Overhauling the nation’s airport facilities as demand increases

Given the remoteness of many communities and resource development projects which have limited or no access to other modes of transportation, air travel in Papua New Guinea plays a more vital role in economic and social development than its regional peers. In a number of cases, the country’s 22 airports serve as the only reliable link to the outside world due to the complexity of the topography and terrain.

With air travel providing essential services ranging from medical evacuation and equipment delivery to passenger transport and tourism, the government has been pushing hard to improve the capabilities of the nation’s 14 jetports and eight non-jet ports to accommodate an ever-increasing demand for passenger and cargo capacity while bringing operational safety and efficiency up to international standards. This emphasis on upgrading air transport has attracted the aid of donors such as the Asian Development Bank (ADB) as well as growing financial commitments from the PNG government itself.

Budget

In all, the state has allocated the National Airports Corporation (NAC) PGK149.7m ($60.9m) in the 2014 national budget, roughly 25% less than the PGK199.5m ($81.1m) spent the previous year. To continue the sectoral reform, the 2014 budget estimates similar expenditures in the coming years valued at PGK148.7m ($60.4m), PGK151.5m ($61.6m) and PGK154.4m ($62.8m) in 2015, 2016 and 2017, respectively. The Civil Aviation Development Investment Programme (CADIP) received the highest share of the government’s 2014 aviation outlay at PGK99.7m ($40.5m) (down from PGK169.5, $68.9m, in 2013). The state also allocated PGK30m ($12.2m) for the upgrading of Jacksons International Airport in Port Moresby (equal to the amount in the previous budget), PGK10m ($4.1m) for the New Ireland Provincial Airport and PGK6.5m ($2.6m) for an alternate landing strip at Tokua Airport.

In addition, Papua New Guinea Air Services (PNGAS) maintained its budget of PGK16.3m ($6.6m) in 2014 (up from PGK14.3m, $5.8m, in 2013), which is primarily used for communication, surveillance and air traffic control operations. The 2014 budget for the Civil Aviation Safety Authority of PNG (CASAPNG) was PGK11.1m ($4.51m), similar to the PGK11.18m ($4.54m) average budget line from 2013 to 2017.

Supply & Demand

As economic development continues to attract investors, business clients, tourists and others from across the world, air passenger traffic is projected to expand from around 2.5m passengers in 2010 to more than 6m in 2020 and in excess of 9m by 2030, according to PNG’s Strategic Development Plan 2010-30 (PNGSDP).

The southern region of the county, which contains many of the large developed resource projects as well as the capital city of Port Moresby, accounts for the lion’s share of air travel with roughly half of all passenger trips in PNG. This region is projected to host around 3m passengers in 2020 and more than 4m by 2030. The Highlands, Momase and Island regions are expected to see only marginal increases in traffic with none of them exceeding 2m passenger trips by 2030.

Attracting Tourists

Tourist arrivals in PNG recorded growth of 0.4% in the first quarter of 2013 compared to the same quarter in 2012, according to the South Pacific Tourism Organisation. The largest country in the region still has a ways to go in terms of attracting tourists, as PNG garnered just 12% of 105,913 Australian visitors during the quarter, behind leader Fiji with 60% but ahead of Vanuatu (11%).

Anticipating future demand, the PNGSDP calls for upgrading regional airports to equip at least 10 of them with capabilities to handle large jets compared with just one airport (Jacksons) currently. Up to 50 other unused smaller airstrips in remote locations are also planned to be rehabilitated, while safety standards will be increased to meet international standards at 70% of the country’s airports which did not meeting these targets as of 2008. Due strong investment by the government and donor organisations, the number of PNG’s airports able to achieve these standards rose from just seven in 2008 to 15 by 2011 with all 22 airports expected to be certified by 2015, according to the PNG Medium Term Development Plan 2011-15. The improvements of these airports also dovetails with efforts by the national carrier, Air Niugini, to expand the capabilities of its fleet by adding larger aircraft to its domestic routes which in turn require more robust runways and supporting infrastructure.

Taking Flight

The largest programme under way to bring PNG’s air sector up to international standards is the CADIP, championed by the ADB. With a price tag of some $640m, the extensive undertaking seeks to improve safety and security operations to the level of international aviation standards; expand cargo and passenger capacity; improve all-weather access and access to non-commercial destinations; and formulate and concession long-term maintenance contracts. The first tranche of the CADIP is targeting improvements at the country’s busiest airports, such as Jacksons International Airport, as well as airports in Mount Hagen, Wewak, Hoskins and Gurney.

Upgrades will be applied across airport facilities and services, including rehabilitation of infrastructure including runways, taxiways and aprons; increasing the capacity of runways and passenger terminals to accommodate larger aircraft; and improvement of communication, navigation, surveillance and fire fighting equipment. Upon completion, five airports will comply with the safety and security standards of the International Civil Aviation Organisation.

Maintenance and support programmes will also be addressed along with management and reform of the Civil Aviation Authority (CAA) and its operational units. In addition, new security fences were installed at the Kavieng and Goroka airports.

Progress So Far

The first phase of the CADIP ran from December 2009 to June 2014 and was financed by a $109.1m tranche of funding. The ADB is the primary donor for the programme, accounting for $92.1m of this figure (and $480m for the programme overall) with the government contributing $17m. As of January 2014 significant progress had been made at all five airports towards achieving the goals of the initial phase of the programme. An instrument landing system was installed at Jacksons International Airport in April 2011, followed in September 2013 by the completion of the airport parking apron extension.

The NAC also signed on contractors to upgrade the Hoskins Airport runway in 2013 and for the Mount Hagen terminal in April 2013. Security fencing work was also completed at the Wewak and Gurney airports in September 2013, while new aviation fire equipment was commissioned by the NAC in April 2013.

Progress was also made on the administrative and regulatory aspects of the sector, including a restructuring of the CAA into National Airports Corporation, PNG Air Services and Civil Aviation Safety Authority.

With the first phase expected to be completed by mid-2014, the second round of funding is set to kick in for the second phase of the project, which runs through September 2017. This will include another $130m from the ADB and $40m from the government. The implementing agency is the NAC.

These new funds will be channelled towards airport infrastructure improvements, enhanced operations for air traffic management and navigation services to comply with best practices and international aviation standards and continued institutional reforms in relevant agencies of the NAC, PNGAS and CASAPNG.

Expanding Their Reach

In addition to upgrades at primary airports, the government is looking to expand domestic flight options in other locations around the country. After being closed for more than two decades, the Aropa Airport near Kieta in the central area of the Autonomous Region of Bougainville (ARB) is scheduled to be reopened in 2014. The latest sign of warming ties between the ARB and the PNG governments will see the island nation’s premier gateway active once again following refurbishment of the facility and associated support infrastructure.

Davis Steven, the civil aviation minister, told local press in March 2014 that the rehabilitation of Aropa would cost between PGK45m ($18.3m) and PGK50m ($20.3m) and that it would take three months to complete. Works to be carried out by the NAC include terminal and runway improvements, upgraded fencing and refurbishment of other supporting facilities before service is resumed by Dash-8 aircraft.

Looking to further boost the tourism sector, the PNG government has also allocated PGK15m ($6.1m) to aid in the upgrade of Tokua (Rabaul) airport located on East New Britain. The outlay is to cover airport refurbishments as well as improvements to the road connecting the airport to the town of Kokopo. This will include the design of a four-lane road at a cost of PGK5m ($2m) and another PGK6.5m ($2.6m) for an alternate landing strip at Tokua airport. Seeking to capitalise on the improvements, Airlines PNG launched in February 2014 its inaugural flight from Kokopo to Buka in the ARB, the latter of which now has scheduled connection with Kavieng and Lae as well.