Papua New Guinea: Maritime and Waterways Safety Project

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Papua New Guinea: Maritime and Waterways Safety Project Report and Recommendation of the President to the Board of Directors Sri Lanka Project Number: 44375 November 2012 Proposed Loan Papua New Guinea: Maritime and Waterways Safety Project CURRENCY EQUIVALENTS (as of 5 November 2012) Currency unit – kina (K) K1.00 = $0.49 $1.00 = K2.06 ABBREVIATIONS ADB – Asian Development Bank AIS – automatic identification system CLC – community lighthouse committee navaid – navigational aid NMSA – National Maritime Safety Authority PAM – project administration manual PIU – project implementation unit PNG – Papua New Guinea SDR – special drawing rights NOTE In this report, “$” refers to US dollars unless otherwise stated. Vice-President S. Groff, Operations 2 Director General X. Yao, Pacific Department (PARD) Director R. Guild, Transport, Energy and Natural Resources Division, PARD Team leader D. Mizusawa, Infrastructure Specialist, PARD Team members A. Batten, Country Economist, Papua New Guinea Resident Mission, PARD H. Everett, Financial Sector Specialist (Public Finance), PARD S. Lee, Principal Social Development Specialist (Gender and Development), PARD A. Pettersson, Senior Procurement Specialist, Central Operations Services Office N. Sapkota, Safeguards Specialist, PARD Y. Seo, Counsel, Office of the General Counsel J. Williams, Senior Environment Specialist, PARD A. Woodruff, Urban Development Specialist, PARD Peer reviewer L. Wright, Senior Transport Specialist, Regional and Sustainable Development Department 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. CONTENTS Page PROJECT AT A GLANCE MAP I. THE PROPOSAL 1 II. THE PROJECT 1 A. Rationale 1 B. Impact and Outcome 3 C. Outputs 3 D. Investment and Financing Plans 4 E. Implementation Arrangements 5 III. DUE DILIGENCE 6 A. Technical 6 B. Economic and Financial 7 C. Governance 7 D. Poverty and Social 8 E. Safeguards 8 F. Risks and Mitigating Measures 9 IV. ASSURANCES 10 V. RECOMMENDATION 10 APPENDIXES 1. Design and Monitoring Framework 11 2. List of Linked Documents 14 PROJECT AT A GLANCE 1. Project Name: Maritime and Waterways Safety Project 2. Project Number: 44375-013 3. Country: Papua New Guinea 4. Department/Division: Pacific Department/Transport, Energy and Natural Resources Division 5. Sector Classification: Sectors Primary Subsectors Transport, and information and √ Water transport communication technology Transport management and policies 6. Thematic Classification: Themes Primary Subthemes Economic growth √ Widening access to markets and economic opportunities Promoting economic efficiency and enabling business environment Private sector development Private sector investment Regional cooperation and integration Other regional public goods Capacity development Institutional development 6a. Climate Change Impact 6b. Gender Mainstreaming No Climate Change Indicator available. Gender equity theme (GEN) Effective gender mainstreaming (EGM) √ Some gender elements (SGE) No gender elements (NGE) 7. Targeting Classification: 8. Location Impact: Targeted Intervention Regional High Geographic Income Rural High General Millennium dimensions of poverty at Urban Low Intervention development inclusive household goals growth level √ 9. Project Risk Categorization: Low 10. Safeguards Categorization: Environment B Involuntary resettlement B Indigenous peoples C 11. ADB Financing: Sovereign/Nonsovereign Modality Source Amount ($ Million) Sovereign Project loan Asian Development Fund 41.5 Total 41.5 12. Cofinancing: No Cofinancing available. 13. Counterpart Financing: Source Amount ($ Million) Government 6.9 Total 6.9 14. Aid Effectiveness: Parallel project implementation unit No Program-based approach No 114 o 00'E 152 o 00'E PAPUA NEW GUINEA MANUS MARITIME AND WATERWAYS B I S M A R C K S E A SAFETY PROJECT NEW IRELAND WEST SEPIK o o 4 00'S Sepik River 4 00'S EAST SEPIK WEST NEW BRITAIN MADANG Ramu River WESTERN AUTONOMOUS ENGA HIGHLANDS REGION OF Markham R. BOUGAINVILLE EAST NEW BRITAIN MOROBE SOUTHERN SIMBU EASTERN HIGHLANDS HIGHLANDS Kikori River GULF Bamu River S O L O M O N S E A WESTERN Fly River N Gulf of Papua 0 50 100 150 200 PORT MORESBY Kilometers Going to NATIONAL CAPITAL Australia ORO DISTRICT MILNE BAY o o 114 00'E National Capital 10 00'S 10 o 00'S Navigational Aids Installation 150o 00'E 170o 00'W Navigational Aids Replacement N o r t h P a c i f i c O c e a n International Dateline CENTRAL 20o 00'N 20o 00'N Tide Gauge Philippine MARSHALL ISLANDS Hydrographic Survey Sea PACIFIC REGION New and Existing Automatic Identification System Transponder and Coverage Area PALAU FEDERATED STATES OF C O R A L S E A MICRONESIA International Shipping Routes 0o 0o NAURU Coastal Shipping Routes K I R I B A T I PAPUA River INDONESIA NEW GUINEA SOLOMON ISLANDS TUVALU Provincial Boundary SAMOA International Boundary COOK C o r a l S e a VANUATU ISLANDS Boundaries are not necessarily authoritative. o TONGA o This map was produced by the cartography unit of the Asian Development Bank. 12-2985 20 00'S 20 00'S FIJI The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the A U S T R A L I A legal status of any territory, or any endorsement or acceptance of such boundaries, S o u t h P a c i f i c O c e a n o colors, denominations, or information. A o o 152 00'E V 150 00'E 170 00'W I. THE PROPOSAL 1. I submit for your approval the following report and recommendation on a proposed loan to Papua New Guinea (PNG) for the Maritime and Waterways Safety Project.1 2. The project will improve the safety and efficiency of national and international shipping in coastal areas and waterways in PNG by replacing, installing, and maintaining navigational aids (navaids); 2 improving the maritime safety information infrastructure; improving the maritime safety practice of communities; and providing efficient project management and capacity development.3 II. THE PROJECT A. Rationale 3. With over 600 islands spanning a total sea area of over 3.1 million square kilometers, PNG relies heavily on its network of coastal shipping services. The reliance of coastal communities on shipping services is amplified by the country’s limited land-based transport network. It is not possible to travel by land between most provinces, and most of the 6,500 kilometers of coastline in the country’s maritime provinces are accessible only by sea. Further, for many coastal communities, the development of land-based transport links is not feasible because of remoteness, rugged or inaccessible terrain, and high cost. 4. The safety and efficiency of PNG’s coastal transport infrastructure directly affects the access of coastal communities to economic opportunities and key public services such as education and health facilities, and thus has a significant impact on the inclusiveness of PNG’s continuing high rates of economic growth.4 The PNG National Household Survey of 1996 shows that 65% of the country’s poor live in the coastal regions of Momase, Islands, and Central provinces.5 PNG’s maritime transport system plays an integral part in PNG’s transport sector and facilitates social and economic connectivity, linking to road and aviation transport networks. 5. PNG’s coastal transport infrastructure also has a significant role in supporting the efficiency of regional shipping services. In 2010, there were about 3,100 international voyages between PNG, the Australian east coast ports, and Asian ports in the People’s Republic of China, Japan, and the Republic of Korea. The number was about half of total sea voyages in PNG. 6 Although the vessels on major routes usually carry radar and a global positioning system, there are safety risks of straying outside key passages and channels that require reliance on local knowledge augmented navaids due to high traffic volume and groups of atolls. 6. To establish a safe and efficient maritime transport environment for international, regional, and national traffic, it is necessary to continue to improve the network of navaids in the country. Navaids reduce risks such as groundings and blockage of channels that can cause 1 The design and monitoring framework is in Appendix 1. 2 Includes hazard markers and channel markers. 3 The Asian Development Bank (ADB) provided project preparatory technical assistance. ADB. 2011. Technical Assistance to Papua New Guinea for the Maritime and Waterways Safety Project. Manila. 4 National Statistical Office. 2010. 2009–2010 Household Income and Expenditure Survey. Port Moresby. Childhood stunting, a key indicator of nutritional status and poverty, was estimated to be as high as 40.1% of the population in the rural areas of PNG’s island provinces in 2010. This effect is particularly pronounced for females, with 43.4% of girls suffering from stunting. 5 ADB. 2012. Papua New Guinea: Critical Development Constraints. Manila. 6 Government of PNG. 2012. Draft National Transport Strategy. Port Moresby. 2 serious injury and loss of life, physical damage to coastal reefs, and environmental damage from pollution through loss of fuel oil or cargo in the case of bulk carriers. Navaids also allow shipping operators to take safe and economic shipping routes by recognizing hazards along routes, thus increasing the efficiency of transport services. 7. Prior to the involvement of the Asian Development Bank (ADB) in the maritime sector, many of the country’s navaids had deteriorated because of insufficient maintenance, weather damage, volcanic damage, and theft. The ADB-funded Rehabilitation of the Maritime Navigation Aids System Project improved the maritime transport environment by repairing, upgrading, or constructing 211 navaids as public assets along mainly international shipping routes by March 2008.7 8. By late 2005, the previous project had also contributed to establishing the National Maritime Safety Authority (NMSA) as the agency responsible for navaids maintenance and operation.
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