Papua New Guinea (PNG) has very challenging geographic conditions, making the movement of people and goods difficult. This creates a total reliance on aviation for tourism and business, exports and imports, domestic freight, and social cohesion. Capacity constraints and deteriorating infrastructure have however put at risk the safety of airports and the socioeconomic benefits that aviation provides.
To help address the situation, the Asian Development Bank (ADB) approved a multifinancing facility (MFF) for the Civil Aviation Development Investment Program in December 2009 for an aggregate $480 million loan to be provided in 4 tranches. The investment program was designed to improve compliance with the safety and security standards of the International Civil Aviation Organization (ICAO). It involved (i) designing and supervising airport improvements and preparing and administering long-term maintenance contracts for 9 national airports; and (ii) monitoring the socioeconomic benefits from the operation and maintenance improvements.
Tranche 1, provided in 3 separate loans equivalent to $95 million, was approved along with the investment program. It financed project 1 that covered the country’s top 5 priority airports, and in line with the investment program’s results framework, had 3 planned outputs ─ reformed institutions, improved infrastructure, and improved operations. These outputs aimed to support the attainment of the investment program’s intended outcome of a safer, more efficient, and accessible all−weather aviation services in the program sites, and impact of economic growth and poverty reduction.
Despite a prolonged implementation period, which caused the completion date to be extended twice from June 2013 to December 2015 ultimately, project 1 only partially delivered its output targets. Security boundary fencing was completed in 5 airports; but only the runways, taxiways, and aprons of Port Moresby and Hoskins airports were rehabilitated. The terminals of Mount Hagen and Hoskins airports were upgraded; an information landing system and a prescription approach path indicator were installed respectively in Port Moresby and Hoskins airports; and the country’s main airport in Port Moresby was provided with firefighting equipment. Institutional and sector reforms were only broadly undertaken. The 10−year performance−based maintenance contracts planned at appraisal were not implemented. Capacity development and strengthening across the civil aviation sector was not advanced in the manner anticipated at appraisal.
Underpinning the project’s significant shortfalls were a host of reasons. Shortfalls in civil works outputs were largely the result of higher-than-expected contract costs due to inflation, local currency devaluation, and significantly higher contractor rates. Shortfalls in human resources and institutional strengthening particularly in the economic, financial, maintenance, and corporate social responsibility spheres, were associated with the stronger orientation toward developing the engineering capacity of the National Aviation Corporation (NAC), which was important but inadequate to enable the NAC to effectively perform its wide−ranging executing agency (EA) functions.
Because of the shortfalls, the project only partially achieved its intended outcome and impact. ADB’s Pacific Department rated the project partly successful. The NAC took over as EA following the restructuring of the Civil Aviation Agency (CAA) in 2010. A project implementation unit supervised the project on a day-to-day basis.
