EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

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Figure A.11: Economies of Scale in the Pacific 35 Tonga 30 Average End User Electricity Price (US cents per kWh) 25 20 15 10 Vanuatu Kiribati Samoa Grenada Solomon Islands St Lucia Timor-Leste St Kitts Barbados Fiji Jamaica New Zealand 5 - 10,000,000 100,000,000 1,000,000,000 10,000,000,000 100,000,000,000 Electricity Generation (kWh) (Log Scale) Source: Castalia Source: Castalia Research Notes: PNG: Papua New Guinea, FSM: Federated States of Micronesia Efficiency Figure A12 shows staff productivity levels for Pacific and comparator countries. Electricity utility labor productivity levels in Pacific countries are poor compared to other utilities of similar size and level of performance, such as Dominica and Grenada. This can be improved, as the Fiji Electricity Authority (FEA) has shown in the last three years. FEA’s experience is described in Box A.6 below. Figure A.12: Staff Productivity 350 300 Number of Customers per Staff Member 250 200 150 100 50 0 Kiribati FSM Marshall Islands Vanuatu Solomon Islands Tonga Samoa Dominica Grenada Fiji St Lucia Barbados Jamaica Source: Meritec Report, country supplied data and Castalia Research Notes: FSM: Federated States of Micronesia 94
Box A.6: Fiji – A Model of Electricity Rehabilitation Fiji’s electricity is supplied by a wholly government owned entity, the Fiji Electricity Authority (FEA). The FEA is a vertically integrated generation, transmission, and distribution and supply entity established by statute in 1966. The Government appoints the Authority members, and apart from fixing the tariffs and determining major policy (such as dividend and rural electrification policy), the FEA now has independence on all operational and financial matters. Prior to 2000, FEA faced significant problems … From 1997 to 2000, the FEA faced significant problems. The organization moved from a profitable to an unprofitable trading entity, while electricity demand was increasing rapidly. The government faced a number of emerging capacity and efficiency problems at a time when the Fijian economy was in poor shape. a board with commercial independence and experience was appointed … In 2001, a new Board was appointed with members who had extensive private sector experience, and a commercial focus to the management of the business of the Authority. The FEA was given three years to restructure and return the business to profitability. In the light of subsequent events, this focus was crucial to managing a major set of concurrent problems in 2002 and 2003. and major business like reforms were implemented … The major steps in the reform process were: Improve efficiency and reduce costs of production Reduce system losses Raise productivity of labor and capital inputs Change accounting practices for accurate recording - Introduce private sector operators - Manage risk pro-actively - Plan for demand growth Significant gains were made in 3 years, both financially and operationally… Impressive progress was made between 2001 and 2003. US$35m in costs were carved out (of a business with annual revenues of US$70m); staff numbers were halved; system losses were reduced from 18 to 10 percent; more efficient diesel generators were installed; surplus assets were sold; crucial engineering maintenance raised operating efficiencies; and collection efficiencies produced one time and permanent increases in revenue. outsourcing to the private sector was a key ingredient to success … Outsourced operator management contracts were let to the private sector for the operation of FEA’s larger diesel generation plants. A 20 year Energy Conversion Agreement was signed with an American company and a joint venture partnership with an Australian company is being adopted to develop major renewable (hydro and wind) generation projects. which helped FEA to cope with a primary energy crisis. The reform process coincided with a major capacity crisis in 2002-03. Two very low rainfall years slashed hydro generation capacity, and extensive and expensive use of diesel plant had to fill the supply gap, at a time when electricity demand from a recovering economy was growing rapidly. FEA managed the crisis well, although the government did provide significant assistance in the form of a US$4m grant, and the provision of guarantee and 95
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The Pacific Infrastructure Challeng
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Table of Contents 1 Acronyms and Ab
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Figure 8.4: Annual Per Capita Inves
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Box 7.9: ECTEL - Regulatory Coopera
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kWh MDG MIAA MIPA MNOC MOTCA MOU MP
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2 Executive Summary This discussion
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Fiscal, regulatory and policy decis
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Figure 2.2: Estimated Annual Invest
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3 What’s the Purpose of the Discu
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Box 4.2: Improving Infrastructure f
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5 How well are Pacific Countries Pe
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Figure 5.1: Access to Electricity 1
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Water tariffs are often too low In
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Table 6.1 shows that in addition to
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These characteristics mean that Pac
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6.2 Challenges to Institutions and
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6.2.2 Demographic Issues in the Reg
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These high rural populations mean t
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Figure 6.3: Comparison of Defining
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Lack of legal and regulatory suppor
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7 Challenge: How do we Lift Perform
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7.1.2 Poor Policy Design and Coordi
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different, some efficiency may be g
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Figure 7.1: Accountability in Infra
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Box 7.3: Expert Panels can Improve
Page 52 and 53: Some of these reforms have already
Page 54 and 55: 7.2.2 Choose an Appropriate Reform
Page 56 and 57: Box 7.5: Public Sector Reforms in t
Page 58 and 59: Pacific countries, management salar
Page 60 and 61: There are three classic types of pr
Page 62 and 63: While private sector involvement ma
Page 64 and 65: Air services would also benefit fro
Page 66 and 67: 7.2.5 Regional Coordination One opt
Page 68 and 69: 8 What’s the Size of the Challeng
Page 70 and 71: Figure 8.3: Annual Per Capita Inves
Page 72 and 73: Figure 8.5: Mainlines Trend 0.600 N
Page 74 and 75: Figure 8.8: Annual Per Capita Inves
Page 76 and 77: Figure 8.11: Total Annual Per Capit
Page 78 and 79: 9 How do we meet the Challenge This
Page 80 and 81: Box 9.3: Can private sector involve
Page 82 and 83: Box 9.6: How can the public sector
Page 84 and 85: The proportion of mainline access a
Page 86 and 87: Box A.2: Introducing Telecommunicat
Page 88 and 89: Universal Access Universal access r
Page 90 and 91: good example of this. The Kiwi Shar
Page 92 and 93: Figure A.7: Reported Faults per 100
Page 94 and 95: Table A.1: Institutional Indicators
Page 96 and 97: and there have been calls to recons
Page 98 and 99: A.2 Electricity Sector Analysis A s
Page 100 and 101: Figure A.10: Average Electricity Ta
Page 104 and 105: interest rate relief on a US$9m loa
Page 106 and 107: As Figure A.14 shows, Vanuatu perfo
Page 108 and 109: Table A.3: Industry Structure and G
Page 110 and 111: Regional Cooperation in Electricity
Page 112 and 113: A.3 Water and Sanitation Sector Ana
Page 114 and 115: Figure A.17: Availability of Water
Page 116 and 117: Figure A.20: Staff per 1000 Connect
Page 118 and 119: including full operating expenses a
Page 120 and 121: Corporatization is often employed t
Page 122 and 123: operating costs, collections levels
Page 124 and 125: Figure A.25: Road Network Density v
Page 126 and 127: Federated States of Micronesia at b
Page 128 and 129: In Samoa: Samoa’s Public Works De
Page 130 and 131: Many Pacific countries already outs
Page 132 and 133: 4. Domestic and Pacific Island serv
Page 134 and 135: Figure A.31: TEU Throughput Levels
Page 136 and 137: system reduces cargo handling effic
Page 138 and 139: Economies of Scale Port operations
Page 140 and 141: The landlord model is the most comm
Page 142 and 143: Fiji 84 Ports The Maritime and Port
Page 144 and 145: Apia Port has become one of the bes
Page 146 and 147: Kiribati 90 Ports The Kiribati Port
Page 148 and 149: In Shipping: Services are considere
Page 150 and 151: Figure A.36: Total Passenger Throug
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Airline Services Figure A.38 illust
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establishment period. For the offic
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Vanuatu 101 Airports Vanuatu Limite
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Samoa 104 The Samoa Airport Authori
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Institutional Arrangements in Aviat
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Summary of Aviation Analysis The Pa
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Fiji Kiribati Marshall Islands Micr
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Barbados Dominica Grenada Jamaica M
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Samoa Solomon Islands Timor-Leste T
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Samoa Solomon Islands Timor-Leste T
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“A-Z World Airports Online” www
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