Multi million dollar loan for Vanuatu port upgrade

ABC Vanuatu is set to upgrade its port facilities and shipping services to remote islands, with an $11 million loan from the Asian Development Bank.

The ADB says many wharves in Vanuatu are in poor condition, with delays and safety problems not uncommon either.

The loan will see new or upgraded jetties for Vanuatu’s outer-islands, plus a a central inter-island terminal in Port Vila.

Presenter: Geraldine Coutts
Speaker: Eugenue Zhukov, head of the Asian Development Bank in Australia
ZHUKOV: Vanuatu depends on water transport, as its population of 200,000 people is spread over Archipelago, 60 populated islands. However, we feel that inadequate infrastructure limits cargo and passenger movement and fully functioning markets make some services commercially unviable. So the projects that we’re putting together will have three major components. The largest component Geraldine will be improvement of infrastructure in capital and outer island. The second component will provide shipping support to capatilise the private sector provision services to remote non-commercial destinations. And the third component will strengthen the Maritime Safety Authority. We are now in the process of getting our internal approvals and we expect that the project will start implement in January, 2012.

COUTTS: It’s an important project, isn’t it, because a lot of Ni Vanuatu use these services in the inter islands. Do you know how many exactly?

ZHUKOV: Well, I cannot give you a precise number, how many people use the services right now, but as I mentioned earlier, population of Vanuatu is about 250,000 people and they’re spread out at a large number about 60 islands, so it’s a very important mode of transportation for Vanuatu.

COUTTS: Can we look at for a minute at how it’s used. Is it cargo and passenger transport services?
ZHUKOV: Yeah, that’s right, cargo and transportation yes.

COUTTS: Now the inter island terminal targeted for Port Vila. Does that mean it will be able to take more international shipping as well? Will it actually beef up and upgrade the services its able to provide?
ZHUKOV: Geraldine, this is a good question. Actually in Port Vila, there will be two projects happening almost at the same time. ADB projects will be taking care of the domestic terminal and at the same time, the government is negotiating with the government of Japan on upgrading the international shipping terminal.

COUTTS: And what will that mean to the local population? Does it mean more tourists, how will it be advantageous to Vanuatu?
ZHUKOV: International terminals will facilitate more tourism traffic and will boost economies even further and the domestic terminal which we’re putting together will allow better services to the outer islands and better cargo facilities, which will facilitate trade and movement of people and goods across the islands.

COUTTS: And will it also help with the movement of goods and services in terms of health facilities?
ZHUKOV: Quite possibly so. Geraldine, we’re implementing similar scheme in Solomon Islands and what we’ve seen is that quite often the boats travel from the capital to the province carrying the general goods and they come back with the copra and coconut and other agricultural commodities boosting the economies on these islands.

COUTTS: And how long do you think it will take to have all these projects completed?
ZHUKOV: This is a five year project and we expect the completion will be in December of 2016.

COUTTS: And is this part A and will there be more sort of wharves and jetties and terminals that you’ll have to put in as a result of improved services?
ZHUKOV: Geraldine, we’ll see how it goes. This is our first project in Vanuatu after a very long break and if it’s successful we’ll look for possible replication down the road.

COUTTS: And why is that ADB has taken a break from Vanuatu and coming back for the first time in a while?
ZHUKOV: Oh, there are a number of reasons for that, but at the moment we’d like to focus on our relationship with the current government in Vanuatu, which I think is very good and this year, we’re actually targeting to approve two projects in the country, in addition to the international shipping project, we’re also seeking approval for the urban development project for Port Vila.

COUTTS: Did it have something to do with transparency issues?
ZHUKOV: No, Geraldine, but simply put in the late 90s, the government had substantial external debt burden and was not in a position to take any more loans from organisations like the ADB to implement projects.

COUTTS: And so that situations changed now?
ZHUKOV: The situation changed dramatically actually. The government of Vanuatu improved the micro-economic situation quite a lot and the economy has grown substantially and the external debt is now is quite low in relationship to overall size of GDP.