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Australian taxpayer funds Chinese construction companies in PNG

By Jeffrey Wall - posted Tuesday, 11 May 2021


To its considerable credit the ADB has subjected one of its major PNG projects to a comprehensive review. And the outcome contained in the attached ADB "Validation Report" could hardly be more negative!

The re-development of the Lae Port is one of the major infrastructure projects in PNG funded by the ADB and undertaken by a Chinese construction company - China Harbour Engineering Company.

The project was initially expected to cost around $US150 million. The final cost ended up at over $US300 million!

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The ADBs own validation report confirms what was well known in the Lae business community, and the PNG and Australian construction sectors, at the time – the project construction was deeply flawed.

Most of the key performance indicators reviewed by the ADB's own team were described as "less than satisfactory".

The second and final "Validation Report" (I have them both) commissioned by the ADB was completed in December 2017.

The question surely is – what has Australia, as a senior ADB member, done about such a negative report on a major infrastructure project undertaken by a PRC company?

When you consider the virtual monopoly PRC companies have had over ADB projects in Papua New Guinea ever since the answer has to be – not much!

When the original tender went to the PNG Cabinet for approval it was made clear that ADB funding was conditional on the project being awarded to a nominated PRC company!

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Was Australia's representative then, or since, aware of that condition? And what was done about it?

The Lae port today is operating just as the validation report said it would – less than efficiently!

The second major ADB project I have written about elsewhere is the major upgrading program for PNG's major regional airports – 20 airport projects worth at least K20 million kina each.

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About the Author

Jeffrey Wall CSM CBE is a Brisbane Political Consultant and has served as Advisor to the PNG Foreign Minister, Sir Rabbie Namaliu – Prime Minister 1988-1992 and Speaker 1994-1997.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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