bpoiK No. 10543EAP Pacific Islands Transport Sector Study (In Seven Volumes) Volume IiI: FiJi- Transport Sector Survey March 1993 Infrastructure Operations Division Country Department III East Asia and Pacific Region FOR OFFICIAL USE ONLY em-.~~~~~ . .. -~~~~~ ~ ~ ~ ~ 7 4~~~~~~~~~~~~~~4 ACRONYMS AND ABBREVIATIONS ADB - Asian Development Bank AIDAB - Australian International Development Assistance Bureau CAD - Civil Aviation Department CAAF - Civil Aviation Authority of Fiji CPO - Central Planning Office GOF - Government of Fiji MIPU Ministry of Infrastructure and Public Utilities NIA - Nadi International Airport PAF - Port Authority of Fiji PITSS - Pacific Islands Transport Sector Study PMCS - Pacific Island member countries PWD - Public Works Department RTD - Road Transpcit Department FOR OMCIAL USE ONLY PREFACE The Pacific Islands Transport Sector Study (PITSS) reviews the status of the transport sectors in the six Pacific Island member countries (PMCs) of the World Bank. The PITSS is reported in two volumes: Volume One - A Regional Perspective on Transport Issues - presents an analyZis of transport issues across the region. Volume Two - Country Surveys - provides a detailed examination of the transport sector in each PMC. This survey of the transport sector in Fiji, is one in the series for the PMCs which, as a whole, represent Volume Two. Each sector survey presents an overview of transport, identifies areas of concern and suggests priorities for consideration by Government. The PMCs share several areas of common concern with their transport sectors, including strategic planning, project evaluation, regulation, modal coordination, pricing and cost-recovery, commercialization, private sector participation, as well as the management of infrastructure and its maintenance. These are.s are reviewed briefly in this survey and, on the basis of the surveys for all PMCs, subjected to comparative analysis in Volume One of this study. PITSS was undertaken by the World Bank with financial support for consultants from the Australian International Development Assistance Bureau (AIDAB) South Pacific Facility. The study was structured and managed by Colin Gannon (Senior Economist). Major contributions to the sector surveys were made by David Bray and Ian Gordon (consultants). The kind cooperation of the many government officials and industry representatives who assisted the mission is gratefully acknowledged. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CONTENTS 1. INTRODUCTION ...............,.,.,.,............. 1 A. Review Conxt . 1 B. Geography 1. C. Demography. 1 D. Economy. 2 2. INSTITUTIONAL STRUCTURE 3 A. Government Structure.. 3 B. Agency Responsibilities.. 3 C. Private Sector.. 6 D. Public Finance.. 6 E. Human Resources .. 7 3. ECONOMIC CONTEXT. . . 8 A. Demand for Transport Services.. 8 B. Country Development Stategy ..13 4. TRANSPORT SECTORS . . .14 A. Land Transport ..14 B. Maritime Transport ..19 C. Aviation ..25 D. Intermodal ..30 5. TRANSPORT SECTOR DEVELOPMENT NEEDS . . .31 A. Introduction ..31 B. General ..31 C. Land Transport Subsetor ..32 D. Maritime Subsector ..33 E. Aviation Subsector ..35 BIBLIOGRAPHY .38 CHART International Air Services MAP IBRD No. 24572 LIST OF TABLES TABLE 2.1 Transport Agency Responsibilities in Fiji .... .......... . 4 TABLE 3.1 Value of Exports by Type of Product .... ........... . 9 TABLE 3.2 Value of Imports by SITC Classification .. 10 TABLE 3.3 Direction of Trade ..................11................ 1 TABLE 3.4 Visitor Arrivals ...... .............1................. 11 TABLE 3.5 Freight Movement at Major Ports, 1989 .... ..... ........... 12 TABLE 3.6 Macroeconomic Projections ............. .. .............. 12 TABLE 4.1 Fiji Road Inventory .................. ................ 14 TABLE 4.2 Road Expenditure by Ministry of Infrastructure and Poblic Utilities ... . 15 TABLE 4.3 Licensed Vehicles ...... ............ ................. 17 TABLE 4.4 Heavy Vehicle Travel ............... .. ............... 17 TABLE 4.5 Cost-Recovery by Vehicle Type ............ .. ............ 19 TABLE 4.6 Maritime Traffic at PAF Ports ............ .. ............. 20 TABLE 4.7 Marine Department Income and Expenditure, 1988 . .24 TABLE 4.8 Passenger and Aircraft Movements at Nadi Airport, 1985-1989 26 TABLE 4.9 Passenger and Aircraft Movement at Nausori Airport, 1985-1989 27 Table 4.10 Passenger and Aircraft Movements at Other Airports, 1984/85 and 1988/89 ..28 SELECTERD DATA Geography Land Area 18,272 sq km Sea Area 1,290,000 sq km EIlatDn Population (1990)1(1991), est. 732,000/744,000 Population Growth (1980-87) 1.9% per annum Population Density (1990) 40 persons per sq km Population of Capital, Suva (1991) est. 170,000 Economic GDP/Capita (1990)/(1991) US$1,770/US$ 1,830 Exchange Rates: 1980 F$0.8175 = US$1.00 1985 F$1.1526 = US$1.00 1989 (September) F$1.4925 = US$1.00 1991 (March) F$1.4987 = US$1.00 Transpo Registered Vehicles (1988) 71,408 Vehicles/'000 Population (1988) 97 Length of Road (1991) 4,994 km % of Road Sealed (1991) 15.7% CHAPTER 1 INTRODUCTION A. REVmw CoNTETr 18,272 kin2, te third largest country in the !outh Pacific after Papua New Gune and the 1.1 This country survey presents an overview Solomon Islands. It is 1,500 km from Australia of the transport sector in Fiji, identifies areas of and New Zealand, its largest trading partners current and emerging concern, indicates (see map at end of text). priorities, and suggests future strategies for the sector.1 1.5 The largest islands in Fiji are volcanic in origin. There is a distinct contrast between the 1.2 To facilitate the present study, a desk windward, eastern side of the major islands and review2 of the transport sector was previously their western siJes: the former enjoy regular to undertaken for each of the Pacific Member heavy rainfall and are well endowed with Countries (PMCs) of the Bank.3 That review tiopical rainforest and thick vegetation, while the provided preliminary information on each latter are in a rain shadow, and are dry and country, including Fiji, and working hypotheses generally treeless. Pine plantations have been on development needs in the transport sector. developed in the western areas, and the The present survey builds on this work to productive lowland areas are extensively develop a current sector overview so as to cultivated for sugar. establish first, directions for the formulation of strategies and priorities for each country, and 1.6 Fiji has a sea area of 1,290,000 km2. The second, the basis for selection of the specific country is subject to both tropical cyclones and issues addressed in Volume One of this Report. droughts. 1.3 The survey of Fiji is complemented with similar surveys for the other PMCs. A regional C. DEMOGRAPHY overview which compares and contrasts transport sector issues across all six rMCs is presented as 1.7 The population of Fiji was estimated at Part I, Volume 1 of this Report. 732,000 in 1990. The overwhelming majority (94 percent in 1986) of the population live on the two main islands, Viti Levu (about three- B. GEOGRAPHY quarters) and Vanua Levu (about one-fifth). Thirty-nine percent of the total population was 1.4 The Republic of Fiji is an archipelago of classified as urban. Viti Levu is the most 330 islands, about 100 of which are inhabited. urbanized island (almost one-half of its Most islands in the country lie within a region population living in urban areas; the average about 450 km from east to west and 400 km degree of urbanization in the remainder of the from north to south. Fiji has a land area of country was 13 percent. Suva was the largest -2- town in 1986, vith a po'ulation of 141,000 1.12 MansfacuwIng accounted for 12 percent (excluding nearby contiguous settlements); the of GDP in 1987. Again, much of the activity is next largest towns were Lautoka (39,000) and attributable to sugar-related activities (31 percent Labasa (16,500). in 1987). As with agriculture, non-sugar manufacturing gre more rapidly than sugar- 1.8 The present annual population growth related activity du ing the 1980s. There has rate is 1.4 percent, a decline on the 1.9 percent been considerable growth in manufacturing for annual growth between the 1976 and 1986 export, mostly garments spurred by preferential censuses. The labor force is increasing by 3.2 access to Australian, New Zealand, EC and US percent per annum, primarily because of markets. Fish canning, timber processing and increasing participation by women in the labor cement production are other major industrial force. activities. The production of coconut oil almost halved betwee 1985 nd 1989, while gold 1.9 Emigration from Fiji rose sharply production more than doubled. following the coups d'etat in 1987. According to the Fii Bureau of Statistics, about 7 percent 1.13 Tourism is a major industry which grew of profasional staff and 17 percent of rapidly up to 1987 when it suffered a major administrative staff, who were employed at the reversal. It has since resumed its growth pattern time of the census in 1986, had left the country and a record number of tourist arrivals was by late 1988. Key professions were affected, achieved in 1990. However, arrivals fell back with 40 percent of accountants and many 6.9 percent in 1991 primarily, it is believed, due engineers, architects and technical staff reported to recession conditions in Australia and New to have emigrated. Zealand. 1.14 Official dewelopment assistance was D. ECONOMY4 increasing during the mid-1980s, but declined in 1987 following the coups d'etat. Assistance 1.10 Fiji is a middle income country. Its GNP jumped by a half in 1988 to US$54.3 million per capita was severely affected by the political (US$75 per capita, and 5 percent of GDP). events of 1987, decreasing from US$1,730 in Bilateral aid accounted 'or 87 percent of this 1986 to US$1,540 in 1988 but rising to assistance, a lower she. han in other South US$1,770 in 1990. Fiji has placed considerable Pacific countries, reflecting Fiji's relatively emphasis on health and education activities, and greater capacity to borrow. Foreign grants social indicators are generally superior to Asia reflected in the government's bud,et were only and to lower middle income countries. F$22.2 million (US$15.9 million) in 1988; considerable aid to Fiji flows outside the 1.11 Economic activity in Fiji is diverse. government's development budget-assistance in Agriculture accounted for a quarter of GDP in kind is noted in the budget but not incorporated. 1987, of which 40 percent was attributable to the sugar growing industry based on internationally competitive smallholder farming. Fisheries, forestry and other agriculture grew more rapidly than sugar cane agriculture during the 1980s. -3- CHAPTER 2 INSTITUTIONAL STRUCTURE A. GovzMERtr SmUCIuRE policies and plans to guide sectoral agencies in their planring. Statutory authorities own and 2.1 Following ninety-six years a a British operate the principal airport and ports. A colcny, Fiji gained independence in 1970. In number of other government agencies are 1987 Fiji left the Commonwealth to become a involved in road deveopment. Agency republic. The Governor General became the responsibilities are summarized in Table 2.1. President, and ministers were appointed by him. The judiciary retained their independence. B. TRANspORT AGENcy RESPONSIBILITIE 2.2 Suva is the capital and administrative center of Fiji. The country is divided into four 2.4 Roads. The planning, construction and Divisions, each with a Divisional Commissioner maintenance of most roads is the responsibility based in; Nausori (Central Division), Levuka of the Public Works Department (PWD) in the (Eastern Division), Lautoka (Western Division), Ministry of Infrastructure and Public Utilities and Labasa (Northern Division). The local (MIPU). The PWD has its own road government system is based on fourteen construction and maintenance resources, but provinces, and is responsible for matters such as makes limited use of contractors on occasion. A village development, local development priorities number of other government agencies are also and rural health. The Minister of Fijian Affairs involved in road development, including: coordinates provincial activities and is responsible for financial supervision. (a) Ministry of Primary Industries and Cooperatives which has road 2.3 Administration and operation of development programs for agricultural government services within the transport sector access roads &id for some area in Fiji are provided primarily by two ministries development projects. Its annual road of the national government: the Ministry of construction budget has been in the order Tourism, Civil Aviation and Energy (aviation)5 of F$4 million. Construction is usually and the Ministry of Infrastructure and Public undertaken by the PWD. Utilities (land transport and maritime).' It is the responsibility of the ministries to undertake (b) Ministry of Forestry, which has its own planning activities, and submit project proposals small road construction unit but uses through the normal budgeting process. PWD for larger projects. FuLding is However, their planning resources are limited. provided mostly by the government, but The Central Planning Office (CPO) in the forestry companies also contribute to Ministry of Finance reviews and integrates construction costs. investment proposals. It also formulates broad -4- Table 2.1: fUI-TRNSrORT AGENCY RES'ONDmES, 1991 La Land Mazldme Aviadon Inter-Modal Policy MIPU, CPO MIPU, CPO MTCAE, CPO CPO Infrastructure Planning PWD PAF, PWD CAAF,CAD CPO Construction and PWD, (Private) PAP, Private CAAF,PWD, Maintenac PWD Private Operation of Facilities - PAP CAAP Provision of Transport Private MD, FMF, Private Services Private Regulation PLA, TCB, MD, PIB ATLB CTA, Police Legislation RTD MD CAD ATLB Air Transport Licensing Board (in CAD) CAAF Civil Aviation Authority of Fiji CAD Civil Aviation Department (in MTCAE) CPO Central Planning Office (in MOF) CTA Central Traffic Authority (in DRT) FMF Fiji Military Forces MD Marine Department (in MIPU) MIPU Ministry of Infrastructure and Public Utilities La MOF Ministry of Finance MTCAE Ministry of Tourism, Civil Aviation and Energy La PAF Ports Authority of Fiji PIB Prices and 'ncomes Board PLA Principal Licensing Authority (in DRT) PWD Public Works Department (in MCTW) RI D Road Transport Department (in MIPU) TCB Transport Control Board (in DRT) La Several Ministries have involved recent (1992) changes in name; see footnotes I/ and 6/ above. Source: Mission consultations. - 5. (c) Ministry of Rura Development and operators can obtain licenses to carry passengers Rural Housing, which receives at negotiated fares. An increasing number of occaional, small grants for road light goods vehicles ar used for these services, construction which is generally but conflicts have arisen as they have encroached undertaken by the PWD. on areas served by scheduled bus services, particularly in urban areos. The bus and taxi (d) Ministry of Housing and Urban industries have been experiencing financial Development, through its Housing difficulties, in part because .tariff regulation. Authority which provides roads and services in developing urban areas using 2.7 Three statutory agencies of the Road grants and intornally-generated revenue. Transport Department (RTD) of the MIPU control and reglate road transport: the (e) City and Town Councils which doveop Principal Licensing Authority, the Transport and maintin local roads usingthdir own Cool Board and the Col Trffic Authrity. construction and maintenance units, 1"he basis for the regulation is to ensure regular, PWD or contractors. qf5 and cost-officient transport services. There are overlapping functions between the agencies, (f) Fiji Sugar Corporation which develops and road users may be referred from one to roads In sugar growing areas using PWD another to secure necessary authorizations to Nd contractors. operate vehicles. There is also overlap between the enforcement responsibilities of these agencies 2.5 The PWD is responsible for maintenance and the police. For example, the RTD agencies of all public roads built to PWD standards, have few resources for enforcing overloading of including public roads built by these other vehicles, and, as is typically the case, can in any agencies. event only to do so in conjunction with the police who a'one have the authority to stop 2.6 Land Transport OFerations. The road vehicles. It has been proposed that the three transport industry is primarily a private sector agencies be combined into a single Road activity. Public transport is provided by Transport Authority. licensed, privately-owned buses and taxis. Taxis are mostly individually owner-operated, but 2.8 Shipping. The Marine Department in some fleet operations exist in towns. Taxi fares the Ministry of Infrastructure and Public Utilities are also regulated, but by the CTA. All taxis (MIPU) is responsible for shipping legislation, are required to operate from a designated base. administration and control. The Marine Taxi driver wages are low although some entry Department surveys ships, reviews and enforces impedimehts appear to prevail. Scheduled bus the Marine Act and associated regulations, and services are provided within towns and on provides and maintains navigational aids. In intercity and rural routes. Buses must obtain terms of staffing and resources, these activities route licenses and charge regulated fares. are overshadowed by its operation of the Several operators may be granted licenses for a governme"'- shipyard, slipway and substantial single route where passenger traffic is fleet. i-.uposals have been made for sufficiently high, for example, Suva - Nadi. In privatization of the government shipping fleet round numbess, about 1,100 buses are operated and commercialization of the shipyard. Inter- on some 100 routes by about 100 operators. island freight rates are set by the government's Freighttransportismostdyprivately-owned, with Prices and Incomes Board. In addition to the a large number of small operators. In areas not government fleet operated by the Marine srved by scheduled bus services, truck Department, which is used for some commercial *6- shippin service, sorvices ar provided by the charter services. Domestic air fares are set by Auxiliary Unit of the Fiji Military Forces7 md the Air Transport Licensing Board in the CAD. private ship-owners. 2.12 Policy and Planning. Modal policy and 2.9 Ports. rTe Ports Authority of Fiji was planning is undertaken within the sectoral created in 1975 as a statutory body responsible agencies described. The Central Planning Of-fice to the Minister for Infrastructure and Plublic reviews project proposals and considers Utilities. It is to be self-financing, and may intersectoral issues, though it has limited borrow with the approval of govermment. The resources to do so. functions of the PAF are to provide and maintain services and facilities in ports and port approaches and to control navigation at ports. C. PRVATE SECrOR The PAF is reponsible for the three existing port to Fii (at Suva, Lautoka ad Levuka). 2.13 As indicated, there is extensive private MIPU is responsible for maintaining other ports sector involvement in Fiji's transport sector. and jetties. A proposal has been recently made With the exception of road freight operations to corporatize the PAF. and inter-island passenger transport, all transport services are subject to price regulation, and 2.10 Aviation. The Civil Aviation buses ae subject to service regulation. Road Department (CAD) in the Ministry of Tourism, transport services are provided by private Civil Aviation and Energy is responsible for operators, with the exception of truck operations economic, regulatory, air safety, and policy by governmnnt agencies and by cooperatives for matters. The Civil Aviation Authority of Fiji their own use. Private contractors are used by (CAAF) is a statutory authority which owns Goverrinent for some road construction, Nadi International Airport (NIA)-where its although this has been to date very limited. The headquarters are lo^.ater1-and is responsible for Government is involved in the provision of inter- developing and operating the airport; it manages island shipping services, but the sector is other do:mestic airports on behalf of the dominated bv private sector operators. The government. CAAF also provides air navigation Government's involve,ment in air services is only and iLcilities and services, flight information indirect, througli thc ownership of shares in services, and assists the CAD with accident airline companies. investigations where there is no conflict of interest. There are six privately-owned airpo.ts in Fiji. The Fiji Meteorological Service D. PUBIuC FINANCE provides weather information for the 7.5 million km2 Nadi Flight Information Region which is 2.14 In 1989 the Government of Fiji obtained operated by the CAAF. 36 percent of its locally-generated tax current income from taxes on income and profits and 31 2.11 There are two principal operators of percent from taxes on internationai uade. scheduled air services in Fiji: Air Pacific, the Current expenditure absorbed 89 percent of the largest domestic airline in the region and the Government's current income, a lower international flag carrier of Fiji, (in which the proportion than generally occurs in South Pacific Fiji Government owns 77 percent), and the countries. much smaller Fiji Air (in which the government also has a shareholding). Other domestic 2.15 Development expenditure in 1989 airlines include Sunflower Airlines and private comprised FS94.8 million of capital expenditure and F$23.3 of net lending, equal to 6.4 percent .7- of GDP. Foreign grants to Fiji which passed hrough the government's accounts were, in comparison, F$19.6 milli . Fiji is considerably less dependent on grant assistance than other countries in the South Pacific, and has borrowed from the World Bank and Asian Development Bank (ADB) on several occasions for transport development t'rojects, most recently for a road upgrading program (IBRD in 1989) and a road maintenance program (ADB in 1988). E. HUMAN RESOURCES 2.16 In common witn other South Pacific countries, Fiji has a shortage of indigenous staff with appropriate technical and managerial skills. This shortage has been exacerbated in recent years by increased emigration. Senior positions in government are held by Fijians. There are a number of expatriate staff in line positions in PWD and CPO. These staff are mostly fiunded through bilaterally-supported staffing assistance schemes and (in PWD) through rnulti-laterally financed projects. -8- CHAPTER 3 ECONOMIC CONTEXT A. DzwA FOR TIAsPoRT Sumviczs and inplications of, structural changes in the modal composition and distribution of transport 3.1 Transport demand in Fiji is influenced by demand, warrant timely investigation, especially the dominance of Viti Levu in terms of with respect to strategic modal investment economic activity and population, and their alternatives. widespread distribution on the island. Forestry and sugar dominate activity at the western end of 3.2 Carriage of sugar cane has been the island. These primary industries, together estimated to account for 40 percent of vehicle- with tourism and export manufacturing kilometers by heavy vehicles (see Section 4.A industries, are supported by the international below). Road transport is increasingly being airport and port at Nadi and Lautoka, used for the carriage of sugar cane to mills to respectively. The tourism industry has expanded complement the use of the dedicated cane from the western end of the island along the railway system. With annual sugar production southern coast and, in recent years, off-shore in the order of half a million tonnes, there will Viti Levu islands and in the vicinity of Nadi and be serious implications for road infrastructure Savusavu. With its large population and service (and potential road damage) if this trend and industrial activities, Suva dominates continues. Road traffic to and from ports was activities at the eastern end of the island. The estimated to account for 26 percent of heavy island is comparatively small, and there is the vehiLle traffic. potential for considerable intra-island road travel. Given the deteriorated condition of the 3.3 Local maritime trade at Fiji's three main inter-town gravel/earth roads, it is probable that ports is small compared with international trade the traffic volumes and trip distribution of road (see Table 3.5 below), and is largely related to transport demand on the island will change as the distribution of imported products from Suva roads are upgraded. While the existing paved and Lautoka to other islands. The trunk inter- road conditions are good, there is an increasing island shipping routes are well-served. Many of number of full containers reported to be carried them are operated from local ports to minimize by road from Suva to Lautoka to use the latter shipping distance, taking advantage of road links as the export port. Investment at Lautoka port within the islands to provide access. could further encourage this traffic. Roll-on roll-off vessels could emerge as another means 3.4 Inter-island trade has been affected by for moving containers between the two ports. changes in industrial location and transport This raises the question of total transport system services. For example, the introduction of roll- costs, including vehicle and vessel operating on roll-off ferry services and relocation of costs, accident risks, transit times and coconut oil processing from Suva to Savusavu investment costs. The contributing factors to, were the main contributing factors to a 23 -9 - percent reduction in the inter-island freight island trade. Services to some smaller islands passing through the three main ports in Fiji in are not commercially viable. This is a matter of 1988. The latter reduced the carriage of copra concern to the Government which considers, for through the port of Suva by 20,000 tonnes. social and economic development reasons, that These structural changes will continue to occur. the regions should be provided with a threshold For example, completion of a wharf at Levuku level of transport service. in mid-1991 for PAFCO (the government-owned fish canner) will enable direct export of tuna fish 3.6 International trade accounts for a large from the port; at present much of the canned and increasing proportion of Fiji's GDP (see fish is carried by roll-on roll-off ferry from Tables 3.1 and 3.2). In contrast with most Ovalau island to Natovi on Viti Levu and thence Pa c Island countries, imports and exports are by road to Suva for export. in approximate balance. Exports are dominated by sugar, though most other categories of 3.5 Travel demand to outer islands in Fiji is exports have grown more rapidly. The United limited by their low population and the modest Kingdom is the single largest destination for Fiji local economic activity on them. However, exports, accepting about a third, of which a there is no consolidated data on travel demand large proportion is sugar (see Table 3.3). Other generated by them. There has been a decline in trade is focused on the Pacific rim, in particular the movement of copra withn Fiji which has Australia, New Zealand and, increasingly, Asia. removed much of the historic base load of inter- A little over 10 percent of trade has been Table 3.1: FUi-VALUE OF EXPORTS BY TYPE OF PRoDuCr, 1985 - 1989 (US$ million, nominal prices, fob) Item 1985 1986 1987 1988 1989 Est. Sagar 97.0 118.1 152.3 137.8 144.8 Molasses 5.6 7.0 8.7 8.0 7.1 Coconut Oil 6.6 3.7 2.5 2.4 3.7 Gold 18.9 34.1 41.4 57.0 49.0 Fish Products 11.9 16.1 20.5 33.7 35.1 Forestry Products 6.2 7.0 13.4 18.6 21.6 Other 20.9 27.8 34.4 51.5 93.1 Domestic Exports 167.1 213.8 273.1 309.8 354.4 Re-exports 69.9 62.2 60.9 58.2 64.6 Total Exports 237,0 276 0 334A MU 419 0 Total Exports as % of GDP 44 41 46 55 58 Source: Fiji authorities, World Bank (1991a). - 10- Table 3.2: FIJ-VALUE OF IMORTS, 1985 - 1989 (US$ milUon at current prices, dt) 1985 1986 1987 1988 1989 Food 69.4 68.6 70.1 81.0 82.5 Beverages & 'robacco 3.7 3.1 la La La Crude Materials 2.9 2.6 2.7 2.9 6.1 Mineral Fuels 100.1 72.6 61.9 62.0 99.6 Oils & Fats 9.1 5.2 6.5 8.1 6.7 Chemicals 33.7 36.5 32.8 46.2 52.2 Manufactured Goods 87.4 93.9 84.6 108.6 138.4 Machinery 79.5 102.7 73.7 97.1 152.4 Miscellaneous Articles 43.4 39.3 47.9 54.9 69.2 Miscellaneous Transactions 11.4 14.4 Lh Lb 68.6 IQoal 4407 Memorandum Item: Percent of GDP 45 39 43 53 58 La Included in Food. Lb Included in Miscellaneous Articles. Source: Bureau of Statistics, World Bank (1991a). destined for other Pacific Island countries; much only a quarter of exports were destined for of this has been in the form of re-exports, with Australia and New Zealand in 1987, about a half Fiji ports serving as a regional hub for of imports came from these countries. Trade transhipment. However, increasing with Japan and Asia are even more heavily manufacturing in Fiji may increase domestically skewed to imports. This imbalance between the manufactured components of exports to other origin of imports and destination of exports Pacific Island countries. Lautoka is the principal increases freight transport costs, but has been export port, accounting for all of Fiji's sugar accommodated by shipping companies. exports in 1989. A high proportion of Fiji's sea freight trade, particularly of exports, is bulk 3.8 Airfireight plays only a limited role in products or is containerized (see Table 3.5), international trade. Imports by air were 4,500 with concomitant effects on land transport to and tonnes (including mail), and exports 6,800 from ports. tonnes, less than or.e percent of that carried by ship. Nevertheless, airfreighted products are of 3.7 Imports are spread across a range of higher unit value, and a reasonably high average products. Most products are handled in bulk of 2.5 tonnes of air freight was carried per (for example, fuel) or are containerized. While departing international flight in 1988/89. - 11 - Table 33: FmI-ORIGIN AND DErlNNATION OF TK4DI FLowS, 196 5 1987 (FS million at current prices) Origin of Imports Dsatination of Exports 1985 1986 1987 1985 1986 1987 Australia 177.3 166.5 133.5 36.5 53.5 75.4 Now Zealand 86.3 83.0 78.7 17.3 20.9 23.8 Japan 76.5 71.3 56.4 6.4 5.4 12.4 EEC 46.9 60.8 84.0 110.8 - Of which: UK 24.5 21.6 21.9 83.0 108.7 138.8 United States 20.8 23.8 24.4 12.8 14.8 20.9 Pacific Islands 3.8 6.0 3.5 44.3 36.2 43.6 Asia 66.9 53.4 95.1 7.9 10.7 27.0 Others 22.8 21.0 45.6 62.5 59.1 65.5 Source: Bureau of Statistics. Table 3.4: FIJ-VISITOR AmUVAiS, 1985 - 1989 C 000) La Jwanur-August 1985 1986 1987 1988 1988 1989 Australia 89.5 86.3 65.4 75.2 45.2 59.6 New Zealand 19.5 22.7 16.2 21.5 14.2 18.7 United States 49.6 69.7 47.0 42.1 25.4 22.0 Canada 18.9 23.7 16.8 16.9 9.9 10.6 Japan 12.6 11.8 5.5 3.4 1.8 8.6 United Kingdom 7.7 10.0 8.5 8.4 5.0 7.5 Other Europe 12.7 15.8 15.7 20.5 12.4 15.8 Pacific Islands 11.9 12.8 11.2 14.2 9.1 11.9 Other 5.8 5.8 4.5 5.7 3.6 4.4 :>al 2Z 251J 18I9 2QL2 126 8A La Excludes cruise ship passengers. Source: Fiji authorities and World Bank (1991a). - 12 - Table 3.5: FUI-FREIGHT MOVENr AT MAJOR PORTS, 1989 ('000 tonnes) International Local Import Export Import Export Total Suva 479.4 156.7 28.7 55.0 719.8 Lautoka 463.9 666.5 6.5 55.7 1,192.5 Levuku 8.9 1.5 20.1 12.2 42.7 I31 952 824.7 122 9 9 Comprising: Container Traffic 279.9 137.3 sugar 0 274.3 Other Bulk Products 489.1 364.9 Other Products 183.2 48.2 Not available. Source: Ports Authority of Fiji. Table 3.6: FIJ-MACROECONOMIC PROJECrlONS, 1985 - 1999 (Growth Rates, in percent per annum) 1985-1989 1990-1994 1995-1999 (a) CM Agriculture 5.4 3.6 2.9 Industry 2.0 7.1 6.3 Services 2.8 6.2 5.4 (b) Irad La Exports 10.1 6.6 5.5 Imports 10.2 5.8 5.5 La Goods and Services. Source: World Bank (1991a). - 13 - Excluding the effects of the coups d'etat in 1987, imports by air to Fiji have declined continuoujsly (and by a total of 17 percent) since 1984/85 while exports have, with the exception of 1985/86, risen continuously (by a total of 74 percent). 3.9 Since 1987, Fiji has taken successful steps to stimulate agricultural investment, to promote labor-intensive manufacturing for export, and to encourage growth in tourism. These areas of activity have strong trade links, resulting in increased demand for both domestic and intenationa transport. B. CouwNm DvEopm STRATEGY 3.10 A recent examination of prospects for economic growth in Fiji (World Bank, 1991) has forecast declining economic growth in agriculture but considerably higher rates of growth in industry and services (see Table 3.6). There is potential to increase production in the sugar industry, which would reinforce present and emerging transport demand patterns in that sector. However, the Government may seek more diversified agricultural production, which could result in new patterns of transport demand. Manufacturing growth will be focused on exports; it is likely that much of this growth will occur within easy access of the ports at Suva and Lautoka. Tourism is forecast to increase in the order of 8 - 10 percent per annum. The tourist industry will expand into new geographical areas of Fiji, including the off- shore islands of Viti Levu, the Nadi vicinity, and, to a lesser extent, outer islands. This will also induce new travel patterns, in particular for road travel on Viti Levu. - 14 - CHAPTER 4 TRANSPORT SUBSECTORS A. LIN TRANroaT 4.2 Road investment has fluctuated (in nominal terms) between F$1 million and FS2 4.1 Road Infrstrus ture. The road network million annually between 1986 and 1990, and is in Fiji expanded rapidly from about 2,600 km in forecast to rise in 1991 because of an EC grant 1970 to 4,671 km in 1984, but has incroased (see Table 4.2). In contrast, investrmt in 1983 only marginally since then as emphasis has been was F$10.3 million (nominal), including FS7.1 given to road rohabilitation and maintence. In million upgrading the Suva - Nadi Queens Road. 1987 there were 4,651 km of roads in Fiji, 90 The shift in emphasis from construction of new percent of which was on the two main islands roads to rehabilitation of existing roads is (see Table 4.1). The PWD is responsible for reflected in the rise in expenditure on upgrading maintenance of all but 106 kim of the roads, the of the order of F$7.7 million in 1983 to in the latter being roads which have not been order of F$20 million annually in recent years. constructed to a specified standard. Sealed roads represent one- quarter (703 kim) of the roads on giv Rehabilitation expenditure has been Viti Levu, but only 6 percent (91 km) on Vanua given a boost through three specific projects: the Levu. Table 4.1: FUI-RoAD INVENTORY, 1987 (kilometers) 1987 1984 Island Main Secondary Country Other Total Total Viti Levu 713 298 1,656 181 2,848 2,797 Vanua Levu 454 346 680 10 1,490 1,375 Taveuni 84 - 32 32 148 147 Ovalau 56 - 8 - 64 57 Other - 327 - 327 275 :QaI: 1987 J 644 20 m A 4&L : (1991) (1,340) (648) (2,793) (212) (4,994) Source: Public Works Department. - 1S- US$23.4 million, World Bank-financed Fiji 4.4 Expenditure on roudne maintenance Road Upgrading Project directed to Viti Levu (F$6.7 million in 1983) has fluctuated between and Vanua Levu; the US$18.1 million ADB- F$6.3 million and FS8 n million in nominal assisted Road and Bridge Maintenance Project terms annually since (sw Table 4.2). In real (with a loan component of US$13.0 million) terms, the expenditure has been declining. which is focused on resealing about 35 percent There is an urgent need for the government to of the sealed portions of the Kings and Queens mobilize increased resources for road Highways (the northern and southern halves, maintenance, in particular to ensure that the respectively, of the circuminsular road on Viti benefits of the recent investment in road Levu); and a US$5.0 million upgrading of Ba rehabilitation are sustained.' and Sigatoka bridges to be undertaken with assistance from Korea (yet to be finalized). 4.5 Road construction has been undertaken Expenditure on these projects was nearing by PWD through force account and use of completion in 1991. A second road project private contractor on an exceptional basis (cofinanced by the Bank/ADB and Japan) has (including an international source). As with the commenced and will continue the process of Bank's First Highway loan in the 1970s, there upgrading the existing road network. have been difficulties in the use of international contractors. However, the ICB process has benefits in developing bidding and management Table 4.2: FUI-ROAD EXPENDITURE BY MnsITRY OF INFRAsRUCTUtE AND PUBLIC UTUTIES, 1986 - 1991 (F$ '000 at current prices) 1986 1987 1988 1989 1990 1991 Est. Administration 1,861.3 1,734.2 1,412.3 1,749.3 1,786.7 2,008.1 Routine Maintenance 7,457.2 7,977.5 7,349.7 8,504.0 7,640.2 6,830.2 New Roads and Bndges _a 1,483.1 1,939.0 961.6 1,028.0 2,029.3 3,145.0 Road and Bridge Upgrading: * Routine Upgrading b 5,977.0 3,386.5 873.3 878.5 927.6 1,150.0 * Road Upgrading Project (IBRD) - - 19,399.6 14,340.5 17,278.4 3,843.0 * Road & Bridge Maintenance Project (ADB) - - 6,870.1 7,787.6 8,615.0 * Ba & Sigatoka Bridges (Korea) - - - - 496.6 1,370.0 Subtotal (Upgrading 5,977.0 3,386.5 20,272.9 22,089.1 26,490.2 14,978.0 TAW 16.778.6 15.037.2 29.996.5 33.370.4 37.946.4 26.91.3 La Include ependiture uing donor funds. lb Includes approximately FSS00,000 p.a. for periodic maintenance. Source: Ministry of Finance and Ministry of Infastructure and Public Utilities. - 16 - skills. PWD undertakes routine maintenance 44,461 in 1986, but then declined to 37,452 in activities. 1988. In 1988 the number of vehicles registered was 90 percent greater than the number of 4.6 Road planning in recent years has been vehicles licensed in that year (see Table 4.3). It focused on project identification and appraisal has been estimated, on the basis of a review of for the current Bank and ADB road these and other data, that about 44,500 vehicles rehabilitation projects. The work has been were in use on roads in 1988 (Roughton, 1989). undertaken by MIPU using consultants. As the The fleet was estimated to be composed on last multi-modal national transport planning 22,050 cars, 1,800 taxis, 2,050 hire cars, study for Fiji was undertaken in the late 1960s, 14,200 light commercial vehicles, 3,350 trucks the government plans a new study which will and 1,050 buses. It is likely that vehicle include the establishment of a small transport numbers have increased since the country's planing unit in MIPU. economic recovery and reductions in import duties on vehicles. The number of licensed 4.7 Recent planning of road projects has vehicles in 1990 is estimated to be 43,600, given some consideration to substitution and however, this is not strictly comparable with the complementarity with other transport modes, but 37,452 licensed vehicles in 1988 as some this has been limited. Potential developments in vehicles in use in 1988, but unlicensed then, all modes should be considered in identifying may now be licensed. Formation of the and appraising road development projects. No proposed Road Transport Authority could study has been made of the potential for changes provide the opportunity to amend the present in the split of travel demand within Fiji and road vehicle registration and licensing system to between modes, and uniform rates of traffic eliminate its present deficiencies. growth typically have been assumed for all roads in the evaluations. This may not be a sound 4.9 Transport Task. It is probable that planning assumption. For example, the internal trucks will continue to increase their modal rate of return for upgrading of the Lodoni road share in the carriage of sugar cane. There are on Viti Levu was a marginal 12 percent; the no available estimates of the extent of the road is under consideration (but t currently present role of trucks in the carriage of cane, but programmed). The road leads to A itovi where the sugar railways generally dominate the a roll-on roll-off ferry travels to Ovalau. As activity. Notwithstanding this lesser role, the discussed above (paragraph 3.4) the carriage of carriage of cane may account for 40 percent of canned tuna by road is expected to cease in the truck travel and substantial overloading (see near future when upgrading of the PAFCO Table 4.4). The prospects for increasing use of wharf at Levuku is completed. Traffic on the trucks for the carriage of cane should clearly road can be expected to decline. More have a major influence on road planning and generally, changes are occurring in vehicle size design. Analysis of He; vy Vehicle travel (Table and traffic mix; for example while traffic 4.4) was prepared using data and estimates of volumes have been static for the past 5 years on factors such as the quantity of freight despatched the Queens Road, tonne-km and container or received, the average load of trucks and movements are understood to have increased. distance travelled. The approach is constrained by data limitations, but provides a useful 4.8 Vehicle Fleet. Vehicles in Fiji are indication of the nature of the road freight task. required to be registered once and to pay an A quarter of the truck kilometers are related to annual license fee. The Principal Licensing port activities, reinforcing the importance of the Authority is responsible for these activities. The road/maritime interface. Main roads account for number of licensed vehicles rose to a peak of one-fifth of the road length in Fiji but carry two- - 17- Table 4.3: FUI-LiCENSED VEUCLE, 1988 Licensed Vehicles Central/ Eastern Western Northern Registered Region Region Region Total Vehicles Car 10,201 9,640 2,008 21,849 34,895 Light Utility 3,238 4,238 2,401 9,877 Heavy Truck 554 956 604 2,114 i3'523 Bus 322 374 110 806 1,294 Other 709 703 1,394 2,806 11,696 Tod 15.024 15.911 AM 37,452 71.408 Source: Departnent of Road Transport. Table 4.4: FmI-HEAVY VidiCLE TRAVEL, 1988 (Vehicle Kilometers '000) Urban Main Secondary Country Logging Total % Truck kilometers: Cane 548 8,417 2,206 1,447 0 12,618 40 Sugar 63 2,038 0 0 0 2,101 7 Logs 10 25 45 79 253 412 1 Timber 29 382 147 29 0 588 2 Port Traffic 3,124 3,036 1,586 481 0 8,227 26 Agricultural/ Industrial 337 6,061 830 43 0 7,271 23 Total 4=112 19,959 4,8142 20 2 31.218 I1 % of Total 13 64 15 7 1 100 Bus kilometers 8,877 17,632 6,201 1,517 0 34,228 % of Total 26 52 18 4 0 100 Source: ADB (1989a). - 18 - thirds of the truck traffic. Bus travel Is similarly to lenient enforcement, notably on axle loads. concentrated on main roads, illustrating the There are considerable opportunities to improve importance of Inter-town travel. transport efficiency by relaxing the control of fares and tariffs, reforming the system of road 4.10 User Charges. Vehicle license fees were user charges and enforcing axle load limits.t" last increased in 1988 and are under review. This was the first increase for many years and 4.13 Road safety has been an issue of license fees rose by about 300 percent. The fees sufficient concern to have warranted a specific remain relatively low, at F$38 annually for a car review (ADB, 1989b). The number of accidents with 1,250 cc engine and FS120 for a 10 ton has been relatively constant during the 1980s. truck. Vehicle registration and permit fees were While considerably lower than accident rates in left unchanged, the former being F$10. Africa, the rate is, at 17.1 fatalities per 10,000 vehicles, considerably higher than the rates of 4.11 Fuel taxes are the principal source of about 2 fatalities per 10,000 vehicles In Europe, revenue from road users. They accounted for the USA, and Japan. Forty-one percent of the 72 percent of revenue from road users during fatalities in Fiji were pedestrians, of which 42 the period 1986 to 1988, compared with 12 percent were under 14 years old. Statistics percent from licenses and 10 percent from attribute about 75 percent of accidents to import duties (ADB, 1989). Cost-recovery careless or dangerous driving, while aicohol is during this period for various classa of vehicles cited as the cause in only 3 percent of cases; has been estimated based on this revenue and an alcohol is understood to be a greater problem analysis of road costs. The resulting data (see than the data indicate. (Compulsory use of seat Table 4.5) indicates: passenger vehicles have belts and use of breath testing were introduced high rates of cost-recovery; trucks pay less in early 1992.) There is a need to establish an revenue than their (separable) cost to the road improved accident data base and for PWD to system; and the smallest commercial vehicles introduce further initiatives to develop traffic impose costs about equal to the revenue obtained engineering skills in PWD. This will improve from them.9 The income from road users via utilization of accident data for the identification road user charges and taxes should be attributed of high accident rate locations and the to cost recovery and any surplus associated with development of remedial measures. Installation general taxation. The particularly low level of of appropriate road signs, markings and safety cost-recovery for medium trucks is exacerbated features are required. Amendments to the if extensive overloading of the vehicles and their Traffic Act have been drafted to enhance its consequent damage to the road pavement is safety features; enforcement and education are taken into account. needed to modify road use related behavior. 4.12 Transport regulation. As previously 4.14 Institutional Performance. The PWD noted, fares for buses and taxis are controlled by has developed considerable skills in road the Government through the Road Transport engineerin-. At present it depends on Department. Providers of public transport considerable number of expatriate staff. Its services have been experiencing financial skills in planning and traffic engineering need troubles and service standards have deteriorated. enhancing. There are weaknesses in the present It is incongruous that the operators of those arrangements for control and regulation of road vehicles with the highest levels of cost-recovery transport. These have been recognized, and a should provide services at tariffs which constrain proposal made to combine the three authorities financial returns, while operators of trucks into a single Road Transport Authority. which do not achieve cost-recovery, are subject Legislation to do this has been prepared for - 19 - Table 4.5: FI-CoT-RECOvERY sy VEHcLz TYP, 1986 - 1988 (F'$) Vehicle Net Vehicle Weight Road Cost Revenue Ia Cost Recovery Car 241 533 221% Taxi 241 2,019 838% Light Utility <2 tonnes 368 424 115% Light Truck 3-4 tonnes 910 1,019 112% Light Truck 4-S tomnes 2,419 1,390 57% Medium Truck 5-6 tonnes 3,918 1,069 27% Medium Truck 6-8 tonnes 4,910 1,407 29% Heavy Truck 8-12 tonnes 2,948 1,369 46% Bus 970 1,994 206% La Based on gasoline fuel for cars and taxis and diesel for other vehicles. Source: ADB (1989). some time, but not yet implemented. The The project involves upgrading of 147 km revised legislation affects other areas of traffic of gravel and sealed roads. The external operations (for example, safety) and financing toward the F$1 18 million impediments to its passage should be reviewed. project involves US$18 million from ADB, US$15 million from IBRD, and 4.15 Future development plans for the road US$6.5 million from Japan. transport subsector have been recently prepared for an aid round table (GOF, 1990). The policies and strategies identified by the B. MARrrME TRANSPORT government were: increasing funding for road maintenance, securing external funding for road Traffic Demand rehabilitation, construction of new roads to rural and isolated areas for social and economic 4.17 Port TraMc. Lautoka is Fiji's busiest development, legislative and enforcement actions port, and its principal export port (see to reduce vehicle overloading, and a national, Table 3.5). All of Fiji's sugar and woodchip multimodal transport study. exports pass through the port. Timber forests are now reaching production stage, and exports 4.16 Road transport proposals submitted for of woodchips have increased over a few years external assistance include:" from a minimal quantity to 16,400 tonnes in 1989. Traffic at Lautoka port has grown more * Second Road Upgrading Project, rapidly than at Suva port (see Table 4.6); this cofinanced by the Bank, ADB and Japan trend is expected to continue. Ninety-one (Exim), and the Government, with an percent of the cargo volumes at the three ports expected total cost of US$70 million. for which the PAF is responsible (Suva, Lautoka -20- and Lovulcu) wa intnational In 1989, though 4.19 As indicated above, domestic freight local vessels accounted for 62 percent of movement at the three principal ports declined shippig movements. substantially in 1986 because of a general decline in copra and relocation of a coconut oil 4. 18 Port efficiency is facilitated by the large processing plant from Suva to Savusavu. proportion of traffic which can be handled in Consolidated data on traffic are not available for bulk. Only 51 percent of international freight at ports other than the PAF ports. There are no the three PAF ports required stevedoring in data and little knowledge of traffic carried by the 1989. Moreover, PAF reperts that 81 percent informal sh.pping sector. of conventional traffic in 1989 was containerized. Table 4.6: FUi-M =TIME TRAmC AT MAOR PORTS la, 1985 - 1989 1985 1986 1987 1988 1989 A. Shipping Movements (No.) Foreign Vessels * Cruise 87 56 42 37 53 * Bulk Cargo 397 396 444 441 476 * Tanker 185 176 175 189 190 * Other 177 149 139 219 241 Subtotal (Foreign) 8 777 8 8 2 Local Vessels 2,251 2,000 1,933 2,477 1,580 B. Cargo Movement ('000 tonnes) * Import 870.2 920.6 734.6 734.9 952.2 * Export 559.0 499.2 593.4 719.6 824.7 * Local 228.0 188.2 206.0 159.3 178.2 l 1.657.2 1.608.0 1.534.0 1.613.9 1,955.0 Distributed as: Suva 725.7 706.4 650.0 585.2 719.8 Lautoka 905.7 882.3 848.4 984.8 1,192.5 Levuku 25.8 19.3 35.5 43.8 42.7 L& Traffic at Suva, Lautoka and Levuku. Source: Ports Authority of Fiji. -2! - Shipping Operations 4.24 Lack of information on the informal shipping sector raises concern at the relatively 4.20 Formal inter-island shipping is provided limited number of outer islands served by the by the private sector, the government shipping formal shipping sector. While there are oceanic fleet operated by the Marine Department. features which constrain inter-island navigation, Informal services are operated by the private it is possible that the irformal shipping sector sector, but there is little information on their has, or could develop, the capacity to make a scale and services. contribution to distribution and consolidation activities at selected ports on outer islands. This 4.21 Atpresentnineprivatecom,paniesoperate could reduce the need for provision of higher 39 vessels. This scale is down from 1984 when cost, formal shipping services to, and the need eighteen cperators owned 57 vessels. A to develop complementary jetty facilities, for all contributing factor to the consolidation was the small island communities. introduction of four roll-on roll-off vessels by two operators in 1983/84. The effect of this 4.25 The government fleet operated by the new technology was a marked increase in freight Marine Department now consists of 30 vessels and passenger traffic, however, it forced smaller (down from 35 in 1988 and 40 in 1985). The operators onto less viable routes and, eventually decline is a,ttributable mostly to disposal of older for some, withdrawal from the industry. vessels. The present fleet includes general purpose vessels and specialist vessels such as 4.22 Three of the present companies, with dredges, medical vessels and vessels to support nine vessels, are the principal operators in the construction and maintenance of navigational industry. Between them, these major operators aids. The objective of the government fleet is provide almost daily services between the main primarily to serve the inter-island shipping needs islands of Viti Levu, Vanua Levu and Ovalau. of government. When available, the vessels are These three islands account for over 94 percent used for commercial purposes to generate of the population of Fiji. A feature of these income. It was estimated that the government services is their operation from minor ports. fleet cafrried about 7 percent of total inter-island Ship utilization is improved and total travel freigi.. and 6 percent of inter-island passenger times for passengers and freight reduced by movemeints in 1985. The vessels are alse taking advantage of the faster travel times by chartered to private operators for international complementary land transport. This pattern of trips. Jt is the government's intention to operation is dependent on adequate road links to withdraw from shipping routes which can be the ports. At least weekly services are provided handled by the private sector. to smaller islands such as Taveuni, Koro, Gau and Kadavu and monthly services to the Lau 4.26 Government has become further involved Group and some other outer islands. in commercial operations (for agricultural commodities) through services operated by the 4.23 Much of the private vessel fleet is National Trading Corporation (using vessels composed of old vessels. In any event, the previously operated by the Auxiliary Unit of the limited traffic on routes to the smaller, outer Fiji Military Forces). The implications of these islands will encourage the use of older vessels are not documented.. on these routes to maximize service and profit potential. It is also possible that further 4.27 Route licensing of inter-island shipping consolidation of the industry will occur, after services has been recommended by a study of which new investment in vessels may emerge. rationalization of inter-island shipping services (ADB, 1986d). Regulatory intervention was - 22 - recommended on the basis of enhanced safety deteriorated with age and heavy use and is in and an improved commercial environment. need of rehabilitation; investment in the port is (These recommendations have not been taken- not justified in financial terms and PAF has no up.) Safety matters do not require route plans for significant investment in it. licensing and, given the consolidation of the formal inter-island shipping industry since the 4.30 Other investment by PAF at Suva and time of the study, these recommendations Lautoka has focused on gradual upgrading to warrant re-assessment. improve efficiency, for example, to reduce vessel turnaround times and to improve cargo Port and Marine Facilities handling. Particular attention has been given to Lautoka port in recent years with improvements 4.28 There are three major ports in Fiji: at incI;ding rehabilitation of the 30 year old Suva and Lautoka on Viti Levu and at Levuku Queeas wharf used for passenger and container on Ovalau. The ports are owned and operated services, a fishing port, and a new privately- by the Port Authority of Fiji (PAF). Privately- owned 'w-odchip loader. The PAF has a FS12.8 owned terminals are located at the PAF ports million loan facility with the European (especially at Lautoka) primarily for the handling Investment Bank which will be used for of bulk materials. Other significant ports or reclamation works and expansion of Lautoka deepwater anchorages are located at Malau, port, in particular to accommodate container Savusavu and Vudu Point. There are some 60 ships. Continuing improvements will also be inter-island shipping origins in Fiji, of which made at Suva, for example, it is proposed to about 20 currently have jetties. There is no relocate local vessel facilities to release space for fixed infrastructure at the other 40 locations. international services. There is little formal knowledge of the usage of jetties. It appears that some have deteriorated, 4.31 Investment by the government in other in part by damage caused by large vessels. ports in Fiji has been an average of F$380,000 annually (1989 prices) between 1985 and 1989. 4.29 The two principal port investment AIDAB provided F$2.0 million (1989 prices) of projects undertaken in the last decade include a assistance in the early 1980s for development of US$7 million ADB-assisted project to develop jetties on outer islands. The government is cargo handling equipment and storage and proposing an expanded program for the circulation areas at Suva port and an AIDAB- construction of jetties on small islands. assisted project to develop a wharf at Levuku for PAFCO (the Government-owned fish carner) to 4.32 There are no serious capacity constraints enable direct export of produce overseas. The at the major ports in Fiji, although storage at PAFCO wharf is adjacent to the PAF wharf. In Suva is limited. With the exception of a addition to these two wharves, a third wharf is substantial project to expand the capacity of located at Buresala (at the western end of Lautoka port, which is expected to be completed Ovalau). The latter wharf is used by the roll-on in early 1993, there are no major port roll-off ferry service which operates to Vanua investment needs. (Proposed upgrading of Levu and to Natovi on Viti Levu. In total this Levuku port is not likely to be economically represents a considerable amount of wharf warranted at the present time.) There will be a capacity for the limited sea traffic to and from need for ongoing, small investment projects to the small island. Moreover, development of the ensure capacity to accommodate future traffic wharf for PAFCO may detract from the potential demand. Much of this investment will be to develop Levuku port, the weakest of tha three directed to measures to improve port efficiency. PAF ports. The PAF wharf at Levuku has - 23 - Private sector investment will occur in associated government shipping fleet, shipyard and port facilities, such as bulk loading equipment. slipway. In 1989 these latter two activities accounted for 80 percent of the Department's 4.33 As a self-financing statutory authority, expenditure and 90 percent of its staffing (see the PAF has a considerable interest in Table 4.7). A previous review indicated that the undertaking adequate maintenance of its shipyard could be profitable and that it be facilities. Expenditure by the PWD on corporatized. However, this same review maintenance of jetties on outer islands has been argued that the slipway (which is unlikely to be an average of F$26,000 per year (1989 prices) financially viable) should remain in government between 1985 and 1989. This appears hands in the nationai interest (ADB, 1986c). inadequate. The annual expenditure to While the number of employees associated with adequately maintain the investment by AIDAB in the shipyard was reduced from 333 to 235 the early 1980s would be of the order of between 1985 and 1989, revenue from slipping FS40,000 alone, with additional summ required fees and other income In 1989 was only 28 to maintain other infrastructure. Adequate percent of the direct costs of shipyard and maintenance is the most economical means for slipway activities. In the meantime, the only sustaining port facilities in the outer islands. major private sector shipyard operator has Continued deferral of maintenance and lack of a ceased operations. Given the lack of success of sinking fund (or equivalent) for rehabilitation/ securing profitable operations since the review in replacement will result in significantly higher 1986, it is now desirable to review the objectives life-cycle costs and financial strains. and prospects for the shipyard under different operating options. Institutional Performance 4.36 The government fleet operations 4.34 The Port Authoriry of Fiji has achieved a accounted for 60 percent of the Marine financial surplus after operating and capital Departnent's expenditure in 1988 (see churges in each year from 1985 to 1989 (with Table 4.7). Vessels are productively utilized the exception of 1987) with an average return on only about 38 percent of the time, are under operating assets of 0.9 percent over the period. repair for 32 percent, and are idle for the It has increased its efficiency markedly; the remainder. A report of possible divestiture of number of employees was reduced by 10 percent the government shipping fleet (ADB, 1986d) during these five years while cargo movement recommended that the fleet be reduced to 25 increased by 18 percent. The PAF is developing vessels and that a user charging system be a corporate plan and has major objectives to introduced. While the fleet size has been improve its marketing and operating efficiency. gradually reduced, charges have not been A proposal has been made to corporatize the introduced. There is considerable economic PAF. This should further encourage improved merit in this proposal and its introduction should financial performance however, appropriate be reconsidered. The government is seeking to accountability and monitoring are required in sell vessels which are surplus to requirements. recognition of PAF's monopoly position at the It would be helpful to establish the fleet which major ports. Although scheduled for 1992, the Marine Department requires to undertake its corporatization of PAP has been deferred own responsibilities (i.e. enforcement of pending the developing of a general policy regulations and provision and maintenance of framework by the Govermment. navigational aids) to assist the ordering of priorities for further vessel disposal and 4.35 In addition to its policy and regulatory replacement. functions, the Marine Department operates the -24 - Table 4.7: FUI-MARN DzPARTmmar INCOME AND ExpsNDnTU, 1988 (FS '000) F$ '000 Income Shipping tariffs 130.8 Slipping Fees 141.3 Light Dues 194.8 Other 64.8 lbtal SL37 Expenditure Administidon 403.7 Fleet Operations and Maintenance 2,202.4 Shipyard and Slipway 741.9 Shipping Office Regulatory 294.0 Navigational Aids 51.7 Toaw 3.693.7 Source: Marine Department. Planning to develop more jetties on outer islands and for route licensing are questionable and warrant 4.37 Incomplete understanding of domestic further investigation. The proposals need to be shipping services in Fiji impedes effective examined against alternative strategies. For transport planning and project identification, example, a strategy being pursued is to develop particularly for facilities and services on outer jetties on islands near existing inter-island islands. On the main islands there is a need to shipping routes to permit ships to stop briefly at explore the inter-relationships between road and the islands. Another approach in come locations sea transport to foster efficient response of the may be to develop road links on islands to avoid transport system as a whole to emerging trends the need for several jetties on a single island. in relative costs and demands. Particular issues Greater use might be made of the informal include: freight transport in the corridor between shipping sector for services within outer islands. Suva and Lautoka,12 road access to these two Technical and economic appraisal of these major ports, and road linkages to ports used for options requires a comprehensive understanding inter-island services. of both the informal and formal inter-island shipping industry, including present trends. 4.38 For inter-island shipping, there is a need to identify the most effective means for serving the transport needs of small islands. Proposals - 25 - 4.39 Those various planning issues reinforce (21 kn from Suva) and NIA. The number of the need for the proposed national transport international flights to Fiji has remained study. relatively steady during the second half of the 1980s, with a decline following the coups d'etat Investment Proposals in 1987 and a major recovery in 1989/90. 4.40 The only major investment proposal by 4.43 Domestic scheduled air services are government for the maritime subsector is provided to eight locations from Nadi and to ten replacement of jetties on three islands (Cicia, locations from Nausori, aside from the heavily Gau and Rotuma) at a cost of F$1.5 million. serviced route between the two airports. About The proposed new jetties could accommodate 63 return services are provided weekly from inter-island vessels, with the objective of Nadi, 78 from Suva and 30 between the two attracting services to islands with reasonably airports. The total market is segmented, substantial populations (for example, Rotuma has however, the Nadi-Suva route is now open. a population of 3,000 people). Funding for this Currently, Air Pacific, Fiji Air and Sunflower project has not yet been secured. serve the route. Air Pacific provides dedicated services between Nadi and Suva (Nausori) and 4.41 A major project is to be undertaken by Fiji Air provide services based from Nausori. PAF to expand Lautoka port. Other investment Sunflower Airlines and Turtle Airways also projects to be undertaken by the PAF will be provide services from NIA. Aircraft used for modest in scale. domestic operations are generally small, Air Pacific's ATR 42s being the largest aircraft currently in use. C. AVIATION 4.44 Services from Nadi are oriented primarily Air Routes to tourism needs, and four of the locations served do not have air links to Suva. Air links 4.42 International air services link Fiji from Suva serve domestic requirements, with at directly to almost all South Pacific countries and least twice daily flights to major centers such as to the principal sources of its tourist traffic (see Labasa, Levuka, Savusavu and Taveuni, and the air route diagram at the end of this survey). infrequent (usually only weekly) services to A transition has occurred as extended rang, small, outer islands. Nadi and Nausori airports aircraft permitted trans-Pacific services to are the foci for all air routes in Fiji excepting overfly Fiji. Although the number of transit services between the islands of Taveuni and services stopping at Fiji to refuel has declined, Vanua Levu. some six return trans-Pacific flights continue to involve stopovers in Nadi. Being the focus for Airport TraMc services to the South Pacific region, Fiji also serves as the hub for travel within the region. 4.45 Nadi International Airport recorded In this role it serves the tourist industries of 863,200 passenger movements in 1990/90, countries such as Tonga and Western Samoa 86 percent of which were international (see which have limited or no direct air links to Table 4.8). Its role as a hub and a transit point major origin markets, particularly Australia and to other countries in the Pacific, and as a New Zealand. Virtually all international flights stopover for trans-Pacific flights, is reflected in operate to Nadi International Airport (NIA). the large number of transit passengers, though The exceptions are some flights to Tonga and these are in general decline. Aircraft used for Western Samoa which include Nausori airport international flights to and from Fiji have -26- Table 4.8: FuI-PASSENGER AND AIRCRAFr MovEmEms AT NADI AIRPORT, 1985- 1990 1985/86 1986/87 1987/88 1988/89 1989/90 International Passenger Movements: Arrivals 260,321 270,894 200,281 266,667 300,188 Departures 269,308 289,990 217,037 273,387 312,523 Transit 210,911 196,342 142,857 168,230 125,163 T1 740,540 757.226 560.17 708.824 737.874 Domestic Passenger Movements 107,028 104,293 84,514 93,507 115,353 Aircraft Movements: International 5,252 5,462 4,456 5,496 6,522 Domestic 15,766 17,280 12,322 13,670 17,033 Other Domestic La 972 2,736 16,808 9,252 5,509 Total 21,2 25.478 33.58 28.238 29.064 Comprising: B747/B767/DC10 3,528 3,422 2,532 3,770 3,734 Other Jet 2,200 1,660 1,202 1,894 1,906 Other 16,262 20,396 29,852 22,574 23,424 /a Inmludes aerial work, military, private and training flights. Training flights account for most of !he annual variations. Source: Department of Immigration and CAAF. changed during the second half of the 1980s. increasingly focused at Nadi, and only a few Passengers numbers increased until 1989/90, flights each week now use Nausori airport. while aircraft movements were generally stable but involved an increasing proportion of large 4.46 Nausoriairportservesadifferentmarket wide-bodied jet aircraft. The number of to NIA, catering for fewer tourists and few passengers using the airport for domestic flights international services. The number of passenger follows the same pattern as international movements at Nausori thus fluctuates less over passengers; most domestic passengers are time than at NIA (see Table 4.9). Increasing transferring between international and domestic use has been made of propeller aircraft at the flights. International services have become airport, and the number of aircraft movements - 27 - Table 4.9: FLi-PASSENGER AND AIRCRAFT MOVEMT AT NAUSORI AItpT, 1985 - 1990 1985/86 1986/87 1987/88 1988/89 1989/90 Passenger Movements International 28,539 20,22- 16,294 13,689 14,309 Domestic 134,837 139,005 111,167 120,210 136,371 Total 163.379 159.227 127.461 13,l22 Aircraft Movements International 876 889 908 798 Domestic L& 14,419 13,661 10,874 10,482 Other Domestic 1,455 1,920 3,046 2,214 Total 16.75 16.470 14,28 13.494 Comprising Aircraft by Type: Jet (B737) 1,148 798 752 624 Other 15,602 15,672 14,076 12,870 La Scheduled and non-scheduled. Source: Department of Immigration and CAAF. has generally moved in line with passenger formulating policies and programs for future demand. development and maintenance of the airstrips. Passenger traffic at Labasa airport, the busiest of 4.47 Activity at other airports in Fiji has the airports, has changed little. The extent to increased slowly. There are, however, two which this change can be attributed to good sea distinct groups of airports; one with large links to Viti Levu will have implications for numbers of passengers and stable or increasing development of maritime and aviation facilities traffic, and the other with declining traffic. for inter-island travel in Fiji. The landing fee at While the number of passengers at airports in the domestic airfields has remained constant at the former group rose by 30 percent between $3 since 1966. At this level it has not been a 1984/85 and 1989/90, passenger movement at constraint to use of the airfields nor has it raised the other fourteen airports declined by 73 significant net revenue to contribute to airfield percent (see Table 4.10). Activity had ceased at maintenance. six of the airports by 1988/89, but recommenced at two of them in 1989/90. The reasons for this dramatic decline at so many of the smaller airports should provide useful lessons in - 28 - Table 4.10: FtU-PASSENGER AND AiRcRAFT MOVEMENTS AT OTrHER ALRPORTS, 1984 - 1989 1984/85 1988/89 Passenger Aircraft Passenger Aircraft Movement Movement Movement Movement Burea 11,710 1,354 15,387 2,058 Kadavu 4,781 678 4,912 590 Labasa 42,477 4,544 44,991 3,223 Malolo-Laiai 21,019 4,244 40,620 7,539 Mate4 13,182 2,247 13,433 2,901 Savusavu 12,466 1,811 17,504 2,538 Subtotal 105.635 14,878 136.847 18.849 Cicia 813 98 251 100 Gau 3,957 306 86 60 Koro 2,255 290 162 40 Lakeba 2,398 228 1,246 210 Laucala Island 282 102 - - Moala 2,092 210 602 102 Ono-I-Lau 22 12 - Pacific Harbor 2,701 1,337 989 485 Rabi 1,140 100 8 2 Rotuma 1,782 246 933 106 Saqani 19 4 - - Vanuabalalavu 2,212 230 1,133 172 Wakaya 455 146 - - Subtotal 20.128 30 S410 1.277 1k 125.763 18.187 142.257 20.126 Source: Passenger figures from airline returns. Aircraft movements from CAAF. Airport Fadflties and Investment to about 4,200 meters would be required to accommodate aircraft on direct services between 4.48 Nadi International Airport has a 3,200 Fiji and the continental USA. No such services meter runway suitable for use by wide-bodied are currently planned. Major investment at the aircraft (to 747 standard) on existing routes. airport in recent years has included a continuing There are no major capacity constraints to use of program to upgrade the passenger terminal and the airport at present. Extension of the runway acquisition of equipment. 13 - 29 - 4.49 Nausorl airport has a sealed 1,800 meter At present the CAAF receives a quarter of the runway which can accommodate aircraft such as departure tax at NIA only. This proposal is B737 which are used for some regional currently being considered by government. international services. There has been little investment at the airport in recent years. At 4.52 In 1988/89 the CAAF achieved a surplus, other airports the facilities are modest. The after interest and depreciation, of F$2.0 million, sealed airstrip at Labasa has deteriorated and has accumulated reserves of F$38.0 million. seriously, and services to the airport Increased overflying of trans-Pacific flights has downgraded. While services to some airports deprived the CAAF of landing charges and have ceased, the CAAF is obliged to continue revenue from concessions such as fuel and maintenance of them; in practice insufricient terminal facilities. However, the CAAF has funds have been expended on maintenance and continued to provide commercial services in its the airstrips have continued to deteriorate. Both very large flight information region. In 1988/89 Au hs and EEC aid funds were used for charges for thesesrvices provided 33 percent of development of these airstrips in the late 1970s its income. Technological advances in air and early 1980s. navigation will reduce the need for these services in the future and this is a cause of Operations and Administration understandable concern. Accordingly, the CAAF is exanining ways to develop further its 4.50 In addition to owning and operating the non-aeronautical revenue. The Fiji Prices and NIA, the CAAF manages Nausori Airport and Incomes Board must approve increases in some other airstrips on behalf of the Government. fees charged by CAAF (for example, the fuel The government reimburses the CAAF for the charge). cost of operating Nausori Airport and the other airstrips, while PWD maintains them. The Airline Operations condition of many of the airstrips is poor. Following a review of eighteen airstrips in 1990 4.53 Air Pacific is currently provided (GHD, 1990) it was necessary to close four of management services by Qantas Airways of them immediately for critical maintenance and to Australia. All services between FUi and require urgent repairs to two others. Potentially Australia are now operated as joint services. serious safety-related deficiencies were identified The generally static demand for domestic air in a further five airstrips, and less urgent works travel and changes in the distribution of demand for two others. Inadequate and inappropriate has placed financial pressure on the local use of recurrent funding for the airstrips has airlines. limited maintenance activities. Planning 4.51 Consideration has been given recently to corporatization of the CAAF. However, it has 4.54 Considerable planning for the not been recommended as many of the functions development of Nadi and, to a lesser degree, presently undertaken by it are not appropriately Nausori has been undertaken. A recent master located in a company, for example, licensing plan prepared for NIA (Bradfield, 1986) (ICAO, 1990). It has been proposed instead that identified the need for ongoing improvements, the CAAF become the sole authori.y for civil for example, construction of a new taxiway, aviation activities in Fiji with enlarged financial overlay of the secondary runway (and powers. This could include CAAF retaining all consideration of its extension) and extension to revenue from the international departure tax but apron areas. These improvements are now taking full responsibility for all airports in Fiji. included in CAAF's proposed investment -30 - program. The ICAO review of CAAF (ICAO, * Extension of the secondary runway at 1990) also prepared projections of future NIA, strengthening of runway and apron demand at all airports in Fiji and forecast areas and construction of a new runway income and expenditure for their operation and ($14 million). development. It has been assumed that the existing airstrips should be sustained. The cost 4.57 At this stage, no donor funds have been of doing so with little or no traffic at some, committed to these projects. Although some of should be assessed and alternatives examined. these projects may be commercially viable, to date, detailed evaluations of their viability have Project Proposals not been prepared. EEC funds are committed to a project to upgrade navigational and other 4.55 The government's objectives for air equipment at Nausori airport. transport are: to provide air service facilities within reasonable reach of the least accessible areas of the country; to maintain safety in D. INrERMODAL domestic air transport; to promote international air services so that they should not constrain 4.58 Fiji is reasonably well-endowed with tourist development; to ensure a high standard of transport infrastructure however, much of it has service at Fiji's Nadi and Nausori airports; and deteriorated. The process of rehabilitating the to promote the provision of air freight capacity road system has commenced. Several strategic (GOP, 1990). issues need to be addressed to ensure ongoing investment is used in the most effective manner. 4.56 Projects submitted to the International A number of these issues are intermodal. The Donors Round Table Meeting in 1990 included: proposed national transport sector plan should be an appropriate means for addressing these issues * iUpgrading of Savusavu airport, including and setting a sound framework to guide future runway rehabilitation and improvements development and operation of the transport to navigational aids and the terminal sector. It is important that the strategic issues ($0.75 million). be addressed as a pre-requisite to identifying and evaluating individual project proposals. This * Repairs to thirteen other domestic will first require a review of the future micro- airstrips ($1.2 million). economic environment for transport, particularly the regulation of services and cost-recovery * Development of an aircraft maintenance policies. center at NIA and relocation of an existing facility at Nausori airport ($10 million)."4 -31 - CHAPTER 5 TRANSPORT SECTOR DEVELOPMENT NEEDS A. IROWDUCTON transport regulatory agencies; the future of the Governmnt shipyard, dipway and shipping 5.1 Fiji has a substandal stock of tramport fleet; the roles of the Civil Aviation Departm ifh tructure, much of it developed during the and the Civil Aviation Authority of Fiji, and the 1970s and early 1980s. No to inadequate appropriate organizadon of the latter; the mainane and poor use, considerable appropriate structure of the Ports Authority of deterioratio in the quality of the infrastruct, Fij. Thes issues have been addrsed by the particularly roads, had occurred by the late Government, hut some are in noed of clearer 1980s. The government has responded to this resolution than has occurred to date. situation by initiating a major road rehabilitation program based on an assessment of upgrading 5.4 Tanport Regulation. As with other priorities. aspects of the economy, the Government took a interventionist approach to regulation and 5.2 Fiji is currently experiencing continued operation of the transport sector during the economic recovery. Given the economic 1970s and 1980s. The effect of this intervention policies being pursued, and under reasonable on constraining economic efficiency has not been climatic conditions and external economic adequately recognized. Nor has it necessarily circumstances, there are good prospects for achieved that which was sought, with the quality sustained economic growth in the 1990s. This of public transport declining at present and growth will exacerbate some of the structural shipping services to outer islands still considered changes in transport demand and supply which inadequate. There is a need to better understand are already evident. There is a need to respond the micro-economic structure of the transport to these changes :o ensure that the transport industry and to allow the industry to meet sector is efficient, future investment directed to transport demand in the most efficient manner. where it can be most effective, and transport Intervention should focus on ensuring safety, does not become a constraint to continued monitoring markets which are least contestable economic growth. and imposing user charges which support cost recovery and transport efficiency. B. GENERAL TRANSPORT SECrOR 5.5 Transport Strategy. Transport planning ISSUES and investment to date has been undertaken mostly on a modal basis, with limited cognisance 5.3 Institutional Responsibilities. of modal interactions and of the economic Government's responsibilities in the transport environment which dictates transport demand. sector are well-organized, and generally with There are a number of strategic issues which little overlap between agencies. Issues raised in must be addressed to ensure that ongoing recent years include: amalgamation of the road investment is made in the most effective manner, -32 - including fu1l social costs and bonefits. A The govenment wIll continue to depend on number of these issues are intermodal, for expatriate staff, but should seek to accelerate the example: transport in the Suva - Lautoka process of developing local skills by incroasingly corridor; the relationship between road and ferry using expatriate staff as advisors, trainers and services for inter-island travel; the relative through "twinning" arrangements with overseas merits of promoting maritime and aviation similar organizations. The governmnent could services to outer islands; growth in the use of also further tap the sklls base of the private trucks for the carriage of sugar cane; and sector by increasing the use of contractors to efficient charges for road users and for use of assist in infrastructure development and a range other transport infr atructure. Consideration of maintenance activities. should also be given to the issues which could in the future cause rapid change in the demand for transport services (as occurred with the C. LAND TXANSPORT SUBSECTOR introduction of roll-on roll-off ferries), for example, the effects of economic development 5.9 Cost-Recovery. The present disparity on Viti Levu and changes in the ports used by between cost-recovery for passenger and freight vessels on inter-island services. carrying vehicles, and the under-recovery ot costs for the latter, is inappropriate and leads to 5.6 A proposed national transport sector plan inefficient use of transport resources. There is should provide an appropriate means for a need to implement a revised scale and addressing these issues and setting a sound structure of taxation and charges which: reflect framework to guide future development and the considerable incremental cost that heavy operation of the transport sector. (Work on this vehicles impose on roads; ensure consistency in sector plan, financed by ADB, is scheduled for the level of cost-recovery fox similar vehicles early 1993.) used for similar purposes; raise sufficient revenue (consistent with efficient road use) to 5.7 Maintenance. Much of the present provide funds needed for road maintenance. deficiency in transport infrastructure is This will require: a considerably stricter attributable to inadequate maintenance in the approach to overloading of trucks, with greater past. Present and future rehabilitation projects enforcement and higher penalties; reduction in will not have lasting impact if routine and the cost-advantage to light commercial vehicles periodic maintenance are not improved. which compete with comparable buses for Funding and careful establishment of passenger transport; establishment of adequate maintenance priorities by asset are the principal and secure funds to efficiently allocate to road constraints to improved maintenance. It is maintenance. crucial that government accrue the necessary financial and human resources to deal with 5.10 A danger of delaying revision of road use effective maintenance management. Other taxation and charges to more appropriate levels potential constraints are the skills of PWD for is that inefficient structural changes in the use of managing and undertaking maintenance transport will occur on the basis of the present activities. charge.. For example, the use of trucks will be excessively encouraged by the present low 5.8 Human Resource Development. With charges imposed on them, leading to increased a shortage of adequately-skilled government staff road maintenance needs and, possibly, to at present, there is a need to continue training inappropriate decisions regarding road programs thit ('velop skills necessary to support development projects. governme,`5; &a,.ivities in the transport sector. *33 - S.11 Regulation. The basis for, and effect of, should take a more strategic view of future present licensing of routes and fares for public traffic growth, reflecting the role of individual transport services should be reviewed. Public roads and complementary modes in supporting safety should be treated as a separate matter in growth areas in the economy and other changes this respect; it is the responsibility of the which could significantly influence travel Principal Licensing Authority to ensure that all demand. road vehicles are in an appropriate condition to be licensed and drivers suitably qualifled. Low fares and improved transport services will be D. MARrma SuBsErit fostered by avoiding route monopolies and imposed fares. Rather, new operators should be S. 15 Inter-island Shipping. The considerable permitted to enter designated routes, possibly rationalization of the formal inter-island shipping under prescribed (though not prohibitive) industry during the 1980s demonstrates the conditions. The fares should be monitored, and, capacity of the industry to change in response to if necessary maximum fare guidelines indicated. market pressures, much of which can be attributed to the introduction of roll-on roll-off 5.12 Maintenance. Urgent attention is vessels in 1983/84. Tbe govenmnt should required to allocate increased resources to road accommodate continuation of the rationalization maintenance. Several major road rehabilitation and evolution of an efficient and appropriate programs were completed in 1991 and 1992; if scale industry. This will be facilitated by the improved roads do not receive adequate reviewing the need fc:, and preferably routine maintenance from the outset, the value of withdrawing, freight rate regulstion; establishing the investment will decline rapidly, and total clharges and taxation of the shipping industry transport system costs be higher than necessary. that are efficient and consistent; insisting that Given the seriousness of the existing situation, commercial shipping services provided by the and the history of budgeting practice and its Marine Departnent and the Fiji Military Forces shortcomings, consideration should be given to do not discriminate against the private sector. establishing a link between road user charges Given circumstances in the shipping industry, and a minimum funding level for road economic maritime regulation should be maintenance.15 unnecessary and consideration should be given to removing the regulation of freight rates and 5.13 Road Safety. The cost of road accidents establishing monitoring capability. to the Fiji economy is substantial and actions which will reduce the number of accidents 5.16 The provision of services to small outer shouild be implemented. Traffic engineering islands by the Marine Department fleet is costly, skil!s need to be developed to facilitate this and alternative, cost effective, means of defining improvement in road safety and to enh2nce road and providing an appropriate level of social capacity. service to these islands should be investigated. In this context, there is a need to identify the 5.14 Road Investment. The emphasis in the potential of the informal shipping sector and to rext few years will remain on rehabilitation of assess its use to support services within the outer the existing road network. These improved islands. roads will, for the most part, meet the needs of growth sectors in the economy. The priority for 5.17 Government Shipyard. It is the new road links should be those which provide Government's intention to promote efficiency, access to new agricultural, industrial and tourism cost effectiveness and increased productivity for developments. Selection of roads for upgrading the shipyard so that it can operate on a -34 . commercial basis, with a view to privatization in the continued deterioration. The value of future the medium term. Given the cost of ongoing capital Investment will be devalued without a subsidies, it is a schedule, of shorter rather than commitment to adequately funding maintenance longer duration, for this proces should be activities. Means for securing these funds from established. A formal business plan should be cost-recovery mechanisms should be examined, prepared indicating the timing and nature o' on a similar secure basis as for the roads financial and performance targets to be achieved, subsector. and actions to be taken in the event they are not. The Government should consider sale of the 5.21 Ports Authority of FIJi. The Ports shipyard "as is" if commercial operations are not Authority of Fiji has effectively managed and achieved within a specifled time, for example, developed the principal ports at Suva and two years. Lautoka. The future of the port at Levuka may need to be assssed in the light of the limited 5.18 Government Fet. There is a need to traffic at the port and the development of an make a distinction between the three present adjacent wharf for PAFCO. The Ports roles of the Government fleet: supporting Authority has operated as a commercial navigational aids and other formal maritime organization, albeit with a low rate of retur on obligations of the Marine Department; provision assets. Extension of PAF activities out , the of shipping services for Government agencies; three main ports (for example, into the inter- and commercial shipping operations. With island wharf at Suva) call for careful assessment. respect to the first role, the Department must The Government will need to develop sound retain the capacity to adequately service its reporting, monitoring and accountability maritime obligations and should define its vessel mechanisms to ensure that the Authority's needs for this purpose. ownership of the two principal ports in Fiji does not lead to inefficiency and excessive charges. 5.19 It is probable that the commercial shipping operations of Government inhibits 5.22 Maritimelnvestment. Investmentneeds rationalization of the inter-island shipping for the ports at Suva and Lautoka are adequately industry. The Government intends withdrawing catered for at present. The prime concern is from routes which can be handled by the private therefore with the development of jetties for sector and selling surplus ships. An immediate inter-island services. The provision of landing program to do so should be prepared and facilities at the forty inter-island origins without implemented. The same should apply to any existing infrastructure and rehabilitation or operations such as the chartering of ships to the replacement of existing facilities required at private sector. The provision of shipping another twenty locations exceeds existing services to Government agencies, including resources. To avoid the over-investment which services to outer islands not served by the may have occurred in the provision of airfields private sector, should, at a minimum, be treated on outer islands, the Government should on a commercial basis, with the agencies examine carefully whether investment in jetty charged accordingly. Preferably, the facilities will achieve the improved inter-island Government should also withdraw from the services desired. (Landing barges may be the provision of these services, chartering private superior approach at some locations). The sector vessels when required. strategy of developing berthing facilities to accomnmodate roll-on roll-off vessels on smaller 5.20 Maintenance. Maintenance of existing islands to attract stopovers by vessels currently jetties and wharves which are the responsibility operating nearby shipping routes could be of Government is inadequate, and will result in effective, but has the high risk of involving - 35 - over-investment. The need to invest in both 5.24 Aviation Investment. Past over- airstr.p rehabilitation and jetty development on investment in airstrips in Fiji is illustrated by the outer islands should be examined concurrently to declining use made of many of them, together identify opportunities for rationalization of with inadequate maintenance which has, from transport infrastructure. time to time, required airstrips be closed for emergency repairs. Alternatives to the proposal to use international departure taxes to fund E. AVITION SUBSECTOR maintenance of airstrips should be examined. For example, increLsing the current low landing 5.23 Institutional Arrangements. The Civil fees at these airstrips. A more detailed appraisal Aviation Authority of Fiji has effectively of the opportunity cost of upgrading little-used managed the development of Nadi airport. The airstrips is warranted prior to implementing proposal for the Authority to become the sole proposed projects to rehabilitate airstrips and agency for all civil aviation activities in Fiji, associated facilities. Including responsibility for all domestic airfields warrants a full assessment. In the longer term 5.25 The investment proposals for the option of separating the conmmercial, developments at Nadi Airport are substantial and regulatory and other activities of the Authority should be assessed on economic grounds, may need to be re-addressed. This may noed to together with the prospects of financing them wait until sufficient skills and resources are from airport associated fees and user charges. available to support more than one organization. - 36 - Endnotes 1. This transport sector survey is based on a mission to Fiji February 18-21, 1991. The mission members were Colin Gannon (Senior Economist and mission leader) and David Bray (consultant). A draft of this report was discussed with the Government of Fiji July 13-14, 1992. 2. See World Bank (1989). 3. The five other South Pacific island countries which were members of the World Bank at the time of this study were Kiribati, Solomon Islands, Tonga, Vanuatu and Western Samoa. 4. The World Bank country study of the Pacific Island Economies (World Bank, 1991a) presents a more detailed review of the Fiji economy. 5. As of June 1992 this ministry was replaced by three separate ministries: Ministry of Tourism, Ministry of Energy and Rural Electrification, and the Ministry of Civil Aviation and Foreign Affairs. 6. In 1992 the name of this ministry was modified to become Infrastructure, Public Works and Maritime. 7. Tbis arrangement was discontinued in 1992, the vessels involved were transferred to the National Trading Corporation (formerly the National Marketing Authority) for shipment of agricultural commodities. 8. Major progress has been made recently in the management and budgeting for road maintenance. The road inventory (as of 1990) is 95 percent complete and a separate budget for periodic and routine road maintenance has been established (as of 1992). In addition, the Public Works Department, as part of various assistance projects, has established a number of very valuable maintenance tools. These include a detailed annual road maintenance report which covers key areas such as traffic statistics, budget and expenditure, technical resources, monitoring, unit costs and projected requirements. Appropriately tailored, these tools would be useful to other PMCs, for example, within the context of 'twinning" arrangements. 9. A full assessment of the separable/joint cost elements in these estimates has not been undertaken. 10. Revised Traffic Act and Regulations have been drafted and these are being progressed to legislation. Many positive revisions are covered including raising legal axle load limits, simplification of the monitoring/enforcement of vehicle weight regulations (portable scale certification and improvement of DRT officers) and heavier penalties for overloading. 11. It is understood that external assistance is no longer being sought for replacement of Korotogo and Vatukarasa Bridges which are the two remaining single-lane bridges on Queens Road. The bridges have an estimated cost of F$1.75 million and estimated economic rates of return of 18 and 8 percent, respectively. - 37 - 12. Ro-Ro transhipment over Suva of containers destined for Lautoka Is an alternative to movement by road. A joint venture involving PAF stevedoring and Marine Pacific was set up to offer this service, however, it did not proceed. Given the time difference (eight hours by road and three days by sea) pricing and marketing of a Ro-Ro service are crucial. 13. The equipment may become a financial burden to CAAF. It was financed, in part, with a concessional bilateral loan for which the borrower incurs the exchange risk. Moreover, the loan, which was used to acquire some equipment with economic lives of about ten years, has a ten year grace period, with repayment over a subsequent twenty-year period. 14. Air Pacific has since proceeded with this project independently and the facility was recently completed. 15. As noted above, very substantial progress has been made recendy (1992) by the Government. A substantial increase in maintenance funding was made in the 1992 Budget. In addition, the Public Works Department has developed valuable procedures for the management of road maintenance. - 38 - BIBLIOGRAPHY Asian Development Bank (1989a), Road User Revenues and Road Expenditures in FUi (Draft Final Report, November. Asian Development Bank (1989b), Road Traffic Safety in FUI, November. Asian Development Bank (1989c), Commercialization of the Gowrnment Shipyard - Interim Report, November. Asian Development Bank (1989d), Divestiture of the Government Shipping Fleet and Rationaization of the Inter-sland Shipping Serivces - Interim Report, November. Bradfield, K. (1986), Nadi International Airport Master Plan, August. Government of Fiji (1990), Soclo-Economic Development Strategies and External Assstn Prioriks (Volwne 1), Developnent Cooperation and Aid Coordination (Volwne 2) and Project ProfUes (Volwne 3), Suva, May. Gutteridge Haskins & Davey Pty. Ltd. (GHD) (1990), Survey of Domestic Aerodromes to Determine Safety-Related Deficiencis, prepared for the Australian International Development Assistance Bureau, May. International Civil Aviation Organization (1990), Organization Study of the COvi Aviaon Authority of FUi, Project TF/FIJ/89/201, March. Roughton and Partners (1989), Road Upgrading Project - Final Report, prepared for the government of Fiji and the Asian Development Bank (TA No. 1046-FU), November. Transport and Road Research Laboratory (1982), The 7RRL Road Investment Model for Developing Countries (R77M2), TRRL Laboratory Report 1057. World Bank (1991a), Towards Higher Growh in Pacific Island Economies: Lessonsfrom the 1980s, Report No. 9059-ASIA, Washington, January 18. 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