Challenges and Opportunities in Sustainable Port Development in Nauru

3 April 2019

Pivithuru IndrawansaInfrastructure SpecialistAsian Development Bank

Capacity Building Workshop on Sustainable Port Development and Improving Port Productivity

• World’s Smallest Island Nation – 21 sqkm

• Deeply Isolated in the Pacific

▪ Population: 11,300▪ Distance to closest

country (Marshal Islands) 1,300km (Brisbane over 3,400km)

The Port is Nauru’s Lifeline

Challenges in Current Port Operations

Looking North

Challenges in Current Port Operations

▪Aiwo Port–Shallow Boat Harbor

▪Current Facilities - Over 115 Years Old –Highly Dysfunctional

▪Fully Exposed to Effects of Climate Change–Complete Shutdown 3 months a year

▪Offshore Loading and Unloading–Costly, hazardous and difficult–Ship Turnaround Time Exceeds 21 Days

▪Weak Port Management–Unskilled Human Resource

(1) Offloading containers into barges

How Port Operates … If and When It Works

(2) Transporting containers into port area

How Port Operates … If and When It Works

(3) Unloading containers

How Port Operates … If and When It Works

(4) Rundown port buildings

How Port Operates … If and When It Works

(4) Rundown port buildings

Harbor Master’s OfficePort Workshop

How Port Operates … If and When It Works

Offshore Mooring System

Mooring diagram for container ship

Mooring diagram for phosphate bulk carrier ship

• The existing mooring system is frequently damaged;

• Annual repairing and maintenance costs about A$1 million;

• Replacement costs about A$6 million every 5-6 years.

Offshore Mooring System

Tug Boats (hired when mooring system is damaged, cost over A$1000 per hour; A$3.5 million a year)

Neptune Shipping is the Only Remaining Shipping LineMatson Shipping withdrew in November 2015

Challenges in Developing a New Port for Nauru

▪Nauru’s Specific Geography–Limited Options

▪Design Constraints–Wind Climate - Strong Westerly Winds–Effects of Climate Change - Sea Level Rise–Wharf Orientation, Berthing Ability, Ship Arrivals and

Departure

▪Satisfying ADB’s Technical, Economic, Financial, Environment, and Social Safeguards Requirements

▪Presence of Unexploded Ordnance

▪Design Validated through;–Detailed Feasibility Study–Geotechnical Investigations–Comprehensive Ship Simulation Modeling–Independent Design Review

Challenges in Developing a New Port for Nauru

Proposed New Port - Layout

Technically feasible, climate resilient, and least cost option

Proposed New Port - Layout

Technically feasible, climate resilient, and least cost option

Development Within Existing Port Footprint

Residential area; nearly

deserted due to extremely

poor living conditions.

Being demolished and

earmarked for a fish

processing plant

Yellow line: Proposed

port development

boundary (within existing

premises)

Red line: Few residential houses

near the port; Other buildings for

industrial use

7 land parcels (204-209 and 131; 16,830 sqm; existing port premises); Customary land owners (426 individuals); leased by the government until 2020; renewable

Foreshore; public land 5,963 sqm

Port is surrounded by two districts;Aiwo - 215 HH; 1263 people; Denig - 337 HH; 1549 people

Project Outputs Fully Financed

▪Three Outputs–Climate-proofed port infrastructure constructed,–Sustainable operations and maintenance achieved,–Efficient port operations established

▪Costs and Financing–Total cost - US$79.59 million–Financed by:

➢ADB – US$21.3 million Grant➢Green Climate Fund - US$26.91 million Grant➢Government of Australia - US$14.08 million (A$18 million)

Grant➢Government of Nauru - US$17.30 million

Challenges in Introducing Reforms Port Authority of Nauru

▪Organization Restructure– Introduce International Best Practices - Financial and Human Resource

Management, Port Operations– Resistance to Change– Highly Political Environment– Legislative Amendments– Limited and Unskilled Human Resource – Comprehensive Training Needs

▪Tariff Restructure– Resistance from port users

▪Outsourcing Port Operations to Private Sector– Port Authority as a Regulator– Cost Recovery– Fish Transshipment– Fish Processing

Project Implementation Status

▪Construction Works Ongoing–Contract Awarded in December 2018 - Competitive Bidding–Construction Supervision Consultants Engaged–Independent Technical Auditor–Civil Works Completion by December 2020

▪Port Equipment–Government of Japan Donation A$10 million–Supply by December 2020

Project Implementation Status

▪Port Reforms Ongoing–Revolving Maintenance Fund Established–Reform Consultants Engaged–Organization Restructure approval by December 2019–Outsourcing Port Operations

➢Expression of Interest - June 2019➢Outsourcing – December 2020

▪Project Completion by December 2022

Thank youFor any queries: