The establishment of the ADB extension office in Solomon Islands was an appropriate measure that enabled more frequent monitoring and timely implementation. Assigning properly trained staff to the extension office would provide the assistance required.
The project did not include funding for rehabilitation or annual maintenance requirements, adversely affecting full utilization of subprojects.
Attributing national GDP growth to the project impact was inappropriate since the planned interventions were not the only factors contributing to economic growth. Furthermore, the target of 30% labor in the GAP for women was not attainable because of the unique socioeconomic conditions within the project area. A more realistic labor participation rate should have been considered reflecting these realities.
Although the output targets were achieved without delays, most policy actions identified in the post-program partnership framework (PPPF) were still in progress at program completion. Progress on PPPF actions to prepare legislation and regulations has been slower than anticipated. This can be explained in part by government capacity constraints, combined with interruptions during the election period in 2019 and disruptions due to COVID-19 in 2020. Therefore, there is a need for ADB to stay fully engaged with monitoring the non-tranche PPPF actions to help ensure they are completed within an appropriate time. The conversion of the ADB Extended Mission in Solomon Islands to a Pacific Country Office and the approval of additional staff, will facilitate continued monitoring of these non-tranche actions. This lesson is 1 of 2 additional lessons demonstrated by this program’s experience, which has also confirmed several lessons from earlier policy-based programs in Solomon Islands, including the need to (i) maintain dialogue with the government to ensure policy actions are aligned with government priorities, (ii) consult with development partners to ensure reform efforts are coordinated and to avoid duplication of effort, (iii) ensure a sharp focus and realistic time frames for policy action, (iv) continue TA support because there is limited government capacity to implement certain reforms, and (v) ensure that essential policy actions are linked to disbursement.
Together with its request for budget support in 2018, the government’s reconvening in late 2017 of the Core Economic Working Group, a forum that coordinates development partner economic and financial assistance in the Solomon Islands, generated much‐needed momentum for reform. ADB responded by designing, implementing, and completing this stand-alone program before the national election on 3 April 2019. The timing helped avoid potential program delays, as public servants and members of Parliament returned to remote constituencies in December 2018, and a caretaker government was put in place ahead of the national election. Without proper timing, progress on reforms already stalled in 2015–2016, would have had to wait further until the new government took office at end-April 2019. ADB should ensure that future policy operations are likewise carefully timed to leverage reform when the political environment is supportive. This lesson is 1 of 2 additional lessons demonstrated by this program’s experience, which has also confirmed several lessons from earlier policy-based programs in Solomon Islands, including the need to (i) maintain dialogue with the government to ensure policy actions are aligned with government priorities, (ii) consult with development partners to ensure reform efforts are coordinated and to avoid duplication of effort, (iii) ensure a sharp focus and realistic time frames for policy action, (iv) continue TA support because there is limited government capacity to implement certain reforms, and (v) ensure that essential policy actions are linked to disbursement.
Work on the non-tranche release conditions associated to two of this program’s policy actions – the customs and excise bill and the state-owned enterprise capital structure policy – was still ongoing as of program completion. It is expected to wrap up only after the Parliament or Congress acts on them in 2018−2019. While the non-tranche release conditions associated to each of the tranche release policy actions may be useful for monitoring purposes and would help ensure that the government continues to pursue the reform agenda after it achieves the policy actions linked to disbursement, their time frames must be carefully considered, especially to avoid their undue prolonged implementation. The long-drawn implementation of these conditions could limit and eventually erode their contribution to the success of the reform programs.
Providing policy-based budget support every two years risks creating a pattern of the government only pursuing essential reforms during the program period. Through the CEWG mechanism, ADB has previously agreed to provide budget support in alternating years to that of the World Bank, mitigating the risk of negatively impacting the government’s reform mindset. However, because the government failed to endorse the CEWG policy matrix in 2015, this cycle was interrupted. ADB should consider reimplementing the alternating cycle with the World Bank and/or other CEWG development partners, as well as the two-tranche stand-alone grants, or programmatic grants to support continuous and sustainable government reforms. The preparation, implementation, and completion of policy-based programs are time- and resource-intensive, so increasing the frequency of such programs is not recommended.
The program drew from existing regional initiatives to meet its TA needs. It tapped the existing adviser support provided to the executing agency by the Regional Assistance Mission to Solomon Islands for assistance in the design and implementation of reforms aimed at strengthening the government’s financial management processes and systems. It also leveraged ADB’s regional TA, Private Sector Development Initiative, for help with drafting a new bill that aimed to introduce transparent decision-making in customs processes and a modern border-control system. Government capacity to design and implement certain reforms remains limited because of lack of resources to attract and retain skilled staff. Expert support provided through TA will continue to be essential to ensuring that program-driven reforms in the Solomon Islands will be successfully implemented and are sustainable.
Like ADB’s previous budget support programs in the Solomon Islands, implementation of this grant was satisfactory. However, some reforms, particularly those involving legislative action, took longer than anticipated. Specifically, the customs and excise bill tax, targeted by the program to be submitted to Parliament in 2016, was still being reviewed by the Attorney General’s Chambers as of project completion. The state-owned enterprise capital structure policy, targeted for Cabinet approval in 2016, is expected to be approved in 2018. The pattern of delayed legislation has constantly nagged the implementation of the government’s economic and fiscal reform program. Therefore, policy actions that include legislative reform need to have realistic timelines.
This program was based on the government’s development policy letter of 23 December 2015. The design was discussed extensively with the government as well as development partners and was consistent with the government’s goals and ADB’s country partnership strategy and operations business plan for the Solomon Islands. Consultations with development partners, even in the absence of a CEWG process and policy matrix, proved essential in ensuring that the program does not duplicate any effort or initiative by partners. Such consultations should continue through all times to strengthen donor coordination and enhance the impact of external development assistance to the country
In March 2009, the government of the Solomon Islands established the core economic working group (CEWG). Consisting of officials from the government and development partners, the CEWG serves as a forum to discuss economic and financial reform priorities, which provide the basis for development partners’ assistance to the country. Agreements reached through the government led CEWG mechanism are translated into an annual policy matrix. But as some policy items lacked political support, the CEWG matrix did not progress in 2015–2016, resulting in other development partners not providing budgetary support. This program, which drew on the previous policy matrix and included additional policy actions that ADB and the government agreed upon, contributed to the reestablishment of the CEWG process. Both the disruption and the reestablishment of the CEWG highlight the critical importance of maintaining policy dialogue and seeking stakeholder feedback in ensuring continuing government commitment to reforms.
The initial plan was to implement this project over 2 years and 9 months, which is longer than the typical 2-year period for ADB post-disaster emergency assistance and rehabilitation projects. According to the financing agreement, the project period was to be at 3 years and 3 months, but project completion was later extended by 9 months. The longer project period was justifiable, considering the country’s unpredictable weather, the government’s capacity constraints in identifying its recovery needs, the long time required to complete the damage assessment and feasibility study, and the considerable amount of time needed to resolve land disputes over the construction sites. These factors need to be considered in setting the implementation period for future similar projects.
Early in the project, the central project implementation unit (CPIU) faced a staff shortage, especially for mid-level engineers. To address this, the CPIU under the Ministry of Infrastructure Development and design and supervision consultant (DSC) implemented a short-term project-specific graduate recruitment program. With support from the head of the engineering faculty of the University of the South Pacific, Solomon Islands, the DSC facilitated the recruitment and eight engineers were successfully engaged in the project construction phase. Working with other experts in the project sites, the graduate engineers contributed to the improvement of construction supervision. Considering the modest number of new graduates in the country, this type of initiative will be beneficial for future similar projects while exposing new graduate engineers to promising professional opportunities. Such an initiative can also help broaden the talent pool of young engineers with practical experience for the government and private sector to recruit from.
Flooding is an annual concern for the main road constructed under this project, especially those sections that cross meandering rivers and so require river training and protection works. The government, through the Sustainable Transport Infrastructure Improvement Program, is developing a transport infrastructure maintenance mechanism using the National Transport Fund (NTF) and is expanding its transport sector development efforts to include physical, financial, and institutional aspects. ADB, along with the government of Australia, is contributing to the NTF, which financed the restoration of the four subprojects that could not be undertaken under this project. Maintenance of the subproject roads under NTF 2−3 year−maintenance contracts would enable the full realization of this project’s benefits, particularly in terms of reducing travel time and cost, which can only be achieved if the entire road alignment connecting east and west Guadalcanal is maintained. While highlighting the need for a road maintenance fund and regular budget to meet the costs of regular and routine maintenance, the experience also reaffirms the importance of good asset management and road maintenance in maximizing project benefits and enhancing the sustainability of the road transport system.
All the 13 subproject roads constructed under this project to reestablish east–west connectivity following tropical cyclone Ita are in good condition. However, the project completion review team observed that the sections of the east–west road that were not rehabilitated have deteriorated and require immediate maintenance. Particularly in need of immediate attention are the approach roads to three high-level bridges that were not sealed and carpeted under the project. In future, ADB should ensure that approach and linked roads are constructed or rehabilitated as an integral part of bridge construction and rehabilitation works and subsequently maintained properly. Shortcomings in this area can diminish the effectiveness and impact of bridge construction and overall road rehabilitation works.
The Makira encountered cost increases because of, among other reasons, the appreciation of the New Zealand dollar, the currency used in paying 65.17% of the Makira contract, against the US dollar. The cost overruns caused delays, as they required processing of the Second Road Improvement Sector Project, from which part of the deficit financing would come, before the Makira contract could be awarded. Building on this experience, it is important to find a more reliable method for determining price contingencies in future projects to better manage cost overruns due to exchange rate fluctuations.
Land acquisition for the Makira subproject was minimal and managed in accordance with the safeguard policy of the Asian Development Bank. In the future, greater government capacity will be needed to manage community liaison, identify affected persons, and manage the process of compensation to avoid community dissatisfaction.
Local communities may be encouraged to develop a contracting industry in the Solomon Islands. This could be more beneficial for the country in the long run, as it will help maintain roads in good condition while creating positive social outcomes. However, this will require adequate resources and effective government supervision. Greater accountability from central and provincial governments will also be needed to ensure value-for-money engagements with local contractors.
Quality control remains a weakness in road sector projects in the Solomon Islands. Funding must be provided to support critical maintenance-related activities, including progressive improvement of performance-based contracts, timely and appropriate supervision of maintenance contracts, and asset management planning to ensure proper forward planning of maintenance needs. Sound fiduciary procedures are needed to ensure that the quality and quantity of civil works, and the purchase of goods and services, are matched by proper financial records and approvals. Adequate travel budgets and efficient mechanisms at MID and the Ministry of Finance and Treasury are required to ensure MID staff regularly travel to the outer islands to inspect ongoing maintenance contracts.
Sound technical, economic, social, and environmental procedures are essential for translating the NTP into worthwhile and fully supported investments. Proper engagement and communication with stakeholders is vital to ensure that the rationale and the processes are fully understood. A stronger country safeguard system, including guidelines on obtaining customary land for transport projects, is essential.