Southeast Asia · Case study

Tibar Bay Port, Grant Funded Technical Assistance and Public Co-Funding for Timor-Leste's First PPP

Tibar Bay, near Dili, Timor-Leste2012 to 2018 (preparation and contract management support)

Timor-Leste built a new international container port at Tibar Bay, 10 kilometers outside the capital Dili, through a public private partnership (PPP) with a consortium led by Bolloré (Government of Timor-Leste, 2016). The Public-Private Infrastructure Advisory Facility (PPIAF) provided technical assistance to the Government from project structuring through to contract management (PPIAF, 2012; PPIAF, 2013; PPIAF, 2018). The Government also put public money into the project alongside the private investor (Government of Timor-Leste, 2016).

Approach

Transaction structuring advice. A PPIAF activity approved in August 2012 advised the Government on structuring and implementing a viable scheme for private sector participation in a greenfield container port terminal (PPIAF, 2012). A follow on activity approved in August 2013 produced a legal due diligence report on the project (PPIAF, 2013).

Transaction advisor. The International Finance Corporation (IFC) engaged HPC Hamburg Port Consulting as transaction advisor in support of the Government (Tibar Bay Port PMU, 2018).

Public co-funding. Of an initial investment of USD 278.3 million, the Government contributed USD 129.45 million and the Bolloré consortium USD 148.85 million (Government of Timor-Leste, 2016). The concession documents refer to this public contribution as Viability Gap Funding (Tibar Bay Port PMU, 2018).

Environmental and social obligations. The concessionaire must prepare an Environmental Impact Statement and maintain environmental and social management and monitoring plans (Tibar Bay Port PMU, 2018).

Contract management capacity. A PPIAF activity approved in March 2018 supported the Tibar Bay Project Management Unit (PMU). It delivered a contract management manual and contract management training for the PMU and other agencies (PPIAF, 2018).

World Bank corroboration. World Bank reporting states that a final USD 90,000 PPIAF grant in early 2018 enabled IFC to help the project reach financial close in August 2018, and supported capacity building for the PMU, including completion of a contract management manual and training (World Bank, 2019).

Results

The Government and the Bolloré consortium signed the concession on 3 June 2016 (Tibar Bay Port PMU, 2018). PPIAF describes it as a 30-year, USD 490 million concession (a whole-of-concession figure, distinct from the USD 278.3 million initial investment) and the first PPP in the country, as well as its largest ever investment with a private partner (PPIAF, 2012). PPIAF lists the 2018 PMU support activity as closed, and World Bank reporting states that it included completion of a contract management manual and training (PPIAF, 2018; World Bank, 2019). An earlier 2016 PPIAF activity to set up the PMU was cancelled (PPIAF, 2016).

Transferability

DMC port authorities with limited PPP experience can use grant funded technical assistance at three stages: structuring the transaction, legal due diligence, and managing the contract after signing.

Public co-funding such as viability gap funding can make a port PPP viable where private revenue alone is not enough.

Building environmental and social obligations into the concession, and training staff to enforce them, helps the public side hold the operator to account. These obligations are contract requirements, not measured environmental outcomes.

Sources

All information used for this case study was based on publicly available resources.