• Prime Minister Scott Morrison. (Defence)
    Prime Minister Scott Morrison. (Defence)

Australia will provide a $580 million loan and grant finance package for upgrades and refurbishments to several priority ports in Papua New Guinea.

Prime Minister Scott Morrison and PNG Prime Minister James Marape met virtually on 21 January to sign the agreements in what PM Morrison says is an investment to improve trade and connectivity in the region and support economic recovery from COVID-19.

“It builds on Australia’s record of supporting critical infrastructure in Papua New Guinea and the Pacific region," PM Morrison added.

Australia’s investment will help Papua New Guinea undertake urgent repairs and upgrades to key ports, some of which are more than 70 years old.

The investment will also position Lae Tidal Basin, Papua New Guinea’s largest port, to become a regional hub to the Pacific by improving Lae Port’s capacity to service dedicated container ships from Southeast Asia.

The agreements will also see works undertaken on Kimbe on the north coast of New Britain, Lorengau on Manus Island, Kavieng in New Ireland, Vanimo in West Sepik and Wewak in East Sepik.

PM Marape welcomed the investment, saying the deal continues the support rendered under the Papua New Guinea-Australia Comprehensive Strategic and Economic Partnership (CSEP) arrangement and strengthens the bilateral partnership between the two countries.

“Upgrades to these key ports will facilitate trade and investment opportunities for PNG local products to reach designated domestic and international markets, create local employment, stimulate economies of scale, and build business confidence to grow our economy,” he said.

According to the SMH, the deal was originally signed in July last year but the funding is $160 million higher than what was agreed then.

SMH also reported that the deal was motivated by the strategic intention to “ward off investment from other nations, including China”.

"The funding comes as Australia has committed to spending more in the Pacific to counter the influence of China, which has been accused of using 'debt trap diplomacy' to saddle poorer nations with expensive projects they cannot afford," SMH wrote.

Ports are critical for connectivity and economic growth in Papua New Guinea, where coastal shipping is the only access to goods and services, trade and passenger travel for many communities.

comments powered by Disqus