Phase 1 of Papua New Guinea’s ambitious K20 billion Connect PNG infrastructure plan will see a focus on connecting capital city Port Moresby to the second city of Lae by road, according to the Department of Works and Implementation’s Secretary, David Wereh. Funding the work remains a challenge, however.

The first phase of the 20-year Connect PNG road recovery plan aims to deliver a completed Trans-Island Highway, connecting Port Moresby and Lae by sealed road for the first time. The Trans-Island Highway remains Connect PNG’s number one priority: a road that would run from Nine Mile Junction in Lae and end in Malalaua in Gulf Province, connecting Lae and Port Moresby via a functional highway.

According to David Wereh, Secretary of Connect PNG’s implementing agency, PNG’s Department of Works and Implementation, that goal will be achieved when the 121 km ‘missing link’ between Bema in Gulf Province and Bulolo in Morobe Province is completed in 2025.

‘To coincide with the 50th anniversary of independence of the country the government would like to see that this section of the highway is fully connected to the southern region. The missing link has 68 kilometres of tough, rugged terrain and that will be our biggest challenge,’ Wereh told the recent 2021 Business Advantage Papua New Guinea Investment Conference.

‘We will be using satellite technology that can relay the coordinates and do some concept design that can give us an idea of how much work we can do.’

Long roads ahead

Overall, Connect PNG is expected to cost around K20 billion up to 2040 to improve road connectivity between PNG’s four geographic regions so that the country can help to quite literally drive more economic participation from regions currently cut off from the country’s major trade routes.

The first phase, which runs to 2027, is costed at K7.98 billion.

In addition to the Trans-Island Highway, phase one includes work to complete missing links along

• the Coastal Highway between Madang and East Sepik provinces
• the Magi Highway between Central and Milne Bay provinces
• the New Britain Highway, between Sule and Kerevat
• the Highlands Highway (various)

Wereh says there will be K3 billion worth of capital works contracts for the initial phase.

Funding

Wereh said funding certainty was ‘critical’ for the Connect PNG project. However, he observed that a ‘funding gap’ of nearly K1.6 billion had accumulated between what PNG needed to spend on its roads and what it could afford to spend.

With the government having limited funds, a significant portion of the funding necessary to complete Connect PNG’s roads program will come from a smorgasbord of willing international donors and lenders, including the Asian Development Bank, the World Bank, the Australian Government (including its Australian Infrastructure Finance Facility for the Pacific), the Japan International Cooperation Agency, and the Chinese and Indian Exim Banks.

The Magi Highway project, for example, has World Bank funding and is considered to have a lot of tourist and agricultural potential.

‘Under the World Bank funding we have already organised some local contractors to start work on this,’ said Wereh.

Robert Jauncey, Chief Investment Officer at the Australian Infrastructure Finance Facility for the Pacific (AIFFP) said the facility has a keen focus on new infrastructure.

‘What we are hoping is that PNG’s capacity to start borrowing for new infrastructure will increase again over the next couple of years. We see this as a very important part of PNG being able to support the economic recovery and bounce back, especially if the infrastructure is focusing on local participation and local employment,’ he told the 2021 Business Advantage Papua New Guinea investment Conference.

‘We are looking to scale up through AIFFP and we are hoping to sign agreements with PNG during the next couple of months for loan financing for maintenance along the Sepik highways,’ Jauncey said. ‘And we will be working with PNG to undertake preparatory work for the first stage of the trans-national highway … we are hoping to be able to offer PNG up to A$300 million (K775 million) for the first phase of that.’