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

Figure 7.1: Accountability in Infrastructure Services Provision
Monopoly
Environment
Competitive
Environment
Government
• Ownership
• Contract
• Regulation
Political
accountability
Infrastructure
Competition
Service Provider
• Payment for
Services
• Regulation
Consumers
Competition
Competing
Infrastructure
Service Providers
Source: Castalia
Poor accountability has contributed towards poor infrastructure provision in Pacific
countries. Pacific countries have few institutional arrangements or governance
processes that encourage accountability in a transparent manner.
In general there is very little competition for services, in part because of size and
geography, but also because the underlying infrastructure policy design is poor.
Papua New Guinea and Samoa have competition in Internet Service Provision, and
Tonga has a duopoly in mobile telecommunications. Samoa and Lae and Port
Moresby ports in Papua New Guinea have competing port service providers and
airport terminal services at Port Vila in Vanuatu and Koror in Palau are procured
competitively.
The absence of competing service providers means that effective oversight
mechanisms are essential to ensure monopoly providers operate efficiently, to price
effectively and in a sustainable way, and to extend services. However, most
infrastructure services are provided and sanctioned by the same entity, the
government. Government departments are often financially constrained, inefficient
and have limited specialist or technical human resources capacity. They also have
little control over investment decisions and staffing. This is a weak model for
accountability and has failed to provide incentives for good performance.
For example in Fiji, the Ministry of Public Works Department is responsible for
providing water and sewerage services. The utility has no control over its budget, and
the existing allocations from Government do not allow for system improvements
and general maintenance. The utility’s performance has been poor on most
indicators, and worse than that of countries with fewer natural, financial and human
resources.
Where there is lack of accountability and transparency in ownership structures, the
problem is sometimes compounded by weak Court systems that provide little
protection for infrastructure investors and operators. An important feature of any
framework to allow infrastructure assets to be managed for the benefit of consumers
and investors/operators, is access to truly independent courts which can protect
contractual arrangements or interpret the law affecting infrastructure transparently
and independent of any political or bureaucratic influence.
Some progress has been made in some Pacific nations where judges operating at
Superior Court level are appointed from outside of the country. These judges bring
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