Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 59110-KI





PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

IN THE AMOUNT OF SDR 13 MILLION
(US$20 MILLION EQUIVALENT)


TO THE

REPUBLIC OF KIRIBATI

FOR THE

KIRIBATI ROAD REHABILITATION PROJECT


January 27, 2011






Timor-Leste, Papua New Guinea & the Pacific Islands
Sustainable Development Department
East Asia and Pacific Region


This document is being made publicly available prior to Board consideration. This does not
imply a presumed outcome. This document may be updated following board consideration and
the updated document will be made publicly available in accordance with the Banks policy on
Access to Information.
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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 31, 2010)

Currency Unit = Australian Dollar (AUD)
SDR 0.6493 = US$ 1
US$ 1.5400 = SDR 1

FISCAL YEAR
January 1 December 31

ABBREVIATIONS AND ACRONYMS


AusAID Australian Government Overseas Aid Program
ADB Asian Development Bank
AUD Australian Dollar
CED Civil Engineering Division
CQ Consultants Qualification
EA Executing Agency
EMP Environmental Management Plan
ERR Economic Rate of Return
FM Financial Management
GOA Government of Australia
GOK
HDM-4
Government of Kiribati
Highway Development and Management Model version 4
HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome
IA Implementing Agency
IC Individual Consultant
ICB International Competitive Bidding
IDA International Development Association
IEC Information and Education Campaign
IFR Interim Financial Report
KAP-II Kiribati Adaptation Program Phase II Pilot Implementation Phase
KCCM
KNAO
Kiribati Country Coordinating Mechanism
Kiribati National Audit Office
LCS Least Cost Selection
LMD Land Management Division
MCTT
MELAD
Ministry of Communications, Transport and Tourism
Ministry of Environment, Land and Agricultural Development
MFED
MISA
MOHMS
Ministry of Finance and Economic Development
Ministry of Internal and Social Affairs
Ministry of Health and Medical Services
MPWU Ministry of Public Works and Utilities
NGO Non Government Organization


NZAP New Zealand Aid Programme
ORAF Operational Risk Assessment Framework
PDO Project Development Objective
PEFA Public Expenditure and Financial Accountability
PMU Project Management Unit
PRIF Pacific Region Infrastructure Facility
PSC Project Steering Committee
QBS Quality-Based Selection of Consultant firms
QCBS Quality and Cost-Based Selection of Consultant Firms
RERF Revenue Equalization Reserve Fund
ROW Right of Way
RPF Resettlement Policy Framework
SDR
SOPAC
Special Drawing Rights
Pacific Islands Applied Geoscience Commission
SSS Sole-Source Selection of Consultants
STI Sexually Transmitted Infection
STP Sustainable Towns Programme
UNDP United Nations Development Programme
US$ United States Dollar
VCT Voluntary Counseling and Testing


























Regional Vice President: James W. Adams
Country Director: Ferid Belhaj
Sector Director:
Sector Managers:
John A. Roome
Charles M. Feinstein
N. Vijay Jagannathan
Task Team Leader: Christopher R. Bennett



REPUBLIC OF KIRIBATI

Kiribati Road Rehabilitation Project

CONTENTS

I. Strategic Context .................................................................................................................... 1
A. Country Context ............................................................................................................... 1
B. Sectoral and Institutional Context .................................................................................... 2
C. Higher Level Objectives to which the Project Contributes .............................................. 4
II. Project Development Objectives............................................................................................ 4
A. PDO .................................................................................................................................. 4
1. Project Beneficiaries ..................................................................................................... 4
2. PDO Level Results Indicators ...................................................................................... 5
III. Project Description................................................................................................................. 5
A. Project components .......................................................................................................... 5
B. Project Financing.............................................................................................................. 7
IV. Implementation ...................................................................................................................... 7
A. Institutional and Implementation Arrangements .............................................................. 8
B. Results Monitoring and Evaluation .................................................................................. 9
C. Sustainability .................................................................................................................... 9
V. Key Risks and Mitigation Measures ...................................................................................... 9
VI. Appraisal Summary ............................................................................................................. 10
A. Economic Analysis ......................................................................................................... 10
B. Technical ........................................................................................................................ 11
C. Financial Management ................................................................................................... 13
D. Procurement ................................................................................................................... 13
E. Social (including safeguards) ......................................................................................... 14
F. Environment (including safeguards) .............................................................................. 16
Annex 1: Results Framework and Monitoring.............................................................................. 17
Annex 2: Detailed Project Description ......................................................................................... 19
Annex 3: Implementation Arrangements ...................................................................................... 23
Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 35
Annex 5: Implementation Support Plan ........................................................................................ 38
Annex 6: Team Composition ........................................................................................................ 40
Annex 7: Maps .............................................................................................................................. 41





REPUBLIC OF KIRIBATI

KIRIBATI ROAD REHABILITATION PROJECT

PROJECT APPRAISAL DOCUMENT

EAST ASIA PACIFIC

EASNS

Date: January 27, 2011
Country Director: Ferid Belhaj
Sector Director: John A. Roome
Sector Manager: Charles M. Feinstein
Team Leader(s): Christopher R. Bennett
Project ID: P122151
Lending Instrument: IDA Grant

Sector(s): Roads & Highways (100%)
Theme(s): Rural Services & Infrastructure (75%),
Other Public Sector Governance (10%), Other Urban
Development (10%), Infrastructure Services for
Private Sector Development (5%)
EA Category: Partial Assessment

Project Financing Data:
Proposed terms:

[ ] Loan [ ] Credit [ x ] Grant [ ] Guarantee [ ] Other:
Source Total Amount (US$M)
Total Project Cost:
Cofinancing:
Government of Australia,
Coordinated through Pacific Region
Infrastructure Facility (PRIF)
Asian Development Bank
Borrower:
Total Bank Financing:

IBRD
IDA
New
Recommitted

38.84

5.79


12.00
1.05
20.00


20.00
Borrower: Republic of Kiribati
Responsible Agency: Ministry of Public Works and Utilities
Contact Person: Mr. Riteti Maninraka, Secretary for Public Works and Utilities


Telephone No.: (686) 26-982
Fax No.:
Email: rmaninraka@gmail.com
Estimated Disbursements (Bank FY/US$ m)
FY 2011 2012 2013 2014 2015 2016
Annual 0.50 5.00 9.00 4.50 1.00 0.00
Cumulative 0.50 5.50 14.50 19.00 20.00 20.00
Project Implementation Period: Start: February 1, 2011 End: December 31, 2015
Expected effectiveness date: March 15, 2011
Expected closing date: June 30, 2016
Does the project depart from the CAS in content or other
significant respects?

Yes x No


If yes, please explain:



Does the project require any exceptions from Bank policies?
Have these been approved/endorsed (as appropriate by Bank
management?
Is approval for any policy exception sought from the Board?
Yes x No
Yes No

Yes No

If yes, please explain:



Does the project meet the Regional criteria for readiness for
implementation?

x Yes No


If no, please explain:



Project Development objective:

The project will improve the condition of South Tarawa's main road network and help
strengthen road financing and maintenance capacity



Project description [one-sentence summary of each component]

Component A: Infrastructure Improvements. This component consists of the main civil works
activities to be undertaken on the South Tarawa road infrastructure including: (i) Reconstruction
and Rehabilitation of Paved Roads on South Tarawa; (ii) Rehabilitation of Betio Causeway; (iii)
Rehabilitation of Paved Roads in Betio; (iv) Sealing of Feeder Roads; (v) Road Safety
Improvements; and (vi) Consulting Services.

Component B: Road Sector Reform. Activities to strengthen the road sector and ultimately lead
to more sustainable main road infrastructure in South Tarawa, including: (i) Land Transport
Institutional Review Study; (ii) Micro-Enterprises for Routine Road Maintenance; (iii) Road
Safety Action Plan; and (iv) Road Emergency Response Plan.

Component C: Project Support. Specialist support to the GOK for implementation of the
Project. This includes: (i) establishment of a Project Management Unit to ensure smooth
operation of the project; (ii) project associated incremental operating costs; (iii) a valuation
specialist to identify the appropriate compensation rates for trees and other assets affected by
the project; (iv) an NGO to monitor implementation of the Resettlement Policy Framework; and
(v) audit of the project accounts.

Safeguard policies triggered?

Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Forests (OP/BP 4.36)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Indigenous Peoples (OP/BP 4.10)
Involuntary Resettlement (OP/BP 4.12)
Safety of Dams (OP/BP 4.37)
Projects on International Waterways (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)



x Yes No
Yes x No
Yes x No
Yes x No
Yes x No
Yes x No
x Yes No
Yes x No
Yes x No
Yes x No

Conditions and Legal Covenants:

Financing Agreement
Reference
Description of Condition/Covenant Date Due
4.01 (a) Each of the Co-financing Agreements has
been executed and delivered, and all
conditions precedent to its effectiveness or
to the right of the Recipient to make
withdrawals thereunder (other than the
effectiveness of this Agreement) have been
fulfilled
Effectiveness


4.01(b) The Project Steering Committee and Project
Management Unit have been duly
established, and the Project Manager and
other key personnel referred to in Section
I.A.2 (b) of Schedule 2 to this Agreement
have been recruited and installed in their
positions;
By effectiveness
4.01(c) The Project Operations Manual has been
duly adopted and deemed acceptable by the
Association.
By effectiveness
Schedule II, 2(a) The Project Management Unit shall have at
its disposal adequate funds and other
resources as required to ensure proper
coordination, and monitoring and
evaluation, of the Project, subject to the
overall authority and oversight functions of
the Project Steering Committee
By effectiveness
Schedule II, 2(b) the Project Manager shall be assisted by a
team of key personnel consisting of (i) a
procurement assistant, (ii) an accountant,
(iii) a part-time internationally-recruited
procurement advisor, (iv) a valuation
specialist to be responsible for
compensation rates for trees and other assets
affected under the Project, and (v) a non-
governmental organization to monitor
implementation of the Resettlement Policy
Framework, along with other technical and
support staff as needed and in adequate
numbers, all of whom shall be suitably
qualified and experienced
By effectiveness
Schedule II, 2(c) the positions of Project Manager and other
key personnel referred shall be kept filled at
all times by persons having qualifications
and experience acceptable to the
Association
Ongoing
V.1 The recipient shall develop and implement a
multi-sector road safety action plan.
No later than 1 July,
2012
V.2 The recipient shall develop and implement a
road emergency response plan.
No later than 1 July,
2012
V.3 The recipient shall provide the Association
draft road sector reform legislation for
review and comment and take into
consideration the Associations comments
on said legislation.
Not later than three
months prior to the
proposed introduction
of any draft legislation
for road sector reform


V.4 The Recipient shall make adequate
budgetary allocations to meet maintenance
requirements of the road subsector,
including:
a) beginning in FY 2013, a provision in
its annual budget for national road
maintenance of at least $1,500 per kilometer
of sealed roads and $500 per kilometer of
unsealed roads in South Tarawa, to be
adjusted annually thereafter according to the
rate of inflation;
b) a provision for the implementation
of the multi-sectoral road safety action plan
referred to under Part B (c) of the Project;
and
c) a provision for the implementation
of the road emergency response plan
referred to under Part B (d) of the Project.



1


Strategic Context

A. Country Context

1. Kiribati (estimated population of 110,000) is a small, remote country comprised of 33
atolls and reef islands, of which 21 are permanently inhabited. The total land area is only 726
km
2
spanning approximately 3.5 million km
2
of ocean. Over half the land (388 km
2
) is on
Kiritimati (Christmas Island) situated some 1,200 km south of Hawaii and over 2,000 km to the
east of the capital of South Tarawa.
2. The maritime sector is central in connecting the dispersed populated atolls and in
underwriting the national economy. The Kiribati Exclusive Economic Zone contains large
resources of tuna and associated species, which are exploited primarily by foreign-based fishing
fleets under access agreements that contribute up to one quarter of annual GNP. The vast
majority of households are dependent to some degree on subsistence fishing. International and
inter-island shipping of passengers and goods is important both from an economic and social
perspective, as reflected in the Kiribati Development Plan 2008-2011 which identifies several
strategies aimed at improving the status and performance of maritime services.
3. Only some 18% of the population is in permanent employment, and over half of these
work for the government. Approximately 44% of the population lives in South Tarawa, and this
is a magnet for internal migration from the outer islands. South Tarawa provides opportunities
for cash employment and consumption, as well as access to higher education and specialist social
services not available elsewhere in Kiribati. This has led to population growth of 5.2% in recent
years into both North and South Tarawa. The UNDP
1
noted that South Tarawa recorded the
highest incidence of basic needs poverty in Kiribati, affecting 18.3% of households and 24.2% of
the population. A household census of Betio and Bairiki villages conducted by the Sustainable
Towns Programme (STP) in November 2009 found that the per capita income of 70% of
residents was less than US$1.75/day. In 2006, with a Gini Coefficient of 0.35, South Tarawa was
bordering on having an unreasonable level of inequality.
4. The revenue of Kiribati is drawn primarily from five main sources: (i) the sale of fishing
licenses (access fees account for more than 50% of annual government revenue and add about
22% to the GDP); (ii) official development assistance from overseas; (iii) The Kiribati Revenue
Equalization Reserve Fund (RERF); (iv) general taxation; and, (v) tariffs paid by households for
services
2
. A high dependency on donor contributions and a vulnerability to external economic
and environmental factors add to the challenges faced by the country, and more specifically the
infrastructure sector. Major long term concerns include environmental degradation, the capacity
of the islands to support a growing population with little coordination of the settlement patterns
(particularly in Tarawa), the impending vulnerability to climate change, and general long term
sustainability issues.

1
Kiribati: Analysis of 2006 Household Income and Expenditure Survey. UNDP, Suva.
2
Kiribati: Infrastructure Sector Review (September 2009). The Pacific Region Infrastructure Facility (PRIF),
Sydney.
2

5. The World Bank has had limited operations in Kiribati. The Kiribati Adaptation Program
Phase II Pilot Implementation Phase (KAP-II) Project, financed by the Global Environment
Facility, is assisting the Government of Kiribati (GOK) in enhancing its capacity to plan and
implement adaptation measures to the climate-related issues facing the country, which will also
reduce the detrimental impacts of climate change on the fragile atoll ecosystems of Kiribati. This
involves technical assistance and small scale civil works. Other currently active technical
assistance activities are the areas of institutional capacity building for labor export and in the
telecommunications sector. Upcoming projects include investments in solar energy and
assistance to respond to the global food crisis.
B. Sectoral and Institutional Context

6. South Tarawa Road I nfrastructure. In South Tarawa, the communities are linked by a
single main sealed road and four causeways that run east to west (see map in Annex 7). For the
majority of its length, the road passes through ribbon development comprising dwellings, small
businesses, schools etc. all located within the confines of the atoll, which is generally no more
than three meters above sea level and has an average width of only 450 meters. Virtually the
entire population lives close to, and is affected by, the roads condition.
7. The road system consists of about 36 km of bituminous sealed main roads (including
causeways), about 20 km of secondary roads (half of which are sealed and half unsealed); and
about 40 km of unsealed feeder roads. Road use on South Tarawa is growing rapidly: in central
Bairiki, traffic volume on the main road has reached 6,000 vehicles per day and is growing at an
average rate of 4 percent per year
2
. As the only main road, all freight transiting South Tarawa
travels along it. Since there are no weigh scales either on the road or at the international port in
Betio, there is no control on vehicle loading. The current road coverage does not support access
to some areas in Betio, Bairiki and other built up villages.
8. Current Situation. While about 7 km of main road in Betio in the west of South Tarawa
was rehabilitated in 2008 using finance from Japan, some 29 km of paved roads have received no
major maintenance for over twenty years. The above mentioned high traffic levels on the road
combined with persistent heavy rainfall in 2009/10 have caused extensive damage, to the extent
that substantial sections have completely lost their surface and reverted to unpaved status. The
state and condition of the roads in Kiribati are having both economic and social repercussions;
particularly with regards to the health and safety of the population. The traffic speed has been
reduced in places to 20 km/h or less as a result of the damage, and driving conditions are
hazardous, particularly after the rain. In 2010 taxi drivers went on strike because they were
unable to make the usual five return trips per day along South Tarawa, sometimes only managing
at most three. Further, during the dry season the dust from unpaved sections of the road is
contributing to upper respiratory problems among local residents.
9. Financing annual maintenance of the main road system in South Tarawa is estimated to
cost AUD 80,000. Increasingly, from 2006 onwards, Government policy has been to move a
number of expenditures, initially subsidies and more recently operations and maintenance of
infrastructure, onto domestic private sector short term loan finance and to the Development
Fund for possible donor assistance. The Budget does not specifically distinguish operations and
maintenance expenditures but by extrapolating from the expenditure codes provided, it is likely
3

that between 23- 25% of the Ministry of Public Works and Utilities (MPWU) GOK funded
budget goes towards actual operations and maintenance. Of the operations and maintenance
expenditures, around 10% is for the Civil Engineering Division (CED), responsible for
maintenance of roads, road drainage, bridges, causeways and the airports. The Divisions
maintenance budget for the whole country AUD 279,000 in 2007, AUD 298,000 in 2008 and
AUD 195,000 in 2010.
10. Further revenues are derived from a toll on the Dai Nippon Betio causeway which raises
an average AUD 300,000 per year, reserved for maintaining the causeway. The Causeway Fund
currently holds some AUD 2.5 m of accumulated revenues. An average AUD 150,000 of
maintenance is purportedly carried out each year. The vehicle registration and driver license fees
are collected by the two Urban Councils and administered through local consolidated revenue
accounts. The Council accounting codes do not distinguish between vehicle licenses and other
types of licenses (e.g. business licenses, dogs, etc.) but are estimated to be in the order of AUD
70,000 annually. Under the STP, the Councils currently are in the process of establishing
performance based budgeting systems including dedicated accounts for specific services
including maintenance of feeder roads and solid waste management. There are taxes of 7 and 8
cents/liter on diesel and petrol respectively.
11. Current Implementation Arrangements. Current responsibility for maintaining the main
roads in South Tarawa lies with the MPWU, and more specifically the CED of the MPWU. The
Highway Authority administered by the Ministry of Communications, Transport and Tourism
(MCTT) is responsible for general road safety and approving road related requests for features
such as speed humps and bus stops. The engineering capability within the relevant divisions of
MPWU is limited and there are no fully qualified Civil Engineers. Additionally, there are
staffing problems within the MPWU divisions. For example, within the CED approximately one-
third of positions are vacant. As noted above, the Urban Councils have the responsibility for
local road maintenance.
12. The only road contracting capability in Kiribati rests with the MPWU where the CED has
some donor-provided plant and machinery for road construction and maintenance work
3
. While
there are some private sector firms engaged in building construction, to date they have not been
engaged in road maintenance work.
13. Government Commitment. Recognizing the key role that the road system plays in the
economy and social fabric of such an isolated and dispersed country, the GOK has
acknowledged the need, not only to rehabilitate the infrastructure, but also to undertake
necessary sector reforms and institutional strengthening to ensure sustainable financing and the
maintenance of the Kiribati road network. However, the remoteness of Kiribati, and the fact that
virtually all materials excluding sand and water have to be imported, means construction costs
are high as much as US$ 0.7 million/km for a two-lane, 7 m wide road. This fact, combined
with tight budget constraints and other challenges facing the GOK, means that Kiribati is unable
to make significant progress utilizing only its own resources and so assistance is required to

3
In November 2009, the CED reportedly had 3 backhoe loaders, 3 tipper trucks, 2 graders, 2 steam rollers, 2 rubber
rollers and 1 bitumen distributor on South Tarawa (more equipment is held on Kiritimati Island). The Plant and
Vehicle Unit responsible for maintaining Government vehicles had 1 backhoe loader and 1 tipper truck. The
equipment is of variable condition.
4

make headway towards improving the road system, undertake road sector reform, and ensure
road safety and the ongoing maintenance of the roads.
C. Higher Level Objectives to which the Project Contributes

14. The project will lead to an improvement in the socioeconomic condition of the population
of South Tarawa. The only road connecting the communities in South Tarawa will be restored to
maintainable condition with proper drainage and safety appurtenances. Plans will be put in place
for how to manage the impact of natural disasters on this critical road infrastructure. The sector
reform will lead to more effective delivery of services and a plan for sustainable financing will
be developed.
II. Project Development Objectives

A. PDO

15. The project development objective is The project will improve the condition of South
Tarawa's main road network and help strengthen road financing and maintenance capacity.
1. Project Beneficiaries

16. The project will benefit the entire population of South Tarawa through improvements to
the road network which will decrease road user costs, reduce travel time, improve safety, reduce
the flooding and water ponding caused by improper drainage, and increase the overall quality
and reliability of travel. Direct beneficiaries of the project will be private car owners, bus and
truck operators, freight handlers, retailers and wholesalers, utility providers, public transport
users, motorcyclists, cyclists, pedestrians, residents, businesses and the government.
17. The project will reduce road-side dust, resulting in better air quality. Not only will houses
and shops near the road be cleaner, there will be benefits to the health of residents living adjacent
to problem areas. The project will improve the convenience and amenity of public transport by
improving bus travel. Bus stops will improve safety and bus shelters will provide protection from
sun and rain. Increased safety and amenities for pedestrians through the provision of footpaths
and solar street lighting will reduce reliance on vehicles, leading to reduced expenditure on
transport.
18. The MPWU staff will benefit from the training they will receive by being embedded with
the consultant for the design and supervision activities, as well as the equipment that will be
provided. The road sector will benefit through the land transport sector reform study which will
provide a plan for sustainable financing and management of roads. The project will also take the
first steps towards establishing a domestic contracting industry by establishing micro-enterprises
to undertake routine maintenance on a performance contract basis.
5

2. PDO Level Results Indicators

19. The achievement of the development objective will be assessed through: (i) the number
of kilometers of the paved road network rehabilitated and suitable for only routine maintenance;
and, (ii) implementation of an agreed plan for reform of road sector management and financing.
III. Project Description

A. Project components

20. The project will have three components with a total investment of US$ 38.84 million.
There will be an IDA Grant of US$ 20 million, the Asian Development Bank (ADB) will
provide co-financing of US$ 12 million, US$ 5.79 million provided by the Government of
Australia (GOA) coordinated through the Pacific Region Infrastructure Facility (PRIF), and the
GOK US$ 1.05 million. Each component is described below. For further details see Annex 2.
21. Component A: Infrastructure Improvement (US$ 36.46 million including
contingencies). This component consists of the main civil works activities to be undertaken on
the South Tarawa road infrastructure. The activities include:
Reconstruction and Rehabilitation of Paved Roads on South Tarawa. The road
from St. Anne to the junction with the Ananau Causeway (~19.25 km), the Ananau
Causeway to just past the airport terminal (~2.25 km), the road from the Ananau
Causeway junction towards Temaiku 1 (~2.75 km), the road from Temaiku 1 to the
south of the airport, and then west to the Ananau Causeway (~2.5 km), and the road
from Tanaea to Buota island (~2.5 km) will be reconstructed or rehabilitated (see map
in Annex 7) with requisite safety improvements. About 7 km of water main adjacent
to the road will be replaced.
Rehabilitation of Betio Causeway. The pavement on the approximately 3.25 km
long causeway will be rehabilitated, as well as potential repairs to the bridge deck.
Rehabilitation of Paved Roads in Betio. Repairs to localized pavement failures and
drainage improvements in Betio.
Sealing of Feeder Roads. Up to 8 km of unsealed urban feeder roads with high
traffic volumes will be sealed and provided with improved drainage. The roads were
identified in consultation with the New Zealand Aid Programme (NZAP) financed
STP.
Road Safety Improvements. Implementation of a road safety improvement program,
including street lighting, road signage and pavement markings, to address road safety
issues on paved roads not otherwise included in the civil works packages.
Consulting Services. For the design and supervision of civil works.

22. Component B: Road Sector Reform (US$ 1.27 million including contingencies).
Activities to strengthen the road sector and ultimately lead to more sustainable main road
infrastructure in South Tarawa:
Land Transport Institutional Review Study. Provision of technical advisory
services for a land transport institutional review study to review the existing land
6

transport sector framework, and develop and implement a road map for sector
restructuring, including: (i) identification of options for reform of the GOKs
concerned ministries and agencies; (ii) identification of cost recovery options
available for provision of access to and maintenance of roads, using revenues from
vehicle import duties, fuel taxes and registration fees; and, (iii) preparation of draft
road legislation reflecting the chosen options.
Micro-Enterprises for Routine Road Maintenance. Provision of assistance in the
form of (i) training, (ii) procurement of basic plant and equipment, and (iii)
operational support for the management and monitoring of contracts, in order to
promote the establishment of micro-enterprises to undertake routine maintenance on
the GOKs paved road network, using performance-based contracting methodology,
and under supervision by MPWU.
Road Safety Action Plan. Development and implementation of a multi-sectoral road
safety action plan in consultation with the Kiribatis National Road Safety Task Force
Committee, including provision of breath testing equipment and radar guns for the
traffic police to improve enforcement.
Road Emergency Response Plan. The development and implementation of an
emergency response plan to help mitigate the impact of any disasters to the GOKs
road network.

23. Component C: Project Support (US$ 1.11 million including contingencies). Specialist
support to the GOK for implementation of the project.
Establishment of a Project Management Unit (PMU) to ensure the smooth operation
of the project
4
. The PMU will handle procurement and financial management, as well
as assisting in the preparation of work-plans, budgets, progress and impact reports,
and coordination of the overall implementation of the project. It will comprise a full-
time locally-recruited project manager, procurement assistant and accountant, part-
time internationally recruited procurement advisor.
Project associated incremental operating costs (e.g. telecommunications, local
workshops for stakeholders, procurement-associated activities, etc.).
A valuation specialist to identify the appropriate compensation rates for trees and
other assets affected by the project.
An NGO to monitor implementation of the Resettlement Policy Framework (RPF).
Audit of project accounts.






4
The PMU will be established in the MFED. It is anticipated that the PMU will not only support this roads project,
but would also support the proposed World Bank financed Kiribati Aviation Infrastructure Investment Project,
which is under preparation with the Ministry of Communication Transport and Tourism Development. The GOK
agreed that the MFED was the best location for the PMU given its role in the financial management of the project
and the need for the PMU to support projects in different ministries.
7

B. Project Financing

Lending Instrument

24. The project will be financed with an IDA Grant of US$ 20 million.
Project Cost and Financing

25. The total project financing requirements are estimated at US$ 38.84 million. Table 1
shows the contributions of the different partners in the project; Tables 2 and 3 the costs by
financier.

Table 1: Financing Plan

Source
Amount
($ million)
Share of
Total (%)
World Bank 20.00 51.5
Asian Development Bank 12.00 30.9
GOA Through PRIF 5.79 14.9
Government of Kiribati 1.05 2.7
Total 38.84 100.0


Table 2: Costs by Component and Financer

Component/Activity
Costs By Component and Financer (US $ m)
World
Bank
ADB
GOA
Through
PRIF
GOK Total
A. Infrastructure Improvements 18.48 12.00 4.93 1.05 36.46
B. Technical Assistance 0.41 0.86 1.27
C. Project Support 1.11 1.11
Total 20.00 12.00 5.79 1.05 38.84


IV. Implementation

26. The Executing Agency (EA) for the project will be the Ministry of Finance and
Economic Development (MFED). The Implementing Agency (IA) for the project will be the
MPWU. There will be a Project Steering Committee (PSC) that will oversee the project and
monitor the projects implementation as well as advising the GOK on any concerns or issues that
may arise with regards to project implementation.
8

Table 3: Detailed Cost Estimate by Financer (US$ million)
Category World Bank ADB
GOA Through
PRIF GOK

$US m % of
Cost
Cat.
$US m % of
Cost
Cat.
$US m % of
Cost
Cat.
$US m % of
Cost
Cat.
Total
Cost
US$ m
A. Investment Costs
1. Infrastructure Improvements 15.57 52.9% 7.96 27.0% 4.93 16.7% 1.00 3.4% 29.46
2. Consultants
a. Design and Supervision 2.23 100% 2.23
b. Technical Assistance 0.13 13.1% 0.86 87% 0.99
c. Project Support 1.01 100.0% 1.01
3. Goods 0.16 100.0% 0.16
4. Land Acquisition and Resettlement 0.05 100% 0.05

Subtotal (A) 16.87 49.8% 10.19 30.1% 5.79 17.1% 1.05 3.1% 33.90

B. Contingencies 3.13 65.2% 1.67 34.8% 4.80

C.
Financing Charges During
Implementation 0.14 100% 0.14

Total Project Costs (A+B+C) 20.00 51.5% 12.00 30.9% 5.79 14.9% 1.05 2.7% 38.84

a
Includes taxes and duties of 10% to be financed from government resources and loan resources.

b
In mid-2010 prices.
c
Physical and Price contingencies computed at 15% for civil works and 10% for consultants services.
d
Includes interest and commitment charges. Interest during construction for ADB loan from the Asian Development
Fund has been computed at an interest rate of 1%. Commitment charges for an ADB loan are 0.15% per year to be
charged on the undisbursed loan amount.


A. Institutional and Implementation Arrangements

27. The institutional arrangements for implementing the project reflect the capacity
constraints within the GOK. The measures to address the constraints include:
The MPWU will be responsible for the implementation aspects of the project only.
A PSC will be formed by the GOK to be responsible for general oversight,
monitoring and supervision of the project.
A PMU will be established in the MFED. It will contain a project manager,
procurement assistant, an accountant, a part-time internationally recruited
procurement advisor, as well as appropriate support staff.
The MFEDthough the PMUwill be responsible for the financial management of
the project, including authorizing withdrawal applications. The project will use direct
payments for the major contracts, and only have a small designated account.
9

At the request of the GOK, the ADB assisted the GOK to hire a consultant for project
design and supervision at the onset of project preparation. The procurement of this
design and supervision consultant was completed prior to project effectiveness
5
.
The design and supervision consultantfinanced by the ADBwill assist the GOK
in all aspects of project implementation, including preparing the bidding documents
for the procurement of the civil works contractor and assisting with the procurement
as necessary.
An NGO will monitor implementation of the RPF.

B. Results Monitoring and Evaluation

28. The results monitoring and evaluation will be undertaken by the MPWU in the form of
semi-annual Project Reports and by the World Bank and ADB through their project missions.
The results monitoring and evaluation will center around the PDO Level Results Indicators of
measuring: (i) the number of kilometers of the paved road network rehabilitated and suitable for
only routine maintenance; and, (ii) implementation of an agreed plan for reform of road sector
management and financing.
29. The majority of the data for the monitoring and evaluation will be gathered by the
projects design and supervision consultant and so is within the capacity of the MPWU to supply.
C. Sustainability

30. The Borrower is very committed to this project and sees it as essential to the economic
well being of the country. They acknowledge that there is a need to address the existing approach
for financing and delivering road maintenance so as to ensure that the investment in road
infrastructure is not allowed to deteriorate. The Borrower also recognizes the need to restructure
the land transport sector in Kiribati.
31. Sustainability of the road network is part of the projects objectives and this will be
achieved through upgrading the existing road network to the point where it can be maintained in
good condition with a minimum of investment, as well as through a series of targeted
institutional strengthening activities aimed at sector reform and strengthening.
V. Key Risks and Mitigation Measures

32. The key risks and mitigation measures are given in Table 4.


5
Consultants for A.2 were selected during preparation by the GOK with the assistance of the ADB, and will be
financed 100% by the ADB. The selection was done using the ADBs Guidelines on the Use of Consultants (2010),
Quality-and-Cost Based Selection (QCBS). A review by the World Bank team has concluded that the selection is in
accordance with paragraphs 1.8 and 1.11 (e) of the World Bank Guidelines for Selection and Employment of
Consultants by World Bank Borrowers.
10

Table 4: Key Risks and Mitigation Measures
Risks Mitigation Measures
GOK lacks capacity to
implement the project
The project will establish a PMU in the MFED with appropriate staff, including
a part-time international procurement advisor to assist the GOK.
The project will employ a single design and supervision consultant to provide
the necessary support to the MPWU and GOK in implementing the project
including procuring the civil works contractor.
The World Bank and ADB will ensure regular and intensive joint missions to
provide support to the GOK.
GOK fails to act on sector
reform recommendations
The technical assistance activities reflect the current recognized interest of the
GOK in sector reform.
The recommendations will reflect the actual capacity and constraints in
Kiribati
There will be regular dialog throughout the technical assistance process with
the GOK to ensure proper buy in.
GOK provides insufficient
funding for road maintenance
Technical assistance will assist the GOK with how to ensure sustainable
financing for the sector.
The project will train community based road maintenance groups who will be
able to undertake routine maintenance on a performance based contracting
basis under management by MPWU. This will be more cost effective and
efficient than existing arrangements.
For 24 months after completing construction the contractor will be responsible
for maintaining the new road works.
Environmental damage
caused by the project
The EMP will be included with the bidding documents and Bill of Quantity,
thereby forming part of the contract.
The design and supervision consultant shall ensure compliance with the EMP
and report on compliance as part of their regular reports.
Land claims An RPF was prepared covering the process for acquiring land and assets
The project will use the existing GOK processes for administering land
compensation since these are familiar to the local population and operate well.
The road design fails to meet
the local needs
A road safety audit was done during preparation to clearly identify road safety
issues and investments.
The use of the same consultant for design and supervision provides clear
accountability for any design errors, such as with drainage as was observed on
previous projects, and will ensure consistency in the works for all activities on
the project.
The use of a 24 month defect liability from the contractor will further reduce
the technical risk.
World Bank and ADB do not
reach agreement on joint co-
financing
Agreement in principle has been reached on the procurement methodology for
co-financing civil works. A formal agreement on the detailed co-financing
modalities is still pending.

VI. Appraisal Summary

A. Economic Analysis

33. An economic analysis was undertaken with HDM-4
6
. The results of this analysis are
presented in Tables 5 and 6. The project has an Economic Rate of Return (ERR) of 40.3% and an

6
An HDM-4 Level I calibration was done for passenger cars (28%), passenger vans (40%) and 4 tonne light trucks
(32%). The initial road roughnesses were 5 7 IRI m/km for paved roads; 12 IRI m/km for the other roads. Traffic
11

NPV of US$ 18.49 million. The lowest rate of return is for the upgrading of the other roads at
14.3%. Betio Causeway gives a very high rate of return since it has a relatively low cost to repair
and the current pavement is in such poor condition with some 6,000 veh/day. The sensitivity
analysis in Table 5 shows that the project is economically viable and robust: varying the civil
works costs, road user costs or traffic volumes by 20% do not compromise the overall economic
viability.
Table 5: Economic Analysis Results



Section
Net Present
Value (NPV)
(US$ million)
Economic Rate
of Return, ERR
(%)
Betio Causeway 3.27 105.3%
St. Anne - Airport Intersection 13.10 43.0%
Airport Road 0.98 46.2%
Temaiku Road 0.62 23.9%
Other Roads 0.52 14.3%
Total 18.49 40.3%
Rehabilitation Works 17.97 45.3%
Upgrading Works 0.52 14.3%
Total 18.49 40.3%

Table 6: Sensitivity Analysis


Section
Base
ERR
(%)
Civil Works
Costs
Road User Costs Current Traffic
-20% +20% -20% +20% -20% +20%
(%) (%) (%) (%) (%) (%)
Betio Causeway 105.3% 128.6% 89.3% 86.1% 124.0% 84.3% 127.2%
St. Anne - Airport Intersection 43.0% 54.6% 34.6% 32.9% 52.4% 32.8% 53.1%
Airport Road 46.2% 57.7% 37.9% 36.2% 55.4% 37.2% 55.3%
Temaiku Road 23.9% 32.1% 17.9% 16.6% 30.5% 18.5% 29.4%
Other Roads 14.3% 18.1% 11.6% 11.0% 17.4% 10.8% 17.6%
Total 40.3% 51.4% 32.4% 30.7% 49.2% 30.8% 49.9%
Rehabilitation Works 45.3% 57.1% 36.7% 34.9% 54.8% 34.9% 55.6%
Upgrading Works 14.3% 18.1% 11.6% 11.0% 17.4% 10.8% 17.6%
Total 40.3% 51.4% 32.4% 30.7% 49.2% 30.8% 49.9%


B. Technical

34. From a technical point of view the project is very straight forward: it is the rehabilitation
of an existing road pavement on the existing alignment. The current pavements have lasted for

growth rates were 4% for 2010-15; 3% 2015-25; 2% after 2015. Traffic volumes ranged from 6,000 2,000 veh/day
for paved roads; 200 veh/day for other roads. The analysis assumed the road will be upgraded with a bituminous
double surface dressed pavement.
12

twenty or more years which indicates that the bearing capacity is adequate. Key considerations
are:
Pavement Type. Confirming the most appropriate type of pavement. The project will
need to import high quality materials from Banaba, Nauru or Fiji. While a double
bituminous dressing surface is common for pavement such as these, given the high
costs of imported materials and the maintenance challenges in Kiribati consideration
will be given to other pavement types, such as cement concrete. The economic
analysis shows that the project would still provide strong economic returns even with
a cement concrete pavement.
Drainage. Particular attention will be paid to drainage as this is a primary factor in
the failure of the existing pavements.
Road Safety. Ensuring that the road design is safe by considering issues such as: (i)
provision of adequate footpaths in critical areas such as the densely populated villages
to reduce the risk to pedestrians; (ii) provision of bus-stops that will contribute to
better safety, traffic management and promote safer driving by bus-drivers; (iii) the
provision of pedestrian crossings at schools and other busy areas to promote
pedestrian safety; (iv) provision of proper signs and pavement markings; (v)
improved intersection designs; (vi) provision of solar street lighting to improve safety
at night in busy pedestrian areas; (vii) speed control measures such as speed humps to
mitigate the likely increased risk of speeding as a result of improved road conditions,
etc.
Climate Adaptation. The designers will need to consider climate adaptation
implications through forecasts of future changed climatic conditions, including but
not limited to changes in rainfall intensity and sea level rise. The coastal assessment
on the KAP-II project identified all beach areas that are adjacent to the road and are
eroding. In some sites erosion is only a few meters away from the road. It will be
necessary to ensure that there is adequate coastal protection for the road. It is
anticipated that this work will contribute towards the disaster plan to be developed
under the projects technical assistance activities.
Groundwater Recharging. Means of improving subsurface water reserves by
introducing road water run-off will be investigated
7
.
Improving Lagoon Flow. The designers will consider the implications and costs of
providing additional culverts in the existing causeways to improve the flow in and out
of the lagoon
8
.

7
A major climate change hazard for South Tarawa is sea level rise and the impact on fresh water supply through salt
intrusion. The availability of fresh water is already a serious problem due to population pressure, behavior and
pollution. The main road investment of 19.25 km represents approximately 15 ha of impervious area, which is
significant when the main Bonriki reservoir is 71 ha. Even if only grey-water recharging is done, this could make a
major contribution towards addressing the water scarcity issue in South Tarawa.
8
The construction of the causeways in South Tarawa has greatly reduced the outflow from the lagoon which has an
impact on public health. Total solid waste generation is estimated at some 7,400 tons/year with an estimated 35% of
this illegally dumped to the lagoon or sea. With only one narrow bridge along the entire length of South Tarawa
there is also a limitation on the size of outriggers on boats which influences safety. The design consultant will
review available information, such as the studies done by the Pacific Islands Applied Geoscience Commission
(SOPAC) and Sustainable Towns Programme Lagoon Roundtable, March 2010, and identify options such as
installing culverts at the time of road rehabilitation works.
13

Other Services. The accommodation of future services including fiber optic cable
ducting, and water and sanitation services
9
.

35. Once the preliminary designs are completed, the consultant will undertake community
consultations to ensure the acceptability of the proposals, particularly with regard to the urban
livability of the road, road safety and climate adaptations. On the basis of the community
feedback the designs will be refined and the detailed designs prepared.
C. Financial Management

36. The project proceeds, including overseeing the Designated Account, will be managed by
the Ministry of Finance and Economic Development (MFED). A financial management capacity
assessment has been conducted by the Bank and actions to strengthen the projects financial
management capacity have been agreed with the relevant implementing agencies. The FM
assessment has concluded that with the implementation of these proposed actions, the financial
management arrangements will satisfy the Banks minimum requirements under OP/BP 10.02.
Annex 3 provides additional information on financial management.
D. Procurement

37. The procurement risk assessment revealed that procurement capacity and knowledge
across the public sector, and specifically in MPWU, is weak. In view of these limitations,
dedicated procurement staff will be hired for the PMU in the MFED. They will be assisted by the
design and supervision consultant in the civil works procurement.
38. Annex 3 includes the procurement plan. Procurement of all Bank-financed components
under the project will be carried out in accordance with the Banks Guidelines: Procurement
Under IBRD Loans and IDA Credits dated May 2004, Revised October 2006 and May 2010
and Guidelines: Selection and Employment of Consultants by World Bank Borrowers dated
May 2004, Revised October 2006 and May 2010. The World Banks standard bidding
documents will be used for the works contracts (to be co-financed with the ADB), and such
contracts will be subject to prior review by the World Bank.
39. The bidding documents shall reflect that the World Bank intends to finance the contract
jointly with ADB. A condition for disbursement for the civil works will be the signing of an
agreement between the ADB and World Bank on joint co-financing. Each bidding document and
contract shall contain a provision permitting the World Bank, ADB or persons appointed by
them to inspect the Project and to inspect or audit the records and accounts of any bidders,
contractors, suppliers or service providers as they relate to the Project.


9
Pacific Infrastructure Advisory Center (PIAC) is assisting the GOK with identifying investment opportunities in
the areas of water, sanitation and waste management. The GOA has provided a grant of US$ 1.5 million through
PRIF to finance approximately 7 km of water main replacement along the road, to be done as part of the civil works
contract.
14

E. Social (including safeguards)

40. As the only major road connecting communities in South Tarawa, the road provides
essential access to all services, including government, education, health, the airport, the port,
local wharves, markets, churches, NGOs and businesses. There are no alternative routes. The
road is also the main thoroughfare for pedestrians, even though there are few areas with proper
provisions for non-motorized traffic.
41. The roads condition is currently causing major social disruptions to South Tarawa. All
vehicle owners experience high and frequent damage to vehicles resulting in premature ageing of
the vehicles, high maintenance costs and unroadworthy vehicles on the road. Cyclists are
deterred from using the road and there are few footpaths, pedestrian crossings, road signage, bus-
stops, and shelters. During the rainy season the road is almost impassible and speeds drop
significantly. Taxi and bus drivers reduce or even stop their service due to the wear and tear on
their vehicles. The holes in the road and edges pool with water and present health risks from
mosquito-borne diseases. In the dry season the dust from the road affects those living nearby and
pneumatic illnesses have been reported from those affected by dust.
42. Road Safety: Road safety is a major concern with a growing incidence of road accidents
due to increased traffic, the age and condition of vehicles and dangerous driving. Perversely, the
current poor condition of the road is probably a factor in reducing the number of serious
accidents due to its influence on vehicle speeds. The project will address road safety through a
multi-faceted approach:
During project preparation, the Task Teams road safety specialist undertook a
detailed road safety audit of the South Tarawa paved road network. This identified the
existing deficiencies from an engineering perspective. This audit will be provided to
the designers and used during project implementation support to ensure that the road
safety issues are fully addressed.
The civil works contract will include addressing road safety on all roads, not just the
roads to be reconstructed as part of the project. This will ensure that South Tarawas
main road network is as safe as is practicable.
In addition to civil works activities to address road safety, there is a need to also
address the problem from a multi-sectoral perspective. This would involve providing
support to other key participants in road safety, such as the police, health and
education sectors. To this end, the project will develop and implement a multi-
sectoral road safety action plan. This will be done in consultation with the existing
National Road Safety Task Force Committee.

43. Displacement of people is not envisaged during the implementation of the project. The
road rehabilitation works are expected to be carried out within the Right of Way (ROW) of the
existing road. Temporary acquisition of land may be required for easements to provide drainage
pipes. There may also be cases where some crops (e.g. coconuts, pandanus etc.) that are currently
standing very close to the road might be damaged or destroyed to make way for footpaths or bus
stops. While the acquisition of land will be avoided whenever feasible, and while all viable
alternatives will be explored, it may be still be necessary to acquire small parcels of land
adjacent to the existing road in order to build bus stops. Even when land is not taken, there may
15

be cases where peoples livelihoods may be impacted by the road works either temporarily or,
less likely, permanently. This will not be clear until the design stage of the road works. In order
to address this, a RPF that identifies principles to be followed in the event of temporary land
acquisition, the damage or removal of assets, and the acquisition of land, was developed and
disclosed during project preparation.
44. HI V/AI DS. It is reported that HIV/AIDS in Kiribati is spread through sexual
transmission, with the prostitution industry that services the international fishing vessels being of
high risk. While the prevalence of HIV/AIDS is reported to be low, a study in 2004 found that
Chlamydia is endemic among both pregnant women (13.0%) and seafarers (9.3%)
10
. This creates
potential for a spread of HIV/AIDS. In accordance with the requirements of the Banks Standard
Bidding Documents, the project will undertake an HIV/AIDS Information and Education
Campaign (IEC) for the contractors employees, sub-contractors, consultants, as well as local
communities in the proximity of the project site. Kiribati already has an existing and active
National Aids Council in the form of the Kiribati Country Coordinating Mechanism (KCCM).
There are already a number of initiatives in place from different NGOs educating people,
particularly the youth, about HIV/AIDS prevention. There are voluntary counseling and testing
(VCT) facilities. The civil works contract will contain a provisional sum to cover the cost of the
IEC activities. The KCCM will work with the contractor to identify an appropriate NGO to
provide the IEC activities using Ministry Of Health and Medical Services (MOHMS)-certified
trainers. The NGO will apply, with suitable local adaptation, the HIV/AIDS in Transport Toolkit
(www.theroadtogoodhealth.org) to the project.
45. Gender Analysis. Kiribati has ratified the Convention on the Elimination of All Forms of
Discrimination Against Women, and womens basic rights are protected under Kiribati's
constitution. In reality, womens social status is low, and men have greater access to and control
of political, economic, knowledge, and time resources. Women comprise 51.5% of the workforce
and 37% of those in paid employment. The need to address gender issues is widely recognized.
46. Women in Kiribati shoulder almost all the home care responsibilities and their
assumption of roles as care givers, nurturers and providers for the family means that they are
particularly affected by the lack of cash income, the impact of price rises for food and basic
necessities, the availability of water and sanitation, and accessibility to health and education
services. The improvements to the road, and provision of footpaths and other safety features, will
help address some of these issues.
47. Kiribati has a national unemployment rate of 6.1%, with official male unemployment of
5.6% and female unemployment of 6.6%. Unemployment in the urban population is estimated at
10.9%. An alternative unemployment measure which excludes village workers (those involved in
subsistence activities) from the labor market, gives a national rate of 14.6%, urban 16.8%, male
12.2% and female 18.2%. Yet another definition includes defining village workers as
unemployed on the basis that these people would look for work if they believed cash work was
available, and gives an unemployment rate of 64.5% nationally (59.6% for men and 70.3% for
women). Irrespective of how it is calculated, women are over-represented in the unemployment
statistics relative to men.

10
KRRP Poverty and Social Analysis.
16

48. During project design consideration was given to providing special employment
opportunities to women. There was considerable community interest in the employment
opportunities presented by the project both in the construction phase and the ongoing road
maintenance component. There was much support for ensuring local people were employed
where possible and extending the employment opportunities as much as possible. The suggestion
that non-skilled labor be employed on short-term contracts was favorably received. The
suggestion that some jobs be reserved for vulnerable groups was generally supported with
women and youth identified as possible target groups. The greatest support was for unemployed
young people to be given these opportunities. To that end, the project will ensure that women are
encouraged to apply for positions and that the availability of project employment is advertised
widely and that recruitment is conducted giving equal opportunity to all.
F. Environment (including safeguards)

49. The project is rated as a Category B project due to the environmental impact. The
environmental management plan (EMP) was prepared and disclosed on September 6, 2010. The
EMP summarizes all the anticipated environmental impacts and its associated mitigation
measures during the design, construction and operational phases. It makes reference to the
relevant law and contract documents, approximate location, timeframe, mitigation costs, and the
responsibility for its implementation and supervision. A field monitoring checklist has been
prepared based on the EMP and monitoring plan. The field monitoring checklist will be used by
the supervising engineers. The signed checklists will be provided to the MPWU who will be
responsible for the appropriate follow-up and compliance reporting.
50. The main potential impacts identified include: (i) disturbance including noise and dust
arising from loading and unloading, and transportation of construction materials (aggregates and
bitumen) by dump trucks; (ii) noise and dust arising during scarifying the existing road base,
construction of the new road base and construction of the new surface; (iii) erosion and
sedimentation from exposed surfaces that may affect the lagoon environment during the
construction processes; (iv) risks from the use and disposal of hazardous materials such as used
fuel and lubricants; and, (v) increased risk of accidents from increased vehicle movements.
51. A key consideration during project preparation was where the materials for the road
construction would be sourced. The bulk of the road construction materials will be imported
from offshore destinations such as Banaba, Nauru or Fiji. This will minimize the demand on the
limited local resources.
17

Annex 1: Results Framework and Monitoring

KIRIBATI: ROAD REHABILITATION PROJECT
Results Framework

Project Development Objective (PDO): The project will improve the condition of South Tarawa's main road network and help strengthen road financing and maintenance
capacity
PDO Level Results
Indicators*
C
o
r
e

Unit of
Measure
Baseline
2010
Cumulative Target Values**
Freque
ncy
Data
Source/
Method.
Responsi
bility for
Data
Collectio
n
Description
(indicator
definition
etc.)
YR 1
(2011)
YR 2
(2012)
YR3
(2013)
YR 4
(2014)
YR5
(2015)
Indicator One:
Number of kilometers of
the paved road network
rehabilitated and
suitable for only routine
maintenance
km 7 (Betio) 39.5 39.5
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Roads
rehabilitated
and only
drain
cleaning and
basic
maintenance
required.
Indicator Two:
An agreed plan for
reform of road sector
management and
financing under
implementation

No plan
for sector
reform

GOK
agrees on
plan for
sector
reform

Sector reform
plan under
implementation
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
INTERMEDIATE RESULTS
Intermediate Result (Component A): Number of kilometers of the road network in maintainable condition
Intermediate Result
indicator One: Number
of kilometers of paved
roads improved


km

0 32.5 32.5
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Number of
km
rehabilitated
under the
project.
Intermediate Result
indicator Two: Number
of kilometers of
km 0 8 8
Semi-
Annual
Project
Supervision
Mission/
Progress
MPWU
Number of
km
rehabilitated
18

unpaved roads improved Report Report under the
project.
Intermediate Result
indicator Three: Main
roads in good and fair
condition as a share of
the total classified roads
% 20% 95% 95%
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Condition in
accordance
with IDA
Core
Indicator
definitions.
Intermediate Result
indicator Four: Average
travel speed St Annes
to Ananau Causeway
km/h 20 40 40
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Speed
measured
outside of
peak hours.
Intermediate Result (Component B): Road Sector Reform
Intermediate Result
indicator One: Land
Transport Institutional
Review Study
No study
Study
complete

Study under
implementation
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Intermediate Result
indicator Two: Number
of micro-enterprises for
routine road
maintenance in South
Tarawa commercially
active for two or more
consecutive years
Number 0 5 5
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Intermediate Result
indicator Three:
Adoption and
implementation of
National Road Safety
Action Plan

No
National
Road
Safety
Action
Plan

Draft
Strategy
prepared
Strategy
adopted
by GOK
Strategy under
implementation
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
Intermediate Result
indicator Four:
Adoption and
implementation of Road
Emergency Response
Plan

No Road
Emergen
cy
Response
Plan

Draft
Plan
prepared
Plan
adopted
by GOK
Plan
under
implem
entation
Plan under
implementation
Semi-
Annual
Project
Report
Supervision
Mission/
Progress
Report
MPWU
19

Annex 2: Detailed Project Description

1. The proposed Kiribati Road Rehabilitation Project involves the rehabilitation of an
estimated 32.5 km of main roads and approximately 8 km of principal feeder roads on South
Tarawa. Extensive damage, primarily from wet weather since 2009 and an increase in traffic
volume plying the roadways, has made the existing roads difficult to traverse. For the main
roads, the upgrading will generally consist of 7 m wide sealed road with 1.5 m easement on each
side for footpath drainage and service lines (electricity, water supply, telephone line, and other
services). A lower standard will be adopted on other roads.
2. The existing road is in poor condition with excessive pot holes, cracks, inadequate
drainage, edge break etc. and is need of urgent repairs. Every time it rains, expensive repair
works are required. While parts of the South Tarawa road network (town roads in Betio and
Biriki and a section of main road at Bikenibeu) were rehabilitated in 2008, no major maintenance
works have been done on the remaining paved roads for more than 20 years. The damage to the
roads has greatly affected travel in South Tarawa with the average travel speed reduced to 20
km/h and vehicles traversing large and deep depressions filled with water during the rainy
seasons. During dry seasons, dust from the unpaved sections of the road has become a nuisance
and health hazard to the adjacent communities. An increase in upper respiratory diseases has
been reported among the residents of the adjacent communities from excessive dust generation.
3. Most of the South Tarawa road traverses a ribbon development area composed of
residential dwelling units, small commercial and business concerns, churches, schools, etc. These
are all situated within the confines of the atoll which is often no more than 100 meters wide.
Virtually the entire population of South Tarawa lives in close proximity to the road and is greatly
affected by the existing conditions of the road.
Component A: Infrastructure Improvements (US$ 36.46 million including contingencies)
4. This component consists of the main civil works activities to be undertaken on the South
Tarawa road infrastructure:
Reconstruction and Rehabilitation of Paved Roads on South Tarawa. The road
from St. Anne to the junction with the Ananau Causeway (~19.25 km), the Ananau
Causeway to just past the airport terminal (~2.25 km), the road from the Ananau
Causeway junction towards Temaiku 1 (~2.75 km), the road from Temaiku 1 to the
south of the airport, and then west to the Ananau Causeway (~2.5 km), and the road
from Tanaea to Buota island (~2.5 km) will be reconstructed or rehabilitated (see map
in Annex 7) with requisite safety improvements. About 7 km of water main adjacent
to the road will be replaced. The works will pay particular attention to drainage since
that is a major problem. The works will also include safety considerations, such as
bus bays, speed humps, solar powered street lighting and footpaths.

The road upgrading will include the scrapping of the top layer of the road and
plowing the existing road base; laying, mixing, spreading and compacting up to 30cm
of new imported crushed gravel base, and a new bitumen or cement concrete surface.
If a bituminous pavement is used, the road will have concrete edging to prevent the
20

propagation of edge breakdown of the new road. The finished road level will be
slightly higher than the surrounding area to ensure proper drainage. The project will
include the construction of speed humps at suitable locations, and construction of
some 50 bus stops at locations to be identified. Wherever possible, the drainage will
be connected to soak pits for groundwater recharge or discharged directly to the
ocean.

During the civil works for the road, approximately 7 km of water main will be
replaced for an estimated cost of US$ 1.5 m (financed by a grant from the GOA
through PRIF). The water main is scheduled to be replaced in the near future under a
separate water and sanitation project. However, replacement during the road
construction will avoid damage to newly constructed roads and reduce costs of laying
the pipes.

Rehabilitation of Betio Causeway. The pavement on the approximately 3.25 km
long causeway is severely deteriorated and potholed so it will be rehabilitated. An
assessment will be made of the bridge deck and, should problems be identified, this
will also be repaired.

Rehabilitation of Paved Roads in Betio. In 2008 there was reconstruction of the
paved road network in Betio. However, design and/or construction faults, mainly
related to failure to properly consider drainage, have led to localized pavement
failures. These will be repaired under the project and appropriate drainage supplied.

Sealing of Feeder Roads. Up to 8 km of unsealed urban feeder roads with high
traffic volumes will be sealed and provided with improved drainage. Currently, these
roads consist of unpaved surfaces with many depressions creating stagnant water after
rain causing severe difficulties to cars in navigating the road. The roads were
identified in consultation with the two urban councils, the MPWU and the NZAP
financed STP.

Road Safety Improvements. During preparation a road safety audit was conducted
of the entire South Tarawa road network, including roads not included in the project.
This identified a range of improvements such as street lighting road signage and
pavement markings to address road safety deficiencies. These will be included in the
contract for the civil works contractor to address.

Consulting Services. For the design and supervision of civil works.

Component B: Road Sector Reform (US$ 1.27 million including contingencies)
5. Activities to strengthen the road sector and ultimately lead to more sustainable main road
infrastructure in South Tarawa:
Land Transport Institutional Review Study. Provision of technical advisory
services for a land transport institutional review study to review the existing land
21

transport sector framework, and develop and implement a road map for sector
restructuring, including: (i) identification of options for reform of the GOKs
concerned ministries and agencies; (ii) identification of cost recovery options
available for provision of access to and maintenance of roads, using revenues from
vehicle import duties, fuel taxes and registration fees; and, (iii) preparation of draft
road legislation reflecting the chosen options.

Micro-Enterprises for Routine Road Maintenance. To ensure that routine
maintenance is executed in a timely manner it is proposed that the project will support
the establishment of micro-enterprises
11
for road maintenance. These will be small
enterprises with a performance based contract to maintain, say, 5 km of paved roads.
Provision of assistance in the form of (i) training, (ii) procurement of basic plant and
equipment, and (iii) operational support for the management and monitoring of
contracts, in order to promote the establishment of micro-enterprises to undertake
routine maintenance on the GOKs paved road network, using performance-based
contracting methodology, and under supervision by MPWU.

Road Safety Action Plan. Development and implementation of a multi-sectoral road
safety action plan in consultation with the Kiribatis National Road Safety Task Force
Committee, including provision of breath testing equipment and radar guns for the
traffic police to improve enforcement.

Road Emergency Response Plan. To help mitigate the impact of any disasters to the
road network, an emergency response plan would be developed which considers: (i)
the available resources and plans the GOK has to support affected communities; (ii)
the resources and actions the GOK needs to take to repair a damaged road as soon as
possible after an event (even if temporarily); (iii) the actions the community can take
to look after and protect the road and actions needed by them in the event of a disaster
(community response plan); and, (iv) how the MPWU is integrated into the disaster
risk management framework and what sort of business continuity arrangements it has
in place.

Component C: Project Support (US$ 1.11 million including contingencies)
6. Specialist support to the GOK for implementation of the project.

11
The concept of micro-enterprises is that local people are assisted to form microenterprises which are subsequently
trained and contracted to carry out basic maintenance activities aimed at preventing serious damage and slowing
down the deterioration of the roads, as well as ensuring continued access. This concept has been successfully
promoted and replicated in numerous Latin American countries with the help of the World Bank and other
international organizations. In Kiribati it is anticipated that local village entities or social groups will form the basis
of the micro-enterprises. During the course of the civil works for road construction, they will receive training on
road maintenance, providing support to the contractor during the 24 month defect liability period. At the end of that
period they will be in a position to undertake the routine maintenance on their own. The role of the MPWU will be
to manage these micro-enterprises against their performance contract to ensure that the agreed standards are met.
22

Establishment of a PMU to ensure the smooth operation of the project
12
. The PMU
will handle procurement and financial management, as well as assisting in the
preparation of work-plans, budgets, progress and impact reports, and coordination of
the overall implementation of the project. It will comprise a full-time locally-recruited
project manager, procurement assistant and accountant, part-time internationally
recruited procurement advisor.

Project associated incremental operating costs (e.g. telecommunications, local
workshops for stakeholders, procurement-associated activities, etc.).

A valuation specialist to identify the appropriate compensation rates for trees and
other assets affected by the project.

An NGO to monitor implementation of the RPF.

Audit of project accounts.



12
The PMU will be established in the MFED. The GOK agreed that the MFED was the best location for the PMU
given its role in the financial management of the project and the anticipated role for the PMU in support of
upcoming World Bank financed projects in other sectors.
23

Annex 3: Implementation Arrangements

1. Project Administration Mechanisms

1. The implementation of the project and its various components are as follows:

Project implementation
organizations
Management Roles and Responsibilities

Project Steering
Committee (PSC)
Oversees and monitors all aspects of project
implementation
Advises the GOK of any issues or concerns affecting
project implementation and propose remedial action
Executing Agency (EA)
MFED
Responsible for the overall execution of the project
Houses and operates the project PMU
Responsible for all procurement and financial
management on the project
Responsible for negotiation of contract for design and
construction supervision of road rehabilitation works
Coordinate with the IA in preparation of withdrawal
applications and submit application to World Bank and
ADB
Implementing Agency
(IA) -MPWU
Responsible for the day-to-day implementation of the
project
Work closely with the consulting firm in the
preparation of design and construction supervision of
road rehabilitation works
Checks and certifies work done by all consultants and
the contractor and submits certificates with invoices to
the EA
World Bank Responsible for administering World Bank and any
GOA through PRIF-financed components of the
project
Responsible for supervision of all procurement
financed under the Grant
ADB Responsible for administering ADB-funded
components of the project
Responsible for procurement of consulting firm for
design and construction supervision of road
rehabilitation works in coordination with the IA

2. The institutional arrangements for implementing the operation reflect the capacity
constraints within the GOK. The measures to address these constraints are:
The MPWU will be responsible for the day-to-day implementation aspects of the
project only.
24

A PMU will be established in the MFED. It will contain a project manager,
procurement assistant, accountant, a part-time international procurement advisor, as
well as appropriate support staff. The PMU will prepare a Project Operations Manual
which will guide project implementation.
The MFEDthrough the PMUwill be responsible for the financial management of
the project, including authorizing withdrawal applications. The project will use direct
payments for major contracts, and have a small designated account.
At the request of the GOK, the ADB assisted the GOK to hire a consultant for project
design and supervision at the onset of project preparation. The procurement of this
design and supervision consultant was completed prior to project effectiveness
13
.
The design and supervision consultant will assist the GOK in all aspects of project
implementation, including preparing the bidding documents for the procurement of
the civil works contractor and assisting with the procurement as necessary.
An NGO will monitor the implementation of the RPF.

2. Financial Management, Disbursements and Procurement

2.1 Financial Management
3. The FM capacity assessment identified the following principal risks: (i) project financial
staff does not have experience with Bank financed projects; and, (ii) limited financial
management capacity within MPWU.
4. Mitigation measures to be agreed include: (i) a PMU to be established within MFED to
manage project funds; (ii) FM training plan to be prepared and all project financial staff to be
trained before and during project implementation; (iii) a brief financial management manual will
be prepared and issued to standardize project FM procedures and provide guidance to project
financial staff on Bank requirements; and, (iv) the terms of reference for the required external
audits be agreed with the Bank.
5. The FM risk pre-mitigation has been assessed as Substantial and post-mitigation has
been assessed as Moderate.
6. FM conditions: Prior to effectiveness, the PMU will complete recruitment of a qualified
project accountant. Within 45 days of effectiveness: (i) FM training will be attended by project
accountant and PMU; (ii) the POM will contain a supplementary FM manual for Bank-specific
requirements; (iii) the PMU will provide the Bank with a copy of the 2009 GoK audit report; (iv)
there will be agreement of the format of unaudited IFRs; and, (v) there will be agreement on
Terms of Reference for external audit.

13
The Task Team undertook a due diligence review of the selection process and, in accordance with paragraphs 1.8
and 1.11 (e) of the World Bank Procurement Guidelines, confirmed that the QCBS procedures were used, the
selected consultants are eligible, and have the necessary professional qualifications to carry out the assignment in
accordance with the agreed schedule, and the scope of the services is consistent with the needs of the project.
25

7. Budgeting. The project will be included in the GoK development budget, and will also
be subject to analysis of budget vs. actual expenditure as part of the quarterly project reporting to
the Bank.
8. Funds flow. The majority of payments will be for large contracts, and will be made by
direct payment. A small advance will be made into a designated project account (DA) to be set
up at a commercial bank acceptable to the Bank, and will be managed by MFED. The MFED
will be directly responsible for the management, maintenance and reconciliation of DA activities
for their component, including preparation of withdrawal applications and supporting documents
for Bank disbursements.
9. Accounting and financial reporting. The administration, accounting and reporting of
the project finances by MFED will be in accordance with the existing GoK financial
management regulations and processes. MFED will each be responsible for managing,
monitoring and maintaining project accounting records. Original supporting documents will be
retained by MFED, although some payments may be initiated by MPWU. Unaudited interim
financial reports (IFRs) will be prepared by MFED on a quarterly basis. The financial reports
will include an analysis of actual and budgeted expenditure for the current period, and for the
cumulative to date. The format will be developed and agreed by the MFED and the World Bank.
The IFRs will be forwarded to the World Bank within one month of the end of each calendar
quarter.
10. The project will utilize a computerized project software package in MFED. The task
team will monitor the accounting process, especially during the initial stage, to ensure that
complete and accurate financial information will be provided in a timely manner.
11. Internal control. There will be reliance on existing GoK financial policies and
procedures. The annual audit of all GoK agencies includes scrutiny of internal controls. To assist
the PMU manage the Bank-specific requirements of the project, a brief FM manual will be
developed to provide guidance on financial reporting, disbursement and audit requirements.
12. Audit. The project finances will require an annual external audit, due to the Bank six
months after the close of the financial year, and will include reference to internal controls. The
Terms of Reference for the external audit will be agreed with the Bank.
2.2 Disbursements
13. Three disbursement methods are available for the project: advance, reimbursement and
direct payment. Supporting documents required for Bank disbursement under different
disbursement methods will be documented in the Disbursement Letter issued by the Bank.
14. A small designated account in local currency will be opened at a commercial bank
acceptable to the Bank, and will be managed MFED. The ceiling of the DA will be determined
and documented in the Disbursement Letter.
15. The project funds will be disbursed against eligible expenditures as in the following
table:
26



Category
Amount of the Grant
Allocated
(expressed in SDR)
Percentage of Expenditures
to be financed
Works for Part A 11,910,000 60%
Goods, consultants services and incremental
operating costs for Parts B, and C of the project
1,090,000 100%
TOTAL AMOUNT 13,000,000

16. Retroactive financing will be applied for this project. Withdrawals up to an aggregate
amount not to exceed SDR 260,000 equivalent may be made for payments made on or after
January 21, 2011, for Eligible Expenditures under the Goods, consultants services and
incremental operating costs for Parts B, and C of the projects expenditure categories.
17. Land acquisition will be financed and executed by the GOK according to existing
legislation. The Land Management Division (LMD) will be responsible for payments of
compensation which will be paid for from the GOKs contribution to the project.
2.3 Procurement
18. Procurement Risk Assessment. An assessment of the capacity of the MPWU revealed a
limited understanding of procurement procedures and good practices. In addition, MPWU is
understaffed, in terms of technical capacity. The procurement-related risk is rated high. To
mitigate this risk, GOK has agreed to hire procurement-competent staff to the PMU to be housed
under the MFED. A full-time procurement assistant will be hired, in addition to an
internationally hired part-time procurement advisor. These staff will be responsible for all
procurement activities under the project, including planning, processing, monitoring and
reporting. MPWU will be responsible for supervision of the works contracts, with the assistance
of a design and construction supervision consultant hired for the project. The design and
supervision consultant will assist in the procurement process for the works contracts.
19. Procurement Plan. The procurement plan for the project is given below. The plan will be
updated at six-monthly intervals by the PMU, in consultation with the MPWU, to reflect actual
project implementation needs.
Activity Description
Estimate
d Cost
(US$ m)
Method
Quali-
ficatio
n
Bank
Review
Expected
Award
A.1
Civil works including: (i) reconstruction and
rehabilitation of paved roads on South Tarawa;
(ii) rehabilitation of Betio Causeway; (iii)
rehabilitation of paved road sections in Betio;
(iv) sealing of feeder roads; (v) road safety
improvements; (vi) replacement of water mains.
$29.46 ICB Post Prior
October
2011
27

Activity Description
Estimate
d Cost
(US$ m)
Method
Quali-
ficatio
n
Bank
Review
Expected
Award
A.2 Construction design and supervision $2.23
Not
Financed
by Bank
See note
December
2010
B.1 Land Transport Institutional Review Study $0.65 QCBS Prior
October
2011
B.2
Assistance in setting up of Micro-enterprises for
routine road maintenance
$0.10 IC Technical June 2012
B.3 Development of Road safety action plan $0.13 IC Technical June 2011
B.4
Equipment for Road Safety action plan
implementation
$0.10 Shopping Prior
October
2011
B.5 Development of Road emergency response plan $0.10 CQS Prior
November
2011
B.6 Micro-enterprise maintenance equipment $0.01 Shopping Post
December
2012
B.7 Micro-asphalt patching plant $0.05 Shopping Post
December
2012
C.1 Valuation specialist $0.02 IC Technical
February
2011
C.2 Project Management Unit Staff $0.75 IC Technical
February
2011
C.3 Project Management Unit Operating Costs $0.19 Note 3 Post continuous
C.4 NGO to monitor RPF implementation $0.01 CQS Prior March 2011
C.5 Project Audit $0.04 LCS Prior June 2011
C.6 Training Costs $0.01
As per
annual
Training
Plan

Notes: 1/ ICB = International Competitive Bidding; QCBS = Quality-and-Cost Based Selection; IC = Individual
Consultant; CQS = Consultants Qualifications Selection; LCS = Least-Cost Selection.
2/ Consultants for A.2 were selected during preparation by the GOK with the assistance of the ADB, and will be
financed 100% by the ADB. The selection was done using the ADBs Guidelines on the Use of Consultants
(2010), Quality-and-Cost Based Selection (QCBS). A review by the World Bank team has concluded that the
selection is in accordance with paragraphs 1.8 and 1.11 (e) of the World Bank Guidelines for Selection and
Employment of Consultants by World Bank Borrowers.
3/ In accordance with GOKs administrative procedures, acceptable to the Bank

20. Prior-Review Thresholds. Prior-review and procurement method thresholds for the
project are shown below. These thresholds may be revised during project implementation, based
on assessments done during post review missions, to be carried out twice a year.
Procurement Methods Applicability Prior Review Thresholds
Goods
Shopping <US$50,000
None; first shopping procurement
subject to prior review
National Competitive Bidding >=50,000 - <US$100,000
First two contracts subject to prior
review
International Competitive Bidding >=US$100,000 All contracts subject to prior review
Works
Shopping <US$50,000 None
28

National Competitive Bidding >=50,000 - <US$250,000
First two contracts subject to prior
review
International Competitive Bidding >=US$250,000 All contracts subject to prior review

Selection Methods
Consultants
Firms (QCBS, QBS, LCS, CQS and SSS)
In accordance with Consultants
Guidelines
>=US$100,000 (exception made to
SSS, where all contracts under this
method are subject to prior review)
Individuals
As indicated in the Procurement
Plan (exception made to SSS, where
all contracts under this method are
subject to prior review)

21. Design and Supervision Consultancy. The project will have a single Design and
Supervision Consultant. This consultant was procured during project preparation by the GOK
with the assistance of the ADB. The ADB will finance 100% of the costs of this consultancy.
The terms of reference for the services were jointly developed and agreed between World Bank,
the ADB, and the GOK. The contract was procured in accordance with ADBs Guidelines on the
Use of Consultants using Quality and Cost Based Selection with 80:20 technical and cost ratio,
and using the simplified technical proposal procedures. ADB selected a consulting firm on behalf
of the GOK, which negotiated the actual contract. The MPWU will administer the contract but
will seek the World Banks and ADBs agreement on any proposed variations to the terms of
reference.
22. Specialized studies. Selection of consultants for specialized studies will be subject to
prior review by the Bank. While the MFED will take the lead in the selection process, MPWU
will be responsible for preparing terms of reference, evaluation criteria, and cost estimates, and
in supervising the consultants and their outputs.
23. Civil Works Contract. The project comprises civil works for the rehabilitation of the
main road on Kiribati from the airport to Bairiki along with upgrading of key urban feeder roads.
For technical reasons, cost-effectiveness considerations, management risks, mobilization costs
and also in view of Kiribatis isolation, it is not feasible or desirable to split the works into
separate physical components or contracts with different contractors. The civil works will
therefore be procured as a single contract, under international competitive bidding, and the
Banks standard bidding documents for Procurement of Works will be used.
24. Goods. Goods to be financed under the project comprise small value equipment, to equip
micro enterprises to undertake routine maintenance and service personnel to improve road safety,
which will be subject to post review.
3. Environmental and Social (including safeguards)

25. There are two safeguard policies triggered under the project. These are OP 4.01:
Environmental Assessment, and OP 4.12: Involuntary Resettlement. The table below
summarizes why the other policies are not triggered.
29



Policy Reason Not Triggered
OP 4.04 Natural Habitats The project will not convert or degrade any protected areas, known natural habitats, or
established or proposed critical natural habitats. All activities are on the existing road
alignment which passes through populated areas.
OP 4.06 Forests The project consists of rehabilitating an existing road on its existing alignment. There are
no forests, forested areas, or tree plantations along the road to be affected, only isolated
coconut trees.
OP 4.09 Pest Management Construction activities will do nothing to influence pest management.
OP 4.10 Indigenous Peoples The population of South Tarawa is from a single ethnic group.
OP 4.11 Physical Cultural
Resources
Historical sites from the World War II consisting of large cannons and bunkers are
located along the beach in Betio area. However, these sites are located outside the project
area. No specific cultural / archeological sites have been identified along the projects
road sections. However, in case a cultural/historical heritage site is identified during the
construction, the contractor will be required to stop work immediately and notify the
MPWU supervision consultant who in turn will notify the relevant GOK agencies.
OP 4.37 Safety of Dams
OP 7.50 International Waterways
OP 7.60 Disputed Areas
None of these are triggered as it is a road project.

26. The safeguards documents were disclosed as shown below:
Document Date of Disclosure
In Country InfoShop
Environmental Management Plan 9/6/2010 9/7/2010
Resettlement Policy Framework 9/21/2010 9/21/2010

Environment
27. The project is rated as a Category B project due to the environmental impact. The EMP
was prepared and disclosed on September 6, 2010. The EMP summarizes all the anticipated
environmental impacts and its associated mitigation measures during the design, construction
and operational phases. It makes reference to the relevant law and contract documents,
approximate location, timeframe, mitigation costs, and the responsibility for its implementation
and supervision. A field monitoring checklist has been prepared based on the EMP and
monitoring plan. The field monitoring checklist will be used by the supervising engineers. The
signed checklists will be provided to the MPWU who will be responsible for the appropriate
follow-up and compliance reporting.
28. Safeguard measures have been incorporated in the project during the design phase to
allow the designers to incorporate the EMP in the project design, technical specifications and
contract documents. During the construction phase the contractor will construct the project as
per the design and technical specifications and implement the EMP with supervision provided by
the supervision consultant. During the operation / maintenance phase, the period starting with
the issuing of the Certificate of Completion the onus for the upkeep long term maintenance of
the road falls on the MPWU.
30

29. Major Impacts. The major environmental impacts associated with the rehabilitation of
the South Tarawa road are: clearance of the roadside vegetation; excavation of road bed to
remove and replace unsuitable material with suitable imported material; soil erosion during
excavation, construction and rainy seasons; transportation of excess waste material and backfill
materials; dust during excavation and construction; emissions from the asphalt plant; disposal of
excess excavated materials; traffic and safety during construction; drainage during construction,
etc. However, in all cases the impacts are expected to be minor, temporary, readily mitigated and
in most cases easily reversible.
30. Soil erosion, considered the most potential threat to the lagoon during and after
construction will be reduced by: (i) minimizing the size of the work area; (ii) keeping clearing of
vegetation to a minimum; (iii) minimizing the stockpiles of borrow materials; (iv) adopting in-
time delivery of construction material; and, (v) by re-vegetating the disturbed areas immediately
after the construction is completed in the area.
31. Contaminated drainage and sedimentation will be controlled by installing silt traps at the
onset of the construction, phasing and limiting soil disturbance to areas of workable size,
scheduling construction to limit disturbance to large areas during rainy seasons and avoiding
direct discharge of contaminated water to the lagoon.
32. To minimize dust generation, all trucks transporting friable materials and all material
stockpiles will be covered. Waste dump sites will be chosen in consultations with the GOK and
the local communities to promote future uses of waste materials. The sites will be re-vegetated.
The contractor will also be required to spray water on exposed surfaces during dry periods and
especially near schools, hospitals, rural communities, etc.
33. Noise will mainly affect schools, hospitals, churches and rural and urban areas. To a large
extent, noisy activities will be carried out during normal working time and completed as soon as
possible. The trucks will be fitted with low volume mufflers. The schools, hospitals, community
halls, etc. will be advised when there will be unavoidable and unusual noisy construction
activities in the areas.
34. Source of Materials. Aggregates for the road construction will be imported from Banaba,
Nauru or Fiji with aggregate size of 5 to 20 mm. The aggregate will likely be stored in Betio port
area, currently an empty field, located next to the port, and about 250 m from the closest
settlements, or a similar isolated area towards Temaiku. The aggregates will be transported to the
construction site in covered transport vehicles, water sprayed to minimize dust generation and
transported at off peak traffic hours.
35. Road Safety. Road safety is a key consideration in the project. A road safety audit was
undertaken during project preparation to identify deficiencies. The designers will ensure that
these deficiencies are addressed in the final designs after community consultations. These
designs will be reviewed by the Bank prior to tendering. During construction, the contractor will
be required to pay special attention to traffic safety, both for road users and the workers.
36. Decommissioning. To minimize ongoing impacts of disturbed areas after the
construction is completed, the contractor will be responsible for the proper decommissioning of
31

the used sites. Recommended measures will include: (i) raking or loosening of compacted
ground surfaces; and, (ii) establishing site re-vegetation. Where practical local communities /
womens groups will be contracted to implement re-vegetation.
Involuntary Resettlement
37. The project will rehabilitate the footprint of the existing road. However, temporary
acquisition of land may be required for easements to provide drainage pipes. There may also be
cases where assets such as coconut trees may be affected to make way for footpaths or bus stops.
While the acquisition of land will be avoided whenever feasible, and while all viable alternatives
will be explored, it may be necessary to acquire small parcels of land adjacent to the existing
road in order to build bus stops. This will not be clear until the design stage of the road works. In
order to address this, an RPF was developed and disclosed on September 21, 2010. The RPF
identifies principles to be followed in the event of temporary land acquisition, the damage or
removal of assets such as coconut trees, and the acquisition of land.
38. The purpose of the RPF is to provide guidance for the process and intended outcomes of
resettlement plans. It seeks to ensure that those people whose assets are directly affected by the
project can share project benefits and be able to improve or at least restore their standard of
living to the level prior to the beginning of project implementation. Compensation will be paid,
and any other resettlement entitlements provided, before physical and economic displacement
arises.
39. I nstitutional Arrangements. The Ministry of Environment, Land and Agricultural
Development (MELAD) is the lead agency responsible for coordinating planning and
implementation of land acquisition and resettlement. The MELAD formulates and manages the
resettlement budget and pays compensation to the affected people after the Lands Management
Division (LMD) has carried out a survey of the assets and trees on the site. The LMD has rates in
place to pay compensation for various types of assets and to lease land when appropriate. As of
2010, the LMD reviews lease rates at least every three years. However, compensation rates have
not been reviewed since 1992 and the LMD has asked the project to finance a Valuation
Specialist to assess the current rates of compensation and suggest revisions if needed. The
updating of the valuation of assets will take place with sufficient time prior to the
commencement of works.
40. The GOK has in place legislation for payment of compensation and resettlement
procedures that are in line with the World Banks policies. The MELAD has the expertise to
assess resettlement plans in line with the Banks resettlement procedures, and the MELAD, in
conjunction with other GOK stakeholders, will have the responsibility for reviewing the
Abbreviated Resettlement Plan that may be needed and their implementation.
41. Consultations. Consultations to inform key stakeholderslocal people, civil society,
government agencies, church organizations and the unimwane representatives (group of
elders)took place September 20-21, 2010 in South Tarawa to disclose the project and its
potential environment and social impacts. These consultations all followed the same format, but
were undertaken in three different locations to ensure ease of access for local people. The
consultations informed stakeholders about potential land disruption, disclosed the RFP and
32

explained that an Abbreviated Resettlement Plan may need to be created and will be
appropriately disclosed. Focus group discussions were also carried out with a variety of womens
groups to ensure their concerns and feedback were incorporated into the project design. These
focus group discussions were part of the gender analysis work done as part of the project
preparation. In addition, household interviews were conducted with a random sample of the
population in South Tarawa to further understand land issues. When the project design is clear
and affected people are identified, further consultations will take place to inform affected people
of the assets that may be impacted and appropriate compensation arrangements. As per Kiribatis
legislation, notice to take land will be published in the Kiribati Gazette.
42. Financing Land Acquisition. The land acquisition will be financed and executed by the
GOK according to existing legislation. The LMD will be responsible for payments of
compensation.
43. Grievance Redress Mechanism. The mechanisms for redressing grievances was
presented and explained in the initial consultations, described above, and will be discussed again
once the affected people have been identified. It should be noted that people in South Tarawa are
generally well informed about compensation processes and redress mechanisms, as land leasing
and land compensation is quite frequent given the lack of land in South Tarawa. The GOK has in
place a grievance mechanism that allows people to file complaints at the Magistrates Court and
make appeals at the High Court. However, the system can be overburdened and slow. The
project will work with the Magistrates Court to ensure that they can address any grievances
related to the road project expediently if needed. The project will work to ensure that women
have access to compensation payments, and that people are provided advice as to how to spend
their compensation wisely (such as school fees or uniforms). This will help to avoid the misuse
of money and ensure equitable access to funds.
44. Monitoring. It is the responsibility of the GOK to make an assessment to determine that
the objectives of the RPF has been achieved. The GOK will undertake internal monitoring of the
projects progress. In addition, the World Bank will assess the implementation of the RPF and
other associated activities during implementation support.
Supervision Mechanism
45. The design and supervision consultant shall have the direct responsibility for monitoring
the implementation of the EMP on the project. The EMP contains reporting requirements and
these will be included in the consultants quarterly progress reports. A summary of these will be
included in the GOKs semi-annual reports to the World Bank and ADB.
46. For land acquisition and resettlement, both the LMD and a local NGO will have
responsibility for monitoring the implementation of the RPF. The local NGO will be contracted
prior to the commencement of works and will be financed by the project.
Social Risks or Issues that go Beyond the Coverage of the Safeguards Policies
47. Traditionally, land plots in South Tarawa are situated in strips from the ocean to the
lagoon side. In the 1940s the British Colonial Government built the existing road through the
island, essentially dividing existing plots. No records exist to confirm how acquisition took place
33

or what, if any, compensation was paid. However, the consensus view is that the Colonial
Government had the power to acquire land with or without compensation. Since then, the land
had been recognized as public property. After independence in 1979, the GOK assumed
responsibility for maintaining the road. In the early 1990s the GOK considered providing back-
payments for the road acquisition for the land under the existing road but the issue was later
dropped.
48. There are no outstanding grievances in the country or complaints from landowners about
the land under the road. This has been confirmed by the Magistrates Court and is consistent with
the results of household surveys carried out with a random sample of people in South Tarawa. In
fact, in recent years several projects have been undertaken to rehabilitate portions of the road and
no ownership claims have been made. Currently, sections of the road are being maintained by
MPWU and no ownership claims have been made. Moreover, the ADB financed the construction
of a water pipe which is buried next to road in many places and no ownership claims were made.
Given this historical scenario, the project will proceed recognizing the road as public property.
However, the project will be in a position to address any claims of ownership for the land under
the road if necessary through the compensation system adopted for land acquisition for bus stops
and footpaths.
4. Monitoring & Evaluation

49. Data on compliance with the EMP will be collected by the supervision consultant as part
of their regular duties. The EMP contains monitoring forms to be used for this purpose. Data
regarding land acquisition will be available in the Abbreviated Resettlement Plans. This will
include the list of people affected and the rates of compensation that they will be paid prior to
commencement of works.
50. The LMD has data for at least half of South Tarawas plots that detail ownership and land
boundaries. For those plots impacted that have not been surveyed, LMD will work with the
implementation contractors to map out the plot boundaries and be able to pay compensation as
needed.
51. The costs of data collection are included as part of the supervision consultants Terms of
Reference. It is estimated that the cost of all data collection will be under US$ 10,000, with most
of this being required for land acquisition and resettlement.
52. The data will be used during implementation to: (i) verify that people have been paid
compensation for assets lost or land acquired prior to the commencement of works, as per World
Bank and GOK policies; and, (ii) to ensure that the contractor is complying with the EMP.
Where there are continued violations of the EMP the supervision consultant shall arrange
training and identify other actions to be taken.
53. The PMU will submit to the Bank: (i) the quarterly supervision consultant reports; and,
(ii) semi-annual progress reports in a format acceptable to the Bank. The MFED shall submit
annual audit reports.
34

5. Role of Partners

54. ADB. The World Bank and ADB are co-financing the project. An MOU was prepared
between the World Bank, the ADB and the GOK outlining the roles and responsibilities of the
respective parties. During preparation, the two parties worked closely, fielding joint missions and
collaborating on social and environmental safeguard activities. For financing, the contract for
design and supervision will be financed by ADB and the civil works contract will be co-
financed. During project implementation the EA will supply withdrawal applications directly to
the ADB for their contribution to the project.
55. Pacific Region I nfrastructure Facility. PRIF is a multi-donor trust fund comprised of
AusAid, ADB, NZAP and the World Bank. The GOA will provide US$ 4.93 million for civil
works through PRIF to cover (i) the road construction towards Temaiku; and, (ii) road safety
infrastructure, as well as US$ 0.86 million for technical assistance activities. These funds will be
administered by the World Bank.
56. New Zealand Aid Program. NZAP is undertaking a number of complementary activities
under its STP. The STP Phase 2 (2010-2013), currently under approval, will be constructing a
fully-serviced residential and associated land uses subdivision on a portion of Temaiku State
Land for 150 low-middle income families. It also will provide a package of visible infrastructure
improvements, in particular potable water and sanitation in the two poorest villages of Betio and
Bairiki (1,000 households). The STP is strengthening the urban management capabilities of the
Ministry of Internal and Social Affairs (MISA) and the Urban Councils through implementing a
range of learning by doing urban management core functions in the existing villages on South
Tarawa and Kiritimati island, including solid waste management, local economic development,
and a small works program comprising routine maintenance of village access roads, drainage,
and construction of rainwater tanks at community maneabas.
57. The project will finance the civil works for rehabilitation and sealing of the main road
eastwards from the Ananau Causeway to 1.7 km east of the mission of Taiwan, China providing
eastern access to the STP-funded Temaiku subdivision (i.e. around 2.8 km east of Ananau). The
costs of these improvements were originally included in the STP budget with financing from
GOA through PRIF. NZAP and GOA agreed to provide these funds to the project instead since
this will allow for the road to be reconstructed for a lower cost than having a separate contractor
do such a small length for the STP project. The projects budget includes provision of US$ 1.75
million for these works. The STP also has a need for the supply of high quality aggregate and it
is anticipated that this will be procured from the same source as that supplying the road project
since there will be economy of scale.
58. The STP has been working closely with the urban town councils on identifying road
investment needs. The 8 km of feeder roads included in the project were identified based on the
STP work in this area, as well as consultations with the two urban councils and the MPWU.

35

Annex 4: Operational Risk Assessment Framework (ORAF)


Project Development Objective(s)


The project will improve the condition of South Tarawa's main road network and help strengthen road financing and maintenance capacity.


PDO Level Results
Indicators:
1. Number of kilometers of the paved road network rehabilitated and suitable for only routine maintenance
2. An agreed plan for reform of road sector management and financing under implementation



Risk Category

Risk Rating Risk Description Proposed Mitigation Measures
Project Stakeholder Risks


Medium-L There may local opposition to the project.








The other donors may not support the project
Through the projects public consultation efforts, the local
stakeholders will be made aware of the scope of the project and
the benefits to the community. The detailed designs will be
discussed with communitiesparticularly with regard to the
safety improvements and locations of bus baysso as both to
advise the communities of the benefits from the project but also
to ensure that their needs are fully considered.

The other donors were fully engaged during project preparation,
for example, the feeder roads were identified in consultation
with the NZAP STP. During implementation there will be joint
missions with the ADB which the other donors will be invited to
participate in.
Implementing Agency Risks


Medium-I The government lacks the capacity for implementing
a major road project such as this.
A PMU will be established in the MFED which will be
responsible for procurement, financial management, reporting,
and liaison with the World Bank and ADB. An international
design and supervision consultant has been hired and they will
not only provide technical support to the government for the
project, but also assist with procurement, reporting and other
activities. The World Bank and ADB will undertake regular
implementation support missions.

36

Project Risks
Design

Medium-I There may be design errors, particularly with regard
to (i) road safety, or (ii) drainage which leads to
premature road failures.

The Bank is financing the re-establishment of accurate survey
benchmarks throughout South Tarawa as part of the Kiribati
Adaptation Program Phase II Pilot Implementation Phase
(KAP II). This will help ensure accurate levels for monitoring
the drainage designs.

The design and supervision consultants TOR highlights the
importance of ensuring proper drainage for the project.

The use of a single consultant for design and supervision will
provide a clear line of accountability should there be drainage
problems.

Having a 24 month defect liability period provides sufficient
time to ensure that the drainage is fully functional.

A road safety audit was undertaken during project preparation
and the implementation of its recommendations will be
monitored during implementation.
Delivery Quality

Medium-I The MPWU may be unable to deliver a quality
project.
The use of an experienced international consulting firm will
ensure proper designs and project supervision throughout the
period of civil works.
Social and Environmental

Medium-L

During construction there may be disturbances to the
local residents given the highly urbanized nature of
the road. There may be dissatisfaction over
compensation for land acquisition.
A detailed EMP was prepared and disclosed which clearly
defines the responsibilities of the contractor with regard to
minimizing disruptions to local residents. The compliance with
the EMP shall be ensured by the project design and supervision
consultant.

A road safety audit was done during preparation which will help
ensure that speeds and pedestrian flows are properly managed,
thereby reducing the risk of accidents.

Any land acquisition will be almost exclusively for bus stops
and drainage easements. During project preparation an RPF was
disclosed and discussed with communities.

Prior to construction, the detailed designs will be discussed with
local communities to confirm that the social and environmental
impacts have been minimized.

37

Program and Donor

Medium-L Donors may present a conflicting agenda.



The MOU outlining the project operations and
responsibilities will not be finalized.
The project will use joint World Bank/ADB implementation
support missions with invitations for participation to the other
donors.

All parties are working towards completing an acceptable MOU.


Overall Risk Rating at
Preparation
Overall Risk Rating During
Implementation
Comments
Medium-I High
This is very large and challenging project for Kiribati.
The project design is such that while the impact of
issues could be large, there is a low likelihood of this
happening. However, due to the projects complexity
during implementation is such that it must be viewed
as a high risk, in spite of the comprehensive
mitigation measures put in place during project
design.

38

Annex 5: Implementation Support Plan

Strategy and approach for Implementation Support

1. The strategy for implementation support has been developed based on the nature of the project
and the ORAF risk profile (see Annex 4).
Procurement. Implementation support will include: (i) reviewing procurement documents
and providing timely feedback to the MPWU; (ii) providing detailed advice and guidance on
the application of the World Banks Procurement Guidelines; and, (iii) monitoring
procurement progress against the Procurement Plan.
Financial Management. The implementation support shall consist of: (i) reviewing the
MFEDs financial management system; (ii) reviewing transactions on each of the contracts;
(iii) reviewing the quarterly IFRs; and, (iv) reviewing the audit and other financial reports.
Environmental and Social Safeguards. The implementation of the EMP will be closely
monitored, both through reviewing the supervision consultants reports and field visits. The
application of the RPF and payment for land acquisition and loss of assets will be reviewed
during missions.
Role of Other Partners. The implementation support team shall consist of joint missions
with the ADB and other donors.

Implementation Support Plan

2. The project implementation will be supported by the task team based out of the Sydney office.
This will ensure that it is possible to rapidly field missions should the need arise. Formal missions will
be conducted at least three times during the first year of implementation, and then semi-annually
afterwards. Detailed inputs from the team are given below.
Technical. The civil works bidding documents will be reviewed by a highway engineer and a
road safety specialist. Throughout implementation a highway engineer will participate on
missions. Appropriate technical specialists shall be used to review and guide the Technical
Assistance components of the project.
Fiduciary. The teams Financial Management Specialist shall undertake appropriate training
of the MFED to ensure adequate capacity for the project. Formal supervision of the financial
management shall be undertaken annually. In addition to the procurement prior review to be
carried out by the Task Team, once a year support missions to visit the field to carry out post
review of procurement actions.
Safeguards. During the period of civil works the environmental and social safeguards
specialists shall make semi-annual mission visits to ensure compliance with the projects
safeguard requirements. Between missions they shall review the supervision consultants
reports to monitor progress and identify issues that may arise.
Operations. The day-to-day operations of the project will be supported from the Sydney
office.





39

I. Implementation Support Focus

Time Focus Skills Needed Resource
Estimate
(Staff
Weeks)
Partner Role
First twelve Technical review of the civil works
bidding documents
Highway Engineer 2 The ADB will
undertake their own
reviews and advise the
Bank of any issues.
Months Road Safety Specialist 1
Procurement Specialist 4
Technical review of TA documents Technical Specialists 4
Environmental Monitoring Environ. Specialist 2 ADB will also field
their own specialists. Resettlement Monitoring Social Specialist 3
Review of financial management Financial Specialist 1
Implementation Support ACS 4
Team Leadership TTL 10
12-48 Project Construction Highway Engineer 6
Months Road Safety Road Safety Specialist 3
Technical Reviews of TA Outputs Technical Specialists 9 ADB will also field
their own specialists
and reviewers.
Environmental Monitoring Environ. Specialist 5
Resettlement Monitoring Social Specialist 6
Review of procurement documents Procurement Specialist 4
Review of financial management Financial Specialist 3
Implementation Support ACS 12
Team Leadership TTL 24

I. Skills Mix Required

Skills Needed Number of Staff Weeks Number of Trips Comments
Environmental Specialist 7 6
Financial Specialist 4 4
Highway Engineer 8 5
Implementation Support 16 2
Procurement Specialist 8 3
Road Safety Specialist 4 2
Social Specialist 9 6
Team Leadership 34 10
Technical Specialists 13 5 In various disciplines


III. Partners

Name Institution/Country Role
Richard Phelps Asian Development Bank Task Team Leader
Sonya Cameron New Zealand Aid Program Development Program Manager - Kiribati


40



Annex 6: Team Composition

World Bank staff and consultants who worked on the Project:
Name Title Unit

Christopher R Bennett Task Team Leader EASNS
Kylie Coulson Senior Financial Management Specialist EAPFM
Miriam Witana Procurement Specialist EAPPR
Cristiano Costa e Silva Nunes Procurement Specialist EAPPR
Raj Soopramanien Lead Counsel LEGAF
Hanneke Van Tilburg Senior Counsel LEGEN
Anil Somani Environmental Specialist Consultant
Asif Faiz Highway Advisor Consultant
Colleen Butcher-Gollach Infrastructure Finance Specialist Consultant
Nanda Gasparini Social Safeguards Specialist Consultant
Phillip Jordan Road Safety Specialist Consultant
Fiona Doube Team Assistant EACNF
Daniel Toga Team Assistant EACNF
Amin Mohammad Program Assistant EACNF
Jean-Francois Marteau Reviewer ECSS5
Jiangbo Ning Reviewer ECSS5


Betio
Bairiki
Nanikaai
Teaoraereke
Banraeaba
Ambo Taborio
Bangantebure
Bikenibeu
Nawerewer
Temaiku
Bonriki
Tanaea
Buota
Abatao
Tabiteuea
Nabeina
Kainaba
Tabonibara
Marenanuka
Abaokoro
Notoue
Taborio
Taratai
Tebangaroi
Nuatabu
Tearinibai
Buariki
Tangintebu
BAIRIKI
Eita
Bonriki Intl.
Airport
Betio
Bairiki
Nanikaai
Teaoraereke
Banraeaba
Ambo Taborio
Bangantebure
Bikenibeu
Nawerewer
Temaiku
Bonriki
Tanaea
Buota
Abatao
Tabiteuea
Nabeina
Kainaba
Tabonibara
Marenanuka
Abaokoro
Notoue
Taborio
Taratai
Tebangaroi
Nuatabu
Tearinibai
Buariki
Tangintebu
Eita
BAIRIKI
BETIO URBAN REPAIRS
MAIN PAVED ROAD
INVESTMENT
OTHER ROAD
INVESTMENTS
BETIO CAUSEWAY
Bonriki Intl.
Airport
P A C I F I C
O C E A N
L a g o o n
KIRIBATI
Area of Map Area of Map
KI RI BATI
TARAWA ATOLL
Thi s map was pr oduced by t he Map Desi gn Uni t of The Wor l d Bank.
The boundar i es, col or s, denomi nat i ons and any ot her i nf or mat i on
shown on t hi s map do not i mpl y, on t he par t of The Wor l d Bank
Gr oup, any j udgment on t he l egal st at us of any t er r i t or y, or any
endor sement or accept ance of such boundar i es.
URBAN CENTERS
ADMINISTRATIVE CENTER*
MAIN PAVED ROADS
OTHER ROADS
Betio
* Bairiki Island serves as administrative center although
the capital is the entire atoll of Tarawa
IBRD 37910
0 5 Kilometers 2.5
JANUARY 2010