Building Capacity by Rebuilding Community Assets: Learning from the Gazelle Restoration Authority (GRA) Experience Background Public Disclosure Authorized The purpose of this review is to bring a more locally-relevant perspective to the World Bank‟s understanding of dynamics of statebuilding, development, and governance in Papua New Guinea (PNG) by exploring the specific lessons from the experience of the post-disaster reconstruction program led by the Gazelle Restoration Authority (GRA) in East New Britain province, after a catastrophic dual volcanic eruption in 1994. Three audiences exist for this review: those interested in more effective approaches to public works and service delivery in PNG; specialists in post-disaster reconstruction; and World Bank staff seeking ways to contribute to institutional and state effectiveness through project implementation choices. Given these diverse audiences, specific lessons will be offered at the end, for each group. The GRA is generally considered – both by PNG stakeholders and in the wider development community – as an effective institution that produced quality results, and its success is all the Public Disclosure Authorized more remarkable given the difficulties usually encountered in implementing major public work programs in PNG. Most observers emphasize the pre-existing strength and quality of the East New Britain Provincial Administration (ENBPA) – also widely viewed as an exceptionally capable and effective state institution – and elements of the Tolai culture, dominant in ENB, described as fostering a collaborative, pragmatic, and dedicated style of working across public and private sectors. While the Implementation Completion Report for the World Bank-financed project implemented by GRA acknowledges those two elements, it also highlights a range of other enabling factors that are less unique to the ENB context – and potentially more useful in considering these three questions: 1. What aspects of what GRA did, and how they did it, are potentially relevant to the Public Disclosure Authorized design and implementation of other post-disaster reconstruction efforts? Are those elements equally useful for consideration in post-conflict reconstruction efforts? 2. What does the post-eruption reconstruction program, and GRA‟s role in it, suggest are the critical institutional and operational building blocks for effective state programs at the provincial or district level in PNG? What can be learned from GRA about the dynamics of nurturing public and private sector capacity? 3. What lessons should the World Bank learn from the GRA experience about how Bank processes and procedures can contribute to strengthening institutions in low-capacity environments? Background: The 1994 Eruption, and the Gazelle Restoration Authority Public Disclosure Authorized The twin volcanoes of Mt. Tavurvur and Mt. Vulcan erupted in September 1994 ejecting 250 million cubic metres of ash, pumice and material over the town of Rabaul and the surrounding Gazelle Peninsula in East New Britain province (ENBP). Almost all of the physical, social, and economic infrastructure and facilities in Rabaul town and surrounding areas were completely destroyed, severely damaged, or ended up being located within the hazardous areas after the eruption. Although deaths and injuries were relatively low, there were significant social and economic disruptions and losses with about 30,000 residents losing their homes and about two-thirds of Learning from the GRA Experience them seeking permanent resettlement away from hazardous areas. Estimates compiled soon after the eruption placed public asset damage and losses at about US$280 million, along with similar losses for private assets such as homes, businesses, inventory, etc. Box 1: Key Facts about the Disaster and the Response Following a severe tectonic earthquake in the early hours of 18 September 1994, the twin volcanoes of Mt Tavurvur and Mt Vulcan erupted early the next morning, displacing around 100,000 persons from Rabaul town and the neighbouring villages, and physically destroying most buildings and infrastructure. A damage and loss assessment calculated that total damage to both public and private assets was in excess of US$550 million, and 20,000-30,000 persons were permanently displaced. The Gazelle Restoration Authority (GRA) was established on 7 February 1995 to act as a Project Implementation Unit (PIU) to manage government and donor- funded restoration works. The Immediate Term Restoration Programme (ITRP) was undertaken from 1995 to 2000, with first priority given to initial emergency and humanitarian works, followed by a programme to restore key public and economic infrastructure. A significant component of these earlier works was the establishment of permanent resettlement areas, the establishment of Kokopo as the administrative capital of the province, and sufficient work in Rabaul to allow it to operate as a port. The structure of the ITRP was based upon a needs assessment report prepared by the then Australia Aid Agency AIDAB, covering six major sectors: aviation, education, health, lands, police, and roads. In agreement with both the National and Provincial Governments, the individual projects in the ITRP were divided between the major donors – AusAID, Japan, and the World Bank. AusAID and Japan largely managed their own programmes in coordination with the GRA, and the World Bank re-allocated portions of three existing loans to ITRP, thus allowing monies to flow from national government directly to GRA. Thirty percent of the ITRP’s total budget of K218.7 million was expended directly by GRA to complete close to 200 projects. The Medium Term Restoration Programme (MTRP) commenced in 2000 and ended in 2010. It was originally split into two phases, with significant financing from a World Bank loan that would be supplied in two tranches, with the second being dependent on the successful disbursement of the first. The primary goal of the MTRP was to consolidate the activities commenced under the ITRP, restoring in a sustainable and risk-averse manner the social and economic well-being of the population of the Gazelle Peninsula. The total financing profile for the MTRP (total of 237.8 million kina) was: budget allocations from national and provincial governments (K 85.3 million); donor grants (K 60.9 million); international concessional loans (K 78.0 million in the World Bank Second Gazelle Restoration Project, or SGRP); and PNGSDP Ltd (K 13.6 million). Of the 125 projects prioritized in the MTRP, all of which demanded a high level of technical, managerial and administrative skills including quality control and engineering oversight, 99 were completed by end-2009; 13 were under implementation or in tender process; and 13 still await funding, are under design, or have been deferred. The MTRP portfolio covered three categories: Land and Transport Infrastructure; Public Utilities and Essential Services; Social and Economic Services Infrastructure. In 2007 GRA joined GoPNG and the Bank in reviewing the SGRP; although effectiveness and development results were rated very highly, the national government political landscape had changed and GoPNG decided not to request the second tranche. The SGRP closed in 2008, with the Implementation Completion Report (ICR) done in 2009; the MTRP ended in 2010. In 1995, the GoPNG commenced its Immediate Term Restoration Program (ITRP), supported by aid and donor agencies, including the World Bank, AusAID, JICA and ADB. Early investments were focused on two related but equally challenging objectives: improve the immediate socioeconomic conditions of the displaced population by restoring safe livelihood opportunities, and plan for longer term investment and development efforts. In light of the extensive damage to the town of Rabaul and the continuing existence of hazardous conditions (ashfall, toxic gases, and tremors), the national and provincial authorities decided to resettle the affected population away from the existing town. They identified prospective areas for new permanent settlements throughout the northeast Gazelle Peninsula and developed plans to build a replacement town at Kokopo, a small village about 30km east of Rabaul. To carry out this transition, the government proposed a Medium Term Restoration Program (MTRP) that would be implemented by government with support from donors. The 2 Learning from the GRA Experience Bank‟s Second1 Gazelle Restoration Project was designed as an Adaptable Program Loan (APL) with two anticipated phases to support implementation of the MRTP by (a) helping complete the emergency restoration works started under the ITRP and (b) facilitating the return to more normalized development planning by the provincial government. The Gazelle Restoration Authority (GRA) was established less than six months after the eruption to oversee government and donor-funded support and act as a Project Implementation Unit (PIU) to manage restoration works. The GRA was formed by mainly local experts, with support from selected and experienced expatriates; planning, engineering, environmental and social expertise as well as the administrative and financial support functions were sourced from East New Britain Provincial Administration (ENBPA) and national departments. In the main, GRA was able to achieve the objectives of improving the quality of life for displaced communities; consolidating Kokopo Town as the provincial capital of East New Britain; restoring those parts of Rabaul Town necessary to ensure its