Updated Project Information Document (PID)
Report No: AB93
Project Name
EAST ASIA AND PACIFIC - 4E-Marine Electronic Highway
Region
East Asia and Pacific Region
Public Disclosure Authorized
Sector
Ports, waterways and shipping (100%)
Theme
Regional integration (P); Pollution management and environmental health (P)
Project
P068133
Borrower(s)
GOVERNMENTS OF INDONESIA & MALAYSIA
Implementing Agency(ies)
INTERNATIONAL MARITIME ORGANIZATION
Address: 4 Albert Embankment, London SE1 7SR
Contact Person: Mr. Jean-Claude Sainlos
Tel: 44 20 7735 7611 Fax: 20 7587 3210 Email:
Environment Category
C (Not Required)
Date PID Prepared
March 4, 2004
Auth Appr/Negs Date
April 29, 2004
Bank Approval Date
June 24, 2004
Public Disclosure Authorized
1. Country and Sector Background
10.
Although the Straits of Malacca and Singapore are shallow, hazardous to navigation, and
characterized by narrow channels, irregular tides and shifting bottom topography, they are the
preferred international route for the majority of ships en route between the Persian Gulf and the Far
East, mainly because the two alternative routes (Lombok-Makassar and Sunda Straits) add several days
the voyage. Recent enhancements in maritime safety infrastructures and regulatory mechanisms in the
Straits have improved navigational safety, vessel traffic flow and the overall management of the Straits
as a major international sea lane. However, the volume of international traffic passing through the
Straits or calling at its ports is already heavy for such a confined and environmentally-sensitive
waterway and is increasing steadily. In 1997, approximately 104,000 vessels transited the Straits of
Malacca and Singapore, and in 2001, 146,265 vessels (>75 GT) arrived at the port of Singapore. Vessel
arrival statistics from 1995 to 2001 showed an annual average increase in arrivals of 5.96% for the Port of
Public Disclosure Authorized
Singapore and 10.58% for Port Klang. There is also substantial volume of cross-Straits traffic between
the three littoral States for trade and fishing. Notwithstanding the current navigation system, the threat
of collision and grounding and of consequent environmental damage is significant and is rising, and the
cost of serious accidents is very high, which justifies further action to reduce them.

11.
Although the three littoral States of Indonesia, Malaysia and Singapore have oil spill response
capabilities, such as oil spill contingency plans and response facilities, including a cooperative response
agreement, a series of recent serious shipping accidents have highlighted the need for a better traffic
management system to reduce their incidence. Another lesson learned from recent incidents is the need
for quicker deployment of spill response equipment and manpower and more efficient institutional
arrangements. In addition to the more rapid response, immediate access to information on the
resources at risk, on spill location and on the locations of stockpiled response equipment can also
contribute to the effectiveness and efficiency of an oil spill response operation. Better and more efficient
communication is the key to achieving a successful response in the event of an oil spill, but an effective
ship monitoring system is also important to prevent such incidents, as well as to serve as early warning.
Public Disclosure Authorized
12.
Recent incremental improvements to existing navigational aids and facilities in the Straits of
Malacca and Singapore have not reduced the incidence of ship collisions and grounding or of chemical
and oil spills. Although risk assessment of tankers in the Straits based on tanker accidents in the period

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from 1982 to 1993 showed a relative constant risk at 0.029% (± 0.03=95%CL) [Malacca Straits: refined risk
assessment, GEF/UNDP/IMO Regional Programme, 1999], a steady number of serious vessel accidents still
occurred in recent years. For example, several vessel groundings and collisions occured in the past two
years, some resulting in spillage of oil, such as the `Natuna Sea' (October 2000) and `Singapora Timur'
(May 2001). Total compensation claims for the `Natuna Sea' from the 3 littoral States were
US$127,003,226, but only 8.48% was paid due to unsubstantiated and disallowed claims, especially on
environmental and fishery-related damages (Annex 2). Reliable information on the Strait's natural
resources, particularly its economic value, is certainly important and urgently needed in order to better
quantify the economic losses incurred in the event of a chemical or oil spill in the Straits.
13.
The increasing volume of maritime traffic and port development in the Straits, as well as the
increasing mix of other uses (e.g., marine recreation, fisheries), are seriously taxing the capacity of the
Straits to handle such growth and diverse uses safely and efficiently. From the maritime safety
standpoint, continued growth will lead to more congestion and will require intensive monitoring,
especially along critical areas of the TSS. The effects of this congestion are exacerbated by
weather-related conditions, including the tidal regime. This combination causes ship delays or
diversions, more conservative loading and higher risk of collision, allision and grounding. The
environmental consequences of the aforementioned situations are increased risk in the number and
magnitude of oil spills, discharges of bilge waters and chemical spills from ships. These facts have
motivated the littoral States to adopt an innovative and more effective approach to improving the
management of maritime traffic and marine environment protection in the Straits, which is to establish a
Marine Electronic Highway (MEH) system.
2. Objectives
5.
The program's development objectives are to increase the efficiency of marine transport
through the Straits, reduce its negative environmental impacts, and strengthen the conservation and
mangement of neighboring marine and coastal environments. The MEH would achieve these objectives
by: (a) reducing the frequency of ship collisions in the Strait's congested sea lanes and ports; (b) making
marine navigation in the Straits safer and therefore more often feasible in poor weather; (c) tracking and
monitoring vessel operations, such as illegal bilge water releases, in the Straits, with benefits for the
management and protection of marine and coastal resources; and (d) testing the feasibility of a MEH
fund to co-finance the system and to support coastal and marine resource conservation and
management in the Straits area. The program will thus generate coastal development and
environmental benefits for the littoral states; global environment benefits by reducing the pollution of
shared marine water bodies; and economic benefits for the international shipping industry and their
billions of customers.
3. Rationale for Bank's Involvement
Bank and GEF support for the MEH Demonstration project will make it possible to establish the conditions
under which the MEH system can be viable both technically and financially, then paving the way for
further development along international sea lanes. From then on, Bank and GEF support, in cooperation
with IMO, will facilitate the dissemination of knowledge and experience so as to spur the replication of the
MEH system, in particular in regions where developing countries will need institutional support and
capacity building to be able to play their part in establishing the system and to reap the expected benefits,
both in terms of more economically efficient international transport and of more sustainable marine
environment protection policy.
4. Description
Essentially, the MEH Demonstration Project has 7 strategic components aimed at addressing the
aforementioned issues:

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Component 1 Establish the Marine Electronic Highway and demonstrate its technical functionalities
on navigation safety and marine environment protection for the Straits of Malacca and
Singapore;
Component 2 Facilitate the integration of marine environment systems and data flow and information
exchange through the MEH system;
Component 3 Develop the operational and administrative mechanisms for the sustainable
management of the MEH system;
Component 4 Evaluate the financial, social and economic benefits and legal issues of the MEH system;
Component 5 Promote awareness and participation of relevant stakeholders to support the MEH
system;
Component 6 Strengthen national and regional capacity in maritime safety and marine environment
protection for the sustainable management of the MEH system; and
Component 7 Implement transitional activities to develop the first phase MEH Full-scale Development
Project and assess the feasibility of establishing the second phase MEH system
extending to other sea areas in the East and West of the Straits.
The logical framework matrix in Annex 1 provides a summary of analysis on the outputs, methodology,
verifiable indicators to measure impacts and the assumptions made to implement the MEH
Demonstration Project.
Component 1 - Establishment of MEH System
Component 2 - Integration of Marine Environment Protection System
Component 3 - Development of Operational and Administrative Mechanisms
Component 4 - Evaluation of Financial, Social and Economic Benefits and Legal Issues
Component 5 - Promoting Participation of Relevant Stakeholders
Component 6 - Capacity Building, Evaluation and Project Management
Component 7 - Implement Transition to Full-scale MEH Development and Feasibility of Second Phase
5. Financing
Source (Total ( US$m))
BORROWER/RECIPIENT ($1.93)
GLOBAL ENVIRONMENT FACILITY ($8.00)
FOREIGN PRIVATE COMMERCIAL SOURCES (UNIDENTIFIED) ($5.52)
Total Project Cost: $15.45
6. Implementation
The Project Steering Committee (PSC) established during the PDF Block B Grant period will continue to
act as the overall regional body to oversee the implementation of project activities in both the
demonstration and the full-scale stages of the MEH Project. The PSC will provide the institutional
arrangement for the development of the managing tool, which will operate, administer and manage the
MEH system on a sustainable basis under a cooperative agreement among relevant stakeholders of the
Malacca Straits.
Four Technical Committees and two Working Groups will be established in the course of implementing
the MEH Demonstration Project to evaluate various technical issues and outputs of the project for the
purpose of refining the activities for the MEH Full-scale Development Project, which will cover the
entire Straits. The Technical Committees and Working Groups will be composed of relevant
stakeholders of the MEH Project including potential users under the direction of the PSC. The PSC will
be developed into the governing body or managing tool (i.e., corporate body) of the MEH system. This
corporate body will operate, administer, maintain and manage the MEH system within the public

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private partnership framework. It is envisaged that the corporate body will be fully commissioned at
the latter part of the second stage of the MEH Project.
Monitoring and evaluation of project activities will include milestones for each major activity with a
corresponding specific timeframe to complete. In addition, there will be annual reviews by the Project
Steering Committee as well as bi-annual internal reviews of project implementation as well as the results
and outputs. The findings of these reviews will be used to assess project progress and the need to
modify approaches and resources. The key performance indicators as shown in Annex 5 will be used to
gauge the outputs and impacts of the MEH Demonstration Project.
In addition, review and evaluation of the project activities will be undertaken by four Technical
Committees (TC) to address relevant issues on the implementation of the project and will come under
the guidance and direction of the Project Steering Committee (PSC). Two Working Groups (WG) will be
established at some stage of the project life to evaluate the impacts of the demonstration project as well
as the formulation of the proposal for the MEH Full-scale Development Project. The technical
committees and working groups will be composed of representatives from relevant stakeholders as well
as consultants hired under the project. The project will participate in the annual GEF Project
Implementation Review (PIR).
A Project Management Office will be established in the region to administer and manage the project
onsite and will have a Project Manager and four experts. The staff will be working closely with the
national agencies staff assigned to the MEH Data Centres and oversee/coordinate the works of the
consultants as well as providing support to the PSC, TC and WG.
7. Sustainability
Since the establishment of the Traffic Separation Scheme in the Straits of Malacca and Singapore,
various regional and international workshops and conferences on the Straits had debated on how to
distribute the financial burden of the littoral States to users (i.e., direct user States and non-state users)
but without any concrete and practical solutions.
The establishment of the MEH system in the Straits provides for a practical and tangible
solution that littoral States, users and other stakeholders can collectively understand and support. The
creation of the MEH Fund can further appeal to the stakeholders, especially the littoral States due to
regional benefits that it could generate through the Environmental Trust Fund (see purposes of the MEH
Fund). At the national level, the Fund could subsidize activities that will enhance environmental
monitoring, especially in coastal areas and ecologically sensitive sea areas or habitats, capacity building
and integrated information sharing for environmental impact assessment, risk assessment and
management including damage assessment (e.g., for oil spill damage compensation).

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8. Lessons learned from past operations in the country/sector
The concept of a marine electronic highway (MEH) was initiated in Canada in the early 1990s with the
application of digital technology to navigation, particularly in the development of electronic
navigational charts and the Electronic Chart Display and Information System (ECDIS). The core of the
Canadian version of the MEH was the integration and interconnection of the ECDIS and the Automatic
Identification System (AIS) with powerful shore-based databases to provide a basis for optimised
shipping traffic management decisions. Since 1995, the ECDIS has been widely deployed in the Great
Lakes and the St. Lawrence River corridor with considerable success, especially in navigating through
treacherous waters even in heavy fog conditions. However, standards for electronic navigational charts
and the unavailability of type approved ECDIS during this early period led to the use of nonconformal
ECDIS by the Canadian shipping sector. Thus, many Canadian ships plying the Great Lakes and the St.
Lawrence Seaway had difficulty in switching to standardized technology subsequent to the commercial
launching of the first type approved EDCIS in 1999 and the wider adoption of the IHO S-57 (electronic
chart standard) due to technical and financial constraints. Furthermore, central government support
waned. Consequently, the MEH concept remains to be realized. Nevertheless, the pioneering efforts in
Canada on digital navigation had led to the widespread adoption of electronic navigational charts and
the ECDIS and subsequently, by the world shipping industry accelerating the commercial development
of electronic maritime technology and the necessary international standards. Since 1999, there are
several type-approved ECDIS in the market and many national hydrographic agencies have S-57 ENC
production capability.
The utility of ECDIS and ENCs is now well accepted in the maritime industry, being able to increase the
safety net of vessels and improve commercial performance (e.g., in areas with restricted under keel
clearance and water depth). Placing these technologies in the framework of the MEH system will
provide greater benefits not only for the shipping industry but also for the marine environment sector.
From the marine environment protection standpoint, for instance, the reduction of vessel accidents and
online availability of marine information could lead to improve monitoring and response to marine
environmental incidents, lower response and clean-up costs and better quantification of damages as well
as enhance management of the coastal and marine resources in the Straits.
9. Environment Aspects (including any public consultation)
Issues : The marine environment protection system (EMPS) component of the MEH system is
an amalgamation of several models and systems. The demonstration project will evaluate several EMP
models and systems for integration into the MEH system including meteorological and oceanographic
systems. The EMPS that will be evaluated are the following: 3-Dimensional hydrodynamic model; oil
spill trajectory and fate model; coastal and ocean monitoring systems (e.g., tides and current);
environmental impact assessment; oil spill damage assessment model and sensitivity mapping. The
ENCs that will be produced from the hydrographic survey using multi-beam technology will be used as
base maps for these models including the sensitivity mapping.
Existing models and systems in use by relevant authorities of the littoral States for marine pollution
prevention and response, environmental monitoring and coastal resource management will be evaluated
and harmonized for incorporation into the MEH system as appropriate. New models and systems will
also be included such for sandwaves monitoring and chemical spill response. Aside from the technical
evaluation of the EMPS, related activities in other components will be implemented to promote the
participation of relevant stakeholders in the environmental sector in the project and also to ensure long
term utility of the MEH system for marine environment protection.
10. List of factual technical documents:

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11. Contact Point:
Task Manager
Robin Carruthers
The World Bank
1818 H Street, NW
Washington D.C. 20433
Telephone: 38761
Fax:
12. For information on other project related documents contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-5454
Fax: (202) 522-1500
Web: http:// www.worldbank.org/infoshop
Note: This is information on an evolving project. Certain components may not be necessarily included
in the final project.

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