Our response to China's influence in PNG continues to fall well short

So in just one week a worthy Australian Government grant to our nearest neighbour is completely swamped by yet another suspect PRC loan –a loan PNG Water and the PNG Government simply cannot afford to repay.

Australia's total development assistance provision for Papua New Guinea as outlined in the federal budget is over $550 million. The total amount will be in grant or specific project form – not loans.

In just two deals in recent weeks loans agreed to by the PNG Government with China – with work to be undertaken by Chinese contractors and funded by loans – total $2.8 billion! The latest is the Port Moresby water project. Recently the PNG Government signed up to a China loan worth at least $2.6 billion for the Ramu Two hydro power project.

At the same time, China, through its embassy in PNG, has pushed out as many positive stories as it can on yet another suspect project – this one sadly funded by the Asian Development Bank.

I have written about the airport upgrades program before – around $10 million each for 20 airport upgrades across the regions.

The reason why the PRC Embassy has been so active is obvious. Criticism is growing on the quality of the work being undertaken – all by PRC contractors. I am gathering more evidence on that so watch this space in the weeks ahead.

Sadly, here is the simple truth - our support for PNG is principally in grant form – just what PNG needs. But it is wholly inadequate in responding to the increasingly aggressive China push to tie up just about all infrastructure spending in Papua New Guinea.

Our initial response was supposed to be the "Pacific Step Up" programme delivered through the Australia Infrastructure Financing Facility for the Pacific first announced in late 2018.

Instead of deterring China there is no doubt it has fired up the PRC Embassy in PNG. The number of projects – all loan funded and carried out by Chinese contractors – is on the increase. They cover infrastructure, education, and communications in particular.

When you look up the Australian Infrastructure Financing Facility website just one PNG project is listed the Markham Valley Solar Project. Details are few, and there is no actual funding outlined.

While DFAT and AIFF continue to dither over details including the actual letting of a construction tender China pushed through the PNG Government and PNG Power the Ramu Two project which is the same general local location as the Markham solar project!

When you look at the AIFF website, just five projects have been "approved" across the Pacific and Timor Leste.