ASIAN DEVELOPMENT BANK

Transcription

1 ASIAN DEVELOPMENT BANK TAR:ETM TECHNICAL ASSISTANCE (Financed from the Japan Special Fund) TO EAST TIMOR FOR TRANSPORT SECTOR IMPROVEMENT October 2001

2 ABBREVIATIONS ADB Asian Development Bank ETTA East Timor Transitional Administration DOTCA Department of Transport and Civil Aviation km kilometer TA technical assistance UNTAET United Nations Transitional Administration in East Timor NOTE In this report, $ refers to US dollars.

3 I. INTRODUCTION 1. During the World Bank-coordinated multiagency joint assessment mission (October- November 1999), the Asian Development Bank (ADB) reviewed the transport sector restoration and development requirements of East Timor for the short and medium term (1 to 3 years). ADBfunded technical assistance 1 (TA) prepared an approach for transport sector establishment with requirements to implement effective transport sector institutions and regulatory frameworks. The ADB-administered Emergency Infrastructure Rehabilitation Project (EIRP), is supporting the setting up of a maintenance field organization for the road sector, including asset and financial management systems and human resources planning During the ADB Implementation Review Mission for the EIRP, the transport sector restoration and development requirements of East Timor were reviewed and the United Nations Transitional Administration in East Timor (UNTAET) and East Timor Transitional Administration (ETTA) requested further ADB TA for implementation of the proposed transport sector institutions. 3. This report was prepared on the basis of the Mission s discussions and observations in the field. The Mission reached understandings with the East Timorese counterparts and UNTAET organizational and planning elements on the TA objectives and scope. 3 A framework for the TA is provided in Appendix 1. II. BACKGROUND AND RATIONALE 4. During the month following the democratic consultation of 30 August 1999, East Timor experienced a campaign of destruction and terror, during which much of the property of value was removed, burned, or destroyed, including residential and public buildings, utilities, telecommunications facilities, inventories of essential food, and agriculture stocks. All current administrative structures became dysfunctional with all transport documentation and most premises destroyed, and institutions depleted of their staff. Under a resolution of the Security Council of the United Nations, UNTAET was established with powers to (i) ensure stability; (ii) establish a transitional government; and (iii) establish the judiciary, laws, and policies. Infrastructure sectors have been organized under a cabinet member of ETTA, whose portfolio includes telecommunications, postal services, electricity, water and sanitation, transport and roads, port management, and civil aviation. Under the current planning, a director general is responsible for the daily management of these services with a small staff of international and East Timorese staff. ETTA operates under Consolidated Fund of East Timor (CFET), which provides establishment of limited local administration and recurrent resources. 5. To plan for the medium-term rehabilitation in a coordinated manner, a joint assessment mission coordinated by the World Bank was fielded in October-November 1999 to prepare a medium-term restoration program. Implementation of this program has been funded from the Trust Fund for East Timor (TFET). ADB is administering the EIRP. A supplementary EIRP (Phase 2) has been prepared to stabilize the road network and enable it to be maintained with a relatively modest budget, and to establish a viable and efficient maintenance operation in East Timor. ADB-funded TA (footnote 1) has proposed institutional and legal arrangements for establishing the road, port, and airport subsectors, and prepared a medium-term development program for these transport modes to contribute to poverty reduction and economic growth. 1 TA 3401-ETM: Transport Sector Restoration, for $1,000,000, approved on 10 February Grant 8181-ETM: Emergency Infrastructure Rehabilitation Project, for $29.8 million, approved on 13 April The TA first appeared in ADB Business Opportunities in March 2001.

4 2 6. The headquarters of East Timor's Department of Infrastructure and its transport division is in Dili. The Department of Infrastructure manages ports, airports, and road activities, with each section having its own head. The cabinet agreed on 12 September 2000 to establish for the transport sector common legislation that would embrace the three transport modes: roads, maritime, and aviation subsectors. The principles of this framework also provide for each subsector to be managed by a semiautonomous organization and that these coordinate their activities to focus on efficiency and effectiveness. 7. Road Administration. The road network comprises about 1,400 kilometer (km) of main roads and 6,600 km of rural roads and 450 bridges. The network was built to minimum standards to provide all-weather access to small and light vehicle traffic. The limited maintenance and the low design standard have compound the maintenance challenge together with heavy recent traffic and loads and the changing course of the many braided rivers flowing from north to south. The network has, as a consequence, incurred a large backlog of road repair needs in addition to the standard need for ordinary routine maintenance. Most district roads are in poor or very poor condition, which inhibits commercial activity. Even under the best conditions, this network in its geological environment requires a moderate to high level of maintenance. 8. The road administration remains to be established, with its (i) organization structures, (ii) delegations, decision, and management arrangements; (iii) reporting and financial systems; (iv) operational mechanisms and structures; and (v) human resources and training, with a goal to ensure accountability for management and operations. Each sector will be administered by a semiautonomous organization focus on direct accountability and management efficiency. The road administration needs (i) a small permanent planning, financial, and technical staff; (ii) a regional structure with a contract management framework and reporting system; and (iii) field staff to ensure sustainability of the network on recurrent basis. The appropriate management and administrative structures will be identified by introducing performance indicators that measure that structures and mechanisms that will be effective in East Timor. 9. Maritime Administration. The maritime infrastructure includes the ports in Carabela, Com Dili, and Laleia; smaller wharves in Liquica and Oecussi; and slip-landing structures and sites in Batugade, Oecussi, and Suai. Dili Port currently receives an average of 36 vessels and handles 1,907 twenty-foot container equivalent units and 9.5 tons of bulk cargo per month. Other ports are used to a minor extent, although services are planned between Dili and Oecussi. The head of ports manages the port sector and Dili port is a responsibility of a harbor master. 10. The port sector is envisaged to be organized under a semiautonomous ports authority as a self-financing and eventually an East Timorese-managed entity with a mission to deliver competitive port services. User charges of about $0.7 million per annum are being collected for the port services. The charges cover about half of the current recurrent expenditures, which include remuneration of local and foreign staff. The powers, organizational structures, management and financial management systems, human resources development and training, regulatory framework, and relationship with the government and international maritime conventions affecting the authority remain to be established to support optimal port operations. 11. Aviation Administration. East Timor has two international standard airports with sealed runways and eight grass landing fields. Traffic at the Dili airport handles 491 aircraft landings and departures per month, two thirds by the United Nations Peacekeeping Force (UNPKF) and about one third is commercial traffic. Dili airport currently handles about 3,036 passengers per month. From 1 March 2001, Dili airport is being managed by Aeroportos de Portugal SA under bilateral funding from the Government of Portugal. This will provide airport operational services and training a total of 48 airport staff. Airport maintenance and consumables, and preparation of the envisaged

5 3 airport authority and the aviation sector regulatory framework remain the responsibility of the UNTAET-ETTA. 12. Similar to the plans for the ports subsector, a civil aviation authority has been envisaged as a self-financing and a locally managed entity to deliver competitive aviation services. The entity is to finance its operations from user charges. An inclusive and consultative process is required to fully detail the legislation for an airport authority providing its powers, organizational structures, management and financial management systems, human resources development and training, regulatory framework, relationship with the government, and accession to international conventions. 13. Approval Process. Adopting the ongoing process in East Timor targeting promulgation of the basic law, the consultations on the preparation of legislation for the airport and port authorities and the road administration will be carried out during the rest of 2001 with a target to submit an inprinciple approved proposal to the cabinet and national parliament of the new government expected to be in place late Implementation of the operational improvements and migration toward autonomous and effective service delivery will be carried out concurrently with this preparation process. III. THE TECHNICAL ASSISTANCE A. Objectives 14. The objective of the TA is to support establishment of sustainable operations, management, and administration of the transport sectors. The TA will assist legal and operational establishment of effective and appropriately sized operations of (i) a port authority, (ii) an airport authority, and (iii) a road administration. The TA will identify effective management and administrative structures and processes through a stakeholder analysis, demand-based service delivery assessment, and an inclusive consultation using performance-based evaluations of agencies to determine operational arrangements for delivery of optimal services. B. Scope 15. The TA scope will include (i) a review of the legal, regulatory, and policy proposals for the transport sectors covering roads, ports, and aviation subsectors; finalization of these proposals; and support for their implementation; (ii) a review of the institutional and administrative arrangements proposed for the transport sectors, finalization of these proposals carrying out extensive consultations to ensure sustainability of the plans, and support for their implementation; and (iii) preparation and support for implementation of a transitional plan transferring transport sector management to East Timorese. C. Cost Estimates and Financing Plan 16. The TA is estimated to cost $500,000. This includes international consultant remuneration and per diems, international and local travel, communications, office supplies and equipment, and contingencies. The TA will also finance all costs of East Timorese counterpart consultants in the absence of an administration with a local payroll for counterpart staff. The TA will be financed by ADB on a grant basis from the Japan Special Fund, funded by the Government of Japan. Detailed cost estimates are provided in Appendix 2.

6 4 D. Implementation Arrangements 17. The TA will require about 16 person-months of consulting services from an international firm and about 20 person-months of East Timorese consultant services. The TA requires consultant services in institutional restructuring, corporate planning, financial management, administration and control functions, human resources management and training, outsourcing and contract management, implementation of community-based development, quality control, maritime economics, transport economics and planning, transport policy and legal instruments, road agency and service delivery planning, port management and service delivery planning, and airport management and service delivery planning. The consultants will be selected in accordance with ADB s Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the engagement of domestic consultants. The outline terms of reference for the international consulting services are in Appendix The Executing Agency for the TA will be the Department of Infrastructure. Daily TA activities will be carried out in close consultation with sector stakeholders, sector operations of the airport, port and the road administration, and other funding agencies active in East Timor. A steering committee will be established and convened frequently to support the TA activities and to provide advice to the consultants. The committee will include representatives from the Department of Infrastructure and its port, airport, and road services division; the Central Fiscal Authority; Office of Legal Affairs of UNTAET-ETTA, East Timor Development Agency; Department of Economic Affairs; and Office of the ETTA Administrator. 19. The TA will be carried out over a period of 12 months commencing in September 2001 and ending in August The consultants will submit an inception report four weeks after starting their services, periodic reports, a medium-term report, a draft final report, and a final report. Tripartite meetings involving the steering committee, the consultants, and ADB will be convened to consider the reports. The consultant will arrange a minimum of four tripartite meetings to ensure a close monitoring and consultation process. The consultant will organize workshops among transport sector stakeholders to develop a consensus on the proposals and action plans. These will be carried out locally in the district capitals and Dili. The consultant will also convene coordination and information dissemination events in connection with the scheduled tripartite meetings. IV. THE PRESIDENT S DECISION 20. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance, on a grant basis, to the United Nations Transitional Administration in East Timor, in an amount not exceeding the equivalent of $500,000, for the purpose of Transport Sector Improvement, and hereby reports such action to the Board.

7 TECHNICAL ASSISTANCE FRAMEWORK A. Goals Design Summary Performance Targets Monitoring Mechanism Assumptions/Risks (Reference in text: page 1, para. 3) Effective and financially selfsustaining port and airport institutions, and efficient and small road administration to support transport sector viability and contribution to economic development and poverty reduction B. Purpose Legal and operational establishment of effective and appropriately sized operations of (i) a port authority, (ii) an airport authority, and (iii) a road administration, for delivery of optimal services C. Outputs (i) Establishment of a road administration (ii) Establishment of airport and port authorities (iii) Transitional program for transferring transport sectors to East Timorese management (i) Agreed legal, regulatory, and policy proposals for the transport subsectors and their implementation (ii) Institutional and administrative arrangements for the transport subsectors and an action plan for their implementation (iii) An action plan for transition of transport sector management to East Timorese (i) Technical assistance performance report (ii) Reports prepared under the TA (iii) Cabinet and National Parliamentary approvals (i) TA reports (ii) Project processing and approval (i) Commitment of the United Nations Transitional Administration (UNTAET) to supporting systematic approach to sector development (ii) Effective coordination among funding agencies Consultative collaboration between the consultant, UNTAET and East Timorese civil society 5 (i) Establishment of domestic counterparts (ii) Establishment of service delivery performance indicators (iii) Legal framework for port and airport authorities (iv) Legal texts for the road administration (v) Subsector operation improvement plans for roads, ports, and airports (vi) Business development plans for the three sectors Time-bound delivery of each output in accordance with the TA implementation plan: (i) Establishment of domestic counterparts within 1 week of mobilization (ii) Establishment of service delivery performance indicators within 1 month of mobilization (iii) Legal framework established for port and airport authorities within 2 months of mobilization (iv) Legal texts provided for the road administration within 2 months of Review reports of the Asian Development Bank (ADB) TA reports TA reviews Timely mobilization of consultant in accordance with the ADB s procurement guidelines Efficient consultation process with all stakeholders Effective relationships with UNTAET staff Appendix 1, page 1

8 Design Summary Performance Targets Monitoring Mechanism Assumptions/Risks (vii) Applications to the necessary international conventions (viii) Cost recovery measures reviewed and recommendations implemented for ports, airport, and roads subsectors (ix) Plan for ensuring maximum private sector involvement in all aspects of transport sector operations (x) Transport sector regulations (xi) A time-bound plan for approving and implementing the legislation and operational proposals and support their implementation mobilization (v) Sector operation improvement plans provided for roads, ports, and airports within 4 months of mobilization (vi) Business development plans provided for the three sectors within 6 months of mobilization (vii) Applications to the necessary international conventions submitted within 3 months of mobilization (viii) Cost recovery measures reviewed and recommendations implemented for ports, airport, and roads subsectors within 2 months of mobilization (ix) Plan for ensuring maximum private sector involvement in all aspects of transport sector operations developed within 6 months of mobilization (x) Transport sector regulations promulgated within 8 months of mobilization (xi) A time-bound plan for approving and implementing the legislation and operational proposals and support their implementation provided by the end of the TA period (8 months) D. Inputs TA for transport sector improvement Award of consulting services contract in total estimated value of $500,000 to prepare legal, regulatory, and operational context of the transport subsectors to provide optimal services by September Time- and quality-bound delivery of consulting services, outputs, and reports (i) Effective consultant selection process (ii) Effective consultation with stakeholders 6 Appendix 1, page 2

9 7 Appendix 2 COST ESTIMATES AND FINANCING PLAN ($) Item Total Cost Asian Development Bank Financing a 1. Consultants 422,800 a. Remuneration 288,000 b. Per Diem 67,200 c. International Travel 30,000 d. Local Travel 21,600 e. Local Consultants 16, Miscellaneous 26,000 a. Communications 3,000 b. Report Preparation 3,000 c. Office Supplies 5,000 e. Workshops 15, East Timorese Participant 5,000 in Contract Negotiations 4. Contingencies 46,200 a Financed from the Japan Special Fund. Source: Staff estimates. Total 500,000 (Reference in text: page 3, para. 16)

10 8 Appendix 3, page 1 A. Terms of Reference OUTLINE TERMS OF REFERENCE FOR CONSULTANTS 1. Review and Inception 1. The TA will require about 16 person-months of consulting services from an international firm and about 20 person-months of East Timorese consultant services in the fields of institutional restructuring, corporate planning, financial management, administration and control functions, human resources management and training, outsourcing and contract management, implementation of community-based development, quality control, maritime economics, transport economics and planning, transport policy and legal instruments, road agency and service delivery planning, port management and service delivery planning, and airport management and service delivery planning. The consultant will accomplish the following: (i) (ii) (iii) (iv) (v) Prepare terms of reference for domestic counterparts, assist in their recruitment, and supervise these consultants throughout the technical assistance (TA). Review all records and proposals prepared under TA 3401-ETM: Transport Sector Restoration Project of the Asian Development Bank (ADB) and under other assistance programs provided to the three transport subsectors (roads, ports, and aviation) and become thoroughly familiar with the current organizational arrangements and plans, management proposals and issues, human resources and budget constraints, as well as the planning for the transition of the transport sector management to East Timorese management. Review all documents ensuring familiarity with ongoing all civil works and investment planning in the three transport subsectors as these pertain to institution development including those supported by the Grant 8181-ETM: Emergency Infrastructure Rehabilitation Project and its Supplementary grant, and become fully familiar with the demand for the transport sector services, client and stakeholder groups and their representatives. Prepare forecasts for demand, and, through consultative processes, educate the relevant transport sector and central agencies regarding these forecasts. Review the legal framework and approval processes with the objective to ensure adequate incorporation of all official process into the approval process for the legislative proposals delivered by the TA and referencing to the affected and affecting legal texts (e.g., land acquisition). Establish a systematic approach for broad consultations on the TA deliverables providing stakeholders and relevant sector and central agencies a clear timebound plan for establishing the port and airport authorities and the road administration. Similarly, prepare a time-bound plan for supporting improvement of the operations of these services, maximizing service delivery performance, and alleviation of any constraints challenging optimal service delivery. (Reference in text: page 4, para. 17)

11 9 Appendix 3, page 2 2. Institution Development 2. The consultants will do the following: (i) (ii) (iii) (iv) Prepare service delivery performance indicators establishing benchmarks, regional comparators, and target service efficiency levels. Determine, in consultation with relevant agencies, programs and operational improvement processes for achieving the set targets. Determine how to use the performance targets to achieve the most effective management structures and processes for achieving the suggested service levels. Assume responsibility, in close consultation with the legal functions of the United Nations Transitional Administration in East Timor and the East Timor Transitional Administration and the Department of Infrastructure, for the preparation of the legal framework, all legal related texts, and submissions required for promulgation of relevant act(s) as proposed under item 1(v). The responsibilities include effective and broad-based liaison with all stakeholders, in particular with the relevant industry, political leadership, and civil society. Finalize full legal texts for the ports and/or airports authority including (a) an analysis of whether two separate authorities are needed, or whether one authority is more appropriate, (b) objectives, powers, functions, and delegations of authority, responsibility, and accountability; (c) control and ownership, safety and civil liability, operational issues (e.g. merchant shipping, navigation, standards, and licensing); (d) relationship with the government; and (e) territorial waters, airspace and its control, right of ways, (f) operational policies including environmental responsibilities of the proposed agencies, and (g) policies covering corporate social responsibilities. Consult with all relevant parties and stakeholders on these proposals, and prepare a detailed submission to the Cabinet and the National Parliament for approval to establish the statutory authorities within the first year of the project implementation period. Finalize legal texts for the road administration including (a) road ownership, road classification, traffic regulations and control, commercial vehicles, vehicle registration, driver licensing, vehicle standards, road safety, axle loading and width dimensions, and enforcement authority; (b) relationship with the government including interagency financing arrangements, and (c) corporate role and responsibilities of the proposed agency; its reporting responsibilities; composition of its board; selection of the executive, mandate, mission, and performance criteria; policies including environmental guidelines; and financial obligations to the Government. During the preparation of the legal framework and texts, carry out a detailed stakeholder analysis and assess the capacity of current sector operation. Propose and finalize through a consultative and inclusive process (a) management arrangements and organizational structures for the three subsectors (roads, ports, and airports) mechanisms and processes to improve operational and to create accountability (this includes roles of board(s) and executives focusing on maximizing efficiency, effectiveness, and economies of scale; personnel duty statements and performance monitoring mechanisms; remuneration and other efficiency improving incentives; and the organizational structures); (b) financial and asset management systems and processes defining

12 10 Appendix 3, page 3 reporting relationships, business plans, and budgeting procedures; (c) the major policy statements, regulatory framework, and safety standards; (d) operations of three subsector services; and (e) identify, finalize, and support implementation of an appropriate staffing structure of three organizations, including development of duty statements for all key positions and qualification programs and criteria for each substantive technical and managerial position. (v) (vi) (vii) (viii) (ix) (x) Review and recommend, as required, business development plans for the three subsectors. Examine and make recommendations on options for increasing the efficiency of the subsector operations through outsourcing, including, but not limited to, (a) revenue collection; (b) accounting; (c) payroll; and (d) surveys, inventory, and asset management. Develop appropriate procurement processes and contractual frameworks for the purchase of outsourced services. Assist in the tender processes, including evaluation of suppliers' proposals, and support establishment of regularized and effective management of contracts. Develop and implement a structured process for the annual review and updating of corporate plans, including consultation with appropriate external stakeholders and stakeholder organizations. Develop and implement a systematic process for measuring the performance of the port and airport authorities and road administration against its performance indicators, and establish a regular reporting framework to disseminate information on performance to key stakeholders. Establish clerical and accounting procedures to streamline and reduce bureaucratic working load ensuring efficiency, appropriateness, and effectiveness of the proposed organizations, and establish the related training needs and prepare programs as required and help implement these programs. Support a staff recruitment and training program covering the three transport subsectors in the areas of administration, management, finance, corporate development, technical operations, contract administration, legal and community liaison functions related to the operations. Identify the regulatory functions of the three transport subsectors and determine organizational arrangements to assume these functions. Prepare documentation for approval and implementation of these functions as required by the legal and approval mechanisms. Prepare applications to the necessary international conventions, protocols, and organizations for the three transport subsector services and develop a timebound application process. Review and reconfirm the adequacy and appropriateness of the cost recovery measures implemented in the ports, airport, and roads subsectors to fully cover operations and maintenance costs in the ports and airports subsectors and partly recover costs in the roads subsector. Address the adequacy of the implemented vehicle axle load penalty fees and controls for ensuring optimal use of the road network. Assess the feasibility of private sector involvement in all aspects of transport sector operation and maintenance, with reference to improvements in quality of services or reductions in cost. Recommend appropriate means and structures to

13 11 Appendix 3, page 4 secure private sector involvement in such activities. Specifically, review market conditions for provision of services in the areas proposed for outsourcing, review the stevedoring market conditions, in particular, and recommend how to improve the prices and conditions. (xi) (xii) (xiii) Identify requirements for modification or promulgation of transport sector regulations for operations and maintenance. Draft the alternative regulatory instruments and standards, and determine and support the implementation of the proposals. Determine and support a time-bound process for approving and implementing the agreed legislation and operational proposals and support their implementation. Arrange and implement a minimum of four tripartite meetings to ensure a close monitoring and consultation process. Convene donor coordination and information dissemination events in connection with the scheduled three tripartite meetings. Organize workshops among transport sector stakeholders to develop consensus on the proposals and action plans. These will be carried out locally in the district capitals and Dili. Clearly document all consultations. B. Reports 3. The consultant will submit five reports in English to UNTAET (five copies) and ADB (four copies). The consultant will organize a minimum of four tripartite meetings for considering the inception, midterm, and draft final reports, and TA progress and status. In connection with these meetings, the consultant will arrange consultation meetings with other aid agencies operating in the sector. The consultant will prepare and circulate minutes of these meetings, and incorporate comments in the TA reports and activities, as appropriate. 4. Inception Report. This brief report will be submitted within four weeks of the start of the TA. It will outline, in accordance with the terms of reference, the consultants approach, methodology, and work plan, as well as cost implications for consulting services. The report will provide a bar chart of all activities under the TA, and recommend changes to the implementation arrangements. 5. Monthly Progress Reports. These brief reports will inform UNTAET and ADB of achievements under each item of the terms of reference, identify any emerging difficulties in implementation, and outline proposed solutions. The reports will clearly present the status of implementing the terms of reference, performance, a bar chart showing the personnel schedule with accomplishments under each item of the terms of reference and plans for the next month s work. The reports will adopt a uniform format to facilitate monitoring and will update the bar chart on all activities under TA. 6. Midterm Report. This report will summarize in all recommendations and concepts developed under the terms of reference up to the submission date. It will also provide in detail background to the sector and identify issues and decision-making requirements, if any, to facilitate progress under the TA.

14 12 Appendix 3, page 5 7. Draft Final Report. This report will be submitted on completion of the TA. It will summarize the TA activities and recommendations. It will provide recommendations on each item under the terms of reference in detail with action plans. 8. Final Report. The consultants will submit this report one month after receipt of the comments on the draft final report from ADB and the UNTAET-ETTA.