Papua
New Guinea is close to securing over $AU 3 billion in a loan from China
to rebuild and rehabilitate road infrastructure throughout the country.
Under a Memorandum of Understanding, China's Exim Bank will provide a 'soft loan' that will be repaid over a 30 year period.
Firmin Nanol reports.
Presenter: Firmin Nanol
Speaker:PNG's Prime Minister Peter O'Neill, PNG's Works Minister Francis Awesa
PNG's Prime Minister Peter O'Neill announced the Chinese government loan in Port Moresby this week.
Mr O'Neill says his Works Minister Francis Awesa has struck a deal with Chinese government and Exim bank officials, who agreed to lend over Three- billion dollars.
He says most of the money will be used to fund and rehabilitate the country's deteriorating economic lifeline the 'Highlands Highway'.
It starts at the coastal port of Lae in the Morobe province and links PNG highlands region, which houses some of the major resources projects including the multi-billion dollar Liquefied Natural Gas or LNG project.
But it has been deteriorating as heavy traffic moving cargo and supplies for the LNG project has added more pressure to the road network.
Coffee, tea and other goods from the highlands region destined for overseas markets are transported through to Lae via the highway and vice versa.
Prime Minister Peter O'Neill says rebuilding it's road infrastructure is part of his government's policy to improve service delivery.
He says under the Chinese government loan agreement, yet to be signed, Chinese companies will be contracted to rebuild the highlands highway and construct new roads.
Peter O'Neill says it's a condition for the loan, which PNG must comply.
O'Neill:"With the Exim bank loans that we have been getting in the past, they prefer Chinese contractors. The Chinese loans are always attached to the fact that, conditional to the fact that Chinese companies do the roads and the contract work. Many of these companies are world class companies,and they have got experience in many of these infrastructure projects all round the world. So we are going to screen the Chinese companies properly, so that they are not just fly by night operators, so let the loan agreement details be finalised by our officials as many of the other loans are, up to 30 years,with a fairly reasonable grace period, I think it's up to five years. That's the sort of terms we are looking for. So it's very comfortable for Papua New Guinea too, because when our economy doubles in 2014 we are able to afford many of these repayments. So it is a very good deal for Papua New Guinea
PNG's Works Minister Francis Awesa says the $3 billion loan is a good one for PNG.
He says the interest rate is not high compared to other commercial lenders.
Mr Awesa has also backed Chinese firms to rebuild run down road networks in the country.
Awesa: "They come good at this time, they have said any amount up to $US 10 billion we are more than happy to give. That's a vote of confidence, in this government and we need to move fast on this one, because if we don't address the issue of the Highlands Highway it is going to deteriorate to such an extent that you might as well rebuild.It is going to be very,very costly. It has deteriorated very rapidly in the last six, seven, eight months because of the heavy traffic used by the LNG project.Nothing has been done. We only put 18-million this year and no funding last year or the year before., So it was a great mistake by the previous regime not to address this issue., They should have said part of the deal with the LNG project was to have some scheme., some arrangement in place, where the Highlands Highway is addressed.I'm very confident, in the next two weeks they want to come, they want to talk business, very serious., They want to come and invest in PNG in a substantial way and I think we should welcome them.Doesn't matter who comes as long as they got money and as long as they follow the laws, in terms of tax and labour laws and all other laws, they are welcome. I would like to see this commitment bear fruit in the next two weeks with the formal agreement being signed
A Chinese delegation including officials from the Chinese government owned, Export and Import Bank, or Exim Bank, are expected to arrive in PNG to sign off the deal.
The final loan agreement is expected to be signed within two weeks time in Port Moresby. Firmin Nanol-Port Moresby.
Firmin Nanol reports.
Presenter: Firmin Nanol
Speaker:PNG's Prime Minister Peter O'Neill, PNG's Works Minister Francis Awesa
PNG's Prime Minister Peter O'Neill announced the Chinese government loan in Port Moresby this week.
Mr O'Neill says his Works Minister Francis Awesa has struck a deal with Chinese government and Exim bank officials, who agreed to lend over Three- billion dollars.
He says most of the money will be used to fund and rehabilitate the country's deteriorating economic lifeline the 'Highlands Highway'.
It starts at the coastal port of Lae in the Morobe province and links PNG highlands region, which houses some of the major resources projects including the multi-billion dollar Liquefied Natural Gas or LNG project.
But it has been deteriorating as heavy traffic moving cargo and supplies for the LNG project has added more pressure to the road network.
Coffee, tea and other goods from the highlands region destined for overseas markets are transported through to Lae via the highway and vice versa.
Prime Minister Peter O'Neill says rebuilding it's road infrastructure is part of his government's policy to improve service delivery.
He says under the Chinese government loan agreement, yet to be signed, Chinese companies will be contracted to rebuild the highlands highway and construct new roads.
Peter O'Neill says it's a condition for the loan, which PNG must comply.
O'Neill:"With the Exim bank loans that we have been getting in the past, they prefer Chinese contractors. The Chinese loans are always attached to the fact that, conditional to the fact that Chinese companies do the roads and the contract work. Many of these companies are world class companies,and they have got experience in many of these infrastructure projects all round the world. So we are going to screen the Chinese companies properly, so that they are not just fly by night operators, so let the loan agreement details be finalised by our officials as many of the other loans are, up to 30 years,with a fairly reasonable grace period, I think it's up to five years. That's the sort of terms we are looking for. So it's very comfortable for Papua New Guinea too, because when our economy doubles in 2014 we are able to afford many of these repayments. So it is a very good deal for Papua New Guinea
PNG's Works Minister Francis Awesa says the $3 billion loan is a good one for PNG.
He says the interest rate is not high compared to other commercial lenders.
Mr Awesa has also backed Chinese firms to rebuild run down road networks in the country.
Awesa: "They come good at this time, they have said any amount up to $US 10 billion we are more than happy to give. That's a vote of confidence, in this government and we need to move fast on this one, because if we don't address the issue of the Highlands Highway it is going to deteriorate to such an extent that you might as well rebuild.It is going to be very,very costly. It has deteriorated very rapidly in the last six, seven, eight months because of the heavy traffic used by the LNG project.Nothing has been done. We only put 18-million this year and no funding last year or the year before., So it was a great mistake by the previous regime not to address this issue., They should have said part of the deal with the LNG project was to have some scheme., some arrangement in place, where the Highlands Highway is addressed.I'm very confident, in the next two weeks they want to come, they want to talk business, very serious., They want to come and invest in PNG in a substantial way and I think we should welcome them.Doesn't matter who comes as long as they got money and as long as they follow the laws, in terms of tax and labour laws and all other laws, they are welcome. I would like to see this commitment bear fruit in the next two weeks with the formal agreement being signed
A Chinese delegation including officials from the Chinese government owned, Export and Import Bank, or Exim Bank, are expected to arrive in PNG to sign off the deal.
The final loan agreement is expected to be signed within two weeks time in Port Moresby. Firmin Nanol-Port Moresby.
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