ADB Funded Projects in TONGA (ao 15 August 2012)

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1 ADB Funded Projects in TONGA (ao 15 August 2012) ADB s Support to Public Sector Reform. Since 2001, ADB has supported Tonga s public sector reforms through comprehensive public enterprise reform (rationalization) with its loans and Technical Assistance (s) projects. ADB financing helped to address deteriorating economic prospects, a large and inefficient public enterprise sector, and deteriorating public services. 1. Economic and Public Sector Reform Program (EPSRP) In 2002, ADB approved the $10.0M loan which focused on fiscal and public sector reforms. The release of second tranche of the loan was tied to the implementation of some 40 policy conditionalities ( policy matrix ) that included freeze hiring, endorsing corporatization/ privatization framework, passage of Public Enterprises Act. [STUS: CLOSED] 2. Rationalization of Public Enterprises In 2003, ADB provided a total $ 1.065M (3 phases) to implement the Public Enterprise Act 2002, including the establishment of a performance monitoring regime for public enterprises, and the privatization of an initial 4 public enterprises (PEs), the proceeds of which would be earmarked for further privatization or financial restructuring. Phase III of the rationalization process, completed in late 2008, focused on 5 PEs Leiola Duty Free Ltd; Tongatapu Machinery Pool, International Dateline Hotel; Shipping Corporation of Polynesia; Tonga Timber. The first privatization of a Tongan PE was executed with the sale of Government s majority shareholding in Leiola duty free stores; another enterprise was liquidated through an asset sales process, and 3 additional enterprises are at various stages of approved rationalization process. By 2006, the Prime Minister made public enterprise reform a central tenet of his economic growth plan, and created the Ministry of Public Enterprises and Information (MPEI) as a specialist public enterprise monitoring agency to accelerate reform. [STUS: CLOSED] 3. Reforming Public Enterprises In 2009, ADB approved $0.5M to ensure that rationalization strategies are formulated for at least 8 PEs and that these strategies are implemented for at least 5 PEs. [STUS: CLOSED] 4. Moreover, ADB s Country Partnership Strategy (CPS) , approved in Nov 2007, has a total portfolio of $21.3M that focuses on private sector development and fiscal management, including rationalization of PEs, outsourcing road maintenance activities, strengthening legal business environment, and enhancing access to finance. [NOTE: Total assistance to Tonga from 2007 is nearly twice the allotted $21.3M.] ADB s Support to Integrated Urban Development. Projects include roads/drainage infrastructure, water supply and solid waste improvement for the capital Nuku'alofa. 1. Integrated Urban Development Sector Project $11.3M Grant approved in May 2008 Aims to improve environmental quality and public health in Nuku'alofa through improved urban infrastructure. Expected outputs include improved roads and drains, a major new drain to Prepared by Violeta P. Corral Consultant, Public Services International Asia Pacific Regional Organization / PSI APRO 1

2 serve a low lying inundated part, capacity building, and establishment of a new urban planning and management unit. [STUS: ACTIVE] 2. Nuku'alofa Urban Development Sector Project $6.06M grant approved in Oct 2011, with Australia providing additional $6.44M grant. Two subprojects: water supply, solid waste improvement. [STUS: ACTIVE) Others. 1. Economic Support Program 10.0M grant approved in Nov 2009, which aims to provide quick disbursing budget support to allow Government to respond to economic, fiscal and social impacts of Global Economic Crisis (GEC). ADB rationalizes thus: Economy (already severely) affected by domestic shocks as result of civil service strike in 2005, civil disturbances in 2006 and impact of global economic developments (e.g., high oil and food prices in 2008). [STUS: CLOSED, but no PCR yet released] 2. Tonga Fiji Submarine Cable Project $9.7M grant approved in Aug 2011, with additional $16.5M financing from World Bank, to construct a submarine fiber optic cable system linking Tonga to Fiji where an existing international submarine cable system will provide onward cost effective access to rest of the world. [STUS: ACTIVE} 3. Outer Island Renewable Energy Project PROPOSED 2.0M grant to construct gridconnected Solar Photovoltaic power plants on outer islands of of 'Eua, Ha'apai, and Vava'u. [MORE DEILS BELOW, INCLUDING LIST OF AVAILABLE PROJECT DOCUMENTS IN ADB WEBSITE.] 2

3 TITLE [Responsible ADB Staff] Outer Island Renewable Energy Project 1 PAUL HATTLE phattle@adb.org Implementing Strategic Economic Management 2 LAISIASA TORA ltora@adb.org Nuku'alofa Urban Development Sector Project 4 STEPHEN BLAIK sblaik@adb.org DESCRIPTION [NOTE: Unless otherwise indicated, Executing Agency (EA) is Ministry of Finance and National Planning.] Construct grid-connected Solar Photovoltaic power plants on outer islands of of 'Eua, Ha'apai, and Vava'u. Project will supply secure, environmentally sustainable energy to households, schools, and other public facilities on the islands. It will build capacity of Tonga Power Limited (TPL) in operation and maintenance of renewable technologies. Subsidized tariff will be assessed during project preparation. Support Government's efforts to sustain momentum of its economic management reforms. Outputs A strategically aligned Medium Term Budget Framework (MTBF) that is used by whole of Government; Strengthened GDP and revenue forecasting model. Support for Economic and Strategic Management. 3 Intended impact of is enhanced resource allocation to foster economic growth and achieve national development priorities. Outputs (i) national strategic plan with targets and indicators being monitored and used in decision making, (ii) strategically aligned corporate plans with cascading targets and indicators being used, (iii) GDP and revenue forecasting model being used, (iv) robust and timely economic policy analysis and proposals placed in front of decision makers, (v) strategically aligned and used MTBF, and (vi) improved policy coordination. Support establishment of municipal government in capital Nuku'alofa and provide high priority urban infrastructure identified in Nuku'alofa Urban Infrastructure Development Plan (UIDP). Project will expand Nuku'alofa Reconstruction Project (NRP) and Integrated Urban Development Sector Project (IUDSP). Outputs - Strengthened policy environment for delivery of urban services; Effective, efficient and sustainable water supply services provided by Tonga Water Board (TWB); Sustainable solid waste services provided by TYPE OF ASSISNCE APPROVAL DATE / STUS AMOUNT (US$) Grant PROPOSED 2.0M (Japan Fund for Poverty Reduction; Clean Energy Fund - Multi-Donor) ( Special (Japan Special Grant (Asian Development Fund / ADF) Dec 2011 Dec 2011 Dec 2009 Oct M 0.675M 0.5M 6.06M (Australian Grant 6.44M) 3

4 Tonga-Fiji Submarine Cable Project 5 HANS VAN RIJN hrijn@adb.org Economic Support Program 6 EMMA VEVE eveve@adb.org Reforming Public Enterprises 7 WINFRIED F. WICKLEIN wwicklein@adb.org Waste Authority Ltd (WAL); Other municipal infrastructure is upgraded and well maintained; Raised community awareness of municipal services; Effective project management services. Provide a submarine fiber optic cable system linking Tonga to Fiji where an existing international submarine cable system will provide onward cost-effective access to rest of the world. Improved access to and lower cost of international connectivity will have significant social benefits in a country with a large number of the people residing in Australia, New Zealand and the United States. Tonga is first country among Pacific developing member countries that introduced competition in telecommunications sector. Preparatory technical assistance (PP) will carry out sector analysis; gender, poverty and social analysis; and governance risk assessment and prepare other inputs. Provide quick-disbursing budget support to allow Government to effectively respond to economic, fiscal and social impacts of Global Economic Crisis (GEC). Budget support needed to (i) protect essential social expenditure for segments of society most adversely affected by crisis, and (ii) advance structural reforms to improve medium-term competitiveness and productivity. Economy affected by domestic shocks as result of civil service strike in 2005, civil disturbances in 2006 and impact of global economic developments (e.g., high oil and food prices in 2008), Increase private investment opportunities in sectors previously dominated by public enterprises. Outputs: (i) rationalization strategies formulated for at least 8 public enterprises (PEs) by end 2009; (ii) implementation of rationalization strategies for at least 5 PEs by end of 2010; (iii) at least 2 training courses delivered for PE directors and management and MPEI staff; and (iv) at least 2 training courses for MPEI staff and relevant government agencies, and on the job training for MPEI. EA is Ministry of Public Enterprises & Information (MPEI). Grant (Asian Development Fund / ADF) PP ( Special Grant (Asian Development Fund / ADF) ( Special Aug 2011 July 2010 Nov 2009 (CLOSED; closing date is June 2011; No PCR yet) April M (World Bank 16.5M) 0,165M 10.0M 0.5M 4

5 Integrated Urban Development Sector Project 8 STEPHEN BLAIK sblaik@adb.org STEPHEN BLAIK sblaik@adb.org MICHIKO SUGA msuga@adb.org Country Partnership Strategy (CPS) Improve environmental quality and public health in Nuku'alofa through improved urban infrastructure. Outputs: (i) improved roads and drains in urban area; (ii) a major new drain to serve a low-lying inundated part of urban area; (iii) capacity building in preventative maintenance, and establishment of a new urban planning and management unit. EA is Ministry of Works. Urban Planning and Management System (UPMS) 9 Support implementation of proposed UPMS. Outcomes (i) planned and sustainable urban development and (ii) a safe and efficient road system within Nuku'alofa. Positive social impacts include improved access to commercial, health, education, and other community facilities within urban area. Other impacts include reduced accident rates for pedestrians and reduction in waterborne disease infections. Potential negative social impacts include those associated with faster vehicular traffic brought about by road rehabilitation. Analysis of social impacts under project performance monitoring will be gender disaggregated (i) differential project impacts and risks facing women, (ii) gender-specific measures to mitigate adverse impacts and manage risks, and (iii) interests and capacities of women to contribute to Project. EA is Ministry of Lands, Survey, Natural Resources & Environment. Preparing the Integrated Urban Development Sector Project. 10 Impact is sustainable urban planning and management, with improvement in living conditions in lowlying areas of Nukualofa. Outputs: (i) a detailed UPMS with action plan (ii) a feasibility study for an integrated urban development project in Nukualofa. CPS focus on private sector development and fiscal management, and includes rationalization of public enterprises, outsourcing road maintenance activities, strengthening legal business environment, and enhancing access to finance. Grant (Asian Development Fund / ADF) (Japan Special (Japan Special May 2008 May 2008 Sep M 0.7M 0.7M - Nov M 5

6 Rationalization of Public Enterprises WINFRIED F. WICKLEIN THUY MELLOR Economic and Public Sector Reform Program (EPSRP) 15 CAI LI Phase Assist in public enterprises reforms under Public Enterprise Act 2002 to improve governance through rationalization of corporate public sector and contribute to an increasingly private sector-driven economic growth. Phase Assist in rationalizing Public Enterprise portfolio, provide technical assistance for privatization of initial 4 public enterprises, as approved for sale by Cabinet. Support capacity building through on-the-job training during sale processes. Phase To accelerate implementation of Public Enterprise Act 2002, including establishment of a performance monitoring regime for public enterprises, and where appropriate, to transfer some enterprises to private sector. Regulatory arrangements is important aspect. Focused on two areas fiscal reform and public service reform, aiming at achieving twin objectives: (i) a sustainable fiscal balance, and (ii) improved service delivery to the private sector and the general public. Release of 2 nd tranche of loan is tied to implementation of 40 policy conditionalities ( policy matrix ), e.g., freeze hiring, endorsing corporatization/ privatization framework, passage of Public Enterprises Act (details provided as Appendix 2 of PCR). Building a Performance-Based Public Service. 16 Support overall civil service reform that will improve public sector service delivery to private sector and general public through (i) establishing institutional framework for a performanceoriented civil service; and (ii) promoting efficient and effective performance management. Advising on the Economic and Public Sector Reform Program. 17 Assist Government develop a comprehensive and specific policy and institutional reform package covering: (i) fiscal and monetary reform; (ii) financial sector reform; (iii) public sector reform; and (iv) social security strengthening, and provide basis for preparing a program loan for possible Bank financing in support of related costs of adjustment. (Japan Special ( Special ( Special Loan (ADF) (Technical Assistance Special (Technical Assistance Special Dec 2006 Dec 2004 May 2003 April 2002 May 2002 Aug M 0.15M 0.515M 10.0M (SDR 8.02M) 0.7M 0.65M 6

7 PROJECT DOCUMENTS AVAILABLE IN ADB WEBSITE: [PDS Project Data Sheet; RRP Report and Recommendation to President; PCR Project/Program Completion Report; R Technical Assistant Report; CR Technical Assistance Completion Report] 1 Outer Island Renewable Energy Project PDS PDS Grant 2 Implementing Strategic Economic Management PDS R (Dec 2011) 3 Support for Economic and Strategic Management PDS R (Dec 2009) 4 Nuku'alofa Urban Development Sector Project PDS Procurement Plan / PP (June 2011) Environmental Assessment and Review Framework / EARF (Aug 2011) Resettlement Framework / RF (Aug 2011) Draft Design and Monitoring Framework / DMF (Aug2011) Summary Poverty Reduction and Social Strategies / SPRSS (Sep 2011) RRP (Sep 2011) Gender Action Plan / GAP (Sep 2011) Project Administration Manual /PAM (Sep 2011) Resettlement Framework as of Board approval / RFAB (Dec 2011) Environmental Assessment and Review Framework (as of Board approval) / EARFAB (Dec 2011) Grant Agreement Externally Financed (Jan 2012) Grant Agreement -- Special Operations (Jan 2012) Subproject: Water Supply Resettlement Plan / RP (Aug 2011) Initial Environmental Examination / IEE (Aug 2011) Resettlement Plan (as of Board approval) / RPAB (Dec 2011) Initial Environmental Examination (as of Board approval) / IEEAB (Dec 2011) 7

8 Subproject: Solid Waste Improvement Initial Environmental Examination / IEE (Aug 2011) Initial Environmental Examination (as of Board approval) / IEEAB (Dec 2011) 5 Tonga-Fiji Submarine Cable Project PDS Initial Poverty and Social Assessment / IPSA (May 2010) Design and Monitoring Framework / DMF (July 2010) Procurement Plan / PP (May 2011) Project Administration Plan / PAM (June 2011) Resettlement Framework / RF (July 2011) Initial Environmental Examination / IEE (July 2011) Summary Poverty Reduction and Social Strategies / SPRSS (July 2011) RRP (July 2011) Project Agreement between ADB and TCL (Sep 2011) Grant Agreement between ADB and Kingdom of Tonga (Sep 2011) 6 Economic Support Program PDS RRP (Nov 09) Grant Agreement (Dec 09) 7 Reforming Public Enterprises PDS R (April 09) CR (June 2011) 8 Integrated Urban Development Sector Project PDS RRP (May 08) Procurement Plan / PP (May 08) Grant Agreement (July 08) 9 Urban Planning and Management System (UPMS) PDS CR (July 2011) 10 Preparing the Integrated Urban Development Sector Project PDS R (Sep 05) 8

9 Initial Poverty and Social Assessment / IPSA (Sep 05) Design and Monitoring Framework / DMF (Sep 05) Land Acquisition and Resettlement Plan / LARP (July 07) Summary Initial Environmental Examination / SIEE (Aug 07) 11 Country Partnership Strategy (CPS) Rationalization of Public Enterprises (Phase 3) PDS R (Dec 06) CR (May 09) 13 Rationalization of Public Enterprises (Phase 2) PDS 14 Rationalization of Public Enterprises (Phase 1) PDS R (May 03) CR (June 05) 15 Economic and Public Sector Reform Program (EPSRP) RRP (April 02) PCR (Sep 05) 16 Building a Performance-Based Public Service PDS CR (Sep 05) 17 Advising on the Economic and Public Sector Reform Program PDS R (Aug 01) CR (Sep 05) 9