Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 28 Apr 2015

Project Name Highlands Region Road Improvement Investment Program - Project 1
Country Papua New Guinea
Project/Program Number 40173-023
Status Approved
Geographical Location Papua New Guinea
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.
Sector Transport
Subsector Road transport (non-urban)
Strategic Agendas Inclusive economic growth (IEG)
Drivers of Change Governance and capacity development (GCD)
Gender Equity and Mainstreaming Categories Category 4: No gender elements (NGE)

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan2496Asian Development Fund71,200
Loan2497Asian Development Fund28,800
TOTAL US$ 100,000

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment B
Involuntary Resettlement B
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects
Climate change may lead higher rainffall, so roadside drainage willneed to be carefully designed. Low traffic volumes mean that vehicle emissions will be minimal. All five roads under Project 1 include improvements within the existing road corridor. No road sections are located in or pass through any protected areas or ecologically sensitve environment. The environmental impacts of road during construction and operation have been assessed, and can be mitigated to acceptable levels
Involuntary Resettlement
A resettlement framework has been reviewed by the PNG Government to establish the policies and procedures for payment of compensationf or lost or damaged assets. The land acquisition impacts, where they occur, will be minor, There will be no displacement of housing and the affected people will experience only small losses of crops, trees, fences or other secondary structures. Short resettlement plans have been prepared for Project 1 roads and these will be updated based on detailed engneering designs during loan implementation.
Indigenous Peoples
The resettlement framework and plans will address specific actions favorable to indigenous peoples, if necessary, in dealing with the customary land acquisition.

Stakeholder Communication, Participation and Consultation

During Project Design
An extensive program of consultation has taken place. At the inception stage, a stakeholder analysis was carried out to identify the primary and secondary stakeholders; their interests in the proposed project, their perceptions of current problems related to road accessibility, mobility and transport services; and, the resources they could bring to the achievement of the goals and objectives of the project. Meetings have been held at the national level with DOW, Ministry of Transport (MOT), NRA, Department of National Planning and Monitoring (DNPM), Department of Land and Physical Planning (DLPP), Department of Community Development (DCD), National Aids Council (NAC) and National Council of Women (NCW); relevant development partners and international organizations such as Australian Aid for International Development (AusAID), UNDP, UNICEF, WHO, Population Services International (PSI), CAREAustralia); and consultants engaged in ADB, AusAID and other donor-funded projects relevant to the Program. Provincial and district authorities in Enga and Southern Highlands provinces have been actively consulted including provincial and district administrators; national and provincial works departments; provincial community development, health and education advisors; provincial AIDS Councils; and, provincial and district women's networks. Other regional stakeholders that have been met with include civil work contractors, trucking companies and representatives of major development enclaves in the Highlands region, e.g., Porgera JV and Oil Search. These provincial, district and regional stakeholders participated in consultation workshops held in the provinces along with other local stakeholders including representatives of the community sector (local NGOs, health institutions, radio stations, etc.) and the private sector (local business houses, bus/truck drivers, etc.). Along each road section, the views of the local population have been sought through surveys of households, market sellers, trade store owners, road users and vehicle operators, as well a program of community consultations and focus groups with village women.
During Project Implementation
Consultations will be undertaken during implementation of the Project.

Description

The Investment Program focuses on the Highlands core road network (HCRN) of 2,500 kilometers (km) of major national and some provincial roads, which carry the bulk of the traffic in the region. The investment program will include (i) projects to improve about 1,400 km of the HCRN, to be funded through four or more tranches under this multitranch financing facility (MFF); (ii) design and supervision of road improvement works, preparation and administration of long-term road maintenance contracts for the entire 2,500 km of the HCRN, and capacity development of road agencies; and (iii) monitoring the socioeconomic benefits of the improved and maintained roads in the Highlands region. Support will also be provided for policies such as road user charges (to increase the resources available for road maintenance). In addition, technical assistance (TA) will be provided to support the Department of Transport to prepare a new National Transport Development Plan (NTDP) for 2011-2020.

Project Rationale and Linkage to Country/Regional Strategy

The Highlands region is a major contributor to the PNG economy through its agricultural and mineral exports. It is also home to 40% of the country's population, who rely almost exclusively on the road network for movement of people and goods. The road network is vulnerable because of the mountainous terrain, the fragile geological conditions, and the climate. The Government and its development partners have invested significantly in improving the road network, but a lack of regular maintenance has left the network in a poor condition. There is a need to (i) initiate a program of regular maintenance on all HCRN roads that are in good condition, and (ii) improve those HCRN roads that are in a poor condition and ensure that routine maintenance begins on these roads as soon as the improvement works are done. The current NTDP provides a framework of policies and strategies for a sustainable road system in PNG. It has led to the establishment of the National Road Authority (NRA) with responsibility for maintaining the road network and a road fund financed through road user charges to finance road maintenance. The NRA and the road fund are managed by an independent board, with representatives from road users, the private sector, and the Government. There is a need to translate these initiatives into a workable system by (i) strengthening the NRA's capacity to plan and manage road maintenance works, (ii) seeking more financing for the road fund by rationalizing road user charges, and (iii) awarding long-term performance-based road maintenance contracts. With a functioning board and staff recruitment for the NRA underway, the Government is keen to support the MFF. It will help to enable implementation of the NTDP and to ensure a sustainable road system in the Highlands region. This initiative could serve as model for other regions of PNG.

Development Impact

The proposed Investment Program will establish a sustainable road system in the Highlands region that will enable maximum use of its natural, mineral, and human resources. It will contribute to the Government's MTDS, 2005-2010 objectives of (i) export-driven economic growth; (ii) rural development, and poverty reduction; (iii) good governance; and (iv) promotion of sustainable agriculture, forestry, fisheries and tourism.

Project Outcome

Description of Outcome
Improved accesibility and reduced transport cost in the Highlands region.
Progress Towards Outcome
Award and execution of road improvement and long-term performance-based contracts for 115kms of road and also project management and supervision support to DoW and NRA. DoW to assess subproject benefits after subproject completion.

Outputs and Implementation Progress

Description of Project Outputs
1. Improved core road network in Highlands region. 2. Sustainable maintenance arrangements for core road network. 3. Improved capacity of NRA to plan and manage long-term road maintenance contracts. 4. More efficient DOW organization to deliver road improvements. 5. A new National Transport Development Plan for 2011 to 2020
Status of Implementation Progress (Outputs, Activities, and Issues)
1. Two contract with total road length of 115kms (Laiagam-Porgera and Mendi-Kandep) signed on 09 February 2012 and under construction. PNRM undertook specific consultation mission from 19-20 Nov 2012. To date, overall physical progress for Mendi-Kandep and Laiagam-Pogera is 10.88% and 9.91% respectively. 2. Yet to start. 3. NRA supervising mid-term performance based contracts for 3-5 years and assisted by the maintenance component consultant in terms of contract admin and supervision. 4. Resident engineers for each subproject mobilized in Oct and Nov 2012 and assisting the project implementation unit during construction. 5. Revised draft NTDP (2011-2020) reviewed and commented. There is a need for extension of the consultants input time to finalize the NTDP.
Status of Development Objectives
Status of Operation / Construction
Material Changes

Business Opportunities

Date of First Listing 2008 Dec 18
Consulting Services
Consulting services will be required for Investment Program implementation support and capacity development. Key tasks include (i) design of road improvement works; (ii) preparation of bid documents, procurement support, and supervision of road improvement and long-term maintenance contracts; (iii) Investment Program performance management; (iv) preparation of subsequent projects; (v) capacity development; and (vi) socio economic monitoring. The capacity development component will involve the strengthening of HRMG, establishment of PIU in NRA, financial/road maintenance contracting/road user charges for NRA, and road safety for NRSC. Project 1 will require a total of 1,266 person-months (362 international and 904 national) of services from consulting firms. Additional consulting services, if necessary, will be procured under subsequent projects. The consulting services will be financed from the ADB loans. DOW will select and engage the consultants in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time) using the quality- and cost-based selection method.
Procurement
All ADB-financed procurement for goods and services will be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). International competitive bidding procedures will be followed for all contracts over $3 million for civil works and $0.5 million for goods. National competitive bidding will be used for contracts under these thresholds. Shopping can be used for goods with contract values lower than $100,000, as appropriate. Contracts have been packaged to attract international contractors as well as promote the national contractors.
Procurement and Consulting Notices
http://www.adb.org/projects/40173-023/business-opportunities

Timetable

Concept Clearance 13 Jun 2008
Fact-finding 16 Jun 2008 to 30 Jun 2008
Management Review Meeting 15 Aug 2008
Approval 22 Dec 2008

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 2496 22 Dec 2008 19 Feb 2009 18 May 2009 30 Jun 2013 29 Jun 2015
Loan 2497 22 Dec 2008 19 Feb 2009 18 May 2009 30 Jun 2013 29 Jun 2015

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
05 Jul 2015 Loan 2496 67,751 0 96.00%
05 Jul 2015 Loan 2497 28,143 0 97.00%
Cumulative Disbursements
05 Jul 2015 Loan 2496 52,729 0 75.00%
05 Jul 2015 Loan 2497 28,498 0 99.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 2496 Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory
Loan 2497 Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

Contacts and Update Details

Responsible ADB Officer Muhammad Amir Ingratubun (mingratubun@adb.org)
Responsible ADB Department Pacific Department
Responsible ADB Divisions Papua New Guinea Resident Mission
Executing Agencies Department of Works
Joel Luma

Links

Project Website http://www.adb.org/projects/40173-023/main
List of Project Documents http://www.adb.org/projects/40173-023/documents