PROJECT INFORMATION DOCUMENT (PID)

CONCEPT STAGE

Report No.: AB6194

(The report # is automatically generated by IDU and should not be changed)

Project Name / Kiribati Aviation Infrastructure Investment Project
Region / East Asia Pacific
Country / Republic of Kiribati
Sector / Aviation (100%)
Lending Instrument / IDA Credit
Project ID / P124363
Borrower(s) / Government of the Republic of Kiribati
Implementing Agency / Ministry of Communication, Transport and Tourism Development
Environmental Screening Category / [ ]A [ x ]B [ ]C [ ]FI [ ]TBD (to be determined)
Date PID Prepared / December 21, 2010
Estimated Date of Appraisal Completion / April 1, 2011
Estimated Date of Board Approval / May 17, 2011
Concept Review Decision / Following the review of the concept, the decision was taken to proceed with the preparation of the operation.

I.  Introduction and Context

Country Context

The Republic of Kiribati is one of the most remote and geographically dispersed countries in the world. It consists of 32 low lying atoll islands and one raised coral island in three main island groups scattered over 3.5 million km2 (an area roughly the size of Europe) of the central and western Pacific. Most of the islands are less than 2 km wide and not more than 6 m above sea level; 21 are inhabited. Over half the land (388 km2) is on Kiritimati (Christmas Island) situated some 1,200 km south of Hawai’i and some 3,300 km to the east of the capital of South Tarawa. The total population is about 100,000, with almost half concentrated in the urban settlements of South Tarawa. Kiribati faces many challenges in developing and maintaining sustainable internal, regional and international transport and communication linkages, all of which are crucial to the economic development and social well-being of its people.

Sectoral and Institutional Context

Aviation plays a vital economic and social role in Kiribati’s development. There are international airports at Bonriki on South Tarawa, Kanton Island, and Cassidy on Kiritimati Island. These three airports serve as the main links to the Gilbert, Phoenix and Line Island groups respectively. There are also domestic airstrips which are essential for inter-island travel, some 60% of total air travel in Kiribati. Due to its location, Cassidy also is an emergency field for extended range twin-engine operations (ETOPS) and other aircraft operating on many of the South Pacific to Hawai’i/North America routes.

Kanton airport is no longer operational. Recent ICAO audits have identified many safety and security deficiencies at Bonriki and Cassidy airports. The runways are in increasingly poor condition and navigational aids are basic. In 2009 air traffic services were suspended for two weeks at Bonriki and 12 months at Cassidy, effectively isolating the country. The New Zealand Aid Program (NZAP) recently assisted the Government to undertake interim resurfacing of Cassidy runway to keep the airport open and has committed to longer term runway remedial works.

The Government of Kiribati (GoK) has identified the aviation sector as a priority in the 2008-11 Kiribati Development Program. Bonriki and Cassidy international airports serve as transit point for seafarers working on foreign fishing vessels, among the largest employers for the country. Kiritimati attracts high-end bone fishing and bird watching tourists. Tarawa is the launching point for outer islands eco-resorts. Newly developing high value added exports of tuna jerky, live fish and farmed clams suffer greatly from any international flight service interruptions. International air links supplement Kirabiti’s limited human resources in specialized skill areas and to facilitate the national strategy of expanding overseas employment opportunities for I-Kiribati youth. International airports are essential to any natural disaster relief effort.

The Ministry of Communication, Transport and Tourism Development (MCTTD) is responsible for both administration and regulation of civil aviation and operation of the airports. Combining regulatory and operational roles in a single agency creates a potential for conflicts of interest and is out of step with ICAO air safety recommendations and Kiribati’s own Civil Aviation Act of 2004.

Relationship to CAS

The Bank’s Regional Engagement Framework for Pacific Islands recognizes that opportunities for development in Kiribati could be fostered by reducing barriers to trade and investment, promoting small scale manufacturing, tourism and marine development, environmental management and investing in human resources development. The Framework focuses the Bank’s engagement in Kiribati on supporting economic reform and generating opportunities through global and regional integration. It also states that initially investments will focus on climate change and transport infrastructure with the potential for further investments to be linked to ‘reform momentum’. The proposed project directly contributes to these objectives.

II.  Proposed Development Objective(s)

Proposed PDO

The development objective is: “(i) to provide safe, secure, and reliable infrastructure for Kiribati’s airports and air strips; (ii) to improve the aviation regulatory environment; and, (iii) to provide sustainable management and operations of the international airports.”

Key Results

Monitoring Indicators: The success of the project will be monitored through three indicators: (i) Bonriki and Cassidy airports meet minimum ICAO requirements and remain open to international flights as category 6 and 4 airports, respectively; (ii) all domestic air strips open for services; and, (iii) an increase in Kiribati civil aviation sector revenue stream (including over-flight fees, ETOPS, and airport departure taxes).

The Intermediate Outcome Indicators proposed are: (i) Kiribati Airports Limited (KAL) is established and adequately staffed; (ii) Ongoing management and operations contract is signed for Bonriki, Cassidy and Kanton Airports; (iii) Civil Aviation Master plan is formally adopted by GoK; (iv) Bonriki, Cassidy and Kanton airport improvements fully implemented; (v) air strips on 14 outer islands improved and fully usable; and (vi) MCTTD’s Civil Aviation Division is adequately staffed an trained to carry out regulatory functions required by Kiribati aviation laws.

III.  Preliminary Description

Component A: International Airport Infrastructure Investments: (US$18 m): This component will invest in the aviation infrastructure at Kiribati’s three international airports: Bonriki, Cassidy and Kanton. The project funds will complement parallel financing provided by NZAP grant (NZ$17m) for the resurfacing of the Cassidy runway and by a Taiwan, China loan (AUD 14 m) for resurfacing the runway and provision of a security fence at Bonriki.

The project funds will be used for: (i) replacement of the terminal at Cassidy Airport; (ii) resealing the road from London to Cassidy Airport to maintain access; (iii) improvements to the terminal at Bonriki Airport; (iv) installation of new navigation aids, safety and security equipment at both airports; (v) provision of fire safety equipment for the Police Force; and, (vi) reestablishment of air service infrastructure for Kanton airport. The project will finance Design and Supervision services for all works, except Cassidy runway which is financed by NZAP.

Component B: Domestic Airport Infrastructure Investments (US$ 4 m): Resurface up to 14 air strips located in the outer islands as well as provide basic navigation aids.

Component C: Sector Reform (US$ 1.0 m): Finance technical assistance to the MCTTD including: (i) development of civil aviation technical regulations and manuals; (ii) preparation and adoption of a Civil Aviation Master Plan (including a policy road map for separating the roles of regulator and airport operator); measures for airport security strengthening through penal code amendments and public awareness campaign; projections for air traffic demand, including over-flights; identifying sources of revenue, public service obligations and gap financing; needs, and prioritization of domestic airstrip needs; (iii) a Project Manager in the MCTTD; and, (iv) a short term aviation regulatory specialist to facilitate the necessary approvals and establishment of an independent KAL and to advise aviation staff in the MCTTD on adopting and enforcing manuals, etc as they are prepared.

Component D: Strengthening airport operations and management capacity (US$ 3 m): An independent public entity (KAL) will be created to for the management and operation of all Kiribati international airports. Due to the acute lack of local specialized capacity to operate international airports capable of meeting ICAO standards, KAL will initially contract management expertise and on-site training capacity through a three-year management contract covering the operations of Bonriki, Cassidy and Kanton International Airports. The contract will include local staff development and preparation of a transition plan in the last year of the contract. The project will also finance a small technical assistance contract to support KAL with the review and implementation of the transition plan at the end of the management contract.

IV.  Safeguard Policies that might apply

Safeguard Policies Triggered by the Project / Yes / No / TBD
Environmental Assessment (OP/BP 4.01) / x
Natural Habitats (OP/BP 4.04) / x
Pest Management (OP 4.09) / x
Physical Cultural Resources (OP/BP 4.11) / x
Involuntary Resettlement (OP/BP 4.12) / x
Indigenous Peoples ( OP/BP 4.10) / x
Forests (OP/BP 4.36) / x
Safety of Dams (OP/BP 4.37) / x
Projects in Disputed Areas (OP/BP 7.60)[*] / x
Projects on International Waterways (OP/BP 7.50) / x

V.  Tentative financing

Source: / ($m.)
Borrower/Recipient
IBRD
IDA
Others (specify) / 26.00
Total / 26.00

VI.  Contact point

World Bank

Contact: Mr. Christopher R. Bennett

Title: Senior Transport Specialist

Tel: +61 2 9235 6592

Email:

Borrower/Client/Recipient

Contact: Atanteora Beiatau

Title: Secretary, Ministry of Finance and Economic Development

Tel: +686 21806/21802

Email:

Implementing Agencies

Contact: Ms. Miire Raieta

Title: Acting Secretary for Communication, Transport and Tourism Development

Tel: +686 26003

Email:

VII.  For more information contact:

The InfoShop

The World Bank

1818 H Street, NW

Washington, D.C. 20433

Telephone: (202) 458-4500

Fax: (202) 522-1500

Web: http://www.worldbank.org/infoshop

[*] By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas