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

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Samoa 104 The Samoa Airport Authority (SAA) is a government owned statutory authority responsible for four airports. Corportization has enabled the airport authority to establish a sound commercial operating basis. It has not resulted in the same shift in profitability that the Samoa Port Authority experienced. SAA recorded an overall low at the end of 2002 when the effect of depreciation and interest on airport capital works was accounted for, despite small profit recordings in 2000 and 2001. It has managed to move away from a heavy dependence on aid funded staff and now manages its most operations with domestic personnel, but revenue generated is not sufficient to recover full operating and maintenance costs. Faleolo airport is constrained by its distance from Apia (35km). This has resulted in relatively lower levels of traffic and a situation in which domestic and regional passengers (mostly from American Samoa) traveling through Fagali’i airport crosssubsidize the international traffic. Functions are also duplicated between Fagali’i and Faleolo. A recent study of the airports concluded the Fagali’i should be closed in a three stage process. Summary of Analysis We are able to comment on some airports, based on past studies, interviews and information gathered from questionnaires. We have observed that in the airports sector: The number of airports in the Pacific region is adequate, but maintenance is poor. Airport utilization levels and the capacity of the airport terminal infrastructure are low when judged against the comparator countries. One reason commonly given for this is that low levels of traffic, do not demand a greater number facilities (e.g. terminal capacity, check in desks or baggage claim belts) and constrain the amount of funding available for such expansion Most airports in the region are government owned and operated in the form of statutory corporations or Civil Aviation bureaucracies. The formation of statutory corporations has had mixed results. One reason for this has been a lack of clarity on the role and responsibilities of the government and the corporation, and of transparency in management structures 105 . Where statutory corporations have resulted in commercial entities, independent of government funding, this has been successful Private sector ownership and operation of airports is extremely limited in the Pacific. Introducing private operation of the whole airport in the form of a long term concession is one option which might help to improve the quality of services at a reasonable cost to the authority. This model has been successfully employed in Jamaica (Sangster) and throughout the Dominican Republic. This model would be suitable for larger airports such as the main international airports in Fiji, Vanuatu or Samoa. Whether it was suitable for very small airports, like those in the Marshall Islands, Kiribati or Palau would depend on the degree of interest from qualified private firms 104 Sources: Castalia Interviews, Samoa Transport Sector Review: Draft Final Report May 2003, World Bank, Samoa Action Plan “Pacific Regional Transport Study” June 2004 (AusAid) on www.forumsec.org.fj 105 “Pacific Regional Transport Study” AusAid, 2004 150
An alternative reform model is for the Government to operate on a ‘Landlord’ basis, with selected services contracted out to private operators. In smaller airports, contracts could be awarded for all terminal services instead of on a service by service basis Existing traffic to and from the Pacific does not appear to justify significant airport expansion. However, expansion would contribute to, and be necessary for, an expanded tourist industry within the region. The experience in Punta Cana in the Dominican Republic suggests that if governments are prepared to support private investment in an entire tourist package, the country may benefit from increased tourism while limiting government investment and risk. A.3.7 Institutional Analysis for Air Services Many Pacific countries’ air services are governed by bilateral air services agreements which provide a framework within which airlines of one country are allowed to fly into and beyond the other country. The frequency, capacity and other operational issues are normally covered by Memoranda of Understanding (MOUs) accompanying the agreements. The agreements cover the rights of carriers to carry passengers originating and terminating in foreign territories. For many years, these agreements have limited the airlines allowed to fly between various countries to their national carriers, and restricted capacities on routes. Unusually, Samoa has an open skies agreement with the United States including beyond rights. Now, Pacific Countries are considering liberalization, as outlined in Box A.12. Box A.12 : Open Skies in the Pacific: Pacific Islands Air Services Agreement (PIASA) The Pacific Islands Air Services Agreement (PIASA) is a Pacific Islands Forum Secretariat initiative aimed at preparing Pacific Island countries for gradual adoption of a region-wide ‘open skies’ regime. In May 1998, the Pacific Islands aviation ministers agreed in principle to move towards the liberalization of regional air services agreements and at a subsequent meting in 1999, they agreed to the concept of a single Pacific Islands aviation market with the drafting of a multi-lateral agreement, which the Pacific Islands Forum Secretariat would organize. The impetus for these agreements was the recognition that existing bilateral agreements restricted market access within the region and limited the growth and development of air transport. PIASA is due to be implemented in three phases over a period of five years. The first phase involves granting Fifth Freedom rights to new Pacific Islands Forum Secretariat countries that do not currently have international services. Phase two involves extending Fifth Freedom rights to all countries to operate within the region, and in the third phase Fifth Freedom rights will be extended to all Pacific Islands Forum Secretariat countries outside the region. Current signatories to PIASA are the Cook Islands, Nauru, Samoa, Tonga and Vanuatu. Protecting national carriers is one of the key reasons more countries have not yet signed up to this agreement. The Association of the South Pacific Airlines (ASPA) has noted that “the national carriers of the region warrant relative protection from “unnecessary” competition on some profitable routes which have been developed by and invested in by Pacific island carriers”. The argument is that the national carriers in the region are operating in a relatively high-cost environment and would not be able to cope with competition on most routes. It is feared that this would result in the collapse of some of the smaller national carriers in a similar manner to the Ansett collapse. This position is supported by Fiji. In fact, neither the Ansett collapse nor the financial difficulties of Air New Zealand, have resulted in fewer (or no) air services to New Zealand. On the contrary, several new carriers have started flying to the country on main routes, such as United Arab Emirates and Pacific Blue. Source: “Fiji’s position on multilateral air service agreements” Worldwide Air Transport Conference: Challenges and Opportunities of Liberalization, 2003; Pacific Islands Forum Secretariat and Castalia Research 151
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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
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Box 7.5: Public Sector Reforms in t
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Pacific countries, management salar
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There are three classic types of pr
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While private sector involvement ma
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Air services would also benefit fro
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7.2.5 Regional Coordination One opt
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8 What’s the Size of the Challeng
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Figure 8.5: Mainlines Trend 0.600 N
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Figure 8.11: Total Annual Per Capit
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9 How do we meet the Challenge This
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Box 9.3: Can private sector involve
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Box 9.6: How can the public sector
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The proportion of mainline access a
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Box A.2: Introducing Telecommunicat
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Universal Access Universal access r
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good example of this. The Kiwi Shar
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Figure A.7: Reported Faults per 100
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Table A.1: Institutional Indicators
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and there have been calls to recons
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A.2 Electricity Sector Analysis A s
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Figure A.10: Average Electricity Ta
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Figure A.11: Economies of Scale in
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interest rate relief on a US$9m loa
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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
Page 152 and 153: Airline Services Figure A.38 illust
Page 154 and 155: establishment period. For the offic
Page 156 and 157: Vanuatu 101 Airports Vanuatu Limite
Page 160 and 161: Institutional Arrangements in Aviat
Page 162 and 163: Summary of Aviation Analysis The Pa
Page 164 and 165: Fiji Kiribati Marshall Islands Micr
Page 166 and 167: Barbados Dominica Grenada Jamaica M
Page 168 and 169: Samoa Solomon Islands Timor-Leste T
Page 174 and 175: Samoa Solomon Islands Timor-Leste T
Page 180 and 181: “A-Z World Airports Online” www
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