1. Progresses and Challenges of Infrastructure Spending in Timor-Leste By: Antonio Vitor The 2013 Timor-Leste Update - ANU ADB Consultant & MPW Adviser

2. Outline: 1.Background 2.The Targets in Strategic Development Plan 3.Some Progresses 4.The Challenges

3. Background The status of infrastructure : inadequate and inefficient Source of Financing : Self + co-financing Implementation issues Low execution High budget diversion

4. Timor-Leste’s Strategic Development Plan 2011-2030 SDP Goal: achieving a middle income country by 2030. Infrastructure Tasks : building & maintaining core and productive infrastructures to support growth, increase productivity, create jobs, and national private sector development Targets for: Roads: - r ural roads are fully rehabilitated by 2015 - district roads fully rehabilitated by 2020 - national roads fully upgrade by 2020 - comprehensive maintenance program - national ring road highway (2 + 2 lanes) by 2030 (to start with Suai-Beaco)

5. Water: - by 2030, all citizens will have access to clean water and improved sanitation Power/ Electricity: by 2015 everyone in Timor-Leste will have access ( 24/7); and by 2020 reduce fuel dependency by half. Ports: Tibar - by 2020 - new, fully operational and efficient major port Suai – by 2015, fully operational and efficient Airports: Dili: extension of the runway and a new terminal building

6. Progresses: National roads: upgraded Liquica-Maubara (Dec 2013) – 14 km by 2017 will upgrade about 600 km out of 1,426 kilometers (40%) Key links (Dili to Motain; Tibar-Gleno, Dili- Baucau, Baucau-Viqueque, Baucau- Loapalos (Com), Dili-Ainaro, and Manatuto- Natarbora Rural roads: 240 kilometres out of 3,025 km of rural roads rehabilitated & maintained (70% of the population living in rural areas)

7. Pilot National Roads Upgrading (Liquica-Maubara)

8. Progresses (continued) Electricity : 2 new power plants with 250 mgws capacity in place 9 Sub-stations, connection of 506 km of transmission lines out of 603 km June 2013, ---106.072 hhs access to electricity, 97,072 hhs connected to the grid -- 9,000 hhs renovable energy. Tibar Port (PPP) at procurement stage

9. Reform the current system, practices and institutional arrangement? lacks capacities (human resources & institutions) to deliver SDP targets under-developed national private sector (construction, design, supervision) still low performance in public investment management and public finance management relative small market for private investment low participation – lack competition- high cost) Challenges

10. under-developed financial markets, high-cost in doing business, weak macro-economy environment, poor governance (led to low return on capital) political economy influences investment logics institutional arrangement in delivering infrastructure (overlapping responsibilities, coordination issues) Ineffective investments prioritization political interference and of multiple, changing and competing stakeholders. clear separation of political and technical responsibilities Challenges (continued):

12. MPW 5-year Action Plan “100% of Dili households with safe 24-hr supply by 2017 ~4000 new connections / year?

13. Figure 2: Dili Water Supply System zoning showing estimated supply continuity level of service (source: ADB TA-7981 in consultation with DNSA)