Business Advantage Papua New Guinea
Ports and shipping
Congestion looks to be a thing of the past thanks to some major changes to the country’s two largest ports.
Major improvements are being made in PNG’S port infrastructure.
PNG Ports Corporation is moving the port of Port Moresby across to the large harbour island, Motukea, in order to relieve congestion in the central business district of the capital. The port had reached operational capacity and was hamstrung by traffic congestion.
PNG Ports’ Chief Executive Officer, Stanley Alphonse, says the new port facility is expected to cost more than K300 million and, when completed in November 2017, will allow international vessels of up to 240 metres in size to berth, discharge and take on cargo bound for Australia, New Zealand, and other Pacific and Asian ports.
Motukea will be bigger than the current Lae port, which is currently PNG’S busiest. PNG Ports Corporation Limited, the owner of the port, has engaged Curtain Bros PNG, the original owner of Motukea, to carry out the work.
‘This is a world-class project, managed by our very own people and they will deliver ahead of, or on, time and within budget,’ says Alphonse.
Curtain Bros is expanding its own ship repair facilities by building a large dry dock, capable of taking Panamax ships for repairs, according to General Manager, Justin Mcgann.
Peter Langslow, Managing Director of Steamships, one of the largest users of PNG’S ports, believes there has been steady improvement in PNG’S shipping infrastructure.
‘Port efficiency and infrastructure in Lae is much improved compared to the torrid years of the PNG LNG project construction, and since the opening of the new berth at the Lae tidal basin at the end of 2015,’ he says. ‘The congestion problem in Lae has been almost entirely relieved.’
Langslow says before the congestion was improved, its subsidiary Consort Express Lines was ‘effectively’ losing one ship a month to congestion, just waiting to get onto a berth.
‘Such lost productivity was extremely damaging, so the turnaround in this regard has been very positive. There’s presently no congestion problem in Port Moresby.’
International operator
The development of Phase 2 of the Lae Tidal Basin project, which includes the port upgrade and an industrial zone, is ‘on track’, according to Kumul Consolidated Holdings (KCH).
THIS IS A WORLD-CLASS PROJECT, MANAGED BY OUR VERY OWN PEOPLE AND THEY WILL DELIVER AHEAD OF, OR ON, TIME AND WITHIN BUDGET. Stanley Alphonse
This is despite the discovery of major structural defects in Phase 1 of the project. The K809 million [US$266 million] Phase 1 project was completed in 2014 by contractor China Harbour Engineering Company (CHEC).
PNG Ports’ Alphonse says an international operator for both the Lae port and Motukea terminal has been sought. This would mark a major change in the way ports are managed; PNG Ports has traditionally operated the nation’s ports directly.
Another part of the Lae port development is Huon Industrial Park, which will store wet (general fuels and chemicals) cargo, dry bulk materials, feed stocks and be the base for a mineral export facility. The cost is estimated to be K258 million.
Lae’s port handles more than 60 per cent of PNG’S international and domestic trade. Alphonse says that Phase 2 includes a second multipurpose berth, a tidal basin, terminal works buildings, storage areas, roads, drainage, water, electricity and sewerage services.
A second berth of at least 240 metres length is required for the terminal to operate as efficiently as possible by an experienced terminal operator, Alphonse says. ‘This will enable two vessels of anything up to 200 metres length overall to berth at the same time.’
Alphonse says PNG Ports has held discussions with potential tenants from the mining, petroleum, power and fisheries sectors. The government estimates that when the expanded port is fully operational, it will create 5000 new jobs. Eventually, as a consequence of growth in revenue from more pilotage, wharfage and berthage, it is projected that 10,000 new jobs will be created.
Regional ports
PNG Ports is gradually rehabilitating 13 other ports around the country. It is needed. According to the World Bank, PNG’S regional ports ‘provide only a basic service for coastal traffic and are often unusable in bad weather.’ The Lorengau port rehabilitation program on Manus Island, for example, includes the installation of wharf fenders, a standby generator set, new fencing and an access gate.