IN a follow-up to the ADB’s Country Programming Mission meetings held in Port Moresby during March and April of this year with the Marape Government, Treasurer Ian Ling-Stuckey virtually met with ADB Country Director David Hill and other representatives of the ADB to agree on the remaining necessary actions to realize the proposed projects for approval before the end of the calendar year.
A very important project for delivery is the policy-based loan for State Owned Enterprises (SOEs) Reform programme, which is focused on legislative and policy actions to support better performance of the SOEs in terms of effective delivery of services and cost efficiency. The proposed Subprogramme 2 planned for approval in 2021 will provide $150 million in budget support in exchange for achievement of 18 policy actions. These actions in Subprogramme 2, build on the 17 policy reform actions achieved by the Marape government in 2020 for $100 million in budget support, which was received in December 2020.
Key policy reform actions under Subprogramme 2 include, the clearing of payment arrears, finalization of due financial management reports and associated audits, approved business operating plans, and measures to increase the transparency and accountability of KCH (Kumul Consolidated Holdings) and responsible SOEs such as PNG Power Limited, Air Nuigini, and PNG Water.
In general, these collective legislative and executive actions are geared to increase the competitiveness of PNG’s SOEs whilst also attracting private sector investors to partner with the Marape Government to provide an expansion of services at cheaper costs.
The ADB expressed some concerns on delays in implementing provisions of the Private Public Partnership (PPP) Act, and specifically the establishment of a functional PPP Centre.
In response the Treasurer stated that, “The partnership between the ADB and the Marape Government is strong and we are thankful for the continued engagement by ADB throughout the years. In coordination with Minister for SOE, other Ministers, and KCH, we will ensure that the necessary policy actions are achieved to satisfy the agreed upon requirements for the budget support.”
The discussion also focused on the ADB financed Sustainable Highlands Highway Investment Programme.
ADB Country Director Hill thanked the Treasurer and his team, in addition to the Department of Works team, for moving forward with the necessary steps to approve Tranche 2. Under the ongoing Tranche 1, 430 km of pavement are being upgraded, rehabilitated and maintained, wherein physical progress is estimated at approximately 37%. Under Tranche 2, 71 single lane Bailey bridges will be replaced with two lane permanent deck structures. The detailed design for these bridges is complete, procurement is ongoing, and approval is expected in September 2021, which will expedite construction and completion of the overall restoration of the Highlands Highway.
The ADB is also working with the Bank of PNG on a financial inclusion project to Small and Medium Enterprises. Lastly, the ADB in coordination with the Australian Infrastructure Financing Facility for the Pacific is working with PNG Power Limited to approve a project to support transmission and distribution improvements to the Port Moresby and Lae grids. Both of these projects are also expected to be approved in 2021.
