Improving the Highlands Highway for further economic development

Although the commercial, political and social centre of Papua New Guinea is firmly entrenched in Port Moresby, its agricultural and resource heartland lies squarely in the rugged Highlands region. Home to some 40% of the population, the fertile soil of the Highlands produces some of the most valuable cash crops including coffee, tea and cocoa. The area also contains substantial natural resources including the oil and gas reserves for the PNG Liquefied Natural Gas (LNG) project and future LNG developments based on the Elk-Antelope fields as well as major mining operations such as the Porgera copper and gold mine.

On The Road

The only road link accessing these areas is the Highlands Highway (HH), which zigs and zags from the gateway port of Lae up to Mount Hagen before forking out to the Porgera gold mine in Enga Province and PNG LNG oil and gas fields in the Southern Highlands. Broaching mountain passes as high as 3000 metres and inclines as steep as 24 degrees, the route is the sole means of access for some 3m citizens, including residents of other important towns such as Goroka and Mendi. The most extensive networks along this 700-km stretch of heavily potholed road are central, western and eastern highlands, although the highway is often limited in places to a single lane due to frequent washouts, while security can also be a concern.

Given the resource wealth in the region and the attractive potential of future operations, developing efficient transportation routes through the territory is crucial for further economic development not only of the Highlands but the country as a whole. Any improvement or extension of the road network would also be of substantial social and economic benefit to the communities in the area, many of which have had limited or no access to reliable transportation or the goods and services which inevitably follow. Recognising its economic and social importance, the government, donor organisations and other non-governmental organisations have been working to overcome the significant natural impediments to a reliable road network in the region.

Francis Awesa, minister of works and implementation, told OBG, “Without a proper network of roads, economic development in PNG will be very difficult to achieve as our farmers struggle to bring their products to market, while our two major cities of Lae and Port Moresby continue to be unconnected.”

Cooperative Effort

The strongest effort made to date to address all aspects of upgrading the HH is being carried out through a partnership between the Asian Development Bank (ADB) and the state of PNG. In total, the Highlands Region Road Improvement Investment Programme (HRRIIP) targets a core network of some 2500 km of major national and provincial roads feeding into the HH which are subjected to the heaviest amounts of regional traffic. This includes improvements to approximately 1400 km of roadways funded by a series of four investment tranches as well as preparation and administration of long-term road maintenance contracts for the entire 2500 km of the network.

Other components include consultancy services for the preparation of investment projects, the design and supervision of civil works, and preparation and administration of long-term road maintenance contracts. This includes an extensive period of consultation with input from dozens of organisations from the government, relevant development partners and international organisations as well as consultants engaged by the ADB, AusAID and other donor-funded projects.

The final two components of the programme are support for capacity development (including technical assistance to support the development of the National Transport Development Plan 2011-20), resource mobilisation for maintenance funds and improving road transport services; and monitoring the socioeconomic benefits of improved roads in the Highland region.

Funding

Donor funding for this first phase of the programme totalled $532m and was sourced from the Asian Development Fund which contributed $331m along with $200.18m in counterpart funding and another $700,000 from the Japan Special Fund, according to the ADB. The first phase of the HRRIIP was initiated in 2008 with the programme moving forward into its second phase in January 2014. The Department of Works (DoW) has been selected as the executing agency and implementing body for the road improvement works, while the National Road Authority (NRA) is the implementing agency for road improvement works.

Work Begins

With the consultation period completed (requiring a total of 1266 person-months), work is moving forward in terms of putting shovels in the ground at priority locations throughout the network. As of January 2014 the DoW had completed technical designs of civil works and had prepared environmental examinations and resettlement plans for all sub-projects. Phase two of the HRRIIP includes projected targets of improvements to 118 km of priority national roads along with maintenance arrangements for 500 km of roads. The second component is support and capacity development and the third is programme administration. Some of the priorities included within the latter two components include improving the capacity of the NRA to plan and manage long-term road maintenance contracts, improving the efficiency of the DoW capabilities to deliver road improvements with attention to safeguards and its asset management system, as well as improved road safety capacity of the National Road Safety Council. Approved financing for the second phase totalled $172.6m with $69m from ordinary capital resources, $63.6m from counterpart funding and $40m from the Asian Development Fund.

A number of previous efforts targeting the HH have also been carried out in conjunction with other agencies including the World Bank, the Japan International Cooperation Agency (JICA) and AusAID. These include the $113m Highlands Highway Redevelopment Project and PNG Road Maintenance and Rehabilitation Projects I and II carried out by the World Bank and the PGK18.8m ($7.6m) Highlands Highway Maintenance programme launched in 2006 by AusAID. The JICA Highlands Highway Bridge Replacement Programme is also ongoing to replace 12 bridges along the highway in the Eastern Highlands Province including the Orompaka Dirty Wara, Nonompinka Siguya, Honeranka Yasifo, Ofiga Parirosay, Umbake Benbena and Kinkio Sunufamu bridges, according to the DoW.

Rough Road Ahead

While the HRRIIP project is ambitious and the potential benefits of a positive outcome tantalising, past efforts have proven that success is far from guaranteed. These challenges stem mainly from the technical obstacles posed by steep, irregular terrain and the inexorable damage caused by the heavy rains that batter the area. This inclement weather, combined with a lack of recurrent funding for proper upkeep and a pattern of heavy use, has negated previous progress made in laying new roads as their condition deteriorates rapidly under the stress. For this reason, the ADB found that any sustainable transportation improvements for the region needed to include a programme of regular maintenance on all Highlands roads that remain in good condition in part by ensuring that routine maintenance begins on newly improved roads as soon as works are completed.

The establishment of the NRA in 2010 represents one step forward in achieving the continuity required to keep these roads in working order. The primary responsibility of the NRA is to maintain the road network supported by a road fund financed through road user charges and managed by an independent board comprising representatives from road users, the private sector and the government. Once construction of new roads or improvements of existing roads are completed, they are handed off from the DoW to the NRA.

Moving Forward

Aided by the promise of billions of kina in additional new funding from a loan from China’s Export Import (EXIM) Bank, a number of contracts have been signed in recent years to carry out major construction works along the HH. Chinese contractor Chinese Machinery Engineering Corporation signed a deal in October 2013 for around PGK400m ($162.6m) to carry out construction along the Kisenepoi to Kaugel Bridge section of the highway. The PNG government allocated PGK150m ($60.9m) for the project in the 2013 budget with the balance planned to be sourced from the EXIM Bank loan. A second construction contract was issued to another Chinese contractor, China Railways International in March 2013. The PGK470m ($191.1m) agreement (also to be funded primarily through the EXIM Bank loan) is for the upgrade of the Lae-Nadzab Road from a two-lane to a four-lane highway for which construction began in late 2013 and is expected to take three years to complete.

In total, the government has allocated hundreds of millions of kina in the 2014 national budget alone to improve the HH as well as surrounding support roads. This includes PGK150m ($61m) for maintenance of the highway and PGK40m ($16.3m) for the development of town roads in Mount Hagen, while a good portion of the PGK100m ($40.7m) 2014 budget for the national roads rehabilitation and maintenance programme will also go towards the road network that crisscrosses the economically crucial Highlands region.