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

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As Figure A.14 shows, Vanuatu performs far better on this measure than the other Pacific countries for which data was available. It does not perform as well as Jamaica, but Jamaica has a much larger system, and higher levels of income, making it easier for the utility to invest in reliability. Fiji has improved the quality of service significantly in the last three years as a result of the reform program described in Box A.6. Figure A.14: Service Quality – Electricity Outage Time 100 90 Electricity Outage (hours per customer per year) 80 70 60 50 40 30 20 10 0 Jamaica Vanuatu Fiji Samoa Solomons Islands Source: Country data and Castalia Research Note 1: Vanuatu has been excluded as the very high tariffs and system losses distort the trend data Note 2: FSM: Federated States of Micronesia Benchmarking Conclusions Electricity tariffs are a complex product based on factors including national fuel procurement systems, economies of scale and degree of government subsidy. It is difficult to be definitive on the performance of Pacific countries as far as tariffs go. What is clear is that Pacific electricity utilities generally perform worse than their Caribbean counterparts (which are of a similar size and income level, and which also depend on imported fossil fuels) at providing access to electricity, have higher system losses and lower labor productivity. Fiji and Vanuatu show that good performance in areas like system losses are possible in the Pacific. 98
A.2.2 Institutional Arrangements The electricity sector in the Pacific region is dominated by government departments or corporatized state owned utilities that are, in general, in regulated monopolies, as shown in Table A.3 Within the Pacific, Fiji and Vanuatu are the best performing utilities, each with different institutional arrangements. It is worth examining the reasons for their relative success: Like many other electricity utilities in the Pacific, the Fiji Electricity Authority (FEA) is a corporatized state owned monopoly, which has not been formally regulated to date (FEA’s rehabilitation is described in Box A.6). Two critical factors contribute to this utility’s success: The Government supported a Board that was commercially independent, and the utility’s Chairman and senior management team are exceptionally driven and have employed sound management practices. This example demonstrates that Pacific countries can achieve improved performance through effective public sector reform However, the potential for state intervention remains (there is nothing in place in Fiji to stop the government from intervening in the utility performance and targets, as it has done in other state owned corporations like Airports Fiji Limited), and should these good managers leave, it is uncertain whether good performance would be sustained, or whether the utility would revert to the level of performance seen in other corporatized utilities Vanuatu’s electricity is owned and operated by the private firm UNELCO, under a concession contract with the Government. Among the Pacific utilities it performs best on quality of service indicators, well on labor productivity and has the lowest levels of system loss. UNELCO’s tariffs are relatively high, which reflects the fact that it recovers full costs through the tariff, including financing investment. On this basis, it is comparable with other full cost recovery systems in some comparator countries like Dominica in the Caribbean. Tariffs are lower than those in Tonga, where the utility is also privately owned and operated Private participation in generation has been implemented in the Pacific. Fiji, Palau and Federated States of Micronesia. These three countries have some of the lowest electricity tariffs in the region. Private operators have also indicated interest in generation in Kiribati (see Box A.7). Provided contracts are wellstructured, private operators have the incentive to run electricity generation assets as efficiently as possible. 99
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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
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Some of these reforms have already
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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 102 and 103: Figure A.11: Economies of Scale in
Page 104 and 105: interest rate relief on a US$9m loa
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
Page 152 and 153: Airline Services Figure A.38 illust
Page 154 and 155: 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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