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The result of the analysis shows that there are substantial advantages in the construction of the new road projects and the performance of most of the indicators, especially the economic assessment with the option of the free of charge user roads. Traffic on the new road projects are much higher and as consequences both users and societies are better off, as total time savings are higher and externalities lower than the user fee option.

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If the Government decided to introduce a pricing scheme only on some links of the network, it is expected to shifts traffic from the priced modes of the road network to the other non-priced links and therefore reduces the consumer surplus. From a welfare point of view, this will lead to a less positive effect. In order to maximise the net benefits of the investment, the analysis shows that it is better to allow the usage of the proposed new roads to be user free and to postpone the idea (if any) of an introduction of a user fee at a later stage, preferably, where traffic flow growth is sustained. The risk analysis assessment shows that all other indicators supported the economic viability of the project if the Government is resort to borrowing to finance these road projects. Furthermore, the return on goods and services export earnings and the total revenue are sufficient to meet external repayment. Together both indicators - proxy of Vanuatu‘s solvency, suggest Vanuatu‘s capacity of repayment is high and strong over the forecast horizon. In other words, Vanuatu‘s debt repayment schedule will be honoured during years of maturity.

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Ministry of Finance and Economic Management (MFEM)
Department of Finance and Treasury (DoFT)
PMB 9031
Port Vila
Vanuatu, South West Pacific
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