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Policy Reform, Road Networks and Border Management: the World Bank’s contribution

Policy Reform, Road Networks and Border Management: the World Bank’s contribution. Transport Development and Trade Facilitation World Bank – UNOHRLLS June 13th 2013. Responding to the needs of the landlocked countries.

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Policy Reform, Road Networks and Border Management: the World Bank’s contribution

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  1. Policy Reform, Road Networks and Border Management:the World Bank’s contribution Transport Development and Trade Facilitation World Bank – UNOHRLLS June 13th 2013

  2. Responding to the needs of the landlocked countries • Road projects funded by the donor community spend hundreds of millions in infrastructure to reduce vehicle operating costs and travel time • But how to ensure that savings are passed to the traders, and ultimately to the consumers? • Analytical work by the World Bank highlighted two important facts: • Reducing costs only translates into reduction of prices when market conditions are right • Delays and uncertainties have a greater impact than usually estimated

  3. The economic cost of delays • Border crossing delays, because they affect traders directly and indirectly, are of particular interest • Delays affect not only directly the traders: • Inventory cost (not new) • But also uncertainties (see ‘Cost of Being Landlocked’) • But also indirectly through more expensive logistics services: • Idle trucks are not making money: less trips mean less income, and higher fixed costs to cover on each paying trip • Idle goods need storage space: terminal congestion, queues at borders, etc.

  4. Reducing border delays:2, 1, 0 border posts? • On the assumption that border delays were caused by border agencies, one-stop border posts were quickly adopted as the ‘miracle solution’: • East Africa: EAC program to convert internal and external borders into OSBP • Southern Africa: SADC Infrastructure Master Plan • West Africa: ECOWAS Joint Border Post program • But different approaches: • Keeping layout / facilities but specializing posts • New facilities development • The next few slides are showing how reduction of border crossing time was achieved in East Africa

  5. Background on the Northern Corridor Border Crossing • Border delays are / were a concern for trucking companies and traders • Regional strategy to convert border posts into OSBP, with Malaba as pilot • SSATP provided support to TTCA-NC for before / after surveys on the three main crossings: • Malaba (over 1000 trucks per day for both directions) • Busia • Gatuna

  6. Reducing border delays works • By chance, a major reform of operational practices at the border took place in the middle of the survey period (Nov. 2011 to March 2012) • On average, crossing time was reducing by 20h. In the survey sample: • Before reform, 49% of trucks spent more than 24h at the border ( of which 13% over 48h) • After the reform, all trucks passed in less than 6h

  7. But remedy must be based on accurate diagnosis • Border agencies process are frequently blamed for delays, but in reality, situation is more nuanced: • Operating hours play a role: even if border agencies operate 24/7, agents often do not • Driving patterns: borders as ‘rest stops’ for trucks • Infrastructure not always a blocking factor: reform produced results in Malababefore rehabilitation

  8. So, how they did it? • Regional Economic Communities, Countries and development partners have coordinated their efforts in the East Africa OSBP program for a whole range of issues • However, critical enablers of the reform were: • The supporting IT • The culture of cooperation • The involvement of the private logistics operators (truckers, drivers and C&F agents) • The measures that worked concerned all: • Border management agencies: advance preparation with pre-arrival lodgment of the declaration (thanks to IT), and inter-agency coordination when the trucks have arrived • Clearing agents: mandatory pre-arrival lodgment of declarations • Truck drivers: traffic and parking rules to decongest access route and Customs Controlled Zone

  9. Lessons for other corridors • Too often, the focus of border projects is on physical facilities • And when it is not, the focus is on public border agencies reform • The Malaba case is rebalancing the respective importance of: • Infrastructure versus inter-agency cooperation and IT • Purely public versus an inclusive approach involving public and private

  10. Thank you for your attention Olivier Hartmann & Dominique Njinkeu SSATP / TFF www.ssatp.org

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