EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
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<strong>The</strong>re is great potential for improvement in the efficiency and customer service standards of<br />
the sector, but major change is required to the way in which governance and management<br />
applies to the institutions.<br />
Box A.7: Private Sector Interest in Kiribati<br />
<strong>The</strong> Kiribati Public Utilities Board is responsible for electricity and water on South<br />
Tarawa. <strong>The</strong> Ministry of Works and Energy oversees the electricity sector for the<br />
remainder of the country. Most electricity in Kiribati is diesel generated, although some<br />
households also employ solar panels.<br />
It is often argued that small countries like Kiribati will not be able attract private sector<br />
interest due to small markets and potentially lower revenues. However, this is not the<br />
case. <strong>The</strong>re have been suggestions of introducing Independent Power Producers (IPPs)<br />
in Kiribati and at least three private operators (Island Power, Telesource and a company<br />
in Guam) have expressed interest. Although this concept has been put to the<br />
Government of Kiribati, Ministry personnel expressed reservations that this interest<br />
may not convert to actual commitments due to low returns, but there is no basis yet<br />
upon which to confirm that this will in fact be the case. <strong>The</strong> fact that some companies<br />
have actually expressed interest, knowing the size and scale of the Kiribati market, and<br />
having operated in other small <strong>Pacific</strong> Island countries (e.g. Telesource is involved in<br />
power generation in Fiji and the Federates States of Micronesia as well), suggests that<br />
the interest is real.<br />
At any rate, it would not hurt for Kiribati (or other small island states for that matter) to<br />
test the interest by giving the private sector the option to tender for services. <strong>The</strong> worst<br />
case scenario is that competitive bidding does not eventuate. In this case, the country<br />
could choose to appoint the single bidder if there is one, or continue with current<br />
government operations having lost very little. On the other hand, if the private sector<br />
interest is real, the country has much to gain.<br />
Source: Castalia Interviews with Kiribati Ministry of Works and Energy and Public Utilities<br />
Board, September 2004<br />
101