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

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Kiribati 90<br />

Ports<br />

<strong>The</strong> Kiribati Port Authority was corporatized in 2000 under the Kiribati Ports Act. As a<br />

commercial entity, the Port Authority is responsible for operating its own budget. Any profit<br />

goes to acquisition and upkeep of assets in return for a government dividend. <strong>The</strong> Port<br />

Authority has not paid any dividends to date while it has been building up its assets.<br />

Corporatization has allowed the Port Authority to focus on “cutting costs and running more<br />

efficiently”. <strong>The</strong> Government retains control of all port assets which the Port Authority<br />

operates and maintains. Betio Port is currently running at a profit and is able to cover costs<br />

with existing charges. <strong>The</strong> Port Authority is currently reviewing options for contracting out<br />

selected services to cut expenses further.<br />

Betio Port is limited by the fact that ships cannot dock quayside due to the shallowness of<br />

the lagoon. Ships must anchor at sea and barges are used to collect containers. Although<br />

there is no waiting time for ships and clearing begins within an hour of berthing, this<br />

arrangement means that it takes an average of two days to process each vessel. A study<br />

recently reviewed the possibilities for upgrading the port to allow vessels to dock quayside.<br />

This proposal is currently being evaluated by the Kiribati Ministry of Transport. If it is<br />

approved, it would significantly improve the ability of the port to process vessels and would<br />

dispense with the additional expenses involved in running the tugs and barges. This would<br />

reduce freight costs in turn and would therefore help to attract more traffic to the port.<br />

However the economic analysis of the project suggests the benefit-cost ratio might be lower<br />

than one might wish.<br />

Shipping<br />

Chief Container Service provides international services between Australia (Sydney, Brisbane<br />

and Melbourne) and Tarawa. It is the sole operator on these routes. Previously, a competing<br />

operator, Sofrana Lines entered the market in competition to Chief Container Services,<br />

which responded by lowering its prices and improving service to the extent that Sofrana<br />

withdrew 91 .<br />

Kiribati’s domestic shipping services to outer islands are mainly provided by a government<br />

owned company Kiribati Shipping Services Limited (KSSL), while private sector operators<br />

provide services to the country’s inner islands. Private services also operate between Tarawa<br />

and Kiritimati. Shipping services to outer islands are infrequent and do not meet<br />

requirements.<br />

KSSL is operating at a loss 92 and vessel repairs and maintenance have not kept pace with<br />

degradation. No explicit subsidy is provided to the company, although rates and charges do<br />

not cover operating costs.<br />

90 Sources: Castalia Interview with Betio Port Master, September 2004<br />

91 <strong>Pacific</strong> Regional Transport Study, Volume 2 Country Action Plan: Kiribati” June 2004, from <strong>Pacific</strong> Islands<br />

Forum Secretariat website<br />

92 Ibid<br />

138

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