The World Bank Tonga Transport Sector Consolidation Project (P096931) REPORT NO.: RES32961 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TONGA TRANSPORT SECTOR CONSOLIDATION PROJECT APPROVED ON JULY 28, 2008 TO KINGDOM OF TONGA TRANSPORT & DIGITAL DEVELOPMENT EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Senior Global Practice Director: Jose Luis Irigoyen Practice Manager/Manager: Almud Weitz Task Team Leader: Julie Babinard, Pierre Graftieaux The World Bank Tonga Transport Sector Consolidation Project (P096931) I. BASIC DATA Product Information Project ID Financing Instrument P096931 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 28-Jul-2008 30-Jun-2018 Organizations Borrower Responsible Agency Kingdom of Tonga Ministry of Infrastructure,Tonga Airports Ltd. Project Development Objective (PDO) Original PDO To establish and consolidate the operations of the newly-created Ministry of Transport as a unified transportsector- policy,planning and regulatory ministry and to improve the level of compliance of the civil aviation and maritime subsectorentities withinternational safety and security standards. Current PDO The objective of the Project is to assist the Recipient to develop its transport sector to have: (i) stronger policy, planning and regulatory institutions and framework; (ii) improved safety and security facilities and compliance with international safety and security standards; and (iii) greater domestic capacity for road rehabilitation and maintenance. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-57300 29-Sep-2015 18-Nov-2015 19-Jan-2016 30-Jun-2018 2.00 .99 1.13 IDA-D0910 29-Sep-2015 18-Nov-2015 19-Jan-2016 30-Jun-2018 2.00 1.98 .13 IDA-H4160 08-Jul-2008 17-Jul-2008 12-Dec-2008 30-Jun-2018 5.44 5.26 0 The World Bank Tonga Transport Sector Consolidation Project (P096931) TF-99585 29-Jul-2011 23-Aug-2011 06-Oct-2011 30-Jun-2018 10.30 10.30 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Summary of Proposed Changes This restructuring proposes a six-month extension of the Closing Date of the Additional Financing (AF) for the Transport Sector Consolidation Project (TSCP) (P151806; IDA Credit No. 5730- TO and IDA Grant No. D091-TO) from June 30, 2018 to December 31, 2018. The Government of Tonga (GOT) sent the request to the Bank on June 5, 2018, explaining the unexpected delays on one open contract for maritime safety works. It is the only change that is proposed under this restructuring. . B. Project Status TSCP started in 2008 and has been the World Bank-financed flagship project in the transport sector in Tonga. It has transformed the sector, supporting major institutional reforms and creating an integrated Ministry (of Infrastructure) responsible for transport policy and planning. The project has progressed very well, on both institutional and investment fronts, supporting the road, air and maritime subsectors, with a 53% disbursement rate for the AF (as of May 31, 2018). Ninety-two percent of funds from the AF have been committed. The disbursement rate is 92% for the whole project since 2008, including the parent project. The AF has been rated Satisfactory since its effectiveness in 2016. Overall Implementation Progress and Progress toward achieving Project Development Objective are both currently Satisfactory. Nevertheless, despite the close supervision from the Project Support Team (PST), some unexpected delays occurred in one of the last contracts to close before June 30, 2018, which is the current Closing date of the AF. The PST was informed on May 30, 2018 by the supervisor/contractor of the TOP$1,949,968 maritime safety improvement works in the outer island ports in Vav’u and Ha’apai that some critical supplies would not be shipped and arrive in time in Tonga for them to complete the works by June 30, 2018 (fenders, bollards, fixing bolts, ladders, worth a total of TOP$214,000). Without an extension of the closing date, the GOT would need to pay for all expenditures incurred after June 30, 2018 and thus miss the opportunity to use the available IDA funds. C. Proposed Changes The proposed change is a six-month extension of the closing date of the AF of the TSCP, from June 30, 2018 to December 31, 2018. This extension is needed for the maritime safety improvement works in the outer island ports of Vava’u and Ha’apai to be completed and entirely financed by the AF IDA funds. The delay occurred for reasons that are out of the control of the Ministry of Infrastructure in so far as that the factory subcontracted by the contractor had to close unexpectedly. The PST was informed by the contractor/supervisor on May 30, 2018 and immediately prepared the information for the Ministry to request the extension from the Bank. The World Bank Tonga Transport Sector Consolidation Project (P096931) The extension would only apply to the IDA grant No. D091-TO and credit No. 5730-TO corresponding to the AF, leaving the closing date of the parent project P096931 at June 30, 2018 (IDA grant H-4160 and PRIF TF-99585, both 100% disbursed). While there are presently unallocated savings under the project, the extension will not permit the financing of activities not initially envisaged under TSCP or whose procurement has not commenced before the original closing date of June 30, 2018. Two road safety contracts, one in Vava’u and one for both Ha’apai and ‘Eua, that will likely not to be completed by June 30, but have already been procured, will be completed during the time of the proposed extension. Any financing amount or unallocated savings will not be used to procure any new activities and the amount that will be left undisbursed by TSCP at the revised closing date will be cancelled prior to the project closing date and may be used for any future Bank project in Tonga that may be approved before the end of the IDA18 cycle. Considering that the requirements of OP/BP 10.00 on closing date extension are met, the request from the GOT is deemed reasonable. In particular: (i) the project objectives continue to be achievable; (ii) the performance of the Recipient remains satisfactory; (iii) the Bank and the Recipient agree on actions that will be undertaken by the Recipient to complete the Project; and (iv) there are no outstanding audit reports, or interim financial reports. More specifically on the actions to be undertaken by the Recipient: the GOT committed to (a) closely monitor the completion of the contracts in question; (b) closely monitor the completion of all the other open contracts; (c) not sign any new contract unless agreed with the Bank and validated in the Procurement plan, or unless there are amendments to open contracts agreed with the Bank and validated in the Procurement plan; and (d) plan for project closing including final financial audit, update of the results framework, evaluation report, etc. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-57300 Effective 30-Jun-2018 31-Dec-2018 30-Apr-2019 IDA-D0910 Effective 30-Jun-2018 31-Dec-2018 30-Apr-2019 31-Dec-2013, 31-Dec- IDA-H4160 Effective 31-Dec-2011 30-Jun-2018 30-Oct-2018 2015, 30-Jun-2018 31-Dec-2015, 30-Jun- TF-99585 Effective 31-Dec-2013 30-Jun-2018 30-Oct-2018 2018