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PNG fails to manage developments funded by China

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Recent experience shows Papua New Guinea Government agencies have failed to manage some key infrastructure developments funded by concessional loans, ABC News report says.

One example is the Lae Tidal Basin, a $390 million expansion at Papua New Guinea’s biggest port built by the Chinese state-owned China Harbour Engineering Company.

The cost of the project, financed primarily through concessional loans from the Asian Development Bank — blew out by $170 million because of engineering problems.

The ADB’s assessment found the project failed tests of efficiency, effectiveness and sustainability and its overall report declared the project “less than successful”.

Sir Nagora Bogan, the former commissioner of Papua New Guinea’s Internal Revenue Commission, said such projects showed the dangers of borrowing heavily without good governance procedures to manage the loan.

“I think generally people want development to take place but development must be done where we have the capability to afford those developments and it must be done transparently,” he said.

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