in any event). The GoTv will advise the local people of potential employment opportunities during the works period.

5 Under PAIP, all investments (e.g. runways, structures, fences, etc.) are designed to appropriate cyclone and earthquake standards.

7

24. The environmental impact will be minimal, and will not necessitate a change from the current project’s Category B rating. The EMP, which covers both the aviation and road projects, was disclosed through InfoShop on May 23, 2013, and in-country on May 24, 2013. The project will mitigate some of the negative impacts of climate change on Fongafale’s road network.

25. Due to the limited land supply in Tuvalu, solid waste management is a challenge. The civil works contractor will have to re-export its waste materials rather than leave them in Tuvalu. In addition, the Department of Environment (DoE) has expressed interest in the project supporting the export of solid waste materials from Tuvalu using the barges which otherwise will return empty from Tuvalu6. Funding to support the export of waste is provisionally included in the project budget. In accordance with the Bank’s Safeguard Policies, the EMP has been updated to address the export of waste materials, as well as the PAIP Program Environmental and Social Monitoring Framework (ESMF). The financing agreement includes a covenant to ensure this activity complies with Safeguard Policies and international protocols.

26. To account for the potential need for temporary easements, the project will trigger OP 4.12. A Resettlement Policy Framework (RPF) was prepared based on the PAIP Program ESMF. This RPF also cover the issue of cutting trees as some need to be removed to eliminate hazards to aircraft using the runway. The RPF was disclosed in country and through InfoShop on August 15, 2013.

27. Gender impacts and opportunities associated with the project have been considered, which indicate that preserving the integrity of the road network will benefit both men and women in providing access, particularly healthcare facilities, schools, education, employment opportunities, markets, food supplies, and the petrol depot. As there is limited risk to personal safety for women in Tuvalu, no specific interventions or project design features have been included. No public transport is provided in Tuvalu so no project design features to facilitate women’s use of public transport were considered. The project will monitor the percentage of local employees, disaggregated by gender, within the project, although not as a formal indicator.

28. As with the parent project, OP 4.10 Indigenous People is not triggered. The population of Tuvalu is culturally homogenous and the population is primarily Polynesian (about 96 percent) with the rest ethnically Micronesian.

29. Financial Management: The Ministry of Finance and Economic Development (MFED) is responsible for handling of project funds, including overseeing the Designated Account. With the support of the International FM advisor, the PST has adopted a financial management manual (FMM) which has been developed for the PAIP Program. The accountants have received training and regular support from the International FM Advisor. The IFRs are up to date. FM performance on the project is satisfactory and is expected to continue to be so with the project restructuring.

30. Procurement: Procurement for the PAIP Program, and the TvAIP Project is carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated January 2011, and “Guidelines: Selection and Employment of Consultants by 6 The project will import some 1,500 m3 of aggregate (seal chips, sand and base course), most likely from Fiji. This would be brought in on up to eight barges, each carrying some 200 m3.

8

World Bank Borrowers” dated January 2011, and the specific provisions stipulated in the Grant Agreements. The principal procurement in the AF is to undertake the road works, which will be tendered as a single lot with the bidding for the runway works. The TFSU, based in Tonga, provides support to Tuvalu for all procurement activities, from advertising through preparation of bid documents, to assistance with evaluations. The PAIP Design and Supervision Consultant provides the necessary technical support to the program. The current procurement plan, dated December 2012, will be updated as part of the AF.

31. Risks: The overall implementation risk at the time of appraisal of the original project was rated as High. The TvAIP is progressing well to date (in reference to the recent ISRs), and the overall risk is rated at Substantial. Although the proposed infrastructure investments are technically straightforward, there will likely be challenges with project implementation once construction commences. As this is the first major World Bank financed project in Tuvalu, political considerations and limited institutional capacity will require special attention. The Operational Risk Assessment Framework has been updated and is attached to this Paper (see Annex 2).

9

Annex 1: Revised Results Framework and Monitoring Indicators

TUVALU: Tuvalu Aviation Investment Project Results Framework

Revisions to the Results Framework Comments/

Rationale for Change PDO

Current (PAD) Proposed The project development objective is to improve operational safety and oversight of international air transport infrastructure.

To improve the safety and security of air transport and associated infrastructure

More clearly accounts for including roads providing access or support to aviation infrastructure.

PDO indicators

Current (PAD) Proposed change Indicator One: Regulatory certification of safety and security at FUN airport

No change

Indicator Two: State requirements for safety and security reaches global ICAO average

No change

Indicator Three: Modernization of air traffic management

No change

Indicator Four: Implementation of a regional safety and security levy for departing international passengers

Date due changed to 30 June 2014 The process of implementing the levy has been delayed.

New Indicator: Rural roads rehabilitated: 8 km by 2014

New IDA core indicator.

New Indicator: Non-rural roads rehabilitated: 7.4 km by 2014


New Indicator: Roads in good and fair condition as a share of total classified roads: 100% by 2014


10

Intermediate Results indicators

Current (PAD) Proposed change* Component A - Intermediate Result Indicator One: Navigation and safety aids fully operational

No change

Component A - Intermediate Result Indicator Two: Rehabilitation of Funafuti runway

No change

Component A - Intermediate Result Indicator Three: Achievement of Fire Standards

No change

Component A - Intermediate Result Indicator Four: Funafuti terminal and control tower upgraded

No change

Component A - Intermediate Result Indicator Five: Number of kilometers of paved roads improved

15.4 km by 2015 New indicator

Component B - Intermediate Result indicator One: Successful implementation of agreed training plan

No change

Component C - Intermediate Result Indicator One: Successful completion of study for Funafuti airport operation options

Deleted This activity has been removed from the project.

11

REVISED RESULTS FRAMEWORK AND MONITORING INDICATORS

Project Name:

Tuvalu Aviation Investment Project - Additional Financing (P145310)

Project Stage:

Additional Financing Status: FINAL

Team Leader:

Christopher R. Bennett Requesting Unit:

EACNF Created by: Christopher R. Bennett on 04-May-2013

Product Line:

IBRD/IDA Responsible Unit:

EASNS Modified by: Kodaganallur G. Sundar on 27-May-2013

Country: Tuvalu Approval FY: 2014

Region: EAST ASIA AND PACIFIC Lending Instrument:

Adaptable Program Loan

Parent Project ID:

P128940 Parent Project Name:

Pacific Aviation Investment - Tuvalu (P128940)

.

Project Development Objectives

Original Project Development Objective - Parent:

The project development objective is to improve operational safety and oversight of international air transport infrastructure.

Current Project Development Objective - Parent:

Proposed Project Development Objective - Additional Financing (AF):

To improve the safety and security of air transport and associated infrastructure.

Results

Core sector indicators are considered: Yes Results reporting level: Project Level .

Project Development Objective Indicators

12

Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target

New Indicator One: ICAO certification of safety and security at project airports

Text Value FUN currently not certified

FUN currently not certified

Certification of airports in accordance with agreed

Date 13-Dec-2011 23-May-2013 30-Jun-2016

Comment Investments have not commenced. Design work nearing completion and major procurements to start later in 2013. Project on track to meet target.

New Indicator Two: Resolution of safety concerns at participating airports reaches global ICAO average

Percentage Value 95.00 95.00 49.00

Date 13-Dec-2011 23-May-2013 30-Jun-2016

Comment Baseline value assumed based on Tonga

Investments have not commenced but project on track to meet target. Design work nearing completion and major procurements to start later in 2013.

New Indicator Three: Modernization Text Value No VSAT or No VSAT or VSAT and

13

of air traffic management ADS-B ADS-B ADS-B operational

Date 13-Dec-2011 23-May-2013 30-Jun-2014

Comment VSAT design consultant recruitment in final stages. Preliminary design of ADS-B prepared. Project on track to meet target.

New Indicator Four: Implementation of a regional safety levy for international passengers

Text Value No levy No levy AU$5 collected from each departing international passenger

Date 13-Dec-2011 23-May-2013 30-Jun-2014

Comment Implementation is overdue. Plan for implementing levy being submitted to cabinet for their urgent attention. TFSU will help with practicalities of implementing the levy.

Target date for implementation changed to 2014 from 2013.

14

New Roads rehabilitated, Rural

Kilometers Value 0.00 0.00 8.00

Date 23-May-2013 23-May-2013 30-Jun-2015

Comment Investments have not commenced.

New Roads rehabilitated, Non-rural


Date 23-May-2013 23-May-2013 30-Jun-2015


New Roads in good and fair condition as a share of total classified roads


Date 23-May-2013 23-May-2013 30-Jun-2015

Comment Estimate based on road condition survey.

Investments have not commenced.

New Size of the total classified network


Sub Type

Supplemental

Intermediate Results Indicators

Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target

New Component A: Intermediate Result indicator One: Navigation and safety aids fully operational


Date 13-Dec-2011 23-May-2013 30-Jun-2015

Comment Investments have not commenced. Design report submitted.

15

Waiting for finalization of Kiribati and Tonga designs to start procurement. Project on track to meet target.

New Component A: Intermediate Result indicator Two: Rehabilitation of Funafuti runway


Date 13-Dec-2011 23-May-2013 30-Jun-2014

Comment Investments have not commenced. Design finalized and bidding documents under preparation. Anticipate bidding late 2013 once Tonga designs are completed.

New Component A: Intermediate Result indicator Three: Achievement of Fire Standards

Text Value N/A Not achieved. Category 5

Date 13-Dec-2011 23-May-2013 30-Jun-2014

Comment Ordering of fire uniforms and other gear under way. GoTv now looking to procure a refurbished fire

16

tender with funding from New Zealand.

New Component A: Intermediate Result indicator Four: Funafuti terminal and control tower upgrade


Date 13-Dec-2011 23-May-2013 30-Jun-2015

Comment Conceptual terminal design agreed on. Detailed design now commencing. To ensure adequate site distance control tower now to be separate building. Detailed design will commence after restructuring. Project on track to meet target.

New Component A - Intermediate Result indicator Five: Number of kilometers of paved roads improved


Date 23-May-2013 23-May-2013 30-Jun-2015


New Component B: Intermediate Result indicator One:

Text Value No training plan

No training plan Training plan completed

17

Successful implementation of agreed training plan

Date 13-Dec-2011 23-May-2013 30-Jun-2016

Comment Training Needs Assessment not satisfactorily completed by consultant so waiting on final version acceptable to fully commence training program. In the interim, key training has been done.

.

18

Annex 2

Operational Risk Assessment Framework (ORAF)

Tuvalu: Tuvalu Aviation Investment Project – Including dditional Financing (P145310).

.

Project Stakeholder Risks

Stakeholder Risk Rating Moderate

Risk Description: Air service operators and passengers object to potential disruptions during implementation. Lack of community support for the improvement of the airport and road network. The community may object to traffic disruption and temporary displacement on account of drainage works.

Risk Management:

The Design and Supervision Consultant in conjunction with the GoTv will identify an implementation schedule that will minimize potential disruptions to the air service operators and passengers.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation 01-Dec-2013

Risk Management:

Consultations will be undertaken by the GoTv on the proposed project to ensure community support for both the airport and road works.


Client In Progress Both 01-Dec-2013

Implementing Agency (IA) Risks (including Fiduciary Risks)

Capacity Rating Moderate

Risk Description: The TFSU will become overwhelmed by the demands of the regional project. PASO will not be able to provide the enhanced technical support to the participating countries.

Risk Management:

There shall be a ‘Service Agreement’ between the TFSU and each country’s EA. A Regional Procurement Evaluation Committee will be established under the framework of the Service Agreement. A single Design and Supervision Consultant will be used to provide the necessary support during implementation. PASO will provide guidance to implementing agencies throughout implementation and

19

Implementing agency lacks the technical skills and financial resources to undertake the project. The project includes major financing towards the strengthening of capacity for the implementing agency. A Project Operation Manual that includes a FM Manual with agreed FM reporting formats has been adopted.

will contract staff as needed to ensure it can meet the technical demands.


Client In Progress Implementation

Risk Management:

The TFSU will have dedicated Project staff including Project Advisors and Aviation Procurement Specialist. Project Support Component includes funding for services rendered by the TFSU.



Risk Management:

Regular and intensive technical, procurement and FM supervision missions to provide support to participating agencies.



Risk Management:

Centralized procurement of works and equipment through TFSU and Regional Procurement Evaluation Committee to address the capacity risk, particularly by combining procurements with other PAIP countries.



Governance Rating Substantial

Risk Description: Government may fail to deliver on promised sector reforms, project implementation support and financing of airport operations and maintenance. Commitment to sectoral reforms is inadequate.

Risk Management:

A National Steering Committee (NSC) shall be established to monitor and advise the implementing agencies on the project and to ensure stakeholder support. Establishment of a Program Steering Committee, which will comprise the Chairmen of the NSC (or designated representative) from each participating country, from PASO, and the project manager of the TFSU.


20

Implementing agencies do not have effective processes and controls to meet IDA procurement and FM standards.

Client Completed Implementation

Risk Management:

An experienced aviation technical advisor will assist MOT drive the necessary reforms during the project.



Risk Management:

The civil works for the road and runway will be bid in conjunction with the runway investment works in Tonga so as to ensure maximum competition, this will minimize the opportunity for local governance issues affecting the project. The TFSU in Tonga will continue to provide program level oversight with regard to FM.



Risk Management:

Regular and intensive technical, procurement and FM supervision missions to provide support to participating agencies.


Bank In Progress Implementation

Risk Management:

The TFSU in Tonga will provide procurement and FM support and oversight for the investment activities.



Risk Management:

There will be regular implementation support missions, particularly during the construction period, including FM and procurement.


21


Project Risks

Design Rating Moderate

Risk Description: The project is technically complex involving sizeable civil works investments for runways, roads, navigation aids, and other specialized equipment. The design of the project (both aviation and road works) is not appropriate.

Risk Management:

The TFSU will provide overall technical guidance to the project, helping ensure consistency and high technical standards. PASO will also advise on appropriateness of specifications to ensure future oversight compliance.



Risk Management:

The final design and bidding documents will be independently reviewed to ensure appropriateness.



Risk Management:

A single consulting firm will be used for the design and supervision activities.


Client Completed Implementation

Social and Environmental Rating Low

Risk Description: An Environmental and Social Framework was developed for the Program and used to develop an Environmental Management Plan (EMP) for the project. A consultant undertook independent social due diligence during project preparation on behalf of IDA to confirm social issues identified by the Recipient.

Risk Management:

A Resettlement Policy Framework (RPF) will be prepared and disclosed.


Client Completed Preparation 30-Jun-2013

Risk Management:

The Detailed Design and Supervision contract includes environment and social monitoring in its scope of work (for both the airport and road works). The EMP will be

22

Unforeseen circumstances may arise regarding social and environmental safeguards.

included with bid documents and form part of contract. The contracts will include clear penalty clauses for non-compliance with the EMP by the contractors.


Both Completed Implementation 30-Jun-2013

Risk Management:

Training budget apportioned for capacity building of implementing agency staff for environment and social safeguard monitoring.



Risk Management:

Consultations will be undertaken to ensure properties affected by drainage issues support the proposed works.


Client Not Yet Due Preparation

Program and Donor Rating Low

Risk Description: Risk Management:

Close donor coordination, with frequent dialog between NZMFAT and AusAID, will continue throughout project preparation and implementation with other donors invited to participate in joint missions.

Close donor coordination, with frequent dialog between NZMFAT and AusAID, will continue throughout project preparation and implementation with other donors invited to participate in joint missions.


Bank In Progress Both

Delivery Monitoring and Sustainability Rating Moderate

Risk Description: The project includes consultant support for contract management and M&E.

Risk Management:

The quality of the physical investments will be assured by: (i) using the same firm for design and supervision which will ensure consistency and quality; (ii) having a 24 month defect liability period on the runway repairs as well as for other key technologies.


23

Project airports are not able to meet ICAO standards or, having met these standards, are unable to maintain them. The roads are not maintained after completion of the works.

Both In Progress Implementation

Risk Management:

Passenger levy will provide income to cover safety oversight and help finance regulatory compliance.


Bank In Progress Implementation

Risk Management:

The project will ensure that the MOW has the necessary skills and equipment for routine maintenance.


Client Not Yet Due Implementation

Other (Optional) Rating



Other (Optional) Rating



Overall Risk

Overall Implementation Risk: Rating Substantial

Risk Description:

Although to date, the Tuvalu Aviation Project is progressing well (in reference to the recent ISRs), the overall risk is rated at substantial because of the challenges Tuvalu will face with the project. While the proposed infrastructure investments are technically straightforward, with this being the

24

first major World Bank financed project in Tuvalu, it is substantial at some 1/3 of the GDP. There will be likely be challenges with project implementation once construction commences. Project implementation capacity constraints will be alleviated through the use of TFSU for procurement, as well as intensive FM and technical support.

the world bank for official use onlydocuments.worldbank.org/curated/en/723181468173392… · ·...

Documents