-fF N. &. A Pacific Islands Transport Sector Study (In Seven Volumes) Volume VI: Tonga - Transport Sector Survey March 1993 Infrastructure Operations Division Country Department IlIl East Asia and Pacific Region FOR OFFICIAL USE ONLY .4m~~~~~~~ .E _pf k ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 r _ _9! E E | _ | s |~~~~~~~~~~~~~~~~~~~~~ D _ . . . .D _ _ _ __ _ _ __~~~~~~~~~~~~~~~~~~~~~~~~~~F X == _5, .--WW'wtrl1E s_ 11_ 1az 11 .; 7] _!_ _ S ii | | R i i | ACRONYMIS AND ABBREVIATIONS ADB - Asian Development Bank AIDAB - Australian International Development Assistance Bureau CPD - Central Planning Department DCC - Development Coordinating Committee FIA - Friendly Island Airways MOW - Ministry of Works PMCs - Pacific Island member countries PITSS - Pacific Islands Transport Sector Study PAD - Ports Administration Department SCP - Shipping Corporation of Polynesia FOR OMCIL Us ONLY PREACE The Pacific Islands Transport Sector Study (PITSS) reviews the status of the transport sectors in the six Pac fic 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 analysis 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 Tonga, 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 concem and suggests priorities for consideration by Government. Maintenance of transport infrastructure is identified as a common major problem area. Therefore, for this particular area, a separate Maintenance Annex is attached to the country sector survey. The PMCs share several areas of common concern w;th 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 areas 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 ind';stry 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. R.vXwContt 1. B. Geography 1. C. Demography ..1..........,,, . I D. Economy . 2 2. INSTITUrIONAL STRUCTURE 4 A. GovernmentStructure 4 B. Transport Agecy Ruponsibilities. 4 C. Privat Sector.. 6 D. Public Finance.. 7 E. Aid Environment. 7 F. Human Resources. 7 3. ECONOMIC CONTEXT .. 9 A. Demand for Transport Services. 9 B. Country Development Strategy. 11 4. TRANSPORT SUBSECTORS ..14 A. Land Transport ............,.,,.,,,. 14 B. Maritime Transport .20 C. Aviation .26 5. TRANSPORT SECTOR DEVELOPMENT NEEDS . . 33 A. Introduction .33 B. Institudonal .33 C. General Transpcet Sector Issues .34 D. Land Transport Sub-Sector .35 E. Maritime Sub-Sector .36 F. Aviation Sub-Sector .37 BIBLIOGRAPHY .39 CHART: International Air Services MAP IBRD No. 24574 LISr OF TABLES TABLE 2.1 Agency Responsibilities ............................... 5 TABLE 3.1 Exports by Major Category ............................. 10 TABLE 3.2 Merchandise Imports (T$'000) ........................... 11 TABLE 3.3 Trading Partners (1989, T$'000) ......................... 12 TABLE 3.4 Mode and Port of Imports, Exports and Re-exports (1989, T$'OOO) .................................... 12 TABLE 3.5 Visitor Arrivals .................................... 13 TABLE 3.6 Projections of GDP Growth, 1990-99 ....................... 13 TABLE 4.1 Road Inventory (in kilometers) ........................... 14 TABLE 4.2 Investment in Road Infrastructures (T$'000) .................. 15 TABLE 4.3 Annual Road Maintenance Expenditure (T$'000) ................ 16 TABLE 4.4 Licensed Vehicles (1985-1988) ........................... 18 TABLE 4.5 Inter-Island Shipping Activity (October-December 1988) .... ....... 21 TABLE 4.6 Interisland Shipping Traffic at Nuku'alofa .................... 21 TABLE 4.7 International Shipping Traffic at Nuku'alofa .................. 22 TABLE 4.8 Container Movements at Nuku'alofa Port (TEUs) ............... 22 TABLE 4.9 Port Administration Department Income and Expenditure (T$'000) ........................................ 24 TABLE 4.10 Domestic Scheduled Air Services ......................... 27 TABLE 4.11 Passenger and Aircraft Movements at Fua'amotu Airport .... ...... 28 TABLE 4.12 Passenger and Aircraft Movements at Lupepau'u Airport .... ...... 28 TABLE 4.13 A:.ports in Tonga ................................... 30 TABLE 4.14 Ministry of Civil Aviation Income and Expenditure (T$'000) ........ 31 SELECIE DATA| TO)NGA Geograox Land Area 699 sq km Sea Area 700,000 sq Ikm Pation Population (1987)/(1991), est. 99,000/101,000 Population Growth (1980-87) 0.9% per annum Population Density 132 persons per sq km Population in Capital Nuku'alofa, (1991) est. 32,000 Ecorlomic GNP/Capita (1987)/(1991), est. US$720/US$1,100 Exchange Rates: 1980 T$0.8582 = US$1.00 1985 T$1.4835 = US$1.00 1989 (September) T$1.27 = US$1.00 1991 (March) T$1.282 = US$1.00 ITanspon Registered Vehicles (1989) 4,687 Vehicles/'000 Population (1989) 47 Length of Road (1988) 1,789 km % of Road Sealed (1988) 29% CHAPTER 1 INTRODUCTION A. R}VIEW CoNTmrr inhabited. The Kingdom stretches about 700 km fom Niuafo'ou and Nluatoputapu in the north to Ata in th south (so map at end of text). The i.l This country survey presents an overview islands of Tonga are divided into three main of the transport sector in Tonga, identifies areas groups, the Tongatepu group in the south, the of current and emerging concern, indicates central Ha'apai group and the northern Vava'u priorities, and sugges future strategioes for the group, though the Niuas islands in Vava'u and sector.' 'Eua in Tongatapu are often identified separately. The lagest island is Tongatapu (114 1.2 To facilitate the present study, a desk kmt), with Vava'u being the second largest review2 of the transport sector was previously island (88 kWn2. Both islands are raised coral; undertaken for each of the Pacific Member a few of the other islands are of volcanic origin. Countries (PMCs) of the Bank.' That review An existing volcano, Kao in the Ha'apai group, provided preliminary information on each 1,030 meters in elevation, is the only significant country, including Tonga, and working mountain in the country. The coral islands are hypotheses onl developmer.t needs in the generally covered with a fertile volcanic ash. transport sector. The present survey builds on Nuku'alofa on Tongatapu is the capital; the only this work t develop a current sector overview other substantial township is NTeiafu on Vava'u. so as to establish first, directions tor the formulation of strategies and priorities for each 1.5 The sea area of Tonga is 700,000 km2. country, and second, the basis for selection of The islands are subject to hurricanes though less the specific issues addressed in Volume One of so than several of the other islands in the South this Report. Pacific. 1.3 The present survey of Tonga is complemented with similar surveys for the other C. DEMOGRAPBY PMCs. A regional overview which compares and contrasts, transport sector issues across all 1.6 The population of Tonga was estimated at six PMCs and indicates priorites for 94,535 in 1986. Two-thirds of the resident improvements in sector efficiency, is presented population are located on the main island of as Part I, Volume 1 of this Report. Tongatapu, with almost half of this population resident in the capital, Nuku'alofa. Vava'u and Ha'apai contain 16 percent and 9 percent of the B. GEOGRAPH population respectively, the remaining 8 percent of population being located in 'Eua and the 1.4 The Polynesian Kingdo!n of Tonga Niuas. Since 1986 the population has stagnated, consists of about 170 islands with a land area of if not declined, because of high emigration 699 km2. Only about 36 islands are permanently occasioned by a temporary abolition of visa -2- requirements fr Pacific J,landers entry to Now 1.11 Official deVelopment assistance to Tonga Zealand. in the late 1980s is estimated at about USS173 per capita (or 22 percent of GDP in gross 1.7 Emigration is a cridcal factor in the flows). Only about half of this aid is recorded demography of Tonga. Estimates of residents in the balance ot k yments, the remainder being abroad, primarily in New Zealand, Australia and in the form of t tchnical assistance, niterial the USA, are between 35,000 and 45,000 supplies, and out-of-country training which do perso,ns. This emigration involves the loss of not necwsarily result in net financial transfers to skilled people, but is a factor compensated by Tonga. substantial financial remittances. 1.12 Agrfculctw accounts for at least 40 1.8 Wbilo the slands of Tonga are spmd prcent of GDP, and is derived almost wholly out, virtualy al the populatio reside In a fm smalolder acty. Much of the reasonably compact region of about 360 km agricultural production is exported. Copra and from north to south and 100 km from east to coconut products dominate these exports, but west. Internal migration occurs oauily as the exports of more specialized crops-vanilla movement of vessols between main centers is beans, root crops, squash-and fish are regular and relativel, inexpensive. During the incroasing. lbe value of agricultural exports period from 1976 to 1986, the population of was generally stagnant in the 198')s. Ha'apai decreased by 17 percent while that of Tongatapu increased by 11 percent. The 1.13 Services are a substantial proportion of population in other parts of the country has GDP, in line with the high levels of Government remained steady. Continuation of the internal expenditure and development assistance. migration trend will change the pattern of Tourism acti-ity dominates receipts while freight demand for interisland travel. payments (at about 30 percent of the f.o.b. value of imports) dominate payments. Manufacturing accounts for about 10 percent of GDP, and is D. ECONOMY4 mostly related to processing of coconut products and other businesses in a small industrial zone 1.9 The Kingdom of Tonga has an estimated located in Nuku'alofa. GDP per capita of US$800, placing it in the lower middle-income group of developing 1.14 A large trade deficit is more than offset countries. However, social indicators in Tonga by prevailing levels of remittances and official are generally far superior to other countries in aid. this group. With a traditional social system based on extended family ties, the incidence of 1.15 Development expenditure by Government poverty is considered to be very low. has been 20 percent of GDP during the 1980s, financed entirely by development assistance, 1.10 Economic activity in Tonga is dominated mostly grant aid. by the effects of the large emigrant population and by aid flows. In the 1980s, financial 1.16 Economi growth in Tonga has averaged remittances by emigrants were about 20 percent about 2.5 percent per annum since 1981,82, of GDP and twice the level of merchandize with population growth of about 0.5 percent per exports. In-kind remittances also occur, for annum. The economic growth has resulted from example, the provision of cars and other goods prudent domestic policies, supported by to Tongan domiciles. Imports are equivalent to continuing, large development assistance. The about 50 percent of GDP. prospects for continued economic growth are good, with potential in the agricultural, manufacturing and tourism sectors in particular. 1.17 There is a need for improved public resource mobilizion to provide adequate resources for operation of services and maintenance of public infrastructure and to ftnanco an increasing proportion of development expenditure. CHAPTER 2 INSTITUTIONAL STRUCTURE A. GOVERNMENr STMUCrUn agency is responsible for developing transport setor polieies ad taig an intersectoral view of die traonport. Insofar u thes mattes ar 2.1 Although Tonga became a British addressed, it is done by the Central Planning Protectorate in 1900, it regained fill sovereignty Department within the Prime Minister's Office. in 1970. Thberc ae three executive arnm to Tho Central Planning Deprtment also Government (the King, Privy Council and coordinates development planning. Cabinet) and two legal bodies (the Legislative Assembly and the Judiciary). Cabinet ministers are selected by the King and, together with the B. 7haxWpte Agency Ruspornbitis 13overnors of Vava'u and Ha'apai, form the Privy Council. The Legislative Assembly 2.4 Roads. The planning, construction and comprises the Privy Council, seven maintenance of roads is the responsibility of the representatives of the nobles and nine Ministry of Works (see Table 2.1). The representatives of the people. Ministry has a Road Section in the Civil Engineering Division and a separate Mechanical 2.2 Nuku'alofa, on the island of Tongatapu, Services Division for plant and equipment. In is the capital and administrative center of Tonga. Nuku'alofa the Road Section contains only 3 Parliament, Ministries and Departments are road engineers and 11 technical and financial located there. Governors, appointed by the support staff to manage 1,790 km. of road and King, are responsible for the island groups of the operation of quarries. There are no road Ha'apai and Vava'u. Ministries of the national engineers located in Ha'apai and Vava'u. All Government are responsible for transport m.atters road construction and almost all road throughout the country. The agencies usually maintenance in Tonga is undertaken by the have regional offices in at least Ha'apai and Ministry of Works. Villages have no equipment Vava'u for day- a-day management of local a few skills and thus can make only a limited activities. Villages are involved in maintenance contribution to road maintenance. The Ministry of some local roads, though generally on an of Works has no planning capacity. Road informal basis. There is no formal local upgrading projects are generally identified and Government. prioritized in the course of aid projects. The Ministry of Lands, Survey and Natural 2.3 The aviation sub-sector is wholly withiu Resources is responsible for defining road rights- the ambit of the Ministry of Aviation. of-way and, whore required, for facilitating land Responsibilities in other transport sub-sectors are acquisition for road improvement projects. shared between the Prime Minister' Office and the Ministries of Works, Marine, Finance, 2.5 Land Transport Operations. The road Labor, Commerce and Industries; and Lands transport industry is primarily a private sector Survey and Natural Resources. No specialized activity. Buses and taxis are privately owned, Table 2.1: ToNGA-AGENcy RE.WoNsiBiLmES Land Maritime Aviation Intermodal Policy CPD, MOW MOM MOA CPD Planning CPD, MOW MOM, PAD MOA CPD Construction and Maintenance MOW MOW MOW NA Operations: Infrastrucure NA PAD MOA NA Services Private Quasi > lvate Quasi-private Quasi-private Regulation /A MOP, MLCI MOM, PAD MOA NA MOW Ministry of Works MOF Ministry of Finance MOP Ministry of Police PAD Ports Admrinistration Department MOM Ministry of Marine MOA Ministry of Aviation CPD Central Planning Department NA Not applicable MLCI Ministry of Labor, Commerce and Industry La Includes legislation, cost-recovery and enforcement. Source: Mission consultantions. with ownership reported to be widely 2.6 Shipping. The Ministry of Marine is distributed. Commercial freight services are responsible for shipping legislation, provided by privately-owned trucks and trucks administration and control. Ministry activities belonging to village co-operatives. It is are focused on marine inspections and surveys, probable that remittance income to Tonga accident investigations, search and rescue and faciiitates investment in, and wider ownership administration of shipping and seamen. Eight of, vehicles-for-hire. The Ministry of Police is vessels were surveyed in 1989. Besides the responsible for maintaining a register of all Director of Marine, the Ministry has only two vehicles and for collecting and enforcing an technic?! taff. annual license fee. The Department is also responsible for vehicle safety inspections, traffic 2.7 Ports. The Ports Administration management, road signing, accident analysis and Department, now in the Prime Minister's Office, traffic enforcement. The Ministry of Labor, is responsible for the provision of harbor and Commerce and Industries issues licenses Cor wharf services in Tonga, consisting of the buses and taxis. Trucks do not require permits country's principal port at Nuku'alofa and to operate services. smaller ports at Lifuka in Ha'apai and Neiafu in Vava'u. The Department has also taken an -6 - intorost in the nood to updato marzne legislation Five Yoar Plan, CPD sector spocialists liaise (relevant legislation being the Wharves Act, with other departments to identify and screen Harbors Act, Shipping and Seamen's Act and projects. In theory, project profiles are then the Petroleum Regulations Act), but has made no prepared and sent to the Miristry of Finance for changes to date. (Strictly, these Acts are the review. The CPD also sees its role as responsibility of the Ministry of Marine which identifying projects and int. icting with aid is also a member of the supervising committee donors. In practice, the planning process is which oversees the Ports Administration more complex, with: (a) some donors working Depament.) Port construction and maintenance direcdy with the Ministry of Foreign Affairs; (b) are undertaker. for the Department by the the separation of the CPD from the Ministry of Ministry of Works. Financ detracting from tho offective plannin of development activities; (c) some project 2.8 M tnime Training. The Tonga proposals being taken directly to Cabinet; and Maritime Polytechnical Institute was developed (d) the normal political component to decision- with ssistance from the Government of making being more evident because of the small Germany. The Institute has previously island onvironment of Tonga. The planning concentrated solely on training in maritime process also involves two regional development services, but has recently broadened its training committees (for Ha'apai and Vava'u) and a to include non-mnarine mechanical engineerinj. national Development Coordinating Committee (DCC). 2.9 Aviaton. The Ministry of Civil Aviation is responsible for the operation of t-he six airports and airfields in Tonga and for air C. PRIVATE SECTOR transport policy and regulation. Three-quarters of the staff of the Ministry are located on 2.12 The private sector is responsible for the Tongatapu. Construction activities are provision and operation of bus and taxi services undertaken by the Ministry of Works or by in Tonga and for most freight services. contractI arranged by bilateral donors. Ministry Operatior.s outside Tongatapu are minimal and officials are represented on the Board of the informal. The private sector also operates local, Government-owned Friendly Island Airways and informal boat services, however there is no the Board of Pacific Air Limited (in which the documentation on the scale or nature of these Tongan Government has an interest).' The services which generally involve vessels of Iless Ministry approves scheduled air services and air than 15 meters in length. The Shipping fares. There are no privately owned companies Corporation of Polynesia (SCP), which is 60 providing air services in Tonga and charter percent owned by the Govermnent of Tonga and operations have not been permitted. 40 percent by the Columbus Line of Germany, is the principal ship operator in Tonga. The 2.10 Policy. Objectives for the transport SCP has four ships, one of which is chartered to sector as a whole and by mode are most clearly the Pacific Forum Line and two of which are of enunciated in the Five Year Plan. They are limited serviceability. The SCP also operates a often global in nature ('to provide road access to workshop and manages the Maritime all rural areas in the main island") and generally Polytechnical Institute. The SCP does not have lack specification of the policies and actions a monopoly on shipping operations in Tonga. required for their implementation. For example, a catamaran with capacity for 100 passengers and some freight provided thrice- 2.11 Planning. The Central Planning weekly service between Tongatapu and Vava'u Department (CPD) in the Prime Minister's for about four months in 1990. On occasions, Office is responsible for preparation of each other firms have attempted formal domestic -7. shipping operations. However, none of these 2.16 To facilitate aid coordination and to operations has been sufficientlv financially viable encourage the provision of aid to locations other to be sustained. There are ni .ormal barriers to than Tongatapu, the Government has established the introduction and operation of such services. regional development committees for the Ha'apai The smai! size of the domestic market and the and Vava'u regions. The CPD acts as the Government's shareholding in the SCP are secretariat for the Ha'apai region. This has been advanced as reasons for Government agencies to successful to the extent that Australia and the use SCP services and thus suppcrt their viability. EEC, respectively, have taken particular interest in the provision of aid to these two regions. There nevertheless remains a general weakness D. PuiuC FINANCE in the ability of the Government to adequately Identify and prioritize development needs and to 2.13 Tonga relies heevily for recurrent coordinate donor activities. This work is made revenue on a narrow tax base which is expectcd more difficult by the differing objectives and to provide 73 percent of recurrent income in practices of donors, and the links between the 1990/91. Three-quaters of tax revenues are Government and donors through different derived from foreign trade, primarily taxes on agencies (i.e., Ministry of Foreign Affairs, imports. Recurrent revenue in 1990/91 was Ministry of Finance and the CPD). expected to be 95 percent of recurrent expenditure. In comparison, revenue was, on 2.17 In the transport sector, aid requests and average, 5 percent greater than expenditure finance have been focused on meeting immediate during the mid-1980s. and perceived infrastructure deficiencies and to training, but not adequately to maintenance of 2.14 Tonga has ambitious development plans, infrastructure assets. No projects have been but limited budget resources. For example, directed to changing the regulatory environment against a budgeted capital expenditure of TS15.3 or operation of transport in recent years, nor has million in 1988/89, actual outlays were T$6.3 assistanceforinfrastructuredevelopmentprojects million; T$6.1 million of these funds were required significant, concurrent changes in provided by bilateral and multilateral donors. Government policy and operations. In several The lower capital expenditure was attributed to cases, little account has been taken of the ability a shortfall in actual aid funds, thidgh aid was 50 of Government to meet ongoing costs for percent greater than in the previous year. operations and maintenance of projects implemented with aid. E. AD ENvIRoNmzT F. HUMAN RESOURCES 2.15 During the five years to 1988/89, external grants and net borrowings were 95 and 2.18 In common with other South Pacific 12 percent, respectively, of the Government's countries, Tonga has a shortage of indigenous development expenditure. Together external staff with appropriate technical and management grants and net borrowings were about 22 percent skills. This shortage has been exacerbated by of GDP. During the period 1985/86 to 1988/89, the substantial emigration from the country. 13 percent of Government development Senior positions in Government agencies are expenditure was directed to the transport sectr, held by indigenes. Expatriate staff hold line divided as roads (26 percent), maritime (45 positions in the Ministries of Works, Aviation percent), aviation (25 percent) and unallocated (4 and Finance and in the Central Planning percent). Department. They are paid local salaries by the Government of Tonga with supplementary -8- income provided through arrangements with bilateral donors. 2.19 Considerable numbers of Tongans travel overseas for training (including short courses and tertiary studies) financed by multi- and bi- lateral donors. However, there are problems in the social benefit to Tonga of some of the extensive training supported. For example, in 1991, of a full complement of ten professional staff in the CPD, half were currently studying overseas: four for Masters degrees and one for a doctorate. The extent, nature, and conditions of this training, and its opportunity cost to the CPD's work and Tonga, should be assessed. -9- CHAPTER 3 ECONOMIC CONTEXT A. DEMAND FOR TRANSPORT SERvIcES exclude Tongan emigrants on return visits to Tonga (see paragraph 4.47 below). 3.1 Demand for transport services in Tonga 3.4 There are inadequate data to enable derives primarily from activities in the estimates of domesdc freight and passenger agricultural and service sectors. Much of this trawl demand to be prepared. Subsequent activity is traded internationally, for example sections of this report describe data which give exports of agricultural products and imports of an indication of the transport task. In essence, processed food. E:.ports greav rapidly in the demand for land transport is high on Tongatapu second half of the 1980s, due largely to where two-thirds of the population reside. increased trade in vanilla beans, fish and squash Agricultural activity is widely distributed on the (see Table 3.1). Agricultural products accounted island. Agricultural products for local for 71 percent of total exports in 1989, and consumption and export, are carried by land manufactured goods for most of the remainder. transport to Nuku'alofa (which accounts for Imports have increased steadily (see Table 3.2), almost half of the island's population). Demand and exceed exports by six-fold (see Table 3.3). for land transport is smaller on Vava'u, and This imbalance, also reflected in volume terms minimal elsewhere. (see Table 4.7 below), has a major effect on the cost-efficiency of port operations. With the 3.5 Virtually all international sea freight exception of imports from Fiji (some of which passes through Nuku'alofa. Accordingly there may be re-exports from Fiji), intra-Pacific trade is a naed to distribute imported products to other is minimal. islands from Nuku'alofa and to consolidate export products there. There are no data and 3.2 Virtually all imports and exports pass little knowledge of travel demand on informal through Nuku'alofa (see Table 3.4). The shipping services (i.e. by vessels less than 15 imbalance between imports and exports is meters in length). greater for sea freight than air freight, reflecting differences in the types of commodities and 3.6 In addition to inter-island travel by possibly reflecting greater discounting of return resident Tongans, visits by emigrant Tongans travel by air than sea. and tourists are sources of additional demand for passenger travel within the country. Vava'u has 3.3 International visitor arrivals rose by 10 considerable scenic value, and attracts some percept annually between 1985 and 1989. The tourists (though in 1987, tourist and domestic nationality of visitor arrivals became more passenger movemerts at Vava'u were 9,360 diverse over that period, with the share of compared with 62,640 international passenger visitors from Australia declining substantially movements at Fua'amotu Airport on Tongatapu). (see Table 3.5). These visitor arrivals appear to As there are no scheduled intenational services to Vava'u at present, tourists must travel by air - 10- Table 3.1: TONGA-EXPORTS BY MAJOR CATEGORY, 1984-1989 La 1984/85 1985/86 1986/87 1987/88 1988/89 Est. CoPra Value - - 101 Volume - - 1,000 - Copra meal value 66 47 54 2 27 Volume 355 1,321 1,671 68 123 Coconut oil Value 4,050 1,465 1,237 959 654 Volume 4,262 4,253 4,108 2,001 1,352 Desiccated coconut Value 521 413 461 310 278 Volume 2,381 3,149 4,974 1,795 970 Bananas Value 578 729 1,230 563 363 Volume 2,381 3,159 4,974 1,795 970 Vanilla beans Value 865 827 938 866 2,041 Volume 13 13 15 13 30 Root crops Value 317 134 174 375 224 Volume 1,550 552 558 400 300 Watermelons Value 350 136 1 12 5 Volume 131 77 1 17 9 Fish Value 439 455 827 976 1,668 Volume 260 347 598 664 992 Other exports Lb 1,472 1,551 1,863 2,656 4,263 Total Exports A 867 LIL7 .8 6.1 22 L Value in thousands of US dollars and volumes in metric tons unless otherwise indicated. Zk Includes squash in 1987/88 and 1988/89. L/ Components may not add to totals because of rounding. Sources: Data provided by the Tongan authorities and World Bank staff estimates. or sea to visit Vava'u. Although proposals have potential of Tongatapu is likely to be limited. been made for development of major tourist The additional demand for land travel on the facilities on Tongatapu, the tourism development island and sight-seeing to nearby islands which - 11 - Table 3.2: TONGA-MERcHANDIsE ImpRTS, 1984-1989 cF$ '000) Item 1984/85 1985/86 1986/87 1987/88 1988/89 La Food and live animals 11,749 13,737 13,606 17,299 9,117 Beverages and Tobacco 2,777 3,163 3,920 3,291 1,515 Crude materials inedible 3,109 2,892 2,671 2,500 1,506 Fuels and lubricants 7,425 8,071 6,715 6,516 3,327 Oils and fats 116 129 126 153 103 Chemicals 3,357 4,075 5,234 4,924 2,123 Cement 831 1,068 1,201 1,167 404 Other manufactured goods 9,940 9,667 13,683 11,265 6,941 Vehicles 2,252 2,330 1,782 3,664 1,802 Other machinery and transport equipment 4,869 9,547 11,109 11,280 6,892 Miscllaneous manufactured articles 4,906 5,392 5,292 6,331 3,278 Commodities and transactions N.C. 221 254 230 302 302 Total 51,552 60,32S 65,569 68,692 37,310 La For the first two quarters only. Source: Statistical Abstract, Statistics Office, Government of Tonga. could result from additional tourism is likely to to achieve the forecast economic growth. add modestly to existing transport demand. Remittance income and official assistance are expected to be maintained. B. CoUNTRY DEVELoPMENT STRATEGY 3.8 This scenario is likely to result in a decline in the volume of imports of agricultural 3.7 A recent Bank study of the Pacific Island products from outer islands for re-export economies (World Bank, 1991) forecast through Nuku'alofa. It is also likely to result in increased, though modest, economic growth in increased demand for road traffic on Tongatapu all sectors of the Tongan economy (see and for travel by tourists between Nuku'alofa Table 3.6). Exports of some traditional bulk and Vava'u. Principal risks in the economic agricultural products (copra and bananas) is scenario include a decline in private remittances forecast to stagnate, but exports of vanilla, root and aid, an inability to contain imports, and crops and squash should continue to rise. stagnant export performance. Increase growth of manufactured exports will be required to support export performance. Tourism should increase by 6 percent annually - 12 - Table 3.3: ToNGA-TRADING PARTNERS, 1989 (T '000) Country Imports Exports Reexports Australia 15,233 2,585 86 China (Mainland) 902 - - China C(aiwan) 1,011 8 Fiji 6,259 78 107 Other Pacific 302 559 56 Hong Kong 1,319 3 0 Japan 4,895 1,999 4 New Zealand 20,906 3,566 318 Singapore 5,918 0 USA (Continental) 6,133 2,134 37 USA (Hawaii) 1,715 577 23 United Kingdom 959 3 Europe 860 1 19 Other 1,922 5 16 Total 68,334 11,518 666 Source: Annual Foreign Trade Report, Statistics Department. Table 3.4: TONGA-MODE AND PORT OF IMPORTS, EXPORTS AND RE-EXPORTS, 1989 (T', '000) Imports Exports Re-exports A. Mode Sea 51,975 4,225 527 Air 15,959 7,287 138 Post 400 6 Total 68,334 11,518 666 B. Location Nuku'alofa 66,389 10,719 665 Vava'u 1,945 79F 1 Ha'apai Total 68,334 11,518 666 Source: Annual Foreign Trade Report, Statistics Department. - 13 - Table 3.5: TONGA-VISITOR ARAVUS, 1980-1989 1980 1985 1986 1987 1988 1989 A. Total Arrivals by Air 12,505 14,216 16,088 17,239 19,456 21,029 Nationality (%): Australia 13 21 19 17 1S 13 New Zaland 27 24 24 24 24 21 USA 17 18 20 24 22 20 UnitedKingdom 3 3 2 4 5 6 Germany 11 7 5 6 7 6 JIN 2 2 2 2 2 3 Fiji 8 8 9 6 8 7 Other Pacific Islands 9 7 8 6 5 7 Other 10 10 11 11 12 17 Total 100 100 100 100 100 100 B. Arrivais by Cruise Ship La No. of ships 37 46 22 18 13 14 No. of visitors: 57,384 61,068 22,588 15,123 14,656 9,187 Passengers 39,521 41,748 14,510 9,055 7,536 5,023 Crew 17,863 19,320 8,078 6,068 7,120 4,164 L& Includes double counting of cruise ships which call at both Tongatapu and Vava'u. Source: Tonga Visitors Bureau. Table 3.6: TONGA-PROJECIrONS OF GDP GROWrH, 1990-99 (annual percent) 1984/85-1988/89 1989/90-1993/94 1994/95-1998/99 Agriculture 1.4 2.6 2.7 Manufacturing 5.7 5.8 5.9 Other 3.9 3.1 3.4 Total 2.6 3.2 3.5 Source: World Bank (1991a). - 14 - CHAPTER 4 TRANSPORT SECTORS A. LAM TRANSPORT 1985/86 and 1987/88 (see Table 4.2). This has been expended almost entirdy on road rehabilitation and upgrading. The total length of 4.1 Read a e Tere 1,790 road Increased by 54 km fom 1985 to 1988, km of road in Tonga, a little over half of which including upgrading of 20 km of road to is on Tongatapu (see Table 4.1). There is no highway stau. Over this period, most new formal road information systen, and thus no roads were in the categories of feeder and access systematic information on road pavement and roads. A substantial proportion of the road condition nor an investment and maintenance investment was fimded under an ADB multi- history for road sections. project which included construction of 20 km of agricultural access roads on 'Eua island and 4.2 Road Investment is estimated to have upgrading of 30 km of road on Tongatapu at an averaged T$0.8 million annually between estimated cost of about T$0.7 million. Aid Table 4.1: ToNGA-RoAD INVENTORY, 1965 AND 1988 La (kilometers) 1988 1985 Highway/b Trink Feeder Access Total Total Tongatapu 64.6 188.6 248.0 487.0 988.1 939.1 Vava'u 9.3 93.3 123.0 97.0 322.6 322.6 Ha'apai 7.0 31.1 145.0 55.0 238.1 233.1 'Eua 0.6 20.8 85.0 40.0 146.4 146.4 Nius - 29.3 654.0 .. 94.3 94.3 Total km (1988) 81.5 363.0 666.0 679.0 1,789.5 Total km (1985) 61.9 363.6 640.0 670.0 1,735.5 La Excludes access roads in Niuas and urban roads. /b The category of Highway is sealed roads, however, some trunk roads are also sealed. Source: Central Planning Department. - 1S - Table 4.2: TONGA-INVEsTM IN ROAD INFRASMUCrURE, 1985-1991 La (I$ '000) 1985/86 1986/87 1987/88 1990/91 lb Tongatapu: 360 623 363 Nuku'alofa 78 358 310 Other 281 85 53 Subtotal 360 623 363 Vava'u 96 20 242 Ha'apai 158 69 34 Unspecified Agric. roads 187 37 225 Total 802 749 864 1,542 La Funds which pass through the accounts of the Government of Tonga only. b Budget. Source: Central Planning Department. funds from other sources also contributed to have established that funding for maintenance is road construction, for example, Australian inadequate. On the basis of the various data it assistance is provided through accountable cash is estimated that expenditure for minimum grants for the supply of equipment and road routine maintenance of roads in Tonga should expenditure by the Government of Tonga. have been almost double the T$0.767 million About AS1.0 million of equipment for the road budgeted for 1990/91 (where this figure itself is sector was provided through AIDAB between a substantial increase over expenditure in recent 1981 and 1988. years). Additional expenditure is required to rehabilitate ,xisting roads to a level where this 4.3 Initial planning for Development Plan VI forecast expenditure for routine maintenance is (1991 to 1995) is based on forecast annual road adequate to sustain the road network. (See investment of T$4.0 million. This is a very Part 2 of this Report). large increase on investment in recent years. Most of the projects are expected to be financed 4.5 The Ministry of Works has undertaken all with aid or loan funds. No indication is road construction and maintenance in Tonga on available of the extent to which funds have been a force account basis. At present, there is little committed to projects. private sector capacity for road construction and maintenance. 4.4 Expenditure on road maintenance declined in real terms by 8 percent per annum 4.6 Tonga has an adequate supply of coral from 1980 to 1987 (see Table 4.3). Previous material for road construction, however there studies (Beca Worley, 1988 and GITEC, 1990) are a number of features which should be taken - 16 - Table 4.3: TONGA-ANNUAL ROAD MAINTENANCE EXPENDMITREs, 1980-1987 (1 '000) Year Current Prices Constant 1989 Prices 1980 262 648 1981 235 493 1982 197 372 1983 202 365 1984 255 442 1985 216 337 1986 396 482 1987 304 362 Source: Ministry of Works, and GITEC (1990). into account to better use the available materials 4.8 Design standards for roads are limited to (for example, retaining the hardest materials for specification of features such as formation and aggregate for asphalt seals and elimination of pavement widths and pavement thickness, clay contamination) (Beca Worley, 1988). although the limited range of traffic, terrain and soil conditions reduce the need for complex 4.7 There is generally inadequate operable standards and design rules. equipment for road construction and maintenance in Tonga. The quantity and condition of the 4.9 Road ccnstruction methods range from equipment varies considerably location and adequate to poor. On Tongatapu some roads type. On Tongatapu the MOW ..as some new currently being upgraded received a prime seal equipment, though it is sometimes underutilised in 1990, but are now deteriorating while (for example there is insufficient demand to fully awaiting the appropriate weather/season for a utilize bitumen sprayers). In contrast, chip seal. Tliese roads have reasonable equipment in Vava'u includes a crusher built in drainage. Spalling of slurry seals and some about 1950 which is operational for only about potholing is evident on roads only five years half of the time, a single poorly-operational old. Construction of feeder roads is poorer, bulldozer, a 20 year old grader with mechanical with sections of road .iaving no proper drainage problems, two unserviceable loaders and a single and, sometimes, a road surface below adjacent vibrating roller in need of major maintenance. ground level. These constraints have been Maintenance of equipment is constrained by a evident for some years, and recommendations lack of spare parts and funding. The unit cost for improvements have been made (Beca of maintenance is increased by the need to Worley, 1988) however, the proposals appear maintain small stocks of equipment in different not to have become common practice. The lack parts of the country, to move equipment to ^f national road design and construction Tongatapu for some major items of maintenance, standards, adequate trained staff, and operations and to move some lowly-utilized specialized manuals, constrains the work of MOW staff, items of equipment from one location to another. especially in regional offices. - 17 - 4.10 The MOW has no formal road or evaluations of individual projects: screening maintenance management system at present. It criteria based on traffic volume and road surface is not possible to establish past maintenance of condition and rudimentary evaluation of user individual road links nor to systematically cost saving beneflts. The average size of establish current and future maintenance needs. projects evaluated has been small, for example T$0.2 million in the ADB Fourth Multiproject. 4.11 Some of these needs are being addressed Trafric growth forecasts have generally been in a current technical assistance project to MOW assumed the same for all roads, and have been with staff training in road design, construction based variously on past traffic growth and and maintenance, funding for road construction, forecast cbanges in vehicle ownership. The installation of a computerized road maintenance Ministry of Works has maintained a program of management system, and supply and annual traffic counts at eighteen locations on rehabilitation of equipment (AIDAB, Tongatapu, providing useful data for planning 1991-1992). Importandy, assistance is also purposes. However, the sampling and other directed at increasing MOW's general capability statistical features of the traffic counts have not to design and implement projects using private been assessed. The counts indicate average sector contractors. annual growth in traffic during the 1970s and 1980s to be about 9 percent annually for total 4.12 Road Planning. No comprehensive traffic and 8 percent annually for rural traffic. transport planning studies have been undertaken Fuel consumption is estimated to have incroased for Tonga. An ADB/UNDP funded study of by 6 percent per annum between 1975 and 1988 road upgrading was prepared in 1975 (Gibb, (GITEC, 1990). In preparing tr,ffic forecasts 1975). This provided the basis for much for major roads, little account has been taken of subsequent road upgrading work, but has not future economic activity. The evaluation of been referred to in recent studies which include: agricultural road projects includes estimated modest increases in production (ADB, 1986). * An evaluation of road upgrading projects on Tongatapu for the ADB-assisted Third 4.14 Project appraisals have included future Multiproject (Redecon, 1987). road maintenance needs. However, they have not prepared summaries indicating the net effect * An evaluation of road standards, road of project investmnent proposals on future construction methods and road Government expenditure, nor have they fully maintenance practices, with particular addressed the capacity of Government to fund emphasis on New Zealand assistance in and implement increased obligations. the sector (Beca Worley, 1988). 4.15 Vehicle Registration. Road vehicles are * An appraisal of road projects on required to be registered and to be licensed Tongatapu and 'Eua Islands for the ADB- annually. Large numbers of vehicles are assisted Fourth Multiproject (GITEC, imported to Tonga, for example 1,157 vehicles 1990). were imported in 1989 (1,076 in the rrevious year), equal to a quarter of the total vehicles Prior to these studies, a policy paper outlining a registered. Of the 5,290 vehicles imported to comprehensive five year road development Tonga during the decade to 1987, 56 percent program had been prepared by MOW (MOW, were used vehicles. Imports in 1988 and in 1986). 1989 were about double the annual average number of vehicles imported in the previous 4.13 The road appraisal studies for the two decade. Some of the imported vehicles are left- Multiprojects have involved basic economic hand drive, but the Ministry of Police does not - 18 - permit thuse vehicles to exceed 1S percent of the incroase in the consumer price index. The registered vehicle population for safety reasons. annual license fee for a typical private car is The greatest rate of growth In registered vehicles T$15 aid T$50 for trucks greater than 3 tonnes. has been in Vava'u, although over three-quarters A driver's license is TS2. of vehicles are presently located on Tongatapu (see Table 4.4). 4.17 The fireigt transport industry is almost entirely in the private sector, and loans for 4.16 Vehicle registration and license fees were acquisition of trucks and vans have been made set in 1976 and implemented in 1978. The fees available by the Tonga Development Bank. are now very low having remained unchanged (Fleets for their own use are operated by the since introduction, relative to an almost fourfold Tonga Commodities Board and the Ministry of Table 4.4: TONGA-LICENsED VEHICLES, 1980 - 1989 Vehicles 1980 1985 1986 1987 1988 1989 A. Number of Vdicles Cars & light trucks 1,530 1,823 2,430 2,892 2,739 2,306 Heavy trucks 350 495 544 648 2,147 895 Taxis 268 277 212 334 601 689 Buses 117 111 122 125 - 95 Motor cycles 188 392 401 543 472 473 Others 396 296 267 216 264 223 Total 2,849 3,394 3,976 4,758 6,223 4,681 B. Ownership of Vehicles Government 285 401 392 452 .. 748 Private 2,564 2,993 3,584 4,306 .. 3,933 Total 2,849 3,394 3,976 4,758 6,223 4,681 C. Regional Distribution of Vehicles Tongatapu .. 2,800 3,352 4,033 5,339 3,644 'Eau .. 91 72 68 130 118 Ha'apai .. 84 85 83 100 98 Vava'u .. 395 446 554 629 797 Niuas .. 24 21 20 25 24 Total 2,849 3,394 3,976 4,758 6,223 4,681 Sources: Police Departnent, Statistics Office (Statistical Abstract), and Central Planning Department (Review of DP-IV and Draft DP-V). 19 - Works.) There is no economic regulation license fees, are insufficient to cover required (entry, routes and rates) for freight transport, road maintenance expenditure. and no data on the scale of the transport task. The principal goods moved by road transport are 4.20 Transport regulation primarily involves agricultural products to major towns and ports, two agencies: the Ministry of Labor, Commerce distribution of processed products (particularly and Industries (bus and taxi licensing and fare from Nuku'alofa on Tongatapu), and movement control); and the Ministry of Police (vehicle and of construction materials (in particular, for driver licensing). There are no current major public sector projects). proposals to change the nature of transport regulation, but an objective of the Sixth Five 4.18 Public transport is provided by privately- Year Plan will be to "better regulate the public owned bus companies, taxi companies and rental and private transport system in order to allow car operations. Bus services are licensed by the the existence of safe and competitive passenger Ministry of Labor, Conunerce and Industries. services". Care will be required to ensure that Bus operators may vary routes and the number changes to regulations are focused on improved of vehicles in response to passenger demand. safety and economic efficiency rather than Fares are set by the Govermment, and were seeking to specifically influence the quantity, reviewed last in 1988. In 1989, there were 91 quality or price of services. private buses in Tonga, almost three-quarters of which operated in Tongatapu. Most of the buses 4.21 Land transport developmentproposals for are used for local public transport services, with Development Plan V (1991-1995) include: only a few dedicated to the modest needs of the tourist industry. Tongatapu is a sufficiently * Tongatapu Road Works (T$7.55 million) small island to permit commuting to Nuku'alofa. - Vuna Road Reconstruction (T$0.6 The number of taxis doubled between 1987 and million) 1989, and are generally aged vehicles operating - Urban Roads, Nuku'alofa (T$2.5 without meters. Fares are controlled, but entry million) and exit from the industry are unconstrained. - Rural Roads, Tongatapu (T$1.2 million) 4.19 Cost-recovery for land transport has not - Urban Footpaths Upgrading (T$0.75 been addressed in detail by the Government. million) Income from fuel excise tax, import duties on - Urban and Village Minor Roads (T$1 vehicles, tires and fuel and vehicle and driver million) licenses in 1988/89 were about T$2.0 million * Ha'apai Road Works (T$0.95 million) (GITEC 1990), compared with maintenance - Roads Reconstruction (T$0.75 expenditure of T$0.6 million and capital million) expenditure of T$0.7 million. However, in as - Causeway Engineering Studies much as import duties are a major source of (T$0.2 million) Government revenue in general, all duty from * Vava'u Road works (T$2.5 million) vehicle imports cannot be readily attributed to - Roads and Drainage transport cost-recovery, notwithstanding that the * 'Eua Road Works (T$0.75 million) average duty on imports of vehicles and spare - Roads and Drainage parts is about double the average rate of duty * Niuas Road Works (T$0.75 million) (about 13 percent) on imports. Even putting - Roads and Drainage aside optimal import duty/elasticity * Other Projects (T$3.65 million) considerations, revenues from abov'e average - Road Works for Sporting Facilities duty on vehicles and spares, together with (T$0.15 million) vehicle registration and license fees, and driver - 20 - - Road Works for the Second Small Table 4.5). Almost all internationally traded Industries Center, Tongatapu (T$1 goods pass through the port, with only 3 percent million) of international trade occurring through Vava'u - Road works for Tourism (see Table 3.4). 123,730 tonnes of freight Infrastructure (T$1.5 million) passed through Nuku'alofa port in 1989, 91 - Agricultural Roads (T$1 million) percent of which was international traffic (see Management, Design and Technical Tables 4.6 and 4.7) - some of the remaining, Assistance (T$4.075 million) domestic traffic are on-carriage of international - Staffing and Tra-ning (T$3.5 million) freight. Exports and domestic freight movement - Road Transport Regulations (T$0.075 at the port declined during the second half of the mllion) 1980s, though imports increased substantially. - Road Traffic Engineering (T$0.5 Recorded interisland vessels are generally million). between 150 and 400 gross tonnes. As no data are maintained for vessels of less than 15 meters 4.22 The total cost of these proposals is in length, no routine data are available on the T$20.125 million.6 This is a substantial informal shipping sector. No assessments have increase on average annual investment of about been made of the scale, role and performance of T$0.8 million between 1985/86 and 1987/88. the informal shipping sector. Little preparation has been undertaken for these projects, they have not been systematically 4.25 After declining in 1988, the number of evaluated and prioritized, and few donor funds container movements at Nuku'alofa port rose by are conmnitted.' 44 percent in 1989. Container traffic is dictated largely by the volume and extent of 4.23 Road safety is an emerging problem, with containerization of imports. These both appear 282 accidents in 1989, up from 94 accidents in to be increasing (see Tables 4.7 and 4.8). Based the previous year. Seventy-seven people died in on typical mass of loaded containers, it appears accidents in the ten years to 1989, with 11 that about 45 percent of imports are deaths in 1989. Alcohol is considered to be the containerized. There remains considerable principal contributing factor in casualty potential to better use outbound empty accidents. There has been no systematic or containers. Efforts to do so could help exports. continuing assessment of accident trends in They would also promote increased Tonga. Vehicles are subject to an annual safety containerization of imports by providing return inspection, carried out in Tongatapu for the traffic for containers. Police by the Mechanical Division of the Ministry of Works. Present speed limits are 40 4.26 Upgrading port infrastructure in Tonga kph in towns and 65 kph elsewhere. The latter, has been accorded high priority in the past. As in particularly, is low and may result in reduced with other transport sub-sectors, only part of the respect for the limit. Speed limits should be investment is recorded in the accounts of the realistic and well-enforced. Government of Tonga as some aid is expended directly by dono- agencies. UNDP data B. MARrIM TRkNSPORT suggests that 59 percent of development expenditure in the transport sector through the Port and Marine Facilities mid-1980s was directed to the maritime subsector (World Bank 1989). During the first 4.24 Port TraMc. Nuku'alofa port is the three years of DP-V, investment in the sub- principal port in Tonga for international traffic. sector was 130 percent greater than had been About 37 percent of interisland shipping planned. movements also occur at the port (see - 21 - Table 4.5: TONGA-INTER-ISLAND SHIPPING ACTIVITY La, OCTOBER-DECEMBER 1988 Ship Movements Passengers Cargg Town Island Arr. Dep. Arr. Dep. Arr. Dep. Nuku'alofa Tongatapu 140 140 4,902 5,484 1,384 2,186 Neiafu Vava'u 20 20 1,636 1,595 1,090 776 Nafanua 'Eua 91 91 2,118 2,278 92 92 Pangai Ha'apai 61 61 6,509 4,078 3,041 2,346 Ha'afeva and Nomuke Ha'apai 57 57 6,434 6,606 2,987 2,951 Niutaoputapu 5 5 269 340 190 365 Niuafo'ou 5 5 340 269 365 190 Total 379 379 21 108 20,650 9,147 8,906 La Activity is double-counted where a ship makes calls at several ports during a single voyage. Source: Bulletin of Coastal Shipping Statistics. Table 4.6: TONGA-INTERISLAND SHIPPING TRAIC AT NWUK'ALFA, 1985 - 1989 /a 1985 196 1987 1988 1989 Cargo /b (Freight tonnes) Inward 13,752 6,970 7,704 5,486 5,454 Outward 7,188 7,915 10,103 7,399 5,695 Passengers (No.) Inward 21,685 22,598 21,639 23,562 18,631 Outward 19,419 23,761 23,658 21,313 19,020 Total 41,104 46,359 45,297 44,875 37,641 Vessels (No.) Inward 644 717 677 712 618 Outward 646 711 674 700 617 Total 1,290 1,428 1,3S1 1,412 1,235 La For vessels with minimum length of 15 meters. & Cargo includes international traffic in transit to and from the outer islands. Source: Ports Administration Department. - 22 - Table 4.7: TONGA-INTERNATIONAL SHIPPING TRAFIC AT NUKU'ALOFA, 1985 - 1990 1985 1986 1987 1988 1989 1990 Cargo (tonnes) Imports 63,903 61,936 100,126 90,663 98,741 111,174 Exports 19,854 23,667 20,930 14,926 13,834 16,117 Total 83,757 85,603 175,000 105,589 112,575 127,291 Veaols (No.) Cruise ships . 13 13 5 9 Cargo ships . 95 111 110 101 Tanker ships .. 24 29 27 36 Other .. 27 9 31 21 Total 157 159 182 173 167 175 Source: Ports Administration Department. 4.27 Major recent maritime projects have AIDAB); development of a the Faua fisheries included: rehabilitation and extension of the harbor adjacent to Nuku'alofa port (T$2.9 Queen Salote Wharf in Nuku'alofa (completed in million funded by the EC, and completed in 1985 at a cost of T$7.5 million and funded by 1987); upgrading of the wharf in Neiafu (ECU1 AIDAB); provision of cargo handling equipment million funded by the EC) and improvement of at Nuku'alofa port (A$0.7 million funded by Nafanua Harbor on 'Eua (US$1 million, with Table 4.8: TONGA-CONTAINER MOVEMENTS AT NuKU'ALOFA PORT (TEU), 1987 - 1989 1987 1988 1989 Inward: Loaded 2,401 2,201 3,061 Empty 220 163 659 Total 2,621 2,364 3,720 Outwards: Loaded 927 394 470 Empty 1,709 1,939 2,580 Total 2,636 2,333 3,050 Source: Ports Administration Department. - 23 - parallel financing from ADB and AIDAB, and scale of these improvements to date. While completed in 1990). Development of proposals for the Ha'apai region marine Nuku'alofa port, Faua fisheries harbor and infrastructure program have been formulated, no foreshore protection works (the latter undertaken appraisal has ueen made of the projects in the with funding assistance from Germany) were T$2.5 million program. coordinated, though not until some construction activities had commenced. Other assistance 4.30 Port construction has been undertaken includes a study by the EEC to assess aimost entirely by the Ministry of Works. This requirements for a harbor dredging machine, represents a major construction effort with, for provision of a pilot boat for Nuku'alofa port example, an average of T$3 millilon of from New Zealand and a continuing program for construction activity in each of the three years the provision of marine navigational aids by 1985/86 to 1987/88. AIDAB. These aid projects have generally resulted from individual requests for assistance 4.31 Annual expenditure required for adequate (often in response to an urgent need, for maintenance of the Queen Salote Wharf is example, resulting from storm damage) rather estimated to be T$94,000 in 1990 prices from a systematic assessment of sector needs and (AIDAB, 1991). In contrast, T$15,900 was project appraisal. spent in 1988/89 and T$24,200 in 1989/90. Similarly, maintenance expenditure for 4.28 Few queuing delays are reported for mechanical equipment at the port has been, at ships at the upgraded Queen Salote Wharf, T$60,500 in 1989/90, a little over half the however the berth length of 110 meters is too T$105,000 estimated to be required. Total short to allow container ships to unload their annual maintenance needs for Nuku'alofa port forward hatches directly onto the wharf. Vessels are estimated at T$0.26 million in 1990 prices, must either de-berth, turn around and reberth to with budgeted expenditure of T$0. 10 million and complete unloading or must incur up to a T$0.08 million in 1989/90 and 1990/91, doubling of handling times as containers are respectively. moved along the ship. Berthing may be difficult at ti-ies because of weather conditions, but the 4.32 Tlhc Ports Administration Department total costs of constructing and operating a better- (PAD) in the Prime Minister's Office is oriented wharf would be considerably greater responsible forport operations. The agency has than total costs with the current facility. identified the need to update the Wharves Act Investment in Nuku'alofa Port has been (passed in 1903 and amended last in 1968) and substantial and excess capacity is currently the Harbors Act (also passed in 1903 and evident. amended last in 1981). Amongst other limitations, the Harbors Act does not deal 4.29 Investment in ports on other islands has adequately with pollution. Associated legislation been limited to channel and reef blasting, also in need of updating include the Shipping particularly on smaller islands. Given the past and Seamens Act and the Petroleum Regulations emphasis on investment in Tonga's major ports, Act. The Ports Administration Department does the Government is now seeking investment in not have equipment or training to respond to ports on outer islands. The Government has maritime pollution, and is conscious of the need sought Australian aid for improvements in for improved industrial safety in the port area Ha'apai (as part of the Ha'apai Regional Plan) (for example, handling of containers). and the EEC for improvements in Vava'u (as part of the Vava'u Regional Development 4.33 Nuku'alofa is the only port to have Programme). There has been no strategic equipment to handle containers. Neiafu port in consideration of the appropriate location and Vava'u is the only other port with significant -24 - container traffic (ten foot containers only), and expenditure required to adequately maintain the port staff must improvise to move containers in infrastructure in the long term. If all the port area. This is currently being achieved maintenance activities of the PAD were similarly by dragging containers along the ground behind underspent, the level of cost-recovery for a tractor. It is unlikely that formal container 1989/90 and 1990/91 would decline from 95 to forklifts could be justified for the limited 75 percent. In the past the PAD has been container traffic at ports other than Nuku'alofa - constrained to its budget vote for operating alternative innovative approaches, such as expenditure. Commencing in 1991, the simple lifts or dollies for handling containers at Department is able to retain revenue in excess of these ports, warrant formulation and support. a budgeted amount and direct it to increased spending on port operations and mainterance. 4.34 Port charges were last revised in 1984. The ability of the Department to increase The revised rates were implemented in 1986. maintenance expenditure will depend evenalaly, Income and expenditure for the PAD indicate however, on an increase in port charges. almost full cost-recovery of operating and maintenance costs (see Table 4.9). This has 4.36 The PAD is considering use of a been achieved largely because of underspending computerized port management system on maintenance of the existing infrastructure. developed by the Ports Authority of Fiji and elements of a model tariff structure developed 4.35 Maintenance expenditure at Nuku'alofa for the region (ESCAP/UNDP, 1989), but has port has been only about 35 percent of no formal program for their adoption. Table 4.9: TONGA-PORT ADMINISTRATION DEPARTMENT INCOME AND EXPENDITURE, 1989- 1991 cm$ '000) 1989/90 /A 1990/91 /b Port and Wharfage Revenue 679.0 738.0 Expenditure: Administration 47.6 58.2 Harbor Services 142.8 172.3 Wharf Services 513.6 556.4 Total 704.0 786.6 Comprising: Operations 591.8 686.0 Maintenance 112.2 100.6 /a Revised estimate. /b Estimate. Source: Ministry of Finance. -25- 4.37 The roles of the two institutions in the * Vuna Wharf and Yel!.w Pier in maritime sector (the PAD and MOM) overlap, Nuku'alofa (T1 million) with the result that both take an interest in a * Vava'u Region Infrastructure and range of common matters but litle change Facilities (S1 million) appears to be effected. The MOM has formal * IiH'apai Region Infrastructure and responsibility for the planning of shipping and Facilities (T$2.5 million) port services in Tonga and for maritime * Improvements to Nafanua Harbor, 'Eua legislation (see paragraph 2.7). In practice, the (T$0.25 million) Ministry has few resources; little planning is * Derricks for Niuafo'ou, Niuas (TS0.12 undertaken and no changes to legislation are million) being formulated. * Ship Building and Repair Facilities, Tongatapu CS6 million) 4.38 No comprehensive planninglpriority * Yacht Marina, Tongatapu (1S2 million) studies have been prepared for the maritime sub- * Establishing a Ports Authority (1 I. 15 sector, nor have inter-modal issues been million) formally explored. Project planning has * Shipping and Ports Regulations (IS.1 generally occurred on a project-by-project basis million) in the past (for example, planning of the * Training (T$.4 million). adjacent Queen Salote Wharf and Faua fisheries harbor proceeded separately, with da,igns being These projects have been identified in response amended during construction to better integrate to perceived needs in Tonga. Some of the the two projects and to reduce project costs). In projects were also included in the previous Five January 1991 the ADB and the Government Year Plan, for example, a berthing tug and agreed to undertake a planning study for an shipping and ports legislation, but did not integrated marine infrastructure development receive funding support. Feasibility studies have project.' not been prepared for any of the projects. 4.39 Project planning has, at times, been an 4.41 Total development expenditure for the extended process. For example, the first period 1991 to 1995 is T$17.9 million, 36 feasibilitv study for upgrading of Nuku'alofa percent of total desired expenditure in the port was undertaken in 1975. An evaluation in transport sector. This is less than the 69 percent 1977 indicated an economic rate of return Ot 13 share of actual expenditure in DP-IV but higher percent, though this was based on a high than the expected 21 percent in DP-V. The only forecast of freight movements. A subsequent significant commitment of donors funds to date evaluation in 1979 did not establish an internal for DP-VI has been by the EC for some rate of return, but noted that the value of the components of the Vava'u project. project depended on intangible items. The project was eventually commenced in 1982 and International Shipping was completed in 1985. 4.42 International shipping calls to Tonga have 4.40 Project proposals for Development Plan been steady in recent years, with a little under VI include: 140 calls by cargo and tanker ships per year. Three shipping lines regularly serve New * Acquisition of a Berthing Tug (T$4 Zealand (including the Pacific Forum Line, of million) which Tonga is a shareholder), three serve Japan * Queen Salote Wharf Improvement and and one each serve Hawaii, the west coast of the Extension (T$5 million) USA and Australia. Present service levels are appropriate to freight demand, and are likely to - 26 - be sustained. Given the imbalance in Tonga's terminated, apparently because it was not imports and exports, the rate differential financially viable. between inbound and outbound traffic is only moderate (for example, in February 1991 the 4.44 No information is available on informal rate for a loaded container from Tonga to boat services in Tonga. Given the geography of Auckland was, at T$2,000, 73 percent of the Tonga, it is likely that most operations occur reverse movement, while the cost from Tonga to within the Ha'apai Group of islands. Sydney of T$1,300 was 53 percent of the reverse movement). C. AvuTON Domestic Shipping Air Routes 4.43 Formal domestic shipping services are currently provided by the Shipping Corporation 4.45 Intenational air services to Tonga of Polynesia (SCP). The SCP is a joint venture involve five airlines: Air Pacific, Polynesian of the Government of Tonga (60 percent) and Airlines, Air New Zealand, Hawaiian Airlines, Colombus Line of Germany (40 percent). The Royal Tonga Airlines and Samoa Air. With the SCP operates four ships, one of whicO (the Fua exception of Samoa Air which serves Vava'u, all Kavenga) is chartered to the Pacific Ivrum Line international services operate to Fua'amotu and two of which are old and have limited airport on Tongatapu. Royal Tvnga Airlines usefulness. The remaining ship, the Olovaha, was introduced in July 1991 by renaming operates weekly services from Tongatapu to Friendly Island Airways; international services Ha'apai and Vava'u. Fares were last revised in (Auckland-Tongatapu) have been established on 1989, and the present fare for the 24 hour trip to the basis of a "wet-lease' cooperative Vava'u is T$36 (compared with the airfare of arrangement with Solomon Airlines (see Part IV TS109). The Olovaha was provided to the of this Report). There has been a small increase Government of Tonga by the Government of in services in recent years: changes have Germany under a concessional loan having a ten included an increase in the number of flights to year grace period and loan repayment over a Fiji by one per week, the transfer of the Vava'u subsequent twenty year period. Present revenue to Pago Pago link from Hawaiian Airlines to for the SCP is sufficient to provide a small Samoa Air and the replacement of one of the surplus after operating costs and interest B737 services by Air New Zealand on the c.harges, however the surplus is insufficient to Auckland-Tongatapu-Apia route with a B767 meet principal repayments which are about to aircraft. Air Pacific's replacement of B737 commence. Moreover, the Olovaha is services from Fiji to Tonga in the mid-1980s considered to have a practical life of twenty with ATR42 aircraft and continued use of the years, and its usefulness will deteriorate before latter aircraft suggests them to be appropriate the loan for its purchase is repaid. Some aircraft for the sector. Half of the international competition to SCP has occurred in the domestic services to Tonga are operated by propeller- market, but this has been sporadic. For driven aircraft. The total market for example, a 100 passenger catamaran operated international air traffic is limited and VFR traffic three services a week from Tongatapu to Vava'u may stagnate. Current seat capacity appears via Ha'apai for about four months in 1990, more than adequate and some rationalization making the one-way trip within daylight hours may occur. on a single day compared with the 24-hour trip with the Olovaha. The service provided a 4.46 Domestic services changed substantially considerable increase in capacity and in 1985 when the Gcvernment-owned Friendly improvement in passenger service, but was Island Airways (Royal Tonga Airlines as of - 27 - 1991) was established to operate all domestic air role of international air freight in facilitating services which had previously been provided by export performance, and opporturities for the privately-owned Tonga Air and South Pacific further investment to support its growth should Island Airways. The present principal scheduled be undertaken. domestic services are from Fua'amotu to 'Eua, Ha'apai and Vava'u, with services operated from 4.49 Lupepau 'u airport in Vava'u is the Vava'u to Niuatoputapu and Niuafo'ou when second most heavily used airport, serving the warranted (see Table 4.10). Scheduled services tourist industry and one international route (to are cancelled or consolidated at short notice Pago Pago) in addition to other domestic traffic. when there is low passenger demand. .. ;ost of the international passengers recorded at Lupepau'u airport in the past were in transit to Airport Traffic or from Fua'amotu airport. There was little growth in the number of passengers on domestic 4.47 International and domestic passenger services in the mid-1980s (see Table 4.12); movements at Fua'amotu airport almost doubled given stagnant population in Vava'u in this between 1984 and 1988 (see Table 4.11). Data period, there appears to have been little growth in Table 3.5 appears to exclude temporary in tourism. residents, i.e. emigrant Tongans returning temporarily to Tonga; these travellers have been Airport Facilities and Investment a reasonably steady 34 percent of total international passenger movements during the 4.50 Fua'amont airport on Tongatapu is 20 period 1985 to 1988. The effect of emigration km from Nuku'alofa. Jet aircraft first used the is also reflected by 10 percent more embarking airport in 1976 following sealing of the runway passengers than arrivals during the period 1985 with assistance from New Zealand. Upgrading to 1989. of a deteriorated pavement and lengthening of the runway by 600 meters (to 2,671 meters) was 4.48 Airfreight has accounted for almost one completed in 1990 with bilateral aid from quarter of the value of imports and, more Australia (with respective costs of A$3.7 and importantly, almost two-thirds of the value of A$3.8 million). The runway is now used by exports (see Table 3.4). Air cargo is currently B767 aircraft without restriction, and is capable estimated at 700 tonnes per year, up from 290 of accommodating B747 aircraft with some tonnes in 1983. A fuller understanding of the restrictions. At 1991, there were sixteen Table 4.10: TONGA-DOMESTIC SCIIEDULED AIR SERVICES, 1991 Route Aircraft Frequency Fua'amotu to: 'Eua BS2A 11/week Ha'apai-Vava'u Twin Otter 6/week Vava'u Twin Otter 12/week Vava'u-Niuatoputapu-Niuafo'ou Twin Otter As required (about 1/week) Source: Friendly Island Airways. - 28 - Table 4.11: TONGA-PASSENGER AND AIRCRAFT MOVEMENTS AT FUA'AP.OTU AIRPORT, 1984 - 1990 1984 1985 1986 1987 1988 1989 1990 Passengers International 38,834 55,771 54,086 62,643 67,401 62,163 106,030 Domestic 10,761 22,270 26,301 31,033 29,466 28,158 Total 49,595 78,041 80,387 93,676 96,867 Aircraft Movements International 1,412 1,358 1,499 1,784 1,838 1,660 1,886 Domestic 1,087 999 2,519 3,050 2,897 2,379 Total 2,499 2,357 4,018 4,834 4,735 4,039 Source: Central Planning Department. scheduled jet aircraft and about seventy propeller equipment from the EEC (T$1.6 million) and a aircraft movements weekly at the airport. A control tower and airport lighting from New new airport terminal was completed in March, Zealand (NZ$0.8 million and NZ$0.7 million, 1991 with Japanese aid (at an unofficial respectively). estimated cost of T$12 million). Other aid projects have included the provision of Table 4.12: TONGA-PASSENGER AND AIRCRAFF MOVEMENTS AT LUPEPAU'U AIRPORT, 1983 - 1989 1983 1984 1985 1986 1987 1988 1989 Passengers International 2,446 1,959 1,463 249 1,794 Domestic 7,233 7,012 7,144 12,042 7,565 Total 9,679 8,971 8,607 12,291 9,359 17,075 17,203 Aircraft International 287 208 176 70 362 Domestic 1,010 833 990 1,558 2,008 Total 1,297 1,041 1,166 1,628 2,370 1,545 815 Source: Ministry of Aviation, in EEC (1988). - 29 - 4.51 While no B747 aircraft currently use Operations and Administration Fua'amotu airport, the Government of Tonga has argued for development of the airport to its 4.53 Tonga is under the Nadi region for air present status on the basis that it needed facilities traffic control services. The Ministry ofAviation equal to those in neighboring countries in order is responsible for the administration and not to be disadvantaged. Moreover, regulation of air transport services, including infrastructure is seen as an important catalyst to operation of the country's airports. New economic development, in particular to support Zejland Civil Aviation Regulations and the development of tourism. Accordingly, Investigation of Accident Regulations apply in development of airport infrastructure has been in Tonga. An expatriate presently serves as the advance of complementary investment, notably, Director of Civil Aviation. tourist facilities. No studies have been undertaken to examine these hypotheses. 4.54 Expenditure of the Ministry of Civil Tourism travel is a derived demand which Aviation was estimated to be 6 percent greater responds to the relative attraction of alternative than income in 1989/90 and 37 percent above travel destinations. Tonga will need to progress income in 1990/91 (see Table 4.14). Revenues its tourism sector strategy, focus on its particular are expected to increase in 1990/91 by 24 strengths, and establish those expenditures which percent. Hcwever, costs in airport services and appear attractive and who should undertake meteorological services are budgeted to increase them. by over 60 percent by comparison with 1989/90 as the Ministry meets the full cost of 4.52 The remaining five regional airports in meteorological services, makes allowance for the Tonga all have unsealed runways (see Table greater cost of operating the new passenger 4.13) and are used only by propeller aircraft. terminal, and increases staffing levels. It is not Investment has been made at Niuatoputapu and possible to precisely delineate the share of Niuafa'ou airports during the 1980s using increased expenditure attributable to the latter Australian aid (for airstrip construction, two items, but the increase explicitly attributable communications equipment and non-directional to maintenance of the terminal is only T$3,000. beacons at a total cost of A$0.5 million). An increase of T$16,000 is allowed for Upgrading of Lupepau'u airport in Vava'u (in electricity, much of which can be attributed to 1991-1992), involves possible sealing of the the new terminal. The bulk of the increase ir. airstrip using assistance from the EEC. This expenditure for airport services is attributable to will allow accommodation of 40-50 seat increases in flight service and fire crew staff and propeller aircraft (ATR 42s) and, on a restricted acquisition of new vehicles. basis, small jet aircraft. A more limited option, with a likely higher priority, involves 4.55 Previous studies have noted that reconstruction with strengthening of the existing inadequate funds have been spent on coral runway. The planning study for the maintenance of airports (AIDAB, 1987). upgrading of Lupepau'u airport does not include Expenditure on maintenance was budgeted to quantification of full costs and benefits rise at a lower rate than operating costs in associated with the project, but implies that it is 1990/91. Given the T$12 million capital cost of necessary to support tourism development in the new terminal building, the annual cost of its Vava'u. Runways at the regionAl airports in maintenance and operation is likely to be of the Tonga are generally of an adequate standard for order of several hundred thousand dollars existing aircraft movements, while other (apparently no estimates of annual O&M facilities are of a basic standard. obligations were established in connection with the terminal feasibility study). Maintenance expenditure, excluding staffing cost, for the - 30 - Table 4.13: TONGA-AIRPoRTS IN TONGA, 1991 Airport Island Runway Length Surface (meters) Fua'amotu Jiongatapu 2,671 Asphalt Concrete Lupepau'u Vava'u 1,700 Coral Salote Pilolevu Ha'apai 1,145 Coral Kaufana 'Eua 730 Grass Mata'aho Niuatoputapu 729 Coral Lavinia Niuafo'ou 1,039 Grass Source: Ministry of Aviation. terminal building in 1990/91 is budgeted at only 4.59 Prior to the establishment of Royal Tonga T$10,000. Only limited consideration has been Airlines (and its cooperative arrangement with given to means for funding the increased cost of Solomon Islands) there had been interest in operating and maintaining the new terminal. obtaining a new aircraft for FIA to operate international services (possibly between Fiji and 4.56 Tonga has been recorded as having Vava'u, in association with Air Pacific, to aviation charges amongst the lowest in the South enhance the tourist potential of Vava'u). Pacific (AIDAB, 1987). Fee increases are However, operation of such international routes currently being considered. Fees were last are not dependent on the acquisition of new increased in 1989, with only minor increases aircraft by Tonga. Commercial viability needs having occurred during the earlier part of the to be tested before major investment is made in 1980s. Higher fees are, questionably, viewed as an aircraft. Use of aid funds to subsidize inimical to expanding tourism. acquisition of an aircraft should be examined in the context of the opportunity cost of using aid 4.57 Consideration has been given to creation funds for this purpose instead of alternative uses, of a Civil Aviation Administration in Tonga, but the sustainability of the investment (i.e. will there are no immediate plans to proceed. revenue from fares be sufficient to allow for replacement of the aircraft at the end of its life), 4.58 Airline Operations. The Government is the beneficiaries of the subsidy (i.e. will they be concerned that domestic air services (and tourist foreign tourists who can afford to pay the full promotion) are constrained by the inability of cost of air services) and the effect on the market Lupepau'u airport in Vava'u to accommodate (i.e. will the subsidized service inhibit the ability aircraft larger than the present Twin Otter of other operators to continue services). The aircraft. However, the average load factor of 65 recent approach of forming cooperative aircraft percent for Friendly Island Airways (FIA) (now sharing arrangements with other carriers in the Royal Tonga Airlines) and sometime cancellation region is likely to be far more cost effective, if or consolidation of domestic flights for lack of not fully viable commercially (see Part IV of traffic suggests the airline has adequate spare this Report). capacity at present to accommodate increased traffic. - 31 - Table 4.14: TONGA-MiNISTRY OF CIVIL AVIATION INCOME AND EXPENDITURE, 1989/90 - 1990/91 cmI '000) 1989/90La 1990/91 /b Revenue 581.0 720.0 Expenditure: Administration /c 91.7 27.2 Airport Services 592.2 889.1 Meteorological Services 3.0 69.3 Total 614.9 985.6 Comprising: Operations 500.0 864.7 Maintenance 114.9 120.9 /a Revised estimate. /b Estimate. /c Excludes costs of Minister's office and Directorate. Source: Ministry of Finance. 4.60 Planning. Planning studies have been standard suggested will require an increase in prepared for Fua'amotu and Lupepau'u airports staffing of the airport from 11 to 24 people. in the past. However, airport development in Higher costs will also be incurred for operation Tonga has not been guided by its economic rate and maintenance of the new facilities. of return; rather, the objective has been to Moreover, the nexus between aviation and develop facilities which promote the aviation and tourism, and especially the use of subsidies for tourist sectors. As there are no clear criteria to the former to expand the latter is questionable establish the appropriate quantity and quality of and requires careful assessment lest scarce funds facilities to be developed given this objective, be poorly utilized. (For an elaboration on this there are continuing proposals to upgrade issue, see Part IV of this Report). airports and air service facilities. For example, a new terminal, control tower and fire/rescue 4.61 Project proposals for Development Plan service at Lupepau'u airport, to upgrading the VI include: airport on Ha'apai to the same standard as Lupepau'u airport, and further extension of the * Upgrading of security, communications runway at Fua'amotu airport have been and other services at Fua'amotu airport proposed. Given the substantial funds required (T$0.6 million). for these projects, careful consideration should * Upgrading of Lupepau'u airport (T$1.0 be given to their cost-effectiveness and their million). implications for subsequent future expenditure. * Lighting for Salote Pilolevu airport For example, upgrading Lupepau'u airport to the (T$0.05 million). - 32 - * Upgrading of Kafana, Mata'aho and Lavinia airports (T$0.25 million). * Feasibility studies and construction of new airpoits at Ha'afeva and Nomuka in Ha'apai to support tourism development (T$0.S million). * Investment in aircraft for Friendly Island Airways (T$7.0 million). * Investment in air cargo facilities (T$0.3 million). * Investment in improved administration, including the possible creation of a Civil Aviation Authority (111.1 million). * Training (TS.38 million). 4.62 The desired development expenditure during the period 1991 to 1995 is T$11.2 million. The only major commitments of donor funds to date have been for some of the improvements at Fua'amotu airport and the upgrading of Lupepau'u airport. In addition to these projects, other proposals are being considered, for example, further lengthening of the runway at Fua'amotu airport to 3,000 meters and additional navaids. The net contribution of these proposals to the Tongan economy (bearing in mind their O&M obligations) has not been established, but would appear questionable. - 33 - CHAPTER 5 TRANSPORT SECTOR DEVELOPMENT NEEDS its institutions and customs, and the present aid environment. However, a number of these A. INTRODUCrION features are not invariate and, together with changes in activities in the tranport sector, will result in a more responsive, apptopriate and 5.1 There is no evidence of transport capacity efficient transport sector. bottlenecks in Tonga. Supported by foreign aid and private romittances, investment in fixed and mobile infrastructure has generally been B. INS-rIJTu1ONAL adequate for the demands placed on the transport system. Indeed, there are instances of over- 5.3 Investment Justiflcation. Implied in investment, in particular in the aviation sector. investment decision-making, particularly in the Yet, there remain areas of deficiency: the single aviation sub-sector, is a belief in the leading role greatest need is improved maintenance of of infrastructure in economic development. The valuable transport infrastructure assets. There effectiveness of this leading role is dependent on are also opportunities for improved institutional complementary activities; benefig attributable to and operational performance. Economic growth it must be offset against the opportunity cost of in Tonga requires that the most effective use be premature or excessively large investment and of made of the existing stoek of assets and future alternative investment opportunities. aid funds; it is likely that improvements can be made in these areas. 5.4 Government Accountability. 5.2 The past practice of global objectives for Governtent is being pressed for greater the trasport sector and a "shopping list' accountability. This will offer both a challenge approach to project selection and implementation to Government to ensure the effective has been an effective tool for obtaining donor perfomance of agencies and an opportunity to suppsprovided a measure of specific promote improved pricing and cost-recovery of support and has Governmentur o secfi actvites consideration of development activities. But as Governent activities. the transport sector has become more developed, 5.5 Transport Strategy. The present there is a need for a more explicit and process for the preparation of Five Year Plans is comprehensive strategy to guide its further in need of review. Past plans have included development and operation. Such a strategy "shopping lists" of projects, with no clear link should enunciate transport policies, indicate the between the strategic role of the transport sector nature of future transport demand, establish a and economic development objectives and framework for the formulation, evaluation and financial resources of the country. These links scrutiny of transport development projects and can provide the basis for consistent objectives, guide priorities. The strategy must be cognizant policies and plans for development of the of the political context of Tonga, the nature of transport sector. Constraints which result from 34 - the lack of a planning context are further the formal budget to amounts of a few thousand exacerbated by the existing fragmentation of dollars for road projects which pass through the responsibilities in the transport sector. Government's accounts. Aid donors are exploring means for better identification and 5.6 In addition to considering alternative implementation of assistance projects. For institutional arrangements in the transport sector, example, AIDAB and the EEC have taken a consideration could also be given to regional focus (in Ha'apai and Vava'u, incorporating the Central Planning Department respectively). Actions which lead to more into the Ministry of Finance (as occurs in Fiji) systematic planning and better coordination of where it can coordinate programs from various development assistance should be encouraged. agencies within the financial resources of Government. Sector planning currently 5.9 Few projects have identified the need for, undertaken by the Central Planning Department or have sought institutional or policy changes could, with appropriate realocation of resources, by, the Tongan Government to accompany be undertaken within sector agencies under the project implementation. Such actions need to be guidance of the Central Planning Department. encouraged, for example, try to ensure that Government can generate adequate funds for, 5.7 Hunan Resource Development. Tonga and make commitmnent to, adequate ntenance has given a high priority to training its citizens of projects. Moreover, it is likely that there will to undertake tasks in the transport sector. be instances in which policy and institutional Howevt,r, there continues to be a need for changes can provide a greater rate of economic further well targeted training. Budgetary and return than additional physical investment. staffing constraints require that this training be undertaken in the most efficient manner. While there is a continuing need for Tongans to C. GENERAL TRANSPORT SECTOR ISSUES complete tertiary studies overseas, the opportunity cost of post-graduate studies is high 5.10 Project Selection and Appraisal. There given the funds expended, their absence from is a need for project formulation to be based on Tonga, limited appropriate positions for them a sound perspective of the strategic role of the upon their return to Tonga, and competing transport sector in the economy and the opportunities outside Tonga. Solid under- appropriate role of each transport mode and the graduate training overseas and technical on-the- private and public sectors. Such a perspective job training in Tonga will, in many instances, be should allow a more systematic approach to the a more effective approach to upgrading needed identification of infrastructure development local skills. Development of local skills and needs. Given the small scale of many projects, responsibilities will be assisted by reassigning screening tools could avoid the need for detailed expatriate staff from line positions in economic evaluations of individual small Government and using them as advisors and projects. The activities of present regional educators. Use of twinning arrangements with development committees would be enhanced by similar overseas organizations warrants a clear, practical vision of the development exploration. potential of the regions. In addition, some overall coordination of development across 5.8 Aid Environment. Aid to Tonga is regions should be undertaken. dominated by bilateral assistance for investment in infrastructure and equipment and the 5.11 Maintenance is perhaps the single most provision of technical assistance. There is a important issue which must be addressed. While spectrum of assistance, ranging from TS12 the opportunity cost of reduced maintenance is million for the new air terminal funded outside low in the short term, its cost increases over - 35 - time as deterioration of infrastructure in a more efficient transport sector and changing accelerates. At present Tonga is dependent on infrastructure development needs and priorities. donor support for reconstruction of deteriorated infrastructure. There is thus a need for adequate 5.14 Institutional Responsibilities. A budget support for maintenance, particularly for constraint to improved performance of the roads for which annual maintenance needs are transport sector is the unclear and fragmented perhaps three to four times that spent in the allocation of institutional responsibilities between 1980s. Moreover, the recurrent budgetary Government agencies. In the maritime sub- implications of future infrastructure development sector, for example, it would seem more projects needs to become a formal part of appropriate that the Ministry of Marine take full project appraisal, with donor assistance responsibility for policy and regulatory matters cognizant of its importance and the means to and the Ports Administration Department focus fund it. It is likely that consideration of life- on port operations. The mix of controls cycle capital and maintenance costs will affect affecting road traffic management and road use design standards. For example, design involving the Ministry of Police and the standards might be modified to simplify ongoing Ministry of Lands and Labor should be reviewed maintenance needs. The first step in improving and responsibilities consolidated. It is also maintenance management is a review of existing likely that performance is hindered by the transport infrastructure to establish the most limited use of the private sector made by valuable assets. Based on these priorities, Government (for example, road construction and maintenance and funding requirements can be maintenance). identified. 5.12 Plant and equipment for maintenance is D. LAND TRANsPoRT SUBSECTOR in limited supply and is in poor condition. The poor condition of some equipment is attributable 5.15 Management Systens. Activities in the to the limited skills of personnel, and road sub-sector are constrained by the lack of maintenance neglect, but much of it is due to formal road inventory and of maintenance and age. financial management systems. As a result there is poor knowledge of the present status and 5.13 There is a need to artic'!ate policies on maintenance history of existing infrastructure user charges, cost-recovery and regulatior; and of outstanding maintenance needs. This which will promote economic efficiency and reduces the efficiency of existing maintenance generate funds for operations and maintenance in activities, and inhibits the formulation and the transport sector. User charges set by articulation of road maintenanace needs. There is Governmnent should be modified more frequently a poor perception of the full social cost to the to be responsive to changes in costs. economy of inadequate maintenance. Specification of cost-recovery policies for Government activities will assist the management 5.16 Private Sector Participation. The of these activities and will aid the setting of user Government has limited direct involvement in charges. Regulation of the transport sector the provision of transport serv,>e-. but has should continue to be minimized ard focused on imposed price regulation of passenger transport. ensuring safety; when directed to economic Care is required to ensure that regulation does matters, it should be directed to articulated not inhibit private sector operations by not objectives and its justification quantified. It is permitting an adequate financial rate of return, likely that transport demand will change in nor that it leads to inefficiency or excessive rates response to policies set in this manner, resulting of return by private operators. This can be assisted by continuing to allow free entry and - 36 - exit by private operators to the transport given to establishing and enforcing more realistic industry. speed limits. 5.17 The scope for substantial private sector involvement in road construction and E. MARrrIm SURsCEOR maintenance in Tonga is limited by the small scale of these activities, the irregularity of 5.21 Strategy and Policies. A proposed study construction over time and the difficulty in to prepare maritime projects should incorporate developing a competitive contractor market. formulation of a strategy to guide development Nevertheless, the efficiency of construction and and management of the subsector. This strategy maintenance activities will be improved by such should lead to maritime policies and a context in participation, and opportunities for private sector which potential investmen' projects can be involvement should be encouraged. assessed. It is likely that domestic maritime Consideration should also be given to transport demand will stagnate or grow little as privatization of quarries. an increasing proportion of economic activity occurs on Tongatapu. Development needs for S.18 User Charges and Cost Recovery. The maritime infrastructure on outer islands should, land transport sector will become more efficient therefore, be assessed carefully. through a regime of market prices, with intervention only where there are demonstrable 5.22 Maritime Regulations. Tonga has market distortions. There is an urgent need to shown a reluctance to ensure commitments to increase road user charges from the present low join regional international maritime codes and levels to reflect the replacement costs of assets associations. This policy should be reviewed consumed by road transport and to establish the and associated legislation considered. appropriate funds available for maintenance and management (traffic management and 5.23 Domestic Shipping. Formal domestic enforcement) of road transport. There may be shipping services are adequate at present, and further gains in economic efficiency by the presence of a contestable market with free reviewing import duties on vehicles and raising entry will promote reasonable efficiency. The fees related to vehicle licensing and use. Shipping Corporation of Polynesia needs to increase its surplus to repay principal on the 5.19 Road Investment. There is limited need loan used to purchase the Olovaha. for construction of new roads in Tonga in the near future (assuming no natural disasters). 5.24 There is no information on services Roads which are required will be those which provided by vessels with a length of less than 15 provide links to agricultural and tourism meters. The presence and role of the informal development projects. shipping industry needs to be appreciated when formulating strategies for the maritime sub- 5.20 Road Safety and TraMc Operations. sector. Road safety and traffic management are emerging issues. It will be necessary in the 5.25 Port Operations. There has been longer term that the Ministry of Works develop considerable investment in port infrastructure, traffic engineering skills and be responsible for particularly at Nuku'alofa. Given the need to road signs and other traffic management devices. better maintain the existing infrastructure, it is Education and enforcement programs are important that cost-recovery be improved and required to improve road safety, particularly .n that further investment have the capacity to the areas of speeding and driving under the increase revenue sufficiently to provide adequate influence of alcohol. Consideration should be funds for maintenance and replacement. -37 - Moreover, there is a need to better optimize 5.28 ArUine Operations. There has been investment project design, including use of relative stability in international air services to greater innovation in project formulation. For Tonga in recent years. There can thus be less example, there may be simpler, more efficient concern that international air services are at risk alternatives to purchasing imported container- and that major concessions must be made to handling equipment for ports such as Neiafu port ensure continuing services. However, the on Vava'u. leasing arrangements to provide Royal Tonga Airline services should be carefully assessed to ensure cost-effective and profitab;3 operations. F. AVInON SUBSECR 5.29 The new international services under 5.26 Strategy and Policies. Tonga has been Royal Tonga Airlines, based on a cooperative successful in securing substantial donor aircraft sharing arrangement with Solomon assistance for the development of its airports. Airlines, is a measured approach for Tonga. Given the large quantity of funds expended, it is Although the success of this approach remains to an opportune time to re-assess the present be established, such arrangements reduce capital policies which guide airport development. This costs and commercial risks. To be sustainable, reassessment should examine the extent to which air services should operate profitably and the development of airports has encouraged without grant assistance. Subsidies to serve tourism, the rate of return on the investment, social obligations need careful design and and means for financing the increased recurrent assessment, especially regarding their cost expenditure which accompany the investments. effectiveness. 5.27 Airport Operations and Maintenance. 5.30 There appears to be adequate domestic Tonga will continue to incur increasing costs for air service capacity in Tonga for present levels operation and maintenance of its airport facilities of demand. However, the lack of competition to as recent and ongoing investments become FIA/Royal Tonga Airlines resulting from the operational and age. As cost-recovery is not prohibition of entry to other operators may currently achieved, particular attention is reduce the efficiency of domestic air services. required to enhance revenue9 to meet the higher costs which will occur in the future. Establishment of maintenance priorities will become increasingly important. - 38 - Endnotes 1. This transport sector survey is based on a mission to Tonga in February 11-14, 1991. The mission members were Colin Gannon (Senior Economist and mission leader), and David Bray (consultant). A draf of this report was discussed with the Government of Tonga June 22-24, 1992. 2. 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 Fiji, Kiribati, Solomon Islands, 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 Solomon Islands economy and its development projects. 5. In late 1991, the Government of Tonga renamed Friendly Island Airways as Royal Tonga Airways which added international services through a collaboration arrangement with Solomon Airlines. rurther discussion of this new arrangement is presented in Part IV, Volume One, of the report on this study. 6. Total desired investment for DPVI is T$49.2 million, distributed as roads (41 percent), ports (36 percent) and aviation (23 percent). 7. AIDAB has a current program which includes about T$S .1 million for projects included in DP-VI, and proposals for funding projects in Ha'apai and Vava'u are currently being discussed with AIDAB and the EEC, respectively. Expenditure proposals for DP-VI exclude some committed projects, for example, an AIDAB project to implement a pavement maintenance management system (T$0.1 million) and to supply equipment (T$0.9 million). 8. An interim report, Maritime Infrastructure Study was issued in June 1992. A major focus of this study is upgrading (strengthening and possible lengthening) of the Queen Salote, No. I Wharf. 9. Landing fees were increased by 40 percent in March 1992 and the departure tax has been increased from T$10.00 to T$15.00. - 39 - BIBLIOGRAPHY Australian International Assistance Bureau (i991), Ministry of Works lfrastructureDewelopmentProject, Pacific Regional Team, Sydney, February. Australian International Assistance Bureau (1987), Fua'amotu Airport, Tonga - AirPOrt Development Study, prepared by Airport Consulting and Construction Australia Pty. Ltd. Beca Worley International (1988), Road Evaluation - Tonga, December. European Commmunity (1988), 'Project Appraisal for Lupepau'u Airport hprovements, Vava'u Island". GITEC Consult GMBH (1990), Fourth Multiproject Appraisal and Implementation Study, Subproject B, Road Improvement Appraisal Report, prepared for the Asian Development Bank and the Kingdom of Tonga, September. Government of Tonga (1986), Five Year Roads Programme, prepared by the Ministry of Works. REDECON Australia (1987), Third Multiproject, Road Improvements Tongatapu, prepared for the Asian Development Bank, July. Transport and Road Research Laboratory (1982), The TRML Road Investment Model for Developing Countries (R77M2), TRRL Laboratory Report 1057. World Bank (199 la), Towards Higher Gromh in PaciflcIsland Economies: Lessons of the 1980s, Report No. 9059-ASIA, January, 18. World Bank (1989), South Pacific Transport Sector Review. World Bank (1989), South Pacific Islands Transport Sector Review, Country Report - Tonga, prepared by PPK Consultants Pty. Ltd., December. - 40 - Tonga ( Hondiu FII VIm,PH>I rLPaHo Pago NZ Ai Now Z*ald FJ Ai Pa fl PH Pdlyem Ane TS Saro& Aklhu Ij AIreA dut te INTERNATIONAL AIR SERVICES N«t of we" Wu In h dhsot -41 - TONGA TRANSPORT SECTOR SURVEY ANNEX 1 -42- ANNEX 1 CONTENTS 1 INTRODUCTION ...................................... 44 A. Context ........ 44 B. Maintenance Management Framework . 44 2 NATURE OF THE MAINTENANCE ISSUE . .47 A. Transport Infrastructure Inventory .47 B. Assessed Maintenance ................................. 51 C. MaintenancePractices . . 52 D. Implications of nadequate Maintenance .57 E. Maintenance Funding .59 F. Situation Summary .64 3 EQUIVALENT ANNUAL VALUE FOR TRANSPORT INFRASTRUCTURE ............... 66 4 ROAD VEHICLE OPERATING COSTS ..68 -43- ANNEX 1 LIST OF TABLES Table No. 1 Tonga-Management Information Inventory Roads .................. 45 2 Tonga-Management Information Inventory Ports ................... 45 3 Tonga-Management Information Inventory Airports ................. 46 4 Tonga-Estimated Road Length, 1991 .......................... 48 5 Tonga-Estimated Road Lengths by Surface Type 1991 ............... 48 6 Tonga-Road Construction Costs ............................. 49 7 Tonga-Estimated Replacement Cist Government Marine Facilities, 1991 50 8 Tonga-Estimated Replacement Cost Government Aviation Facilities, 1991 ... 50 9 Tonga-Average Annual Road Maintenance Costs, 1991 .51 10 Tonga-Annual Average Maintenance Cost as a Percentage of Replacement Value for Marine Facilities .52 11 Tonga-Estimated Average Annual Maintenance Cost Government Marine Facilities .53 12 Tonga-Estimated Average Annual Maintenance Cost Government Aviation Facilities .53 13 Tonga-Recurrent Income and Expenditure for Ministry of Works .54 14 Tonga-Recurrent Income and Expenditure for Ports Administration Department .56 15 Tonga-Recurrent Income and Expenditure Ministry of Civil Aviation 58 16 Tonga-Summary of Infrastructure and Maintenance Costs .59 17 Tonga-Income from Import Duty and Service Tax (1990) .62 18 Tonga-Summary of Cost Recovery .65 19 Tonga-Summary of Infrastructure Value and Maintenance Costs, 1991 67 20 Road Roughness and Condition .............................. 68 21 Tonga-Vehicle Operating Parameters, 1991 ...................... 70 22 Tonga-Vehicle Operating Costs, 1991 ......................... 71 LIST OF BOXES Box No. 2.1 Vehicle Operating Cost ................................... 60 4.1 Traffic Volumes ........................................ 69 -44- ANNEX 1 CHAPTER 1 INTRODUCTION A. CoNTExT B. MAINTANCE MANAGEMENT FRAMWORK 1.1 This annex provides documentation of a survey of the maintenance situation in Tonga.' 1.4 Tables 1 to 3 indicate the extent of This survey, along with similar surveys for other management information available for each PMCs, represents the background for the transport subsector.2 regional analysis of transport infrastructure maintenance for the five PMCs presented in 1.5 The tables illustrate the almost complete Volume One (Part ED of this report. lack of information available below the sectoral level which would assist in the development, 1.2 Previous studies (Beca Worley 1988 and operation and maintenance of the transport GITEC 1990) identify the inadequacy of road system. An adequate road traffic counting maintenance on Tonga, as noted in the Country system exists, particulariy for the main island of Survey. The current National Development Plan Tongatapu, but there are deficiencies in all other (DPVI) reiterates the key transport issues and aspects of the road information system. Some constraints identified in DPV-the need for additional information is available in the aviation effective management of existing road assets and subsector, directed mainly to meeting the development of a road user charge system to international operational and air safety contribute to the provision of maintenance funds. requirements. The major deficiencies relate to information useful to the development of 1.3 The present rudimentary asset adequate maintenance management strategies and inventories, held by the responsible systems. Departments, contain no information on asset conditions, nor historical data (other than an estimate of the total length of road in the country). Existing evidence of insufficient maintenance is circumstantial, and generally consists of descriptive observations of the present poor condition of on the basis of infrastructure. Little analysis has been undertaken of the need for cost effective maintenance. Beca Worley (1988) estimates the minimum requirement for road maintenance should have been almost double the funds budgeted in 1990/91. .45 - ANNEX 1 Table 1: TONGA-MANAGEMNr INFORMATON INvETOY ROADS _wieam Prpos -wl_ hE GmoL . Levd Road Pavement Sucts Traff Finnc Activy Resour e _______ ___ ___ _______ ____ In ento !y I__ _ _ _ _ _ _ _ _ Sectorcl Overdl budjets7 P U U A P P P .__ ___ _ mnation I Network Traffic denand and P U U P U U P physical characteristics by _ _ _ _ _ _ ~link_ _ _ _ _ _ _ _ _-- Project Spcifc inm isted to coatnac- - Not As d tao bm t ad Operations Maintence of thd U U U U U U U system to provido efective srice Reebah U"d forqaeiflc U U U U U U U and ieiadouof Developmant developmetof the ii q~~syteD or its apera- .. ~~~~tional effciency_ / See pa 1. 1.7. A .acceptabl badc information available P - partial basc inforrmtion available U - information uavailable. Source: Mision review. Table 2: TONGA-MANAGEMENT INFORMATION INVENTORY PORTS -______ Technical Grou Functional Prpose Level Structures Civr Buldinp Pla & Traftc Face Resoumes Works Equipment _ Sectoral Overall budgetary U U U U P p P and adtistical information Network Trafric demand and p p U U P U U physical character- istics by locatien Project Specific data Not Ausseed- Operations Maintenance of the U U U U U U U system to provide effective ervice Rewearch and Ued for pecific U U u U U U u Development investigations La See para 1. 1.7. A - acceptable basic informdtion available P - partial basic informtion available U - information unavailablk. Source: Mision review. mm - - - - * F iifTI[ if I I EEl - - - - -_ H f[ 1!i' uL I I it *r iii. S. 3' I. 1 5. a tdb 5. - - - - __ -- 'ml .5 .50 0 1a _____________ I * a 0 I. liz I-- I. C C C .5 a C C C * C a mm - - - - - - - - 47 - ANNEX I CHAPTER 2 NATURE OF TIE MAINTENANCE ISSUE A. TRuNSPORT INFRASTRUCTuRE 2.4 The estimated lengths of road in Tonga INVEZ RY by road classification are set out in Table 4. The table includes an estimated length of 42 km 2.1 Very little data are available on transport of urban roads in Nuku'alofa, additional to road infrastructure in Tonga. Such information which lengths which are generally reported. Reported exists is presented below.' lengths of Highway, Trunk, Federal and Access roads in DPVI have been increased to reflect the 2.2 the value of major transport assets in situation at 1991. Tonga has been established using estimates of the replacement cost of identified assets. Where 2.5 The road lengths in Table 5 have been projects have been completed recently, the retabulated to give estimated lengths of road by replacement cost is assumed equal to the surface type; sealed, coral surfaced and earth construction cost, adjusted to present prices. formed. No formal inventory of roads by For older assets the replacement values have surface type exists and the figures are based on been calculated by comparison with the recorded partial information from available source value of similar recent assets. By using a material. 'replacement' value for the asset, no consideration has been given to the condition of 2.6 The replacement cost of the road assets is the asset. In most cases the actual value of the estimated on the basis of road construction costs asset would be considerably lower than the prepared for road studies (ADB 1987, GITEC replacement cost, due to age and lack of 1990) and Ministry of Works, Tonga, cost maintenance. figures. As it is not possible to differentiate road lengths by surface type and by pavenment Road Inventory width (Road Classification) the construction cost for a sealed highway (Class A road) has been 2.3 The Public Works Department does not used for all sealed road and the construction cost maintain a formal road inventory. As set out in for a coral surfaced trunk road (Class B road) Table 1, there is little or no data which would has been used for all coral surfaced roads within assist with the strategic planning, work the Highway/Trunk classification. programming, project development c-r operational control of the road system. NL 2.7 The calculated replacement cost of road information is available on pavement condition assets is T$77.64 million (1991 prices) based on and no inventory exists of bridges and culverts. estimates in Table 6. This estimate does not Traffic volume information for major roads on include bridge and major drainage structures, for Tongatapu' however, is well detailed. which no inventory or estimated value is available. The topography of Tonga is flat and these structures are unlikely to be extensive. If -48- ANNEX I Table 4: ToNGA-ROAD LENGTH, 1991 _____ n~~~~~~~~~(un) (m)- Region Highway Trunk Feeder Access Urban Total Tongatapu 64.6 192.0 287.0 487.0 42.0 1,072.6 Vava'u 9.3 93.3 123.0 97.0 - 322.6 Ha'apai 7.0 31.1 145.0 55.0 - 238.1 'Eua 1.0 20.8 85.0 40.0 - 146.8 Niuas _ 29.3 65.0 - - 94.3 Total kms 81.9 366.5 705.0 679.0 42.0 1 ,874.4 Source: Ministry of Works, Central Planning Department. these assets are assessed at 10 percent of road expenditure includes funding for interisland costs, the total replacement cost of public road shipping, marine navigation aids and other assets is some T$85 million (1991 prices). marine works in addition to port facilities at Nuku'alofa, Neiafu and Nafanua Harbor. Marine Infrastructure Inventory 2.10 The replacement cost of port facilities at 2.8 The Ports Administration Department Nuku'alofa has been estimated by assessing the does not maintain an inventory of assets, use an present value of major construction works asset depreciation system, or prepare carried out at Nuku'alofa during the period 1983 commercially oriented financial accounts. - 1987, including the development of the Faua fishing harbor and adjacent foreshore protection 2.9 An unpublished review of transport works. Construction cost reports during 1985 facilities in Tonga (AIDAB, 1990) estimates an and 1986 were used to assess the costs of mnajor expeniditure of T$19.7 million on the Tonga components of the development. An estimated marine subsector in the period 1978 to 1988. In cost of existing facilities (the original Queen present (1991) prices this expenditure is Salote Wharf) has been included. equivalent to T$32.4 million using an average annual inflation factor of 7 percent. This Table 5: TONGA-ROAD LENGTHS BY SURFACE TYPE, 1991 (un) Classification Urban Rural Total l__________I Highway/Trunk Feeder/Access Sealed 24 85 109 Coral Surfaced 18 363 111 492 Earth _ 1,273 1,273 448 1,384 1,874 Source: Mission estimates - 49* ANNEX 1 Table 6: TONGA-ROAD CONSrRUCrlON COSTS (1991 prices) Road Type Class Construction Road Replacement Cost Length Cost l______________ (IT$/kin) (km) (I millionis) Sealed lrban, Highway & 140,000 109 15.26 _ _ _ _ _ _ _ _ _ _ _ T runk_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Coral Surfaced Highway and Trunk 85,000 381 32.39 Coral Surface Feeder 50,000 111 5.5' Earth Formed Feeder 24,000 594 14.26 EarthFormed Access 15,000 ' 679 | 10.18 Total Road Replacement Cost 77.64 Source: Mission Estimates. 2.11 An estimate of the replacement cost of 2.14 The unpublished review of transport outer island port facilities has been made by facilities in Tonga (AIDAB, 1990) estimates an using the present cost of developments in expenditure of TS11.91 million on the Tonga Ha'apai, N4eiafu ('Eau) and Nafanua (Vava'u) aviation subsector over the period 1978 to 1988. which were financed through aid funding in the This expenditure is equivalent to T$16.88 early 1980s and later during 1987-1990. The million in present (1991) dollars, using an resultant estimate is a conservative valuation of average annual inflation factor of 7 percent. assets as it does not include the value of The addition of T$12 million for the new previous works. terminal at Fua'amotu, completed in 1991, indicates a total investment in the aviation 2.12 Table 7 sets out the estimated subsector of some T$29 million (1991 prices) replacement cost of port assets and includes an from 1978 to the present. allowance for marine navigation facilities. Th., total estimated replacement cost is T$36.3 2.15 The replacement cost of aviation facilities million (1991 prices). at Fua'amotu has been estimated by assessing the present value of major investments in the Aviation Infrastructure Inventory runway, terminal, control tower and lighting, most of which has occurred since 1987, and 2.13 The Ministry of Civil Aviation has not adding an estimated cost for previous investment developed an asset inventory which can provide in the runway, taxiway and apron. A the basis for an asset management system. provisional allowance has been made for General data are available on the facilities at navigation and communications equipment, Fua'amotu and the five regional airfields (for building plant and mobile equipment. example, runway length and surface, buildings and facilities). 2.16 The five regional airports have coral surfaced runways varying in length from 1700 meters at Lupepau'u (Vava'u) to 730 meters at -SO- ANNEX 1 Table 7: TONGA-GOVERNrM MARINE FACLTIES REPLACEMENT CoSr, 1991 (IS million) Location Fadlity Replacement Nuku'alofa * Harbor, foreshore protection works 1.5 and Faua * Wharves and jetties 15.6 * Hardstand 4.5 * Buildings 1.8 * Shipwrrking equipment 1.S * Tugs and workboats 3.0 * Other (ship lifting fdcUlity) 0.S Subtotal 28.4 Outer Islands All facilities 5.4 General Navigation Aids 2.5 Total Marine Infrastructure Replacement Cost 36.3 Source: Mission Estimates. Kaufano and Mata'aho. The Ministry of Civil been taken as the replacement value. As shown Aviation estimates that a total of T$3.9 million in Tabe 8, the total replacement of government (nominal prices) has been invested in their aviation assets is estimated at TS40.5 million airports over the past 5 years. This figure has (1991 prices). Table 8: TONGA-GOVERNMENT AVIATION FACILITIES REPLACEMNT COST (T$ million, 1991 prices) Location Item Facility Cost Fua'amotu * Runway, taxiway, apron 20.2 * Terminal 12.0 * Control Tower 0.9 * Equipment, plant 2.2 Subtotal 35.3 Regional Navigation, radio equipment beacons 1.3 Regional Airfields and facilities 3.9 Total Aviation Infrastructure Replacement Cost 40.5 Source: Ministry of Civil Aviation and Mission Estimates. -51- ANNEX 1 B. ASSEsseD MA ANCE a road development program totalling T$20. 125 million (1991 prices) over the plan period. Of Roads this amnount T$10.05 million appears from the program to be for reconstruction and 2.17 Average annual road maintenance costs rehabilitation works and can be assumed to are developed based on estimates prepared for reflect the present backlog in road maintenance the Road Evaluation Study, Tonga (Beca Worley needs. 1988), adjusted to 1991 prices. The estimates used include periodic reseal and regravel costs, Marine Infrastructure reduced to an average annual equivalent cost. The estimated values on a kilometer base have 2.19 Annual average maintenance costs for the been applied to the lengths of road by class and marine subsector have been calculated by surface condition (Table 6) to derive total annual applying industry-wide guideline percentage maintenance costs (Table 9). factors to the estimated replacement costs of marine structures and equipment. Because 2.18 The estimated annual maintenance cost costings of replacement value are aggregated, assumes that the road system is in good rather than individually detailed, general maintainable condition and that maintenance is percentages have been used (see Table 10). On directed to preserving design standards. This is the basis of these data, the estimated average not the case, although no pavement or structure annual maintenance cost is TS0.73 million (1991 inventory exists from which to calculate the prices) for facilities at the main port of backlog of the rehabilitation or reconstruction Nuku'alofa and T$0.21 million (1991 prices) for costs. A number of reports (ADB 1987, Beca outer island wharves and jetties and for Worley 1988, GrTEC 1990) have commented on navigation aids (see Table 11). This represents the underprovision of funding for maintenance. a total annual maintenance requirement of The general conclusion has been that the annual T$0.94 million (1991 prices). provision for road maintenance should be twice the level provided. Reports indicate that roads 2.20 There is firm evidence of maintenance in the outer regions are generally in poor and rehabilitation needs in the marine subsector. condition and that rehabilitation of some roads The Ports administration Department on Tongatapu is required. The National commissioned a Maintenance Audit of Port Development Plan 1991-1995 (DPVI) indicates Facilities in Tonga in 1991. The audit did not Table 9: TONGA-AvERAGE ANNUAL ROAD MAINTENANCE COSTS, (TS, 1991 prices) Road Type Class Cost/km Length Total Cost TS (kln) (T$ million) Sealed Urban, Highway & Trunk 3,300 109 0.36 Coral Surfaced Urban, Highway & Trunk 1,400 381 0.53 Coral & Earth Feeder & Access 800 1,384 1.11 Total 2.00 Source: Mission Estimates. - 52- ANNEX 1 Table 10: TONGA-MARINE FACILITIES ANNUAL AVERAGE MAIEANCE COST AS A PERCENTAGE OF REPLACEENCT VALUE Facility Percent of Capital Value * Qu-v, wharf structures - reinforced concrete deck with steel piles 1.0 - hardwood deck and steel or reinforced concrete piles - mass concrete 1.5 * Buildings, offices, sheds 0.15 * Mobile equipment and boats 1.5 10.0 Source: Ports Authority of Fiji and UNDP. include ship working equipment, tugs, the replacement cost. These figures include workboats and other mobile equipment. The periodic as well as routine maintenance (soe audit found that structural repairs were required Table 12). The estimated average annual to wharf structures and general repairs to a maintenance requirement for aviation number of buildings and sheds, totalling infrastructure at Fua'amotu is T$0.44 million TSS267,000 (1991 prices) for the port of (1991 prices) and for the five regional airstrips Nuku'alofa and the Faua Harbor. Outer island and the navigation aids TW. 1 million (1991 wharf repairs required an estimated T$38,000 prices). The total for all facilities is TS0.54 (1991 prices). This level of outstanding million (1991 prices). maintenance needs is not excessive, and approximates the estimated long term annual 2.22 Facilities at Fua'amotu have been maintenance requirements of relevant items in reconstructed or replaced recently and there is Table 28. A major project to upgrade and little evidence of any outstanding rehabilitation replace about 50 percent of navigation aids in requirements. The regional airstrips are Tonga has been completed recently (AIDAB) at understood to be in reasonable condition with a cost of TS$1.2 million (1991 prices) which the exception of Salote Pilolevu airport (Ha'apai) should reduce the outstanding rehabilitation which needs resurfacing of the coral runway. needs of these facilities. Aviation Infrastructure C. MAINTENANCE PRACTICES 2.21 Annual maintenance costs for the aviation Roads subsector have been calculated by applying percentage factors to the estimated replacement 2.23 Published data pertaining to the Ministry cost of facilities. No specific source documents of Works is set out in Table 13. Allocations for have been identified which provide indicative road maintenance by region are set out in the values, as is the case for marine infrastructure. budget and the total has varied between Percentage values have been based on general TS$680,000 and TSS850,000 over the period figures for building maintenance, building plant from 1988/89 to 1990/91. The budget estimate maintenance and civil works maintenance in the for 1991/92 provides a sinificant increase for case of major airports. For regional airports the road maintenance, with funding increased by annual costs of maintaining the runway and 30 percent over the 1990/91 allocation. These general area have been estimated at 2 percent of appropriations cover labor, plant (at the - 53- ANNEX 1 Table 11: TONGA-GOVERNMEN MARINE FACILTmS AVERAGE ANNUAL MAINTENANCE COST, 1991 (C', 1991 prices) Itern Replacement Factor Average Annual Value (percent) Maintee ($ million) (S) Nuku'alofa * Protection works 1.5 0.5 7,500 * Wharves & jetties 15.6 1.0 156,000 * Hardstand 4.5 1.0 45,000 * Buildings 1.8 1.5 27,000 * Shipworking equipment 1.5 10.0 150,000 * Tugs/workboats 3.0 10.0 300,000 * Other 0.5 10.0 50,000 Subtotal _ . 735,500 Outer slands 5.4 1.5 81,000 Navigation Aids 2.5 5.0 125,000 TOTAL 941,500 Source: Mission Estimates. Table 12: TONGA-GoVERNMENT AVIATION FAcILMES EsTIMATED AVERAGE ANNUAL MAINTENANCE COST, 1991 (TS, 1991 prices) Facility Facility Value Factor Average Annual ____________ __ (F$ million) (percent) Maintenance (US) Major Facilities * Terminal and other buildings 12.9 1.0 129,000 * Runway/aprons/taxiways 20.2 1.5 202,000 * Fire tenders, mobile equipment/plant 2.2 5.0 110,000 Regional Airfields * Lump sum estimate (per airfield) 3.9 2.0 78,000 Regional Navigation Aids 1.3 2.0 26,000 TOTAL 545,000 Source: Mission estimates. _54- ANNEX 1 Table 13: TONGA-RECURRENT INCOME AND EXPENDITURE FOR MNIMSTRY OF WORKS, 1988/89 - 1991/92 (1$ 000's, current prices) Revenues 1988/89 1989/90 1990/91 1991/92 (budget) Income: * Building Architectural Services .. .. 81.0 83.2 * Mechanical Services .. .. 380.0 381.0 * Sale of Aggregate .. .. 200.0 210.0 * Rent of Buildings .. .. 50.0 52.0 Total .. .. 711.0 726.0 Expenditure: * Ministers Office 22.0 24.6 27.9 29.5 * Directors Office (Engineering) 71.9 92.5 117.2 153.0 * Administration 75.1 93.4 116.9 121.8 * Transport, travel, other services 172.2 198.9 201.9 162.5 * Mechanical Services: - staff 105.5 146.4 196.6 210.6 - maintenance of machine shop 19.6 22.5 19.7 20.0 - Maintenance/operation vehicles & plant 189.9 723.3 912.4 820.0 * Building Services * Roads Services: 424.5 405.4 674.3 611.1 - staff - maintenance: 56.6 67.4 96.1 135.1 Tongatapu Ha'apai 412.8 386.8 511.6 515.3 Vava'u 25.0 19.3 19.9 28.0 'Eua 182.6 164.2 173.3 176.0 other 26.1 21.8 29.1 30.0 special works 9.4 12.2 15.9 18.0 * Maintenance/ops of quarries 30.9 11.8 - 192.5 * Other Services 514.2 606.1 479.9 533 261.5 257.1 235.7 279.7 Total 3,563.3 3,253.7 3,828.4 4,036.3 Of which the direct allocation to Road 743.4 683.5 845.9 1,095.3 Maintenance is Source: Ministry of Works. approved hire rates) and materials purchase. not possible, given the other services in the The apportionment of the net costs of plant and Ministry which utilize these functions. The vehicle maintenance and quarry operations apportionment of other overhead costs (office, (expenditure less income) to road maintenance is administration etc.), however, would increase -55 - ANNEX 1 the allocation to road maintenance by some 10 comprise 70-80 percent of the total maintenance percent. The appropriation for road budget. The allocation for harbor works, maintenance has not met demands for routine wharves and jetties has averaged just over maintenance and funding is normally fully T$30,000 per annum during the period. utilized within the first 9 months of the financial Although much of the harbor facilities at year. Nuku'alofa are relatively new and maintenance requirements can be expected to be low during 2.24 The present system of budget allocation the early life of the port structures, the provision and cost reporting does not provide information for maintenance is inadequate. The Maintenance on a program or project cost basis and the actual Audit of the port facilities (see para. 2.23) expenditure attributable to road maintenance identified T$267,000 (1991 prices) of cannot be defined. In addition the plant hire outstanding maintenance works at Juku'alofa rates for maintenance works, historically, have which is equivalent to 9-10 times the recent been set at levels well below real operating annual maintenance allocations for the relevant costs. The hire rates were increased on 15 July, facilities. The total allocation for maintenance 1991 by some 25 percent over the previous rates falls well below the estimated long term average which were set in 1986. The plant hire charges requirements of T$0.94 million (1991 prices) are based on general estimates of costs, as there (see Table 11). is no effective plant costing system in operation. Aviation Ports 2.28 Funding for the maintenance of aviation 2.25 The Ports Administration Department is facilities is appropriated to the Ministry of Civil responsible for the maintenance of port facilities Aviation. Routine maintenance of general at Nuku'alofa and for the maintenance of public facilities is carried out by Ministry staff. wharves and jetties outside of the main port. Periodic maintenance of airstrips, buildings and Funds for maintenance are appropriated to the equipment is undertaken by contract in Department. The Ministry of Works undertakes accordance with priorities determined by the maintenance of fixed facilities on request from Ministry of Civil Aviation. Maintenance of the Ports Administration Department. Other navigation acts and communication equipment is general maintenance works are carried out by undertaken using in-house resources and private Port personnel. sector contracts. 2.26 During the period 1988/89 to 1991/92 the 2.29 The recurrent funding for the Ministry of difference between expenditure and income has Civil Aviation for the years 1988/89 to 1991/92 increased from 2 percent to 15 percent of is set out in Table 15. Expenditure has income (see Table 14). Income increased by exceeded income in each year. The deficit in only 8 percent and declined in real terms by 14 income has declined in percentage terms in each percent while expenditure remained constant in year and a substantial reduction in the deficit is real terms over the period. estimated for the 1991/92 year. About 88 percent of income collected by the Ministry 2.27 Allocations for maintenance increased is derived from landing fees and passenger substantia1ly in 1989/90 but have declined since departure taxes. In the period since 1988 then. Budgeted expenditure for maintenance in income has increased substantially, the 1991/92 1991/92 is less in real terms than the allocation budgeted income being more than double actual in 1988/89. As shown in Table 14 the income in 1988/89 (current year prices). allocations for maintenance of lights, buoys and Expenditure on airport and meteorological beacons and maintenance of plant and equipment services has also increased substantially, but the -56 - ANNEX 1 Table 14: TONGA-RECURRENT INCOME AND EXPENDITURE FOR PORTS ADMINisTRATioN DEFARTMENT, 1988/89 - 1991/92 (T$ 000's, current prices) 1988/89 1989/90 1990/91 1991/92 (budget estimate) Income: * Tonnage Due 34.4 31.7 38 39 * Harbor Due 42.8 47.2 52 53.5 * Pilotage 53.3 64.8 60 62 * Recoverable Charges 546.3 550.2 530 555 * Other .. .. 21.3 22.3 Total 676.8 693.9 701.3 731.8 Expenditure: * Administration of Office 45.7 43.8 59.3 63.6 * Harbor Services: - p-lots/Pilotage 27.5 18.5 44.3 15.9 - labor 37.8 51.8 68.8 93.3 - maintenance: lights, beacons, buoys 29.0 36.4 35.11 36.0 other equipt 16.8 13.2 17.8 18.9 harbors/wharves (outer islands) 5.3 8.1 10.6 9.6 - other 0.9 1.0 0.5 1.0 * Wharf Services: - labor 116.4 137.1 147.8 135.0 - maintenance: equipment 45.7 61.4 60.1 50.5 Salote Wharf 15.5 24.0 17.3 12.0 Faua Harbor - 15.9 13.7 5.0 other 3.4 6.2 7.4 4.0 * Utilities 79.9 54.3 52.2 49.1 * Handling Cargo 231.3 254.2 282.2 345.1 * Other 29.5 6.0 2.8 3.3 Total 687.8 708.6 822.1 842.8 Of which maintenance to: * lights, beacons,buoys 29.0 36.4 35.1 36.0 * equipment 62.5 74.6 77.9 69,4 * outer island wharves 5.3 8.1 10.6 9.6 * Queen Salote wharf 15.5 24/.0 17 3 12.0 * Faua Harbor . 15.9 13.7 5.0 * other facilities 3.4 6.2 7.4 3.3 Total 115.7 165.2 162.0 135.3 Source: Ports Administration Departnent. -57 - ANNEX 1 budgeted allocation for maintenance has reduced proportion of the replacement value of marine in real terms over the period. The separate and aviation infrastructure. This level of figures for actual maintenance expenditure have expenditure is used as an approximation of the been provided by the Ministry and are set out as amount assessed as optimal maintenance part of Table 15. The overall actual and (maintenance expenditure which results in a budgeted maintenance figures are similar, minimum life-cycle cost for the asset at a given although there are differences in the design standard). Assessed maintenance does apportionment to the various facilities. not imply it Is warranted; this requires a benefit- cost appraisal of Indiv'lual assets. The optimal 2.30 The maintenance outlays for regional level of maintenance expenditure cannot be airports in 1990/91 appears consistent with the established. Current maintenance expenditure is estimated requirement in Table 12 (T$78,000). derived from budget data. Present provision for maintenance of Fua'amotu Airport is well below the estimated long term 2.32 The replacement value of Government average maintenance requirements. Present transport infrastructure is estimated at T$162 maintenance needs are low as the terminal has million (US$123 million) or TS1,620/capita (at recently been constructed (1991) and the runway 1991 prices). Current maintenance expenditure repaved and extended (1987). Neverthdeless, on transport infrastructure is only 40 percent of provision needs to be made for major periodic that estimated as being required. If there was no maintan ce requirements in the future. accrued maintenance overhang will require expenditure greater than the assessed Summay maintenance of T$3.5 million per year if the average condition of infrastructure is to be 2.31 Tbe estimated replacement value of improved. transport infrastructure, maintenance overhang, assessed maintenance and actuRl maintenance 2.33 Inadequate maintenance results in more expenditure derived in this and preceding rapid deterioration of infrastructure than need be sections are summarized in Table 16. The the case. An estimate of the increase in the estimates are derived from a very limited equivalent annual cost of infrastructure resulting database. The objective of the estimates is to from poor maintenance is also presented in provide an indicative quantifled perspective of Table 16. This item is discussed in the next the present situation for the purpose of section. illustrating the nature and scale of the transport infrastructure maintenance issue. the current D. IMPLICATnONS OF INADEQUATE replacement value of transport infrastructure has MAIRENANCE been based on data assembled on the quantity of infrastructure and unit construction costs. The 2.34 Reduced expenditure on maintenance is maintenance overhang (i.e., rehabilitation offset by more rapid deterioration of requirements resulting from past inadequate infrastructure than would be the case with maintenazve) is derived from past studies which optimal maintenance. Indicative estimates of the have identified infrastructure rehabilitation equivalent annual capital cost of infrastructure needs; however, none of these is comprehensive with current and optimal maintenance is derived or up-to-date, and rehabilitation needs are in below. The increase in the cost is greater than presented in Table 16. The summarized in Table 16. The (equivalent expenditure required to adequately maintain annual) cost of more rapid deterioration of current infrastructure, suitably rehabilitated so transport infrastructure is nearly four times the that it is maintainable, is estimated oii the basis cost of improved maintenance (i.e., T$7.6 of unit maintenance costs for roads and a million compared with TS2.1 million). - 58 - ANNEX 1 Table 15: TONGA-REcuRRENT INCOME AND EXPENDITURE MINISTRY OF CnlL AVIATioN, 1988/89 - 1991/92 (1$ 000's current prices) 1988/89 1989/90 1990/91 1991/92 Income: * Landing Fees 247.9 253.5 370.8 450 * Passenger Service Charge 137.6 179.3 311.3 350 * Other 51.2 47.9 80.5 110 Total 436.7 480.7 762.6 910 Expenditure: * Admin & Airport Services 399.7 462.4 661.0 784.3 * Maintenance: - plant, equipment, radio 20.4 20.5 13.2 15.0 - Fua'amotu: 11.4 16.4 24.4 16.0 35.7 14.0 13.0 35.0 terminal 6.5 7.7 8.5 20.0 - regional airfields 55.0 63.1 86.1 45.5 * Oter 84.1 68.0 187.0 48.8 * Meteorological Services - 53.3 75.9 Total 612.8 652.1 1046.4 Of which the budgeted direct allocation to maintenance is: 129.1 121.7 145.2 131.5 Actual Maintenance Expenditure: * Fua'amotu - buildings 36.4 14.9 8.1 - fire/crash 15.1 13.8 16.5 - civil 45.9 26.1 42.0 Subtotal 97.4 54.6 66.6 * Regional Airports 48.4 61.5 88.6 Total 145.8 116.1 155.2 Source: Ministry of Civil Aviation. increased costs make a potential industry 2.35 In addition to the higher costs which unviable. The current poor road conditions accrue to the Government from inadequate increase road user costs by around 10 percent maintenance, users of the tranhsport system incur through increased fuel and tire use and higher costs. For road users, this includes additional wear and tear on vehicles (see increased vehicle operating costs; these in turn Box 2.1 on Vehicle Operating Costs). may result in further decline in economic Similarly, increases in port costs which result efficiency through reduced accessibility and from inadequately maintained port infrastructure increased spoilage of products, and suppressed will add to the cost of imported goods and make foregone productive economic activity, if the exports, most of which pass through sea ports - 59 - ANNEX 1 Table 16: TONGA-SUMMARY OF INRASTuCrURE AND MAINTENANCE COW, 1991 $ million, 1991 price) Itoad Marine Aviation Total Replacement Cost 85.4 36.3 40.5 162.2 Maintenance Overhang L& 10.0 0.3 10.3 Assessed Average Annual Maintenance 2.0 0.9 0.5 3.5 Requirements Lk Estimated Current Annual Maintenance 1.1 0.1 0.1 1.4 Expenditure (as percentage of assessed requirement) (55) (14) (20) (40) Additional Expenditure to Achieve 0.9 0.8 0.4 2.1 Assessed Maintenance L- Additional Annual Capital Expenditure 4.5 1.3 1.7 7.6 arising from Inadequate Maintenance L-- La Cost required to rehabilitate infrastructure to a sound standard, i.e., the staimUrd through time which would have been the case with assessed maintenance and for which the assessed annual maintenance expenditure is sufficient to adequately maintain the infrastructure. /b Expenditure required for assessed maintenance. / Difference between current annual expenditure on maintenance and the equivalent annual assessed maintenance expenditure. Ld Difference between equivalent annual capital cost for replacement of assets with assessed and current maintenance-see below. Source: Mission estimates. less competitive on international markets. For development needs to be better understood to example, inadequate maintenance of wharves ensure that agricultural development is and jetties may result in reduced safe working sustainable. Development of local transport loads for forklifts and veliicles and consequent links will increase producer surplus and may increases in the costs of handling cargo. have a significant effect on the propensity to Tourism could be severely affected if deficient produce. However, the reduction in the total maintenance results in unreliability and delay of cost of delivery of agricultural output overseas services due to closure of airports-deterioration is likely to be small, unless there are avoidable of the airport terminal could also have an constraints elsewhere in the transport ;ystem, adverse effect on user perception and marketing and may not secure significantly greater sales. credibility. 2.36 There are opportunities for agricultural E. MAINENANCE; FUNDING development in Tonga, primarily in root crops, fruit and other vegetables. However, the 2.37 There is no hypothecation of revenue to connection between improvement of transport maintenance of road, marine or aviation links to improve accessibility and economic infrastructure in Tonga. Nor is there a formal -60 - ANNEX 1 Box 2.1: VEHICLE OPERATING Cosrs Vehicle operating costs rise rapidly as roads deteriorate, more so on gravel than sealed roads as shown below: Road Condition Grave Road Sealed Road Good 0.282 0 274 I/ Fair 0 311 (8%) 2/ 0.280 (2%) Poor 0.353 (23%) 0.312 (14 ) TIere is an almost complete absence of data on traffic volume by road type and condition. Therefore, it is not poible to oeiate, with any measure of accuracy, th totl cost of opeti vehiclea over th road network m its current condition and the cost with roads in good condition. Howvor, workdng aumptions, boed on judgment, have been made to provide an indicative esie of sh vehicle oa cost. Based on say 5,000 registered vehicles travelling an average of 14,000 km per year (sy, half of which is on sealed roads) and with say a third of the roads oeh in bad, fair and good condition, total annual economic vehicle oprating costs will be TS21.2 million. Th equivalent coat if roads are in good on dition is TS19.6 milion, i.e., current voeicle operating cots ar 8 percent higher than would be the cas if roads wero in good condition. Foreign osts account for-76 percent of these costs. The T1.6 million difference betwoen vehicle opating costs on good and poor roads thus represents an incromental import bil of T$1.2 million per year (equal to 2 percent of current imports). I/ Average economic vehicle operating costs in T$/km (see below). Vehicle financial oporating cots are 40 percent greater. Z/ Increase compared with the cost on a road in good condition. policy on cost-recovery in the road sector where sales tax of 5 percent of the retail price of specific fees for use of the road system are not vehicles is considered a form of general taxation imposed. The Ports Administration Department, rather than a charge for cost recovery in the however, is now able to retain revenue in excess transport sector. The fuel sales tax of T#0.02 of a specified amount for its own use in addition per liter (1991) is only 3 percent of the retail to its usual budget appropriations. price of petrol, and is also considered a form of general taxation. The fuel sales tax generated an Roads estimated T$8.0 million in 1990/91. All imports are subject to a port service tax at a rate of 2.38 There are no specific charges for use of 20 percent of CIF value, with the exception of the road system in Tonga which are directed to imports for Government purposes and aid development, maintenance and operation of the projects which are free of the tax and goods for system. Road users contribute to the cost of economic development purposes. This Tax too developing and maintaining the road system is not considered as contributing to cost recovery indirectly through: (a) annual road license paid because of its generally universal coverage. for each vehicle; (b) driving license fee; (c) import duty on vehicles and (d) fuel excise. 2.39 Revenue from the vehicle registration and The cost of annual vehicle road-worthiness, license fees and driving iicense fees was inspections is considered a user charge to recoup budgeted at T$0.22 million in 1990. Based on the cost of the inspection rather than contribute data from other countries, it is estimated that to the cost of providing the road system. A collection costs are about 10 percent of this sum, -61- ANNEX I leaving net revenue of TSO.20 million (T$O.22 duty/excise tax thw results in an additional levy million in 1091 prices based on inflation of on road users of T$1.97 million in that year. 11.5 percent). There Is no incremental cost asciated with the collection of the higher rate of tax applied to 2.40 The Government of Tonga derived vehicles and fuel, and the amount of T$1.97 50 percent of its income from import duties and million can be considered an additional charge to the port and service tax. The rate of import road users to meet the cost of development and duty is 45 percent for motor vehicles, although maintenance of public roads and as a fiscal/ aggregate data indicates the average rate of duty general revenue raising measure. Finally, a to be marginally less for cars and vans and Petroleum Import Commission is imposed by the higher for trucks and buses (see Table 17). Customs Department which was budgeted to Import duty for petro and diesel was TS0.03 per generate TS0.06 million in 1990/91. This too is liter in 1990, but has since been changed to considered a speciflc charge on the transport 35 percent of the CIF value of import. On sector. average, vehicles and fuel were subject to an average rate of import duty 28 percent, 2.41 If the incremental import duty/service tax compared with 18 percent of other imports (see is viewed as contributing to cost recovery, and Table 17). The revised rate of import duty for inflating 1990 data by 11.5 percont to 1991 fuel would assuming zero elasticity raise the prices, costs and revenue associated with average rate of duty on the transport sector to development and maintenance of the road system 36 percent. The fiscal efficiency of imposing a are estimated for 1991 at: higher rate of these duties in the transport sector is an open matter. Imposing tax "mark-ups' TS million where price elasticities are relatively low ("Ramsey' pricing) might justify higher tariffs Net Revenue: for the road transport subsector, with higher * Registration Fees and Driving tariffs for road transport resources being a fiscal Licenses 0.22 measure, and not treated as cost-recovery. * "Excess" Import Duties and Alternatively, all income from duties can be Petroleum Import Commission 2.27 considered as contributing to cost-recovery, to Total 2.49 the extent that the duties are imposed on road transport users, and revenue from the duties is Expenditure: less than that required for full cost-recovery. * Current Maintenance 1.10 The analysis presented in this Annex is based on * Incremental Maintenance only that revenue from the duty on road Requirement 0.90 transport resources in excess of the average rate * Annual Capital Charge 8.40 of duty for all other imports as contributing to Total 10.40 cost-recovery. (The regional analysis presented in Volume One of this study presents the effect 2.42 Notwithstanding the question of of all revenue from duties being treated as cost- attribution of some import duty revenue as recoveiy.) The revenue from these duties in indirect road user charges, total revenue from excess of the average rate for other imports is the sector is only a quarter of the minimum total viewed here as a specific levy on road users. long term cost of sustaining the present road An import duty/excise tax of 18 percent of the system. Donors have financed construction of value of vehicles and fuel would produce roads in Tonga and currently provide some revenue of T$1.76 million in 1990 (also grand funds for road rehabilitation required as a assuming price elasticity of demand equal to result of past inadequate maintenance. zero). The average 38 percent import However, it is unlikely that this aid is sufficient -62 - ANNEX 1 Table 17: TONGA-INCOME FROM IMPORT DUTY AND SERVICE TAX (1990) CIF Value of Imports Import Average (IS million) Duty and Rate of Service Tax Duty and Total Exempt Dutiable (TS million) Tax (%) Imports from L Vehicles * Cars 2.206 0.604 1,602 0.709 44 * Trucks 1.556 0.584 0.864 0.480 49 *Motorcycles, tires and parts 1.558 0.067 0.260 0.054 21 Fuel * Petrol 2.842 . 2.842 0.625 22 * Distillate lk 4.290 - 4.290 0.965 22 Total 11,223 1,255 9.968 2.833 28 Total Imports * Including Vehicles and Fuel 78.989 18.837 60.152 11.692 19 * Excluding Vehicles and Fuel 67.766 17.582 50.184 ?' 18 /A Percent of CIF value of imports subject to duty. a Excludes distillate fuel used for power generators. Source: Customs Department. to finance the gap between the revenue being Tongatapu. This may be warranted on social derived by the Government from the road and development grounds, but should be transport sector and its expenditure on it. Road monitored to ensure affordability and users are thus being subsidized with funds from sustainability including adoption of appropriate overseas aid grants and from Government road design standards. A major proportion of general revenue. In the long term the the road network involves low traffic volumes Government will need to increase its revenue or (less than 100 vehicles per day). Such roads, secure increased and continuing aid funding to typically gravel and earth formed, provide sustain the present road network. accessibility as a social service. Fixed costs for maintaining these roads are high-over 2.43 Two key equiy issues relate to cost 75 percent. In such circumstances, a lower recovery in the land transport subsector: (a) the share of revenue for cost recovery will derive geographical distribution of sources of receipts from specific vehicle-related fees; a higher share and disbursements of expenditure; and (b) the will need to be supported by more indirect and apportionment of costs and revenue by vehicle general taxes.' The second equity issue pertains category. Given the distribution of economic to the allocation of cost and revenue to vehicle activity and road infrastructure between types. Trucks cause considerable damage to the Tongatapu and Vava'u in particular, it is likely road system, disproportionately more than their that there is a higher level of cost-recovery on share of total vehicle kilometers by all road -63- ANNEX I vehicles, and road user charges should be Government may not be able to sustain all of the designed to reflect this incremental cost to the infrastructure from its own resources. Further system. Registration fees for trucks are higher funds are required for rehabilitation of current than for cars, but, for example are only three port infrastructure which has deteriorated due to times in the case of a three tonne truck (T$65 inadequate maintenance in the past. for the truck and T$20 for a mid-size car); these fees are very low and make only a minor Airports contribution to the greater damage imposed on the road system by the larger vehicles. The 2.46 Data in Tables 15 and 16 indicates inacuiate urgency of this issue is lessened by estimated costs and revenue associated with the small number of large vehicles in use in development, operation and maintenance of Tonga at present-trucks and buses make up airports by the Ministry of Civil Aviation in 21 percent of the vehicle fleet, but many of them 1991 to be about: are small in size (3 tonne trucks and mini- buses). T$ Million Ports Income 0.76 Operating Expenditure 2.44 Data in Tables 14 and 16 indicates * With Current Maintenance 1.05 estimate costs and revenue associated with * Incremental Maintenance Needs 0.40 development, operations and maintenance of the ports and other a( 'ities of the Ports Division of Operating Surplus (Loss) (0.69) the Ministry of Transport in 1991 to be about: Less: Annual Capital Charge 3.90 TS Million Net Surplus (Loss) (4.59) Income 0.70 2.47 The revenue of the Ministry is Operating Expenditure insufficiert to meet the cost of current * With Current Maintenance 0.82 maintenance and operations. The Miristry's * Incremental Maintenance Needs 0.80 revenue would need to increase substantially to generate sufficient revenue to cover the cost of Operating Surplus (Loss) (0.92) sustaining the present airport infrastructure. Less: Annual Capital Charge 3.20 While the airport and aviation charges have been very low in the past, income increased by Net Surplus (Loss) (4.12) 74 percent from 1989 to 1991, and is expected to increase by a further 19 percent to 1992. It 2.45 The Ports Administration Department will be difficult for the Ministry to generate does not generate sufficient revenue at present to sufficient revenue to sustain the present aviation fund even its current inadequate level of infrastructure. As with ports, this suggests there maintenance expenditure. Current revenue has been over-investment in infrastructure in the would need to be increased substantially to past, with insufficient Government capacity to provide sufficient revenue to meet the cost of sustain the infrastructure. Further funds would sufficient maintenance and capital replacement to be required for rehabilitation of current airport sustain the present marine infrastructure in infrastructure which has deteriorated due to Tonga. WhIlie port fees in Tonga are lower than inadequate maintenance in the past. those in some other countries, the scale of this increase suggests that there has been ,ver- investmnent in port infrastructure and tha. t e -64 - ANiNEX 1 F. SrIUATON SUMMARY imprecise data; nevertheless they indicate the significant level of deferred maintenance. 2.48 The previous sections of this survey indicate the problems facing the Goverment in 2.52 The historic levels of actual maintenance providing for the maintenance and rehabilitation expenditure are difficult to establish and hence of the nation's infrastructure. The analysis assess. Departmental budget allocations and reflects the rudimentary nature of the costing procedures are not designed to provide information which is available to assess asset information on a program functional/basis (e.g., management needs,s even from the most general maintenance task). The lack of function based perspective. tinancial data is a constraint to understanding and managing maintenance. An apportionment 2.49 The replacement value of Tonga's of recurren; expe3ditures for all transport modes transport infrastructure (excluding the vehicles, indicates that some T$1.37 million was spent on v.ssels and aircraft which use the system) is mainenance in 1991/92; this is estimated to estimated to be close to T$162 million (US$123 represent only 40 percent of assessed average million) (1991 prices). The average annual annual maintenance requirements. assessed maintenance for the transport system is estimated conservatively at T$3.56 million 2.53 At present virtually all maintenance is (US$2.7 mill zn) (1991 prices). The annual undertaken by Government Ministries using assessed maintenance is on average equal to force account and Government-owned some 3 percent of the replacement valut of the equipment. This approach fails to give sufficient assets. consideration to the separation of management and technical activities, and has resulted in 2.50 The estimated annual outlays required for almost exclusive emphasis on the latter. The asset maintenance presume that the system has approach also places heavy demands on the been well maintained in the past and that limited number of qualified staff in Ministries, rehabilitation or reconstruction requirements and fails to take advantage of the greater should only relate to the general ageing of the flexibility available in private companies. system. This is not the present situation in Tonga. 2.54 An indication of cost recovery, with assessed maintenance, as presented in Table 18, 2.51 Much of the port and aviation indicates substantial under-recovery of costs for infrastructure has been built or reconstructed in road, marine and aviation transport. Use of the past 10 years. Estimated investment in the current maintenance expenditure and the marine subsector since 1979 is in excess of T$30 equivalent, higher annual capital charges would million (1991 dollars-para. 2.9) and T$17 result il. a lower level of cost recovery. million in the aviation subsector (1991 dollars- para. 2.14). Inthe circumstancesthe immediate 2.55 Assessment of all existing maintenance needs are less than the long term Infrastructure and determination of what average, which includes periodic and specific assets warrant maintenance (and at what maintenance outlays. The situation in regard to standard) Is needed. So too is attention to road assets is different. The rehabilitation maintenance priorities and higher cost recovery overhang for the road system is estimated at through user charges. Each of thesc actions T$10 million (1991 prices), whereas the should be weighed against the costs of their estimated annual maintenance requirement is impl.nentation. T$2 million (1991 prices). It needs to be reiterated that these estimates are based on - 65 - ANNEX 1 Table 18: TONGA-SUMMARY OF COST RECOVERY, 1991 (T Million, 1991 prices) ___________ __ Roads Marine Aviation Income * Direct 0.22 0.70 0.76 * Indirect 2.27lai Total 2.49 0.70 0.76 Operating Expenditure * With Current Maintenance 1.10 0.82 1.05 * Incremental Maintenance Needs 0.90 0.80 0.40 Operaing Surplus (Los) 0.49 (0.92) (0.69) Less: Annual Capital Charge 8.40 3.20 3.90 Net Surplus (Loss) (7.91) (4.12) (4.59) La Share of import duty in excess of average rate of duty for all imports. Source: Mission estimates. -66- ANNEX 1 CHAPTER 3 EQUIVALENT ANNUAL VALUE FOR TRANSPORT INFRASTRUCTURE 3.1 IntroductIon. Inadequate maintenance current assessment are presented in Table 19. results in more rapid deterioration of transport An opportunity cost of capital of 7 percent is infrastructure than would be the case with used. The data illustrate that the current optim maintnance. This Annex estimates the equivalent annual capital cost with current extent of this effect. maintenance patterns is about 50 percent greater than would be the case of optimum maintenance 3.2 Infnstructure Value. The value of was undertaken (i.e., TS23.1 million compared current infrastructure estimated in Section A of with TS; 5.5 million). The data also shows the Chapter 2 is summarized in Table 19. The cost importance of adequate maintcmaance of of this infrastructure comprises two parts: a engineered, unsealed roads, with the incremental fixed component and a renewable component. capital cost of this item alone accounting for The former includes, for example, clearing and 55 percent of the incremental capital cost for all construction of the base for a road. infrastructure. 3.3 The renewable component of infrastructure is that part which periodically requires reconstruction, for example the surface of a road. The approximate proportion of the total cost of infrastructure which is fixed and renewable is described in Table 19. The estimates are drawn from construction cost estimates for typical construction projects. 3.4 Economic Life. With optimum maintenance, the fixed component of infrastructure should have a life of at least 50 years. By definition, all elements of the fixed component of infrastructure should not be affected by the level of maintenance. this is not necessarily the case, however, in practice. For example, poor maintenance of a road may result in adequate drainage and pot-holing. Water can then penetrate the base structure of the road and result in deterioration of this element of the fixed component. The lives of the fixed components of infrastructure adopted for the Table 19: TONGA-SuMMARY OF INFRASRucTuRE VALuE AND MANmNANcE Cosis, 1991 CM( million, 1991 prce) .m _brws _ _ip. _ __ & TO_ Imbi mi _ a1 T_a * VWd. 3l- * 0 1 T_1a 11u.. IO110 O_b TOW A_m _APbMUM v" 363 41.7 25.9 *5.4 2nA Is 7.5 36.3 24.1 12.9 133 43.3 142.2 II h-t . 10 0 . . . 3 ... ... 10 A Adwi M 0 0.4 0.5 I.I 2.0 03 a 0 e.9 03 0.1 eSI 0.5 3.5 C%_n M__ l_ : .. . . 1.1 ..1 .. . . .. .1 1.4 $ d .S. 14% IOS 4 E__ m.. . 0.9 0. .. .. 0.4 2.1 Sb Ori _l II IC Zwk.AM A.W CpiW &f 1.4 4.5 2.5 8.4 2.0 1.1 1.1 3.2 2.4 * 0*5 3.9 1535 a 1 7.3 3.3 129 2.4 Is IJ 43 3A 1.4 6 S.7 23.1 Vao M. bf 0.4 2.9 1.3 4.5 0.5 0. 1.3 1.2 * .4 0.2 1.7 71 _ C_ El PFds dCa9I Cm4: F~jC _ 655 US IUS UZ 0S I*S 2OS US 36% P~C y35S DS 0O S 9% 3S0 US ICO OSOS WiO_ q aNu D U1 D 30 0 so 32 Wk C M_ de 3 10 43 Is 0 43 is Smsw"cmpw Wk%op* u Mdw if 5 so to Id W _ _c M u . * 2501.0 1I 1 Cam .-m ondmm owomf a mud uE. I.., OD bw.bd &mg% ulbbA w,MU km bm lb W - wA=Wmi~= lb lb de mod I= mw xpdmi EVw- em" h qd m~dl Mob- ~ ulm3 b* p d C1116 " bmm _ _~ __._ .vonm 2t __'mo ad .D _g w mwAd ___o m m d o ..t .7 ___ BMW 1b_ i . *_ _$ =0 of alhdat7 m_ _ M%w_ _DIwwGS - 68- ANNEX 1 CHAPTER 4 ROAD VEHICLE OPERATKIG COSTS 4.1 Introduction. Vehicle operating costs average annual cost over the economic have been established using the RTIM2 model,' life of vehicles. with two exceptions: 4.2 Vehicle Features. Representative vehicle (a) The model to determine road roughness types for the most commonly found types of (based on, for example, the number of vehicles in use in Tonga are: vehicle passes since the last grading on unpaved roads) has not been used as * Car (Toyota Corona) traffic volumes are commonly very low, * Light Utility (Mazda i tonne pickup) and the rate of road deterioration will be * Four Wheel Drive (Toyota Hilux, 2.4 heavily affected by environmental liter, double cab) conditions in addition to traffic activity. * Light Truck (3 tonne Nissan flat bed) Moreover, no systematic data are available on the present condition of Other vehicles will have operating costs similar roads. For indicative purposes three to these vehicles. Features of these vehicles road conditions have been adopted, as which influence operating costs are presented in shown in Table 20. Table 21. The data has been obtained from investigations in Tonga. The share of each Table 20: ROAD RouGHNEsS vehicle type is based on the share of registered AND CONDITION vehicles and the annual distance travelled by each vehicle category. The number of vehicles Road Condition Road Roughness registered in 1990/91 was: (mm/km) Grve SMotor cars, taxis and light trucks 2,995 Gravel Sealed Heavy trucks 895 ______________ Road Road Buses 95 Good 3,000 2,000 Other 696 Fair 5,000 3,000 Total 4,681 Poor 8,000 5,000 __ - Some of these vehicles span the four vehicle Source: Mission estimates. categories for which operating costs have been derived. Specific data to disaggregate the vehicle types is not available, but it is assumed (b) Data on the age profile of vehicles in that 70 percent of cars, taxis and light truck Tonga and sc- ,ppage rates are not category are cars, with a further 15 percent each available, and the cost of capital and being pickups and 4-WD vehicles respectively. depreciation have been based on the This results in the distribution of vehicles types -69- ANNEX 1 as shown in Table 21; the distribution is similar 4.4 The principal Items with a substantial to that in other Pacific countries currently being imported component are fuel, oil, dres, spare reviewed. Vehicle resource consumption for parts for maintenance and capital charges. travel on good sealed roads derived from the About a quarter of these costs can be attributed RTIM model is also presented in Table 21. to local distribution and retailing; however, there is an import component to these latter costs. 4.3 Vehicle Operating Costs. Total vehicle This component is estimated as 40 percent, the operating costs, in T$ per kilometer (1991 share of net imports in GDP in Tonga.7 prices), for travel on sealed roads in good Applying this proportion to other components of condition are described in Table 22. (Note these vehicle operating costs, the foreign cost economic operating costs are 71 percent of component of financial vehicle operating costs is financial costs.) These figures are used as a estimated to be 81 percent. Average vehicle datum from which vehicle operating costs are operating costs on gravel and sealed roads in the estimated for sealed roads in fair and poor three conditions described in Table 20 are condition and unsealed roads (in each of the presented in Box 2.1 of Volume One of this three conditions) using road roughness as present report. described in Table 20, and relationships in the RTIM model. Traffic volumes are low (see Box 4.1) and representative volumes have been used in estimating total vehicle operating cost savings. Box 4.1: TRAmC VOLUmES The distributiou of traffic volumes over the road network is highly skewed. Traffic volumes on Tongatapu are relatively heavy. Volumes on the main roads within Tongatapu generally exceed 10,000 vehicles per day with in excess of 2,500 vehicles per day on the main roads close to the urban areas. Elsewhere on the main road system traffic volumes are generally in excess of 250 vehicles per day. On the outer islands traffic volumes can be as low as only a few vehicles per day. -70- ANNEX 1 Table 21: TONGA-VEHICLE OPERATING PARAMETERS: SEALED ROADS IN GOOD CONDITION, 1991 _Car Light Utility 4'ND Light Truck Physical Data Free Speed 60 50 60 45 Power-Weight Ratio (BHP/t) - - 25 Annual Use: 1.0 1.0 1.5 3.0 Distance (km) Time (hours) 12,500 14,750 12,500 17,000 Effective Life (years) 500 600 500 680 Average Vehicle Age (years) 10 10 10 10 Vehicle Crew: 4 4 S 5 Driver Other 0 1 I 1 Traffic Composition 0 1 1 1 34% 6% 5% 20% -Unit Price Data (t991 prices) (i) Financial Prices l.^ Vehicle 31,000 17,000 29,000 39,800 Tire 90 90 160 130 Fuel 0.63 0.63 0.62 0.62 Oil 7.00 7.00 7.00 7.00 Driver Time (/hr) 2.20 2.20 2.20 2.20 Crew Time (/hr) 0.66 0.66 0.66 0.66 Maintenance Labor (/hr) 2.20 2.20 2.20 2.20 Insurance 1,200 700 1,200 1,600 Annual Registration 25 40 27 55 Real Interest Rate 7% 7% 7% 7% (ii) Economic Prices L Vehicle 19,050 10,450 17,820 24,460 Tire 74 74 132 107 Fuel 0.44 0.44 0.43 0.43 Oil 5.00 5.00 5.00 5.00 Derived Data /c Average Speed (kph) 58 48 59 44 Fuel Consumption (1/'000 km) 72 67 113 134 Oil Consumption (1/'000 km) 1.2 1.8 1.8 4.0 Tires (Consumed/'000 kim) 0.139 0.139 0.139 0.331 Spare Parts (%/'000 kim) 0.001 0.001 0.001 0.001 Maintenance Labor (hrs/km) 0.001 0.001 0.001 0.001 LA Includes Sales Tax of 5 percent of retail price. Lb Excludes taxes and duties. Lg Derived from RTIM for sealed roads with roughness of 2,000 mm/km. Source: Mission estimates. - 71- ANNEX 1 Table 22: TONGA-VEHICLE OPERATING COSTS ON PAVED RoADs IN GOOD CONDITION, 1991 (T$/km, 1991 Values) Car Light 4WD Light Average ______________________ _ _ Utility Truck Financial Cost Fuel 0.045 0.042 0.070 0.083 0.038 Oil 0.008 0.013 0.013 0.028 0.010 Tires 0.012 0.012 0.022 0.043 0.015 Maintenance 0.038 0.025 0.044 0.051 0.027 Interest and Depreciation 0.353 0.164 0.330 0.333 0.215 Licenses and Lnsurance 0.098 0.050 0.098 0(97 0.061 Driver and Crew 0.000 0.059 0.049 0.06- 0.019 Total 0.555 0.366 0.626 0.700 0.385 Economic Cost Fuel 0.032 0.029 0.048 0.057 0.027 Oil 0.006 0.009 0.009 0.020 0.007 Tires 0.010 0.010 0.018 0.035 0.012 Maintenance 0.024 0.016 0.028 0.032 0.017 Interest and Depreciation 0.217 0.101 0.203 0.205 0.132 Insurance 0.096 0.047 0.096 0.094 0.060 Driver and Crew 0.000 0.059 0.049 0.065 0.019 Total 0.385 0.273 0.451 0.509 0.274 IA Vehicle operating costs for paved roads in good condition (roughness index 2,000 mm/kim) are used as the datum, against which vehicle operating costs for other road types (unsealed and earth) and road conditions (fair and poor) are estimated. The total annual cost of owning and operating vehicles is expressed in T$/km; variations in operating costs with road conditions are tested only for fuel, oil, tires and maintenance. Source: Mission estimates. - 72- ANNEX I Endnotes 1. The survey of the maintenance situation presented here is based upon a World Bank mission visit to Tonga September 24-25, 1991. 2. These tables are based on a classification system outlined in Volume One, Part 11. The notional classifications used in the marine and aviation subsectors are subject to further refinement. 3. The information is derived from two sources. A questionnaire setting out the data required was circulated prior to the mission visit and used as the reference for discussions with the relevant Ministries and Departments. In addition to the information from the mission, data have been drawn from sectoral and subsectoral reports on transport in Tonga. 4. The structure of road user charges and other fees/taxes for road cost recovery is more compilex in such situations. this issue of providing reliable access to small, often remote, communities also arises in maritime and aviation with small wharves and airfields. 5. Transport and Road Research Laboratory (1982). 6. The vehicle operating costs are summarized in Box 2.1 in Volume One of this report. 7. Based on data for 1989 when imports, exports and GDP were T$50.3 million, T$8.7 million and T$127 million respectively. MAP SECTION T o N G A PACIFIC ISLANDS TRANSPORT SECTOR REPORT MAIN ROADS * CAPITAL MAJOR PORT t AIRSTRIPS 4 INTERNATIONAL AIRPORT B 175 10' 17 F. 21'10' M., i 21°10' VA VA V \1elO 1 TONGATrAPU GO Ho- TONGATAPU 'Euo GROUP io ,K O 5 10 Mile 0 10 20 Kik.eI.. 175°10 A^k-~- 174° ,Uta Vavc'u t Ho'.okI HA'APAI \r , .I u, GROUP Ir140 Ih.r Tu'r oio 40 _ :,r-p Lb- 20° VAVA'U GROUP NRMUA '._ 0 5 10 Mi1B 0 /rrzr ° _ 25 5 0 A iI5 M6e, t O 10 201 K,ilrrn, I-.L K _ _ < 1 ~~~~~~~~~~ ~~ ~~~~~~~~~~~~~~~~~~~~74' ... r 17xiq0' - ISTJd1 1 l6r ,PoIel00 15' VANUATU W' 5AMA A. S.e Foa FUI U.S. I TONGA -21~~~~~~~~~~~~~~~~~~- 21' 21- N- C.6d-i., F,~~~21 Lihika HA'APAI K...' k... N.Z. GROUP Lod H- I., M,LIo I I Aurt. t_' 2 3 r~~~ONG^A APU L ,bal,,° 1 2 4 5 TGROUP t NEW ZEALAND 9---- _ _ ___75'K. 50 16o/ 180 165'