China Eximbank provides government concessional loan worth 89 million Kina for Kokopo Town Sewerage Project

Project narrative

In November 2014, China Eximbank and the Ministry of Treasury of the Government of Papua New Guinea signed a government concessional loan (GCL) agreement for the Kokopo Town Sewerage Project. The borrowing terms of the loan are unknown. However, it is known that the proceeds of the loan were to be used by the borrower to partially finance a commercial contract worth 89 million Kina that the Government of Papua New Guinea signed with China Jiangsu International Economic and Technical Cooperation Corporation Ltd (CJIC) on August 14, 2014. The purpose of the project is to expand and upgrade sewerage system of Kokopo Town — a growing international tourist destination — to account for ongoing urbanization and continue providing the residents and public & private institutions in the area with an acceptable standard of living while minimizing the spread of water borne diseases. The project has four primary components. The first component is the source mobilization phase where the contractor (CJIC) will assemble the materials necessary for construction at the project site. The second component will involve preparation at the sites where the sewerage ponds will be constructed. The third component will involve the construction of the sewerage ponds, pipe lines, and pump stations in the town of Ulaveo. The fourth and final component will be making sure the project meets industrial standards. Upon completion, it was envisaged that the sewerage system would have 19 pump stations along a reticulated sewerage system and two sewerage treatment ponds. CJIC is the contractor responsible for implementation. Its work is being overseen by Islands Design and Engineering, a locally owned engineering firm. The project commenced in 2016 and it was originally expected to take 24 months to complete (6 months for design and 18 months for construction). However, the project encountered various problems and delays. In November 2017, concerns were raised by a nearby resort (Rapopo Plantation Resort) that the sewerage plant at Ulaveo was too close to the resort and put at risk dolphins in a nearby lagoon. The resort’s Executive Director, James Ipang, warned that the treatment plant would be pumping waste into pristine sea water near Kokopo and Rabaul towns. He also said that the crystal-clear waters were a breeding and feeding ground for a pod of 300 dolphins directly in front of the plant, and that other alternatives should be considered. The East New Britainn Chamber of Commerce Incorporated raised similar concerns in August 2019. As of December 31, 2019, the project had achieved a 98% completion rate, and the fourth component of the project was pending certification because of public concerns that the sewerage ponds were constructed too close to local communities, businesses, and the sea.