Port authority PNG Ports Corporation is “re-conceptualising” Papua New Guinea’s ports into business and logistics hubs, beginning with the signature Westside project in Lae. A bullish Chief Executive Neil Papenfus outlines its plans to upgrade ports across the country.

The 45-hectare Westside industrial and logistics site in Lae. Credit: PNG Ports

Papua New Guinea’s port authority, PNG Ports Corporation, is in the process of conducting a major upgrade of the country’s ports nationally, thanks in large part to an A$521 million (K1,390 million) loan and A$100 million grant from the Australian Infrastructure Financing Facility for the Pacific (AIFFP).

But, as Chief Executive Neil Papenfus told the 2024 Business Advantage PNG Investment Conference earlier this month, the fact that most of this money will need to be repaid puts the impetus on the state-owned entity to address profitability across its network.

Currently, 12 of PNG’s 15 ports run at a loss and are cross-subsidised by the ports of Lae (which accounts for 54 per cent of PNG’s trade volume), Motukea (Port Moresby, 27 per cent) and Kimbe (7 per cent). However, there are radical plans afoot to change that.

“There is huge opportunity to engage with the local business community.”

“These [non-profitable] ports are extremely important for communities, local businesses and the economy and we are committed to continue to support them,” Papenfus told the conference.

“To date, we have only really thought of these ports in terms of throughput – that is, places where vessels can be loaded and unloaded. But we are now re-conceptualising these ports as green ports or business-enabling ports.

“Green Ports can look at rain harvesting and recycling. Business-enabling ports sit on their own prime waterfront land. We are looking to seriously assist local communities to set up processing plants, cool rooms for agriculture or fishing or rubbish recycling. So, there is huge opportunity to engage with the local business community.”

Lae’s Westside the centrepiece

The new 45-hectare Westside industrial park and logistics hub in Lae, PNG’s biggest and busiest port, is a prime example of this approach.

Situated at the Lae Tidal Basin and under “ongoing and staged development,” Papenfus said work on water, sewage, storm-water drainage, 4.8km of roads and lighting has already been completed.

“The PNG and global economy have had a tough couple of years but, at Ports, we are bullish for the long term.”

“We believe [Westside] could be the industrial heartland of Lae,” Papenfus said.

“You can operate just about any type of business there and build just about any type of facility there. It is suitable for manufacturing, processing, warehousing, general cargo storage, dangerous goods storage, fuel farms, office complexes or project staging, and we will start to look at the possibility of using it as a special economic zone.

“The PNG and global economy have had a tough couple of years but, at Ports, we are bullish for the long term.”

Watch Neil Papenfus’ full speech at the 2024 Business Advantage PNG Investment Conference here

Other ports

PNG Ports Corporation’s Neil Papenfus. Credit: Stefan Daniljchenko/BAI

Meanwhile, PNG Ports is set to break ground on the Kimbe port facility upgrade at the end of the first quarter of 2025, while Oro Bay is expected to start upgrading at the end of this year. Papenfus said there are also “really exciting prospects” for Kavieng, which will enter construction in 2026.

Work on Rabaul is also in the pipeline, with assistance from the European Union.

“The preparatory work has taken a lot of time, but you need to do it properly. You need to do your seismic activity. You need to make sure that your plans are fit for purpose,” he said.

Upskilling across PNG

PNG Ports is also investing heavily in its people and their safety. It will soon purchase a new pilotage simulator, the first of its kind in the South Pacific outside of Australia and New Zealand. And it plans to train not only its own pilots but those from competitor ports and neighbouring island nations “to greatly improve the safety of the ports as a whole.”

There is also a plan for a nationwide roll-out of portable pilot units for more dangerous work, as well as a new round of cadetship programs with a focus on female employees.

“This is an area I am very passionate about,” Papenfus said.

“Women represent a significant pool of talent, and they deserve the same opportunities for economic empowerment as men.”