China Eximbank pledges loan for Lae–Nadzab Section of Highlands Highway Project (Linked to Project ID#63174 and #65114)

In 2012, there were several media reports about a 6 million Kina loan, part of which would go towards the Highlands Highway Project. However, this loan was never signed for. The Highlands Highway is a 1200km, two-land road traversing the 7 provinces comprising the rural Highlands region, where 40% of PNG's population resides. The Highlands Highway Project has been marked as a key infrastructure project because weather conditions have severely damaged the road. On September 25, 2013, China Railway International signed a contract for phase one of the Lae–Nadzab Road, part of the Highlands Highway. The value of the contract was US$132 million. On September 30, 2013, China Railway International China signed a contract to outsource work on the Highlands Highway to the Railway Eryuan Engineering Group. As of August 2015, construction was behind and the road had cost 500 million Kina. The project was expected to take 3 years to complete. According to PNG's June 2015 National Government Critical Activity Matrix Report, the Highlands Highway was divided into smaller projects. Three sections were supposed to be funded or co-funded by China's Eximbank. The sections are: - Section 1: 14km from Bugandi Roundabout to Wau/Bulolo Turnoff (4 lane road including Bewapi & Yalu Bridge) and Section 2: Wau-Bulolo Turnoff (@km14) to Nazab- 26km. Funding of K547,815,680.00 to be sourced from Eximbank and K150,000,000 by the government of PNG. Contract awarded to China Railway International Ltd (CRI). This section also referred to as the Lae–Nadzab Road (captured in this project) - Mt Hagen to Togoba Junction (10km - 4 lane carriageway). Funding of K141,445,256.00 to be sourced from Eximbank. Contract awarded to China Machinery Engineering Corporation (CMEC) Ltd - Pup Bridge (SHP/WHP) Border to Kisenepoi (34km) including construction of 2 lane Pup and Kaguel bridges. Funding of K257,856,869.00 to be sourced from Eximbank. Contract awarded to China Machinery Engineering Corporation (CMEC) Ltd. (captured in #65114). This report suggests that (K547,815,680.00 - K150,000,000) + K141,445,256.00 + K257,856,869.00 = K797,117,805 in financing is expected from China Eximbank. The government of PNG has referred to a China Eximbank's loan for the Highlands project as concessional. A 2019 academic source states that a four lane road in the vicinity of Lae built by China Railway International were built and fully funded by a Chinese loan. In 2015 budget estimates, however, only PNG’s contribution to the the Lae–Nadzab and Togoba–Kisenopoi roads were listed and no Chinese funding was listed. Furthermore, a 2016 budget submission stated that Section 1: Bugandi Roundabout to Wau/Bulolo Turnoff was awarded to CRI, under construction, and financed by the government of Papua New Guinea budget. Section 2: Wau/Bulolo Turnoff to Naza had CRI recommended as its contractor and its loan application to the Eximbank was yet to be submitted. As of June 13, 2018, the Mt Hagen to Togoba Junction road was not complete. As of August 2020, according to the Post-Courier article, the loan had not been allocated. This project is linked to #63174, another Eximbank loan to the Highlands Highway Project in 2016.

Number of official sources

5

Number of total sources

11