Nauru depends significantly on its port for supplies of food, energy and most other essentials. Constructing a climate-resilient port that can operate year-round will provide the basis for regional and international maritime transport. The rehabilitation and climate-proofing of the existing infrastructure will be combined with supporting reforms of the Nauru Port Authority to assure long-term viability of the investment. The upgraded port infrastructure will feature a channel for oceangoing ships, a wharf with a turning berth, a breakwater to shelter the wharf and berth from waves, and other facilities.

This project will also help reform port governance and management and capacity building of Nauru Port Authority (NPA) to ensure financial, economic, and institutional sustainability. The State Own Enterprise (SOE) model is recommended as the appropriate management model for NPA. This recommendation was concluded upon detailed assessment of other potential options including contracting port management and operations to a specialist private sector company and possible public private partnership (PPP). The primary issue is the ability of the NPA to generate sufficient revenue for the operations and lack of necessary skills of the NPA workforce in operating port activities efficiently. The effect of this is it is unlikely that any contracting or PPP would work effectively. However, the proposed reforms and new port facilities will attract new business opportunities for NPA and the PPP option can be considered consequently possibly after 3-5 years upon establishing new port facilities. The project will support NPA to implement reforms for at least 5 years. The reforms and capacity building of NPA are contingent for successful port management, operations and sustainability of the new assets acquired under the project. Under ongoing project preparatory works, a detailed study concluded that (i) NPA need to be restructured as a State-Owned Enterprise (SOE) against current government's department type management, (ii) establish and implement a cost recovery level tariff structure and regulations, (iii) establish new IT based accounting, financial, human resource and training, operation and asset management system and procedures, and (iv) capacity building of port authority staff through on-the job and specific training. The government has agreed to institute necessary legislative approvals for transforming NPA into a SOE, revision to tariff structure, and introduce or revise port related regulations. It is planned that legislative and regularity amendments and new organization structure, procedures and practices can be established by mid-2018. By the time the new port assets will be completed by end 2019, the NPA will be expected to substantially function as a credible organization compliant to international standards especially the requirements of international maritime organization (ISPS Code) and UN maritime conventions (UNCLOS) which government is signatory to.

Asian Development Bank (ADB), and Ministry of Finance, Nauru