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PNG road investment to total K7 billion over the next five years, but maintenance the challenge

Scheduled road projects in Papua New Guinea will cost around K7 billion over the next five years, according to David Wereh, Secretary of the Department of Works and Implementation, with almost K2.6 billion of works currently under way. But PNG’s poorly-maintained existing roads represent a ‘time bomb’ for the country.

According to David Wereh, the main focuses of the Department of Works and Implementation’s road building program over the next five years were rebuilding the 800 km Highlands Highway world to ‘world standard’, upgrading 70km of Lae City’s roads, upgrading Port Moresby’s roads, upgrading and sealing 2500 km of PNG’s national highways, and building 1400km of new ‘missing links’ roads to connect four key road corridors.

Loans from donors such as the Asian Development Bank, Australian Aid, the World Bank, the Japan International Cooperation Agency and China’s Exim Bank currently provide 27 per cent of road funding, he told the 2014 Papua New Guinea Advantage Investment and Infrastructure Summit, with the remainder of funds coming from government.

Maintenance ‘time bomb’

‘Our challenge is the deferred maintenance backlog, which is equivalent to K3 billion each year. We need K1 billion each year for the next three years to clear the backlog that we have,’ he said.

‘If we continue to delay the maintenance, we continue to build up the backlog,’ he said.

A Department of Works report estimates that K1 spent on routine maintenance saves K4–5 in rehabilitation costs.

‘The consequences of not maintaining these roads and the blacklog have a lot of financial implications: the cost of wear and tear, and fuel costs on road users,’ said Wereh.

But, he said, the government was trying to bring 75 per cent of the national network to good condition and extend the national road network by 25 per cent.

More private sector participation

‘Industry and institutional capacity contractor capacity continues to be one of our major hindrances in trying to deliver some of these major upgrade and construction works,’ he said.

‘There is only so many resources, and so much capacity and people, to deliver these maintenance and upgrading projects.

‘So, what we are trying to do is to partner with the private sector to manage and provide quality control and some of the work we are now starting to outsource and we are getting a lot of benefits from some of those changes in working with the private sector.’

‘We are also looking at outsourcing the management and maintenance of our key roads to private sector under long-term arrangements.’

He said PNG’s new Infrastructure Development Authority would procure and manage road projects above the value of K50 million.

Supporting local contractors

Wereh agreed that the majority of current contractors were working at their capacity, but the department would increase the packages ‘so we can attract major players from outside [Papua New Guinea], with a 40%–50% allowance for local content’.

Responding to a question that the Chinese contractor building the Lae–Nadzab road had failed to employ any local staff, Wereh said he had asked the contractor to provide ‘a breakdown’ of how many locals and subcontractors were involved in the project.

‘The Chinese are going to give us a breakdown of how many locals they are engaging in relation to that 50 per cent local content that we are referring to.’

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