PNG National Transport Strategy

National
Transport
Strategy
Volume 3
Detailed Strategy
May 2013
An electronic copy of this document can be obtained by visiting the following website
https://www.dropbox.com/sh/8ue6rp8v1jnqj1r/ubWr1vrCrB
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Copyright © Department of Transport, 2013

Enga Haus, Jackson’s Parade
P.O. Box 1489, Port Moresby, National Capital District
Papua New Guinea
2013
Government of Papua New Guinea
Department of Transport
DETAILED STRATEGY
Volume 3 – Detailed Strategy
July 2013
INDEPENDENT STATE OF PAPUA NEW GUINEA NATIONAL TRANSPORT STRATEGY – VOL 3
DEPARTMENT OF TRANSPORT DETAILED STRATEGY
Table of Contents
List of Figures................................................................................................................. vi
List of Tables.................................................................................................................. vii
Glossary of Acronyms ................................................................................................... ix
Minister’s Statement .................................................................................................... xiii
Introduction from the Secretary .................................................................................. xiv
1 Introduction – Preparation of the NTS .................................................................... 1
1.1 The Purpose of the National Transport Strategy .............................................................. 1
1.2 The Medium Term Transport Plan ................................................................................... 1
1.3 Timeframe and Activities .................................................................................................. 1
1.4 Background Papers .......................................................................................................... 2
1.5 Review of the NTDP 2006-2010 and Earlier Sector Plans ............................................... 2
1.6 Analysis of Implementation Progress of the NTDP .......................................................... 5
Part A – Sector Vision, Profile and Guiding Principles ................................................. 7
2 Vision and Goals....................................................................................................... 7
3 Guiding National Vision and Plans .......................................................................... 9
3.1 Introduction ....................................................................................................................... 9
3.2 The Millennium Development Goals ................................................................................ 9
3.3 Vision 2050 ..................................................................................................................... 11
3.4 Development Strategic Plan and Medium Term Development Plan .............................. 13
3.5 Economic Sector Strategies ........................................................................................... 22
3.6 Social Sector Strategies ................................................................................................. 26
3.7 Safeguards and Cross-Cutting Strategies ...................................................................... 27
3.8 Provincial Development and Transport Plans ................................................................ 31
4 Profile of the Transport Sector .............................................................................. 32
4.1 Physical Geography ....................................................................................................... 32
4.2 Population Distribution .................................................................................................... 32
4.3 Economic Activity and Transport Demand ..................................................................... 33
4.4 Social Services Delivery and Transport ......................................................................... 33
4.5 Transport Sector Institutions .......................................................................................... 34
4.6 The Transport Network as a Whole ................................................................................ 40
4.7 Roads and Road Transport ............................................................................................ 49
4.8 Maritime and Inland Water Transport ............................................................................. 53
4.9 Air Transport ................................................................................................................... 60
5 Transport Demand and the Outlook for Growth ................................................... 65
5.1 Population and Economic Growth .................................................................................. 65
5.2 Composition of Travel Demand ...................................................................................... 67
5.3 Personal Travel Demand ................................................................................................ 67
5.4 Freight Transport Demand ............................................................................................. 69
5.5 Road Transport Demand Growth ................................................................................... 82
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5.6 Overseas and Coastal Shipping Demand Growth ......................................................... 84

5.7 Air Transport Demand Growth ....................................................................................... 85
Part B – Transport Sector Policy and Institutions ....................................................... 86
6 Introduction to Part B ............................................................................................. 86
7 Recent Transport Policy ......................................................................................... 87
7.1 NTDP Policy and Ministerial Statement 2009 ................................................................ 87
7.2 Existing Policy Applying across the Transport Sector .................................................... 87
7.3 Recent Land Transport Policy ........................................................................................ 89
7.4 Recent Maritime Transport Policy .................................................................................. 90
7.5 Existing Civil Aviation Policy ........................................................................................... 91
7.6 Recent Policy on Modal Integration ................................................................................ 92
8 Statement of Overall Sector Policy........................................................................ 93
8.1 Public and Private Sector Roles ..................................................................................... 93
8.2 National, Provincial and Local Level Government Roles ............................................... 96
8.3 Market Entry and Competition Regulation ...................................................................... 99
8.4 Cost Recovery and User Charges ................................................................................ 100
8.5 Priorities for Call on Available Funds ........................................................................... 101
8.6 Community Assistance, Subsidies and CSOs.............................................................. 103
8.7 Transport Corridor Protection and Land Acquisition .................................................... 107
8.8 Service Quality Standards and Monitoring ................................................................... 108
8.9 Transport Safety ........................................................................................................... 109
8.10 Transport Security ........................................................................................................ 110
8.11 Transport Integration .................................................................................................... 110
9 Statement of Policy for Cross-Cutting Issues .................................................... 112
9.1 Introduction ................................................................................................................... 112
9.2 Good Governance and Policies against Corruption ..................................................... 112
9.3 Environmental Protection and Enhancement ............................................................... 115
9.4 Climate Change ............................................................................................................ 116
9.5 Poverty Alleviation ........................................................................................................ 117
9.6 Gender Equity and Women’s Development ................................................................. 118
9.7 Communicable Disease Control, HIV/AIDS ................................................................. 118
10 Statement of Policy for Institutional Roles and Reform ..................................... 119
10.1 The Need for Reform .................................................................................................... 119
10.2 Principles for Institutional Reform ................................................................................. 119
10.3 Delegation and Outsourcing of Functions .................................................................... 120
10.4 Role and Functions of the Government Transport Agencies ....................................... 121
10.5 Role of Oversight, Audit and Regulatory Institutions .................................................... 131
10.6 Role of Special Purpose Infrastructure Development Authorities ................................ 132
10.7 Public – Private Sector Coordination ............................................................................ 134
10.8 The National Budget Process ....................................................................................... 134
11 Statement of Policy for Land Transport .............................................................. 136
11.1 Introduction ................................................................................................................... 136
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11.2 Development of the Land Transport Institutions........................................................... 136

11.3 Market Entry and Competition Regulation .................................................................... 138
11.4 Road Network Development, Ownership and Management ........................................ 138
11.5 Public Private Partnerships .......................................................................................... 141
11.6 Cost Recovery, Road Fund and CSOs ........................................................................ 142
11.7 Regulation of Service Standards in the Land Transport Subsector ............................. 144
11.8 Road Safety .................................................................................................................. 144
11.9 Environmental and Social Safeguards for Road Transport .......................................... 145
12 Policy Statement on Maritime Transport ............................................................. 148
12.1 Introduction ................................................................................................................... 148
12.2 Development of Maritime Transport Institutions ........................................................... 148
12.4 Maritime Infrastructure Ownership, Management and Regulation ............................... 155
12.5 Maritime Infrastructure Protection ................................................................................ 156
12.6 Pricing, Cost Recovery and CSOs ............................................................................... 157
12.7 Regulation of Service Standards in the Maritime Subsector ........................................ 158
12.8 Maritime Safety ............................................................................................................. 158
12.9 Maritime Security .......................................................................................................... 161
12.10 Environmental and Social Safeguards ......................................................................... 162
12.11 Regional Relationships in the Maritime Sector............................................................. 163
13 Policy Statement on Air Transport ...................................................................... 164
13.1 Introduction ................................................................................................................... 164
13.2 Development of the Air Transport Institutions .............................................................. 164
13.4 Government Ownership of Airports, Air Operators and Aircraft ................................... 166
13.5 Cost Recovery and CSOs ............................................................................................ 167
13.6 Private Sector Role in Air Infrastructure Services ........................................................ 170
13.7 Service Standards in Air Transport .............................................................................. 170
13.8 Aviation Safety .............................................................................................................. 171
13.9 Aviation Security ........................................................................................................... 172
13.10 Environmental Safeguards ........................................................................................... 173
14 Policy Statement on Modal Integration ............................................................... 175
14.1 Principles ...................................................................................................................... 175
14.2 Modal Transitions for Passenger Traffic....................................................................... 175
14.3 Modal Transitions for Freight Traffic ............................................................................. 176
14.4 Basic Access Provision to Rural Areas ........................................................................ 176
14.5 Other Transport Modes ................................................................................................ 177
14.6 Balance of Investment between Modes ....................................................................... 178
14.7 Economic Corridors ...................................................................................................... 178
15 Policy Statement on Sector Capacity Building ................................................... 179
15.1 Introduction ................................................................................................................... 179
15.2 The Existing Situation ................................................................................................... 179
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15.3 Development of a Sector-Wide Education and Training Strategy ................................ 182

16 Supporting Legislative Programme..................................................................... 184
16.1 Introduction ................................................................................................................... 184
16.2 Land Transport ............................................................................................................. 184
16.3 Maritime Transport ....................................................................................................... 184
16.4 Air Transport ................................................................................................................. 185
Part C – Transport Funding and Investment Strategy............................................... 186
17 Introduction to Part C ........................................................................................... 186
18 Transport Infrastructure Investment Policy ........................................................ 187
18.1 Investment Policy Elements ......................................................................................... 187
18.2 Strategic and Tactical Planning .................................................................................... 187
18.3 Planning Investment in Transport Infrastructure .......................................................... 188
18.4 The Framework for Prioritising Asset Investment......................................................... 191
19 Present Structure of Transport Infrastructure Funding ..................................... 198
19.1 Sources of Funds ......................................................................................................... 198
19.2 Recent Funding and Expenditure Trends ..................................................................... 199
20 Functional Hierarchy and Standards of Provision ............................................. 202
20.1 Traffic and Access Functions ....................................................................................... 202
20.2 Primary Transport Infrastructure .................................................................................. 202
20.3 Critical Lifelines and Network Redundancy .................................................................. 203
20.4 The Functional Hierarchy ............................................................................................. 204
20.5 Relationship to Other Classifications ............................................................................ 205
20.6 Identification of Transport Assets by Functional Hierarchy .......................................... 206
20.7 Standards of Provision for Infrastructure ...................................................................... 206
21 Transport Infrastructure Deficiencies ................................................................. 213
21.1 General ......................................................................................................................... 213
21.2 The Road Network ........................................................................................................ 213
21.3 Ports, Coastal and Marine Navigation .......................................................................... 214
21.4 Airports and Air Navigation ........................................................................................... 216
21.5 Modal Integration and Overall Coverage ...................................................................... 217
22 Development Cost of the MTDP ........................................................................... 218
22.1 Cost Escalation ............................................................................................................. 218
22.2 Road Network ............................................................................................................... 218
22.3 Ports, Coastal and Marine Navigation .......................................................................... 228
22.4 Airports and Air Navigation ........................................................................................... 232
22.5 Sector Capital Infrastructure Funding Requirement Summary .................................... 238
23 Maintenance Cost of the MTDP ........................................................................... 239
23.1 Roads ........................................................................................................................... 239
23.2 Ports and Maritime Infrastructure ................................................................................. 242
23.3 Airports and Air Transport Infrastructure ...................................................................... 244
23.4 Summary of Transport Infrastructure Maintenance Funding Requirements ................ 246
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24 Funding Projections and Funding Gap ............................................................... 248

24.1 Introduction ................................................................................................................... 248
24.2 MTDP Infrastructure Funding Requirement ................................................................. 248
24.3 Government Appropriations through the National Budget ........................................... 249
24.4 Development Partner Grant and Loan Assistance ....................................................... 251
24.5 Funding from Transport User Charges ......................................................................... 252
24.6 CSO Funding ................................................................................................................ 255
24.7 Other Funding Sources ................................................................................................ 257
24.8 The Overall Funding Envelope and Funding Gap ........................................................ 258
25 Ongoing and Committed Projects ....................................................................... 264
25.1 Introduction ................................................................................................................... 264
25.2 Committed and Ongoing Road Projects ....................................................................... 264
25.3 Committed and Ongoing Maritime Projects .................................................................. 281
25.4 Committed and Ongoing Air Transport Projects .......................................................... 282
26 Priorities for Selecting Projects for the MTTP .................................................... 285
26.1 Introduction ................................................................................................................... 285
26.2 Priorities for Roads ....................................................................................................... 285
26.3 Priorities for Maritime Projects...................................................................................... 288
26.4 Priorities for Air Transport Projects .............................................................................. 293
Part D – Resourcing, Monitoring and Review ............................................................ 295
27 Resourcing and Monitoring the NTS and MTTP ................................................. 295
27.1 Resources Needed for Successful Implementation ..................................................... 295
27.2 Information Needs ........................................................................................................ 295
27.3 Monitoring Progress and Achievement ........................................................................ 296
28 Process for Periodic Review and Updating ........................................................ 297
28.1 Five Yearly and Annual Reviews .................................................................................. 297
28.2 Annual Review of the Maintenance Programme .......................................................... 297
28.3 Progressive Development and Review of Projects ...................................................... 297
28.4 TIPS Project Prioritisation Review ................................................................................ 299
28.5 Integration with SOE Forward Plans ............................................................................ 299
References Consulted in Preparation of the NTS ..................................................... 300
NTS Background Reports and Working Papers ..................................................................... 300
Previous Transport Sector Plans ............................................................................................ 300
Strategies and Corporate Plans of Transport Sector Agencies .............................................. 301
National Strategies and Plans ................................................................................................ 301
Government Transport Policy Statements .............................................................................. 301
Strategies and Plans of Other Government Agencies ............................................................ 301
Strategies and Plans for Cross Cutting Issues ....................................................................... 302
Oversight and Regulatory Agencies ....................................................................................... 302
Development Partner Strategies and Plans ........................................................................... 303
Transport Sector, Project Planning, Feasibility and Design Studies ...................................... 303
PNG Transport Infrastructure Priorities Study (TIPS) 2010 ................................................... 303
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Mapping .................................................................................................................................. 304

Other Reference Material ....................................................................................................... 304
Links to Official PNG Websites Accessed .............................................................................. 304
List of Figures
Figure 1 – The Future Main Transport Infrastructure from the Development Strategic Plan ............ 16
Figure 2 – Missing Links .................................................................................................................... 17
Figure 3 – DSP Projected Increase in Port Container Traffic............................................................ 19
Figure 4 – DSP Projected Improvement in Port Handling Efficiency ................................................ 20
Figure 5 – Development Strategic Plan Increase in Domestic Air Traffic ......................................... 21
Figure 6 – Projected Copper and Gold Production ........................................................................... 25
Figure 7 – Provincial Populations and Population Density, 2010 Estimates ..................................... 33
Figure 8 – Regional Populations and Population Density, Estimated 2010 ...................................... 33
Figure 9 – Institutional Structure of the Transport Sector ................................................................. 34
Figure 10 – Existing Institutional Structure in Land Transport at National Level .............................. 36
Figure 11 – Institutional Structure in Maritime Transport .................................................................. 38
Figure 12 – Institutional Structure in Air Transport ............................................................................ 39
Figure 13 – North Coast Transport Network ..................................................................................... 41
Figure 14 – Upper Highlands Transport Network .............................................................................. 42
Figure 15 – Lower Highlands Transport Network .............................................................................. 43
Figure 16 – Western and Gulf Transport Network ............................................................................ 44
Figure 17 – Southern Transport Network .......................................................................................... 45
Figure 18 – New Britain Transport Network ...................................................................................... 46
Figure 19 – New Ireland Transport Network ..................................................................................... 47
Figure 20 – Manus Island Transport Network ................................................................................... 48
Figure 21 – Autonomous Bougainville Region Transport Network ................................................... 48
Figure 22 – Projected Regional Populations to 2030, millions .......................................................... 65
Figure 23 – Employment Trends ....................................................................................................... 67
Figure 24 – Main Export Commodities 2001-2010, Volumes............................................................ 69
Figure 25 - Main Export Commodities Excluding Logs and Oil 2001-2010, Volumes ...................... 70
Figure 26 – Value of Main Exports, K2001 Constant Values ............................................................ 70
Figure 27 – Commodity Price Indices, Adjusted for Inflation (2001 base) ........................................ 71
Figure 28 – Comparison of TIPS and MTDP Port Cargo Projections ............................................... 84
Figure 29 – Comparison of Air Passenger Growth Projections ........................................................ 85
Figure 30 – The Investment Planning Cycle ................................................................................... 189
Figure 31 – Recent Trends in Road Construction and Maintenance Expenditure .......................... 199
Figure 32 – Projected National Road Length and Ownership/Management................................... 222
Figure 33 – National Airports Projected Funding Requirement ...................................................... 234
Figure 34 – Estimated Maintenance Funding Needs, National Roads, 2011-2030 ........................ 240
Figure 35 – Estimated Maintenance Funding Needs, Provincial & Other Roads, 2011-2030 ........ 241
Figure 36 – Estimated Maintenance Funding Needs, by Ownership, 2011-2030........................... 241
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Figure 37 - Required Funding Projection for Main Port Fixed Infrastructure .................................. 243
Figure 38 – National Airports Projected Maintenance Funding Requirement ................................. 245
Figure 39 – Transport Infrastructure Maintenance Grants to Provinces, K’000s ............................ 250
Figure 40 – Transport Infrastructure Maintenance Grants by Province, 2013, K’000s ................... 251
Figure 41 – Motor Vehicle Registration and Licensing Revenue, 2009 .......................................... 254
Figure 42 – Road Funding Projections ............................................................................................ 260
Figure 43 – Roads Expenditure Projections, Annual Funding Gap, K millions (2010/11) .............. 260
Figure 44 – Airports & Navaids Expenditure, Annual Funding and Funding Gap, K mill (2010) .... 263
List of Tables
Table 1 – Provincial Comparison for Millennium Development Goal Indicators ............................... 11
Table 2 - Relating the Seven Pillars of Vision 2050 to the Transport Sector .................................... 12
Table 3 – Economic Corridors and Corresponding Road Links ........................................................ 14
Table 4 – “Missing Link” and Corridor Roads .................................................................................... 15
Table 5 – The NTDP 16 “Priority” Roads .......................................................................................... 18
Table 6 – Physical Characteristics of the Declared Ports ................................................................. 54
Table 7 - Traffic through PNG Ports Ltd Declared Ports ................................................................... 56
Table 8 – International Shipping Services ......................................................................................... 57
Table 9 – Characteristics of the ICAO recognised airports ............................................................... 60
Table 10 – Other Airports and Rural Airstrips classed as Active ...................................................... 61
Table 11 – Air Traffic at Main Airports and Trends ........................................................................... 62
Table 12 – Projected Population Growth Rates, per cent per annum ............................................... 66
Table 13 – Mineral Development and Production Outlook ................................................................ 75
Table 14 – PNG Oil and Gas Development ...................................................................................... 80
Table 15 – Functional Hierarchy for Transport Infrastructure ......................................................... 204
Table 16 – Guideline Minimum Performance Standards for Rural Roads ...................................... 208
Table 17 – Guideline Standards for Ports ....................................................................................... 211
Table 18 – Typical Standards for Airports by Network Functional Classification ............................ 212
Table 19 – National Highways condition versus standards............................................................. 213
Table 20 – Initial Screening Prioritisation of New and Restored Road Links .................................. 219
Table 21 – Road Sealing Targets in MTDP and proposed NTS ..................................................... 223
Table 22 – Remaining Priority Road Sections for Upgrading to Sealed Standard.......................... 224
Table 23 – Targets for Rehabilitating Sealed National Roads ........................................................ 224
Table 24 – TIPS Bridge Upgrading or Replacement ....................................................................... 226
Table 25 – Bridges for Upgrading or Replacement on the Priority Roads ...................................... 226
Table 26 – Summary Indicative Costs for Road Construction, Upgrading and Rehabilitation ........ 227
Table 27 – Short to Medium Term National Port Project Proposals ............................................... 228
Table 28 – Maritime Sector Projected Capital Funding Requirement ............................................. 232
Table 29 – National Airport Projected Funding Requirement.......................................................... 234
Table 30 – Estimated Funding Requirement for Other Airport Rehabilitation ................................. 236
Table 31 – Airports and Air Navigation Projected Funding Requirement, K millions (2010/11) ..... 237
Table 32 – Transport Infrastructure Sector Capital Funding Projection, K millions (2010/11) ........ 238
Table 33 – Routine and Periodic Road Maintenance Funding Requirements, K millions .............. 240
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Table 34 – Projected Maritime Infrastructure Maintenance Requirement, K millions 2010 ........... 244
Table 35 – Projected Air Transport Infrastructure Maintenance Requirement, K mill. 2010/11..... 246
Table 36 – Transport Infrastructure Sector Maintenance Funding Projection, K mill. (2010/11) .... 247
Table 37 – Summary of Transport Infrastructure Investment to Support the MTDP, K mill 2010 ... 249
Table 38 – The Present Funding Envelope for Roads, K millions 2010/11 .................................... 258
Table 39 - Recent, Committed and Proposed Road Upgrading, Donor Programs ......................... 267
Table 40 – Committed and Ongoing Road Infrastructure Projects, K million .................................. 279
Table 41 – Committed and Ongoing Air Transport Infrastructure Projects ..................................... 283
Table 42 – Provisional Priorities for Rehabilitation of Sealed Sections, National Rural Roads ...... 285
Table 43 – Provisional Priorities for Upgrading to Seal, National Rural Roads .............................. 286
Table 44 – Priority List of Missing Links and Economic Corridor Roads ........................................ 287
Table 45 – Airport Development Proposals and Economic Evaluation ........................................... 293
viii
Glossary of Acronyms
Acronym Description
ADB - Asian Development Bank
AIC - Accident Investigation Commission
APEC - Asia Pacific Economic Cooperation
ATC - Air Traffic Control
ATM - Air Traffic Management
AusAID - Australian Agency for International Development
ATR/ASD - Air Traffic Regulation and Air Services Division (of DOT)
ATS - Air Traffic Services
BAMS - Bridge Asset Management System
BCR - Benefit Cost Ratio
BDA - Border Development Authority
Br - Bridge
CAA - Civil Aviation Act
CACC - Central Agency Coordinating Committee
CADIP - Civil Aviation Development Investment Program
CAR - Civil Aviation Regulations
CASA - Civil Aviation Safety Authority
CEO - Chief Executive Officer
CNS - Communication, Navigation and Surveillance (air)
CIMC - Consultative Implementation and Monitoring Council
COA - Certificate of Airworthiness
COLREG - International Regulations for Preventing Collisions at Sea (IMO)
CSO - Community Service Obligation
CSTB - Central Supply and Tenders Board
CTC - Coasting Trade Committee
CWTP - Community Water Transport Project (within DOT)
DAL - Department of Agriculture and Livestock
DEC - Department of Environment and Conservation
DFCD - Department of Family and Community Development
DME - Distance Measuring Equipment (air navigation)
DNPM - Department of National Planning and Monitoring
DOE - Department of Education
DOF - Department of Finance
DOH - Department of Health
DOT - Department of Transport
DOW - Department of Works and Implementation
DPLLGA - Department of Provincial and Local Level Government Affairs
DPE - Department of Petroleum and Energy
DRIP - District Road Improvement Programme
DSIP - District Services Improvement Programme
DSP - Development Strategic Plan
DTIP - District Transport Improvement Programme
DVOR - Doppler VOR
EC - European Commission
ECIA - Economic Corridor Implementation Authority
ix
Acronym Description
ECP - Enhanced Cooperation Programme (Australia)
EIRR - Economic Internal Rate of Return
ESCAP - Economic and Social Commission for Asia and the Pacific
FAS - First Assistance Secretary
FIR - Flight Information Region
FRA - Forest Resources Authority
GDP - Gross Domestic Product
GIS - Geographic Information System
GLONASS - Global Navigation and Surveillance System (air)
GNSS - Global Navigation Satellite System (air)
GPS - Global Positioning System (satellite)
HIV/AIDS - Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome
IALA - International Association of Marine Aids to Navigation and Lighthouse Authorities
IATA - International Air Transport Association
ICAO - International Civil Aviation Organisation
ICCC - Independent Consumer and Competition Commission
IDA - Infrastructure Development Authority (proposed)
IPEPNG - Institute of Professional Engineers of Papua New Guinea
IFR - Instrument Flight Rules
IHO - International Hydrographic Organization
ILO - International Labour Organization
ILS - Instrument Landing System
IMO - International Maritime Organization
INA - Institute of National Affairs
IOCS - International Organisation of Classification Societies
IPBC - Independent Public Business Corporation
ISDM - Intergovernmental Service Delivery Mechanism
ISPS - International Shipping and Port Security
JICA - Japan International Cooperation Agency
KPI - Key Performance Indicator
LLG - Local Level Government
LNG - Liquefied Natural Gas
LTD - Land Transport Division (of DOT)
LTB - Land Transport Board
LTIP - Long Term Investment Plan
LTMC - Long Term Maintenance Contract
MARPOL - International Convention for the Prevention of Pollution from Ships
MDG - Millennium Development Goals
MFF - Multi-Tranche Financing Facility
MOA - Memorandum of Agreement
MOU - Memorandum of Understanding
MPKG - Madang-Baiyer River-Karamui-Gulf Corridor
MRA - Mineral Resources Authority
MSU - Maritime Security Unit (of DOT)
MTD - Maritime Transport Division (of DOT)
MTDP - Medium Term Development Plan
MTDS - Medium Term Development Strategy
x
Acronym Description
MTTP - Medium Term Transport Plan
MVIL - Motor Vehicle Insurance Ltd
NAC - National Airports Corporation
NADP - National Agriculture Development Plan
NASMP - National Airport Strategic Management Plan
NASP - National Aviation Security Programme
Navaids - Navigation Aids
NBPOL - New Britain Palm Oil Limited
NCD - National Capital District
NCDC - National Capital District Commission
NDB - Non Directional Beacon
NDC - National Disaster Centre
NEC - National Executive Council
NEFC - National Economic and Fiscal Commission
NLTB - National Land Transport Board
NMB - National Mapping Bureau
NMA - National Maritime Authority
NMSA - National Maritime Safety Authority
NRA - National Roads Authority
NRI - National Research Institute
NRCC - National Rescue Coordination Centre
NRSC - National Road Safety Council
NSO - National Statistical Office
NSP - National Strategic Plan
NTC - National Training Council
NTDP - National Transport Development Plan
NTI - National Training Institute
NTS - National Transport Strategy
NWS - National Weather Service
OCCD - Office of Climate Change and Development
OPEC - Organization of the Petroleum Exporting Countries
ORD - Office of Rural Development
PATA - Policy and Advisory Technical Assistance (ADB)
PBMC - Performance Based Maintenance Contract
PCD - Planning and Coordination Division (of DOT)
PIP - Public Investment Plan
PLTB - Provincial Land Transport Board
PMAMP - Port Moresby Airport Master Plan
PMIA - Port Moresby International Airport
PMV - Public Motor Vehicle (Taxis and Buses)
PNGDF - Papua New Guinea Defence Force
PNGASL - Papua New Guinea Air Services Ltd
PNGNLA - Papua New Guinea National Logistics Association (proposed)
PNGPCL - Papua New Guinea Ports Corporation Ltd
POM - Port Moresby (airport code)

PPP - Public Private Partnership
xi
Acronym Description
PPTA - Project Preparatory Technical Assistance (ADB)
PRD - Policy and Research Division (of DOT)
PRAEC - Petroleum Resources Area Economic Corridor
RAMS - Road Asset Management System (currently held in DOW)
RFSS - Rescue and Fire Fighting Service (airport)
RIDD - Rural Infrastructure Development Division
RIGFA - Review of Inter-Governmental Funding Arrangements
RMRP - Road Maintenance and Rehabilitation Project (World Bank)
RSO - Recognised Security Organisation
RTA - Road Traffic Authority
SAR - Search and Rescue
SMEs - Small to Medium-sized Enterprises
SMS - Safety Management System
SOE - State Owned Enterprise
SWF - Sovereign Wealth Fund (proposed)
TA - Technical Assistance
TEU - Twenty Foot Equivalent Unit (shipping containers)
TIMG - Transport Infrastructure Maintenance Grants
TIPS - Transport Infrastructure Priorities Study
TPA - Papua New Guinea Tourism Promotion Authority
TOR - Terms of Reference
TSCMIC - Transport Sector Coordination, Monitoring and Implementation Committee
TSSP - Transport Sector Support Programme
TSU - Transport Security Unit (DoT)
Unitech - Papua New Guinea University of Technology
USOAP - Universal Safety Oversight Audit Program (ICAO)
VFR - Visual Flight Rules
VHF - Very High Frequency
VOR - VHF Omnidirectional Range (ground based air navaid)
WB - World Bank
xii
Minister’s Statement
I am pleased to present the National Transport Strategy (NTS) and
Medium Term Transport Plan (MTTP) prepared by the Department of
Transport (DOT) with participation from the transport sector and central
agencies of the National Government. The Strategy and Plan are in
three volumes:
o Volume 1 – National Transport Strategy Summary

o Volume 2 – The Medium Term Transport Plan 2014-2018
o Volume 3 – Detailed National Transport Strategy
The Department of Transport is the leading Government department

with responsibility for policy and planning in the transport sector and for
the compilation of the annual development budget from the
submissions of the modal transport agencies.
The NTS has been developed as an entirely fresh review of the transport sector, its guiding
principles, the structure and development of its institutions, transport policy in regards to economic
and safety regulation, the role of Government, public funding and an investment strategy for
maintaining and developing the transport network.
The NTS replaces the National Transport Development Plan 2006-2010 and is a more far reaching
strategic view of the sector and its relationship to national level planning and policy as contained in
Vision 2050, the Development Strategic Plan and the Medium Term Development Plan. It provides
a chart for the future with a 20 to 30 year time horizon and a rolling five year investment plan for
transport infrastructure and an action plan for policy and institutional development and a legislative
programme.
The successful implementation of the NTS depends on active participation and commitment from
everyone including other state line agencies, the private sector, provincial governments and the
wider members of our communities nation-wide. To ensure that it remains a living document, a
process has been established for annual monitoring and periodic review of the NTS, at no more
than five year intervals through the planning period, while the MTTP will be updated annually.
I commend the Strategy and Plan as a guide for the wise application of our limited resources in
order to fully meet the national development goals and to provide an affordable and equitable
balance between transport services that serve our main economic sectors and those that provide
reliable access to our widely distributed rural population.
Finally, I wish to thank the Secretary and all the staff of the DOT for their hard work in preparing the
new National Transport Strategy.
Hon. Ano Pala MP
Minister for Transport
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Introduction from the Secretary
Papua New Guinea faces many challenges in the development of its

transport infrastructure to serve the needs of economic development,
wealth creation and to provide equitable access to transport services for
its widely distributed population. The period of the last 10 year National
Transport Development Plan was marked by some successes in arresting
the deterioration of transport infrastructure assets, with sections of the
national highway network reconstructed, rehabilitation of selected
provincial roads, further expansion of Port Moresby International Airport
and the commencement of a water transport franchise scheme and jetty
programme to deliver transport access to small coastal and river
communities.
The anticipated increase in national income from the development of LNG and increased funding for
the transport network, offer a renewed prospect of a cohesive national effort to fully rehabilitate the
national road, port and airport network, to develop the provincial road networks to serve the rural
population and agricultural production and to rehabilitate or construct rural airstrips and jetties to
communities where road access is not feasible.
Over the past 10 years, a number of institutional, policy and legal reforms have been completed in
the transport sector, which was necessary to create a more responsive framework for planning,
regulating and delivering public services in the transport sector. Safety oversight and economic
regulation have been strengthened and separated from service delivery which is increasingly
through more self-reliant and commercially focused state owned enterprises (SOEs), through the
creation of the National Maritime Safety Authority, the Civil Aviation Safety Authority, the National
Airports Corporation, PNG Air Services Ltd and the PNG Ports Corporation.
However, further structural reform is still required, and development of capacity within the new
agencies, particularly for roads and land transport. The creation of the National Roads Authority
was an important development but must be followed up with a modern responsive system of road
user charges to ensure sustainable maintenance funding for the core national road network. This
National Transport Strategy also foreshadows the creation of new Road Traffic Authority, combining
the regulatory functions of the Land Transport Division of the Department of Transport and the
safety functions of the National Road Safety Council.
To provide for improved consultation among the transport agencies and alignment of forward plans,
the Transport Sector Coordination and Monitoring Committee (TSCMIC) comprising the heads of
the transport agencies was established in 2006 and will continue to be a key focal point for
Government’s role in the transport sector, chaired by the Secretary of Transport.
The National Transport Strategy and Medium Term Transport Plan are living documents and the
staff of the DOT make a commitment to annually monitor their progress and to undertake milestone
reviews every five years in concert with Government’s five year plans and targets.
Roy Mumu
Secretary for Department of Transport
xiv
1 Introduction – Preparation of the NTS
1.1 The Purpose of the National Transport Strategy
The economic and social activity of the nation and its

people determine the demand for passenger and freight
1. Role - The role of the NTS is
movement. The aim of the transport agencies is to
to convey Government’s policy
provide and facilitate infrastructure and transport services
for development of the transport
to best meet this demand. The Department of Transport
sector over the next 20 to 30
(DOT) as the coordinating agency for the transport sector
years.
is responsible for preparing the sector strategy for policy,
2. Responsible Agency - The
institutional development and investment.
Department of Transport (DOT)
This National Transport Strategy (NTS) and Medium Term is the responsible agency for
Transport Plan (MTTP) are the successors to the National preparing the sector strategy for
Transport Development Plan (NTDP) 2001-2010 and the transport policy, institutional
mid-term review of that plan, the National Transport development and infrastructure
Development Plan 2006-2010. However, while investment.
acknowledging the achievements and shortcomings of
these past plans, the development of the NTS is based on 3. Scope - The NTS includes
a fresh review of the transport sector and its performance transport policy, development of
and uses recently developed tools in its preparation. the transport institutions and the
strategy for transport investment
Note - the summary points in the boxed text link with the
corresponding numbers in the National Transport Strategy
Summary Volume 1.
1.2 The Medium Term Transport Plan
The Medium Term Transport Plan 2014 to 2018 (MTTP)

4. MTTP Role - The MTTP
is the second volume of the National Transport Strategy
provides a short term action plan
(NTS). It provides a short to medium term action plan
for transport policy, institutional
under the overall structure of the NTS. The MTTP
development and legislative
includes a timeline of actions for transport policy,
programme.
institutional development and the accompanying
legislative programme and a five year rolling programme
It also provides a five year rolling
for transport infrastructure spending to ensure that
programme for transport
upcoming projects are consistent with the NTS
infrastructure spending to
investment strategy. This rolling programme will be
ensure that upcoming projects
updated annually as part of the forward planning process
are consistent with the NTS
and development of submissions under the national
investment strategy.
Budget round. It may be noted that the MTTP is
deliberately not a five year plan to match the MTDP; prior experience with five years plans has been
that by the end of the period priorities have changed and economic growth and Government
financing for the sector has inevitably varied from forecast. The decision was made to develop a
five year rolling programme, reliant on annual updating and closely linked to the Budget and PIP
processes.
1.3 Timeframe and Activities
The NTS and MTTP were prepared largely over the period 3Q 2009 to 1Q 2012, with some later
amendments to incorporate consultation feedback and updating to recognise the 2013 budget. This
timeframe was dependent on the prior publication of Government’s higher level strategies and
1
plans, notably Vision 2050, the DSP and MTDP which were published during 2010. During this
period other government agencies in the economic and social sectors that depend on transport also
prepared major reviews of their own forward strategies, which are also instrumental in informing the
NTS.
Also important to the development of the NTS was the Transport Infrastructure Priorities Study
(TIPS) 2010 which had the objective of developing a method for prioritising transport infrastructure
investment across all transport modes, taking account of both economic and social benefits, and
using available data to prepare ranked lists of priorities for maintenance, upgrading and new
construction. The TIPS model and data became available in March 2011. Additional data and
model revisions were made to TIPS for the analysis of projects for inclusion in the MTTP. The
reports produced under TIPS consulted in the development of the NTS are included in the reference
list at the end of this document.
1.4 Background Papers
The following papers and consultant reports were produced either for stakeholder consultation or as
background information for the development of the NTS. Again, these are referenced at the end of
this document and include:
 NTS Scope and Implementation Plan;
 Review of Prior National Transport Plans;
 National Transport Strategy – Issues;
 Port Regulation Working Paper;
 NRA, DOW and the Road Fund Working Paper;
 Regulation of Coastal Shipping and Cabotage Rules within Papua New Guinea;
 Land Transport - Institutional Arrangements and Regulation of Vehicles, Drivers and
Transport Services.
Other external reports that contributed to the development of the NTS included:
 National Airports Strategic Management Plan;
 Port Moresby Airport Master Plan (PMAMP);
 Sea Freight Rates Study;
 PMV Working Party Report;
 Port Moresby Urban Public Transport Study.
A large amount of other published material has been used in developing the NTS and MTTP,
including:
 Government departments and statutory authority corporate and business plans;
 Reports and information from the CIMC;
 Economic and social sector agency strategies and plans;
 SOE annual reports, corporate plans and profiles;
 Information reports from the minerals, oil and gas industries.
1.5 Review of the NTDP 2006-2010 and Earlier Sector Plans
1.5.1 Strengths of the NTDP
As part of the NTS development, a review was made of the National Transport Development Plan
(NTDP) 2006-2010 and prior national transport plans. Although the NTDP 2006-2010 was by no
2
means fully implemented, it did have a number of strengths that made it stand out from its
predecessors:
 First Sector-Wide Plan - The 2001-2010 NTDP and the 2006-2010 Review was the first
time that a complete sector policy and plan had been produced by the Department of
Transport.
 Vision for the Sector – it included a vision, objectives and a mission statement for the
sector.
 Recognition of Problems and Challenges – it set out existing problems and future
challenges to delivering on the sector vision and objectives.
 Policy Guidance – it provided statements of policy for each transport mode and covered
all of the main aspects of economic and safety regulation.
 Institutional Development – it gave a plan for institutional reform.
 Legislative Program – it included proposals for legislative reform.
 Funding – it included some short statements on funding and user charges.
 Modal Integration – it recognised the need for modal integration.
 Standard Setting – it provided policy direction for setting standards of transport service,
particularly in matters of transport safety and security for domestic and international
transport.
 Asset Management – it recognised the importance of maintaining existing assets as the
first call on funds and the need to recover the maintenance backlog.
 Development Priorities – national investment priorities were clearly set out and there
was recognition that investment would be funding-constrained and that only investment
showing a high rate of economic return would be justified.
 Community Service Obligations – it recognised Government’s obligation to provide
transport services to remote communities where projects would not be justified purely on
economic return but met social equity needs.
 Implementation and Monitoring – it recognised the need for monitoring of implementation
progress and provided an implementation schedule, performance indicators and agency
responsibilities in Appendix F.
 Production Qualities – the NTDP was professionally printed in large numbers.
1.5.2 Weaknesses of the NTDP
However, the review also showed the following weaknesses.
Institutional and Process Weaknesses:
 Ownership – the developers of the NTDP either did not make sufficient attempts to
involve the sector agencies, or the agencies were not sufficiently engaged, or both – in
either case there was a relatively low level of ownership and recognition of the NTDP by
the sector agencies. The NTDP was regarded, particularly for the maritime and aviation
sector which have a corporatised SOE institutional model, as a creature of the DOT and
of only passing relevance to their operations.
 DOT Profile – the lack of recognition stemmed in part from the relatively low profile of the
DOT despite its position as the senior policy, planning and regulatory agency for the
sector. As well as a low profile, DOT also has been constrained in human and financial
resources which have limited its ability to proactively pursue its responsibilities.
 Dissemination – although produced in large numbers, the NTDP was not widely known
publicly and a large number of copies of the document remained undistributed. There
was insufficiently marketing of the document, or work to establish it in the minds of
3
Government agencies. It was not publicly available in electronic form and, unlike most
Government agencies, at the time DOT did not have a public website where its work and
publications were displayed.
Document Structural Weaknesses:
 Publication – the review of the NTDP 2001-2010 Volumes 1 and 2 were published
alongside the (reviewed) NTDP 2006-2010 Volume 1&2 in similar format; this was
confusing, particularly as the review document was almost as large as the new NTDP.
Also the distinction between Volume 1 which dealt mainly with policy and strategy and
Volume 2 which contained the investment programme, and the respective functions of
each volume, were unclear.
 Overall Document Structure – the documents, particularly Volume 1, could have been
better structured. There were areas of repetition and overlap, particularly between the
investment section in Volume 1 and the Investment Program in Volume 2. The
Appendices in Volume 2 rightly belonged to sections in Volume 1 on the existing network
status and expenditure projections/funding gap.
 Degree of Detail – there was a general shortage of detail throughout and unevenness
between the modes. Statements were often general and in some cases were
restatements of objectives rather than actionable policies.
 Linkage to Government Strategies and Plans – apart from the Minister’s Statement,
there was little on the relationship between the NTDP and existing higher level strategies
(MTDS, MDG) at the time, nor was there any linkage to other economic development
and social sector strategies and investment.
 Layout and Illustrations – for a printed publication the layout was poor and there were
insufficient diagrams and illustrations. Apart from chapter numbers there was no number
referencing from the contents which made the document hard to follow.
Document Technical Weaknesses:
 Vision, Aims, Goals, Objectives, Mission, Priority etc. – the hierarchy of vision,
objectives, strategies and actions did not come through very well and the terminology
was not very clear.
 Demarcation between National and Provincial/Local Level – there was a lack of
demarcation and inconsistent treatment between national and sub-national level. The
infrastructure investment plan was confined to national level. While objectives and
policies targeted at local level were included, there was no discussion of national and
sub-national institutions, coordination, funding or legislation. Arguably the NTDP should
be a sector-wide document but delineate where the boundaries and responsibilities lie
between national, provincial and local level government.
 Sector Status – There was a very short and general description which gave no historical
view of development of the transport network or where its status was advancing or
retreating. The same applied to transport policy and institutions. A detailed sector
snapshot would have given a point of reference for future reviews.
 Overall Policy Principles – there was no overall statement of policy principles and their
rationale either derived from higher level national strategy or across transport modes.
Principles for separation of regulation and service delivery were not mentioned, nor were
principles for transport services competition, community services obligations, economic
regulation, or public/private sector roles.
 Legislative Reform – this section dwelt on policy matters on a mode-by-mode basis in
the process of establishing legislative needs. The legislative program should follow on
and be driven by policy decisions, not the other way around.
4
 Transport Demand – there was no discussion of the determinants of transport demand

(population, economic growth, export commodities) or how these were likely to change
and influence policy and investment in the future and on which parts of the transport
system these pressures would impact.
 Modal Integration and Investment Balance – while there was recognition of the need for
modal integration, there was no guidance as to what should to be achieved or how, and
there was no analysis of the investment requirements and balance between modes.
 Investment Priorities – there was no evidence-based approach, analysis or evaluation
framework for identifying, assessing, prioritising and programming transport investment.
Most of the investment program was made up of project lists obtained from the modal
agencies with varying background justification. The TIPS 2006 study on which much of
the investment program rested was a study of the relative importance of different
infrastructure assets rather than their investment needs, and was confined in its view to
the top level infrastructure serving economic activity.
 Institutional Reform – the section on institutional reform was more a list of institutional
responsibilities and achievements of the first five years of the NTDP, and did not chart
any future direction.
 Institutional Capacity – the limitations of institutional capacity and severe lack of
qualified, experienced professional and technical people in the government sector was
not addressed; there was a need for policies on developing human resources and on
retention and career development of the transport sector labour force.
 Community Service Obligations – the section on CSOs recognised the problem and
listed programs that support transport to remote communities but provided no future
direction, set no principles for CSOs, costs or means of funding.
 Aid Harmonization – this subject was not mentioned but influences infrastructure
investment decisions in the sector and the operation of the implementing agencies.
 Transport Security – again this tended to be a list of actions already taken rather than
policy and actions for the future.
 Transport Safety – the section on transport safety did specify future action, although
there was no overall framework for safety standard setting and benchmarking. There
was no indication in the text of who would be responsible for the actions listed, the
resources required or time scales.
 Implementation – while an appendix provided an implementation schedule with
responsibilities, this was not linked back to the main text and there was no consideration
of resourcing requirements.
 Monitoring – there was no consideration of the resources needed for monitoring the
implementation schedule and although monitoring was to be reported quarterly to the
TSCMIC, a framework and process for collecting, analysing and reporting on
implementation is missing. Monitoring indicators were not defined.
1.6 Analysis of Implementation Progress of the NTDP
1.6.1 Policy and Institutional Components
Planning and Coordination Division (PCD) of DOT prepared a matrix for monitoring the progress in
implementation of the NTDP policy and institutional components, listing all of the expected actions,
timeframes and outputs and comparing these against actual performance. A qualitative summary of
the implementation matrix has been prepared and is presented in the background paper “Review of
Prior Transport Plans”. The matrix grades the achievement of the NTDP as expected at the end of
calendar year 2010 on a scale from fully completed to no progress.
5
The overall assessment of implementation progress of the policy actions against the activities in the
matrix is that very few of the actions were complete at the nominal end of the NTDP in 2010. Many
actions had not even been started, some had been abandoned and some were regarded as no
longer appropriate. The original time frames were met in only a very few cases.
In general, the institutional reforms had been completed, although on a later timeframe, but the
supporting legislative changes had not caught up, so there was a disjuncture between practice and
the legal underpinning. The regulatory reviews and reforms had largely not occurred and most of
the same issues outstanding are the same as they were in 2005. Where actions had occurred this
was often through initiatives generated from outside the transport sector agencies – such as those
by the National Economic and Fiscal Commission (NEFC) and the Independent Consumer and
Competition Commission (ICCC). The activities under DOT’s responsibility had a very low level of
achievement.
1.6.2 Infrastructure Investment Components
Actual total expenditure by DOW on national roads maintenance and rehabilitation for the four year
period 2007 to 2010 matched the programmed expenditure at approximately K1,600 million taking
account of inflation. However the route length of road projects completed was less than
programmed due to project implementation costs being greater than anticipated, attributable to an
increase in PNG civil infrastructure costs above the general rate of inflation and the rehabilitation
needs being greater than originally planned for.
In the port sector, the 2009 ministerial policy statement identified Lae, Port Moresby, Kimbe,
Wewak, Daru and Vanimo as the priority ports. In relation to ongoing investment, the rehabilitation
of berths in Lae and Port Moresby were included in the Minister’s statement, as three year
programmes with investment costs of K182 million and K390 million respectively. Actual
expenditure considerably exceeded the NTDP plan, primarily due to the Lae port development
which commenced in 2008. However, some elements, such as rehabilitation of Daru, expansion at
Wewak, mobile cranes for Lae, Alotau wharf and the rural jetty programme had not progressed at
all. Some aspects of the port investment plan, such as the new wharf at Kupiano, were of
questionable priority.
The total investment planned for nationally important airports in the NTDP for the period 2007 to
2010 was K115 million; this compared with approximately K 65 million actual expenditure. Many of
the projects listed in the NTDP 2006-2010 were not started and have now been taken up by the
Civil Aviation Development Investment Program (CADIP).
1.6.3 Lesson Learned and Applied in the NTS
There were many lessons to be learned and applied in the development of the NTS. The most
important of these were:
 Encouraging ownership of the NTS by the transport agencies – this meant involving the
agencies in the development of the NTS, and producing a document relevant to their
needs that will assist them in defining and achieving their own objectives;
 Producing a well laid out document that is clear, comprehensive, accurate, well-ordered,
well-illustrated and accompanied by a concise summary;
 Marketing the NTS and MTTP to the sector and to the wider audience through publicity
at launching, and wide availability, including through a DOT website. The NTS is an
opportunity for the DOT to raise its profile;
 Demonstrating that the NTS is backed by serious technical and policy analysis – if the
document has the weight of objective analysis behind it, it is more likely to be recognised
and used by the sector agencies, by the donor community and by the Government
central agencies.
6
Part A – Sector Vision, Profile and Guiding Principles
2 Vision and Goals

The Vision of the National Transport Strategy is for a well-
5. Vision – “a well-integrated,
integrated, competitive, safe, affordable, financially and
competitive, safe, affordable,
environmentally sustainable transport system that serves
financially and environmentally
the economic and social goals of Papua New Guinea as
sustainable transport system
set out in Vision 2050, The Millennium Development
that efficiently serves the
Goals (MDGs), the Development Strategic Plan (DSP)
economy and society of Papua
and Medium Term Development Plan (MTDP).
New Guinea”.
The goals of the NTS are to:
6. Goals
 restore the national transport network to a good
maintainable condition and level of design Restore the national transport
appropriate to the nature and volume of traffic network
carried and the function of each link in the network; Fully fund maintenance as far as
 maintain the restored national transport network in possible from user charges
good condition, supported by reliable and Deliver a safe and secure
sustainable sources of funding that reduce transport system for users and
dependence on external assistance and, as far as the public
practicable, are self-funded through user fees and
charges; Mitigate or avoid adverse social,
health and environmental effects
 in developing, maintaining and operating the
transport network give due consideration to the
of transport
safety and security of transport users and the Develop new infrastructure to
general public; serve national and provincial
 similarly, give due consideration to avoiding or priorities where economically
mitigating adverse social, health and environmental viable and within financial and
effects of transport and to fostering long term capacity constraints
environmental sustainability; Provide better Government
 where further funding and industry capacity institutional structures to deliver
permits, develop new transport infrastructure to transport infrastructure and
serve national and provincial planning priorities, services
while maintaining social and regional equity in
Strengthen the human resource
investment and subject to meeting minimum
capacity of the Government
standards of economic feasibility;
transport agencies
 provide improved Government institutional
structures to better deliver transport infrastructure Develop capacity and capability
and services; of PNG national enterprises in
the transport sector
 develop the professional, technical and
management capacity of the Government
departments, state owned transport enterprises and the provincial governments to a high
level of efficiency, cost-effectiveness and probity in managing and operating their transport
assets;
 actively facilitate the development of capable and competitive PNG-owned and staffed
enterprises in the transport sector, including transport service operators, works contractors
and associated support industries;
7
 bring 95% or more of the population within easy

reach of an all-weather transport service 6. Goals
connecting to the national transport network, either
by road, water or air and to work with the agencies Bring 95% of the population
of Government to establish clear and sustainable within easy reach of all-weather
commitment and processes for funding the transport access
community services obligation inherent in meeting
Provide transport access to 95%
this target;
or more of developable
 provide transport connectivity for 95% or more of agricultural land
the land planned for smallholder or large scale
agricultural development, subject to economic Provide well planned, regulated
feasibility and environmental and social and operated traffic networks
safeguards; and urban public transport
 provide well planned, regulated and operated traffic systems in the major cities
networks and urban public transport systems in the
major cities.
8
3 Guiding National Vision and Plans
3.1 Introduction
Transport is a sector of the economy that facilitates

economic activity and community interaction. It provides 7. Guiding National Plans
the physical connections that allow the other economic
sectors to function by providing access to markets and PNG Vision 2050
allowing people to travel for work, personal business and
social purposes.
Development Strategic Plan
(DSP), 2010-2030
It is important that the National Transport Strategy be
supportive of the plans for economic and social Medium Term Development
development at national, provincial and local level. The Plan, 2010-2030
forward plans for the nation are embodied in the National
Strategic Plan or Vision 2050, and the Development Alotau Accord 2012
Strategic Plan which looks forward twenty years to 2030.
Within these high level national plans, the development Millennium Development Goals
plans for the economic and social sector also influence
the responses required of the transport system. The Alotau Accord gives further expression to
Government’s vision, including a commitment to review the MTDP, a confirmation of the Economic
Corridor concept, announcing the Infrastructure Development Authority and making other proposals
for the transport sector. These include the development of a policy on freight subsidies, a national
shipping programme and air services to rural areas. This section shows how the National Transport
Strategy fits into this framework for economic and social planning over the medium and longer term.
The cities of PNG are the major transport, business, administrative and political hubs of the country.
An increasingly large population will reside in cities in future even with further rural development. A
well planned urban land use and transport system is essential for the good functioning of cities and
indeed the nation. Urban transport plans should include provision for road passenger and goods
transport, as well as intermodal considerations for passengers and goods transferring between air
or sea and land transport.
3.2 The Millennium Development Goals
Papua New Guinea is a signatory to the United Nations Millennium Declaration and has set targets
for each of eight goals aimed at raising the development status of the nation and its people. The
first comprehensive report on PNG’s achievement was published in 2004 (Millennium Development
Goals, Progress Report for Papua New Guinea, 2004, UN and Government of PNG). A
comprehensive review was made in 2010 at which time the local goals for Papua New Guinea were
revised to harmonize with the MTDP. A progress review against the original international goals was
made by the UN in 2009 (Second National MDG Progress Summary, UN, 2009) From these
reports, the goals and targets for year 2015 and progress to date are summarised below:
 Eradicating poverty – reducing the percentage of the population below the poverty line
from 30% in 1990 to 15% by 2015; a less ambitious national target of 27% for 2015 was
set in 2000. The 2009 Progress Report indicated only a marginal reduction in “poverty of
opportunity” compared with a 1996 baseline;
 Achieve universal primary education – enrolment rates at primary school were targeted
to increase from 66.3% in 1990 to 100% by 2015; the national target and projections
was subsequently reduced to 85%. Core retention rates were also targeted to increase
from 58% to 100% in 2015, but a lower national target is now 70% and the trend has
unfortunately been a deterioration;
9
 Promoting gender equality and women’s empowerment – the targeted indicator being
convergence of male and female literacy rates to 100% by 2015. While there has been
convergence this has been through declining literacy among the male population and a
lesser rate of improved literacy among women, both now being equal;
 Reduced child mortality – the MDG target is to reduce child mortality from 82% in 1990
to 27% in 2015. The national target and projection were reset in 2005 to 39% by 2016
but progress has slowed since;
 Improved maternal health – maternal mortality rates were targeted in the MDG to reduce
from 388 per 100,000 live births to 86 by 2015; the National Department of Health target
is 242 and the projection 274. However recent updates indicate that the baseline was
higher than initially reported, at 733 maternal deaths per 100,0000 live births in 1994,
and that there has only been a slight improvement;
 Combating HIV/AIDS, malaria and other diseases – there has been an exponential rise
in the cumulative reported cases of HIV/AIDS, from 72 in 1990 to 9,000 recorded in
2003; the MDG target was that cases rise to no more than 54,000 by 2015, but the
present rate of growth would give 466,000 by that date. The latest report indicates that
the HIV/AIDS epidemic has not yet been stabilised and that the same applies to other
associated diseases;
 Ensuring environmental sustainability – there are no precise targets, but environmental
degradation is observed in the 2004 report to be proceeding rapidly, often
undocumented and uncontrolled. The 2009 update reports that there is insufficient
systematic measurement to monitor environmental change;
 Partnership for global development – although PNG is signatory to a large number of
international conventions and agreements, the 2004 report revealed no coordinated
approach to monitoring progress against the commitments entered into. The 2009
update recommended that a task force led by DNPM be established and some moves
have been made in this direction in the past few years.
Transport is a necessary service to deliver primary level health care, education, other social
programmes and opportunities for economic participation to what is still largely a rural population. It
can also be a vector for diseases such as HIV/AIDS, and on its own is largely neutral in relation to
gender equality. The 2004 MDG report maps the relative levels of achievement of the provinces for
some of the MDGs and this gives a picture of where increased emphasis may need to be placed in
ensuring that communities have basic access to a means of transport (Table 1 overleaf).
Provinces where transport accessibility is low tend to be lower on those indicators most influenced
by access to transport services. The Sepik, Gulf, the outlying parts of the highlands provinces,
Madang and Morobe, all of which have large groups of inland population with poor road access, are
the lowest ranked against the MDG indicators. At the other end of the scale those most closely
linked to central services, with NCD ranked highest, fare better. The islands provinces, with mainly
coastally located communities, are relatively higher ranked than the mainland provinces.
The provincial data do not tell the full story, and a more detailed district or LLG level would give
greater discrimination and most likely show that certain provinces have a mix of urban and easily
accessible rural population that rank relatively better against the MDGs, and outlying districts with
poor access that rank lower.
It is clear from observations on MDG achievement that a basic level of transport accessibility is a
necessary, although not sufficient, condition to enable the delivery of social programmes that raise
the primary health and education status of the rural population, as well as providing opportunities for
economic engagement beyond localised subsistence agriculture and developing social cohesion.
10
The project assessment framework adopted by the NTS, discussed in Section 18.4.2, incorporates
a weighting that reflects the relative disadvantage of provinces and, potentially, districts, thereby
recognising their MDG status and goals.
Table 1 – Provincial Comparison for Millennium Development Goal Indicators
Health and Morbidity
Reproductive Health
Composite Indicator
Poverty and Hunger
Provincial Ranking
Gender Inequality
Participation and
Education and
Labour Force
Employment
Fertility and
Province
Mortality
Literacy
Western MH H L ML MH L MH MH 9
Gulf L L L L ML L L L 18
Central L H M H ML H H MH 8
NCD H H H H H L M H 1
Milne Bay L MH H L H H H H 5
Oro ML M L ML M M H M 10
S Highlands H L ML M L H L L 19
Enga H L H L L H L L 17
W Highlands H L MH H L H L M 11
Simbu H L H MH L H L ML 12
E Highlands H L H M L H L L 15
Morobe L ML M L MH L ML ML 13
Madang L ML L L M ML M L 14
East Sepik L M ML L L ML ML L 16
Sandaun L L L L L ML L L 19
Manus H H MH H H L H H 2
New Ireland MH H H H H L H H 4
E New Britain M H H H H MH H H 3
W New Britain M MH L MH H MH MH H 7
Bougainville ML H L H H M H H 6
Key: H – well above national average, MH – above national average, M -around national average, ML - below national
average, L – well below national average
3.3 Vision 2050

The Government in February 2010 published the National Strategic Plan (NSP), or “Vision 2050”.
This provides goals for transforming the PNG economy and society over a 40 year period. The
NSP Task Force identified service delivery, wealth creation and human capital development as the
core areas for attention. Transport services underpin all three areas and are some way involved in
all of the seven pillars, as shown in Table 2.
Transport also receives specific mention in Vision 2050 as set out below:
 The construction and maintenance of high quality transportation ... networks will create
economic corridors and increase the movement of public goods and services and develop
trade in general.
 Increase the national road network from the current 25,000 km to complete road networks
throughout Papua New Guinea
 Develop and seal all airstrips throughout the country
11
Table 2 - Relating the Seven Pillars of Vision 2050 to the Transport Sector
Vision 2050 Pillar Transport
Regulatory Policy Institutions Investment
Human Capital  Can influence PNG  The transport sector  Basic transport access
Development, Gender, national preferences requires a supports health,
Youth and People in transport sector vocationally, education service
Empowerment employment and technically and delivery and access to
ownership professionally employment and
educated and trained market opportunities
workforce
Wealth Creation  Encouragement of  Support to education  Transport investment to

and preferences to and training of support economic
PNG national transport workforce development based on
ownership, SMEs in for greater earning sound planning and
construction industry potential economic analysis
and transport
services
Institutional Development  Relaxation of market  Institutional reforms  improved technical and

and Service Delivery entry and competition for improved service financial management
regulation where delivery in road traffic of infrastructure other
compatible with services and road government transport
service obligations to infrastructure services delivery,
outlying rural funding and
communities accountability
Security and International  Regulate aviation  Establish a  Invest in port, ship,

Relations and maritime sustainable transport airport and freight
transport security to security security systems
international administration in the through international
standards sector borders
Environment Sustainability  Regulatory policy to  Incorporate  Climate change

and Climate Change help lower carbon environmental and adaptation in transport
intensity transport climate change investments
knowledge and
responsibilities in
DOT and the
transport agencies
Spiritual, Cultural and  Community services  Coordination  Assist church-

Community Development obligation policies to between Government owned/provided rural
recognise role of transport institutions transport infrastructure
church-based and church-based
agencies in rural organisations
transport
Strategic Planning,  Compliance with the  DOT planning and  Transport investment
National Transport coordination activities policy alignment with
Integration and Control
Strategy made a technically Vision 2050, DSP,
government strengthened MTDP and MDG
administrative including inter-
 Improved coordination
requirement agency relationships
of national and
provincial transport
plans
 Increase the number of jetties and wharfs in all maritime provinces, and reintroduce
government work boats
 Ensure that the Department of Works takes full ownership of all road networks throughout
Papua New Guinea
12
3.4 Development Strategic Plan and Medium Term Development Plan

The emphasis of the Development Strategic Plan, 2011-2030, published in April 2010, is on
coordinated action across all sectors aimed at producing transformational change in the rate of
Papua New Guinea’s economic growth and social development. At the heart of the DSP are ten
economic development corridors which are to open up and better link regions with new and
upgraded transport connections with economic and social infrastructure developed along them.
Restoring the existing main transport infrastructure is also

a high priority, bringing all facilities up to good condition
8. Economic Corridor Roads
and upgrading existing roads, ports and airports to a
and Missing Links
higher level of capacity to serve the anticipated future
The NTS has considered all
transport demand.
economic corridor roads
The Medium Term Development Plan, 2011-2015, described or mapped in the DSP
published in October 2010 gives effect to the DSP and and MTDP.
also includes interim targets for the five year periods to
2030. It is a requirement that sector plans align with the They have been examined for
MTDP. order of cost, likely feasibility
and a priority order established.
Details of the intentions for transport sector development
in the MTDP and DSP are summarised below. Where While a few appear
there is any difference between the DSP and MTDP, the economically feasible, a number
MTDP has been assumed to govern, as it is the most of the proposed links are likely to
recent expression of Government policy. prove technically difficult, high
cost and at the best, only very
3.4.1 The Economic Corridors long term prospects.
A map of the economic corridors is shown below in Figure
1. The corridors are identified in the Development Strategic Plan as shown in Table 3.
The economic corridors include a number of the “missing links”, mainly inter-provincial road
connections linking the several isolated road networks that have long been a feature of Papua New
Guinea.
The first priority economic corridor in the MTDP is Petroleum Resource Area Economic Corridor
(PRAEC), for development by 2020. Transport infrastructure associated with this corridor includes
the road running parallel with the pipeline route from Kutubu to Kikori, and the Gulf to Southern
Highlands Road, for which the most likely route is a new section of road between Kerema and Kikori
and, from Kopi along the existing pipeline road branching off at Gobe to connect, via Samberigi,
with Erave in Southern Highlands. The development of a new port to serve exports from the
western part of the Highlands Region at a point on the Gulf coast is also a possibility.
The second priority corridors for development by 2030 are:

 The Momase Corridor, linking Madang to East and West Sepik, primarily by connecting the
two sections of the Coastal Highway via a new road link between Bogia and Angoram;
 the Central Corridor linking Morobe, Oro and Central Provinces, providing a cross-island
link between Safia in Oro province and Moreguina on the Magi Highway in Central
Province;
 The South Coast Corridor, New Britain, linking the disconnected sections of the road along
the south coast from Rabaul via Pomio and Kandrian, and potentially to Cape Gloucester to
eventually complete a ring route around the island.
 Other economic corridors are described in Table 3.
13
Table 3 – Economic Corridors and Corresponding Road Links

No. Name Provincial Road Linkages Priority for
Development
Pipeline road from Kutubu to Kikori, Gulf-S
Petroleum Resource Area 1st priority, by
1 Highlands Road from Erave to Kikori to
Economic Corridor (PRAEC) 2020
Wowei and then to Kerema.
Sandaun to Western Provinces parallel with
5th to 10th
the international border, linking Bewani,
2 Border Corridor priority, post-
Amanab, Green River, Telefomin, Tabubil,
2030
Kiunga, Aiambak, Nakuku, Morehead, Daru
Morobe to Oro to Central Provinces, linking
2nd to 4th priority,
3 Central Corridor Wau, Garaina, Ioma, Popondetta, Baraji,
by 2030
Safia, Moreguina
Madang to Western Highlands to Simbu to
Gulf, linking Madang, Amele, Aiome, Simbai, 5th to 10th
Madang-Baiyer-Karamui-Gulf
4 Ruti, Baiyer River, and also a road link to priority, post-
Corridor
Karamui from either Simbu or Eastern 2030
Highlands
Coastal corridor between Madang and 5th to 10th
5 Morobe-Madang Corridor Morobe Provinces, linking Madang, Saidor, priority, post-
Wasu, Finschhafen and Lae 2030
East Sepik to Enga Province, linking Pagwi, 5th to 10th
6 Enga-Sepik Corridor Ambunti, Kuvenmas, Maramuni to the priority, post-
Laiagam Road 2030
South Coast from East to West New Britain,
7 South Coast Corridor linking Rabaul, Tol, Pomio, Gasmata,
by 2030
Kandrian, Gloucester.
Madang to East Sepik to West Sepik, the
8 Momase Corridor Coastal Highway linking Madang, Bogia,
by 2030
Angoram, Wewak and Aitape.
Completion of the Bougainville coastal road 5th to 10th
9 Solomons Corridor from Siara junction, Kunua, Koripobi, priority, post-
Torokina to Boku 2030
Manus, New Ireland, East and West Sepik 5th to 10th
10 Free Zone Corridor comprise the Free Zone Corridor. No specific priority, post-
road linkages are involved 2030
Not included in the ten corridor descriptions above, but shown in Figure 1 is a corridor linking the
Border Corridor at Kiunga with the PRAEC Corridor. This has been included with the “missing links”
described below.
3.4.2 Missing Link Roads
The MTDP includes 16 “missing link” national roads and 4 economic corridor roads in the
development plan to 2030. The prioritisation of these new roads has been left to the NTS but
targets are set for the numbers of roads to be constructed with most of the development taking
place in the 2016 to 2030 period (one missing link constructed by 2015, and one per year
thereafter, and two economic corridor roads in the 2016-2020 period and one in each subsequent
five year period). The first five years is envisaged to be taken up largely with feasibility studies and
other pre-construction investigations and land acquisition.
There is some overlap between the recognised missing links and the new roads needed to provide
connections through the economic corridors. The following list combines the available information
on the two categories of road, drawn from Table 4.2 of the DSP, the road links indicated in Figure 1
and descriptions in the MTDP.
14
There are some links shown in the figure that are not in Table 4.2 of the DSP (the Trans-Island
Road, Kiunga-Mendi Road) and vice versa (Kopiago - Tabubil and Bubuletta - Motau - Lavora -
Raba Raba - Agaun), and in some cases there are alternative routes, in which case only the more
likely feasible route is listed below (for the Gulf to Southern Highlands Road and the Sepik-Enga
corridor road).
Table 4 – “Missing Link” and Corridor Roads

Road Connection Missing Economic
Links Corridor
Kiunga - Aiambak -Obo - Morehead - Malam - Daru (Western) ML Border
Kiunga - Mendi (Western P - SHP) ML
Kerema - Ihu - Kopi (part of Gulf to Southern Highlands) ML PRAEC
Kagua - Erave - Samberigi - Kopi Road (part of Gulf to S Highlands) ML PRAEC
Malalaua - Wau (Trans-Island Road) ML
Kupiano - Gadaisu (Central to Milne Bay) ML
Bubuletta - Motau - Lavora - Raba Raba - Agaun (Milne Bay P) ML
Bariji - Safia - Moreguina (Oro to Central P) ML Central
Garaina - Ioma - Popondetta Central
Wau - Garaina - Morobe Patrol Post ML Central
Lae - Finschhafen Road ML Morobe-Madang
Baiyer River - Aiome - Amele (WHP to Madang) ML MBKG (1)
Kopiago - Oksapmin -Telefomin -Tabubil (SHP to Western P) ML
Karimui Road (from Simbu or EHP) MBGK
Saidor - Wasu - Sialum ML Morobe-Madang
Bogia - Angoram (Madang to ESP) ML Momase
Pagwi - Ambunti - Kuvenmas - Laiagam (ESP to Enga) ML Enga-Sepik
Aitape - Vanimo (Coastal Highway) ML
Bewani - Imonda - Amanab - Green River - Telefomin (Sandaun to WP) ML Border
Bialla - Kerevat (part of New Britain Highway) ML
Kimbe - Gloucester (part of New Britain Highway) ML
Rabaul - Tol - Pomio - Gasmata - Kandrian - Gloucester (ENB-WNB) ML South Coast
Siara Junction - Soraken - Kunua - Koripobi - Torokina - Boku ML Solomons
Key: (1) MBKG Madang-Baiyer River-Karamui-Gulf Corridor
In this list order does not imply priority. The links have been grouped roughly into provinces and
corridors according to the normal order of provinces. In some cases more than one new road
section is required to complete a link and these sections may be assigned a different priority and
could be regarded as separate links. The total number of missing links and corridor roads on this
list is 23 compared with 20 in the MTDP. It shows the new links listed in the table, including
alternative alignments in a few cases shown in orange (ESP-Enga, Karimui access, Kerema-Ialibu
as a less likely alternative to Gulf-SHP using the Kerema-Kikori link and Kiunga-Mendi).
3.4.3 The 16 Priority National Roads
The MTDP development targets reconfirm that priority be given to bringing the 16 national roads
first identified in the NTDP up to a good sealed standard, comprising about 50% of the national road
network length, with second priority given to the remaining national network and selected sub-
national roads (see below).
15
Figure 1 – The Future Main Transport Infrastructure from the Development Strategic Plan
16
Figure 2 – Missing Links
17
Table 5 – The NTDP 16 “Priority” Roads

Importance Road Name Linkage Length Class
kms
1. Highlands Highway Mendi-Mt Hagen-Lae 604.0 I
2. Boluminski Highway Kavieng-Namatanai-Huris 336.7 II
Very High 3. Koroba to Mendi Rd Koroba-Tari-Mendi 195.1 II / I
4. Porgera Rd/Enga H’way Porgera-Laiagam-Togoba 201.2 II / I
5. New Britain Highway Kimbe-Bialla-Nuau, Gaulim-Rabaul 251.2 II
6. Sepik Highway Passam-Maprik-Lumi 266.0 II
7. Coastal Highway (East) Madang-Bogia 214.1 II
High 8. Baiyer Road Mt Hagen-Baiyer-Ruti Rd 60.0 II / III
9. Hiritano Highway P Moresby-Bereina-Kerema 304.3 I
10.Coastal Highway (West) Angoram-Wewak-Aitape 309.8 II
11.Kokoda Road Popondetta-Kokoda 79.6 II
12.Wau Road Highlands H’way-Bulolo-Wau 125.6 II / III
Medium 13.Buka Road Arawa-Wakunai-Buka ferry 183.1 II
14.Magi Highway P Moresby-Kupiano-Babaguina 239.7 II / III
15.Ramu Highway Usino Jnc-Madang 180.9 I
16.Northern Road Popondetta-Oro Bay-Afore Rd 83.2 II / III
Total 3,634.5
Sources: MTDP, NTDP, RAMS road inventory
10. The 16 NTDP Priority
The 16 national priority roads in the NTDP 2006-2010 National Roads
were divided into three categories in terms of their
importance to supporting national economic development While these roads continue to
and their relative priority for improvement to a good sealed be important road network links,
standard, on the assumption that all required restoration. the investment that has been
made in them and the economic
This priority is a measure of the importance of the road
development and population
connection rather than an assessment of the restoration
growth that has taken place
work required and was based on population served, village
since they were first identified
income earned and access to main domestic and export
means that the merits of further
markets through the country’s main ports.
improvement needs to be
While the previous assessment of the relative importance considered alongside that of
of the national road links remains largely valid, several of other national and provincial
these roads have been subject to rehabilitation and roads.
upgrading in the intervening period, so the priorities for
further restorative maintenance need to be considered on The TIPS 2010 modelling, the
a case-by-case basis taking account of costs and benefits. development of a functional
classification and the
In addition, the development of a function classification of subsequent prioritisation of
the road network (see Section 20) invites a reconsideration national roads in this NTS goes
of the importance rankings. The functional classification of some way to redefining future
the existing roads is shown in Table 5 above. From this road investment priorities.
review, the importance of the Hiritano and Ramu Highways
may need to be elevated, due to their inter-provincial Consequently, while the MTDP
connectivity whereas the Baiyer Road should possibly be requires that the 16 priority
reduced in importance. However, if the more feasible of roads be monitored in regard to
the missing links are constructed, then the relative their improvement and particular
importance of the NTDP roads may change. The Hiritano targets have been set, this NTS
Highway would become much more important if linked treats the 16 roads on an equal
through to the Gulf to Southern Highlands Road or if the basis to all other roads.
Trans-Island Highway were to be constructed. Similarly
18
the New Britain Highway would increase in importance if the link between West and East New
Britain was made (Nuau to Open Bay to Gaulim).
Also shown in orange in Figure 2 are a few links proposed as part of Provincial Development Plans,
resource developments (Kikori-Daru, Tolukuma mine access) or being pursued as part of DOW’s
on-going works programme (Kaintiba-Malalaua)
3.4.4 Road Financing
The DSP envisages the use of private financing and performance based term maintenance
contracts:
“To finance the expansion and maintenance of a nation-wide network of roads, the
Government will engage the private sector through the public private partnership
scheme.
The Government is committed to the construction of quality roads that do not

deteriorate quickly. To this end, tenders and contracts for construction or repair will
specify an obligation to maintain the road for a number of years and payments will
be contingent on the road being maintained in good condition. Contractors will then
have the incentive to construct a good road from the outset, as they will have to
maintain it later. Further, contracts for construction will be open to international
road construction firms with an excellent proven record, as well as to domestic
firms.”
The Government also intends to consider tolling for financing main urban road development:
“As PNG prospers, the number of passenger vehicles on the road will increase, as
will the capacity of road users to pay for road use. In this context, toll roads will be
cost-effective for relieving congestion on urban roads, including in Port Moresby.”
3.4.5 Ports and Shipping

A fivefold increase in port container traffic is anticipated in the DSP, with a slightly higher growth
rate in overseas cargo, requiring a threefold increase in port capacity (Figure 3). The domestic
volumes are reported to be from economic modelling which relates cargo volume directly to
increases in GDP whereas the overseas cargo volumes are based on individual commodity export
projections and inward general goods.
Source: DNPM, DSP
Figure 3 – DSP Projected Increase in Port Container Traffic
19
Source: DNPM, DSP
Figure 4 – DSP Projected Improvement in Port Handling Efficiency

The DSP also anticipates an improvement in cargo handling efficiency through the main ports due
to better equipment and systems so that port capacity increases at a 2% higher rate than the fixed
capital investment in the ports (Figure 4).
The port expansion includes the possible relocation of Port Moresby port, redevelopment of
Madang port and Lae wharf expansion, all potentially PPP projects. Manus would become a
northern hub port for the Islands Region. As previously mentioned, there is also the possibility of a
new or expanded port on the Gulf coast to facilitate trade from the Gulf to Southern Highlands Road
when this is constructed. There would be port rehabilitation and capacity upgrades as warranted by
trade in the secondary national (declared) ports and for 200 minor coastal wharves and jetties.
Restoration of 47 small navigational aids is envisaged in the first five years of the MTDP.
In respect of port investment the DSP states:
“Investment is needed throughout the nation to rehabilitate and upgrade major

ports. At Lae, the country's busiest port, work is well underway to expand the port's
capacity. A second port will also be constructed at Lae. Fairfax harbour in Port
Moresby needs to be relocated well away from Port Moresby to make way for the
city's development - beginning with a desktop feasibility study assessing the
suitability of four or five potential sites away from the city of Port Moresby.
Madang’'s port also needs to be relocated, because its capacity is being
constrained by the shallow depth of its waters. Again this must be preceded with a
comparison of potential sites to ensure the new site best caters for the region's
needs over the long term.”
The DSP envisages improved coastal cargo and passenger services to the maritime provinces and
a possible intention of Government to re-enter the coastal shipping trade:
“For the purposes of passenger and local freight transport in Maritime Provinces,
drive-on passenger vessels will be central for interconnection as these enable the
road and water transport networks to operate smoothly with one another. New
transport routes will therefore need to be opened up and more frequent services
provided on existing routes. Partnership with the private sector will be crucial in
raising the capacity of shipping services as the private sector will be relied upon for
much of the investment.
20
There may be a case for introducing Government funded shipping services to

facilitate the flow of people and cargo, particularly in remote regions of the 14
Maritime Provinces and islands of PNG. To minimise the impact on the budget, the
Government will pursue a public private partnership arrangement. It is expected
that between 15 and 20 ships will be required over the next 20 years to serve the
coastal regions.”
3.4.6 Air Transport
The Development Strategic Plan is for a three- to four-fold increase in domestic air traffic by 2030.
The MTDP targets are, by 2030, (i) to bring all 22 national (NAC) airports up to international safety
and security certification standards (ii) to upgrade 10 domestic airports to large jet standard and (iii)
and to rehabilitate 50 small rural airstrips to basic safety levels prioritised by economic viability and
need. Figure 5 shows the air traffic increase anticipated in the DSP.
Source: DNPM
Figure 5 – Development Strategic Plan Increase in Domestic Air Traffic

The DSP states:
“Alternatives to Jacksons airport are also required in the region with the capacity to
handle large jets and international flights. This is to alleviate the costs associated
when one airport is closed, for example because of a lightning storm, and to
otherwise reduce the pressure on Jackson's airport.
The growth of international tourism will require new international routes and
appropriate airport infrastructure at key tourist destinations including Alotau,
Rabaul, Madang and Manus. International airports may also be required near cities
such as Lae that are an important hub for international business. Regional airlines
amongst Pacific island countries should be encouraged as they promote closer
regional integration.
The liberalisation of PNG's air space and the promotion of a competitive airline
market are vital for reducing the cost of travel and for improving service on
domestic flights.”
21
3.5 Economic Sector Strategies 10. Economic Sector

The NTS will be responsive to the development strategies
Strategies and Plans
and plans in those economic sectors that are particularly
Agriculture – of the main
dependant on transport links. Agriculture relies on public
economic resource sectors of
investment in transport infrastructure and services,
agriculture, minerals, petroleum
particularly smallholder production. Larger estate and
and forestry, agriculture is the
corporate agricultural projects may support internal road
most affected by public sector
systems and connections to the main network, either by
investment in transport
road or sea, such as the port of Bialla for palm oil. The
infrastructure. Further
economics of agricultural production can also be quite
coordination and planning
sensitive to transport costs.
between DoT and DAL is
Mining and forestry also rely on transport infrastructure required to fully incorporate
but, because of their scale and the nature of operation, agricultural demand into national
these industries are more likely to include transport and provincial transport
infrastructure development as part of resource infrastructure planning. The
development, including mine access roads, logging National Agricultural
tracks, airfields and coastal landings and specialised Development Plan (NADP)
ports, such as the new port development for Ramu provides a basis.
Nickel. An outcome of a mining or forestry project may
be some legacy transport infrastructure that can be Mining, Petroleum and
incorporated into the national network, although design Forestry – are mainly builders
standards and configuration may require upgrading of transport infrastructure for
before this can happen - for example developing forestry resource extraction rather than
tracks into rural access roads. depending on public sector
investment; roads, ports and
Economic sector strategies and plans taken into account airports built originally for
in preparing the NTS include: resource extraction can become
 Agricultural Sector - National Agricultural
legacy infrastructure for the
Development Plan (NADP), 2007-2016 and
Government which can provide
Implementation Plan;
both benefit and an ongoing cost
imposition; also some public
 Minerals Sector - Mineral Resources Authority roads can be required to
(MRA) Corporate Plan 2008-2013 and accommodate traffic generated
industry information on mine and prospect by construction (such as oil and
locations and development intentions; gas development) or extraction
 Oil and Gas Sector – DSP goals and MTDP (such as logs) over limited
targets and industry information; periods of time; the NTS has
 Forestry Sector - PNG Forestry Authority. located these developments but
 Tourism Sector - TPA Tourism Sector Review some further work will be
and Master Plan, 2006-2017 required in quantifying impacts
and long term incorporation of
3.5.1 Agricultural Sector the infrastructure.
A primary goal of the NADP is to stimulate the Tourism – The Tourism Master
development of agricultural production as a contributor to Plan 2007-2017 identifies visitor
the PNG economy through increased export income and handling at international
imported produce substitution. A second main aim is to gateways, internal transport
improve the standard of nutrition, enhance food security safety, quality and cost and
and provide income and employment opportunities to the passenger facilities for cruise
rural population. Behind this stands the role of vessels as key constraints on
Government in encouraging and funding agricultural development.
research and the dissemination of knowledge through
22
extension services. The NADP aims for sustainable agricultural production which requires that the
crops most suited to soil and climatic conditions over the long term are chosen for planting, having
regard to their income earning potential and capability of rural people to afford the inputs, cultivate
the crops and market the produce.
The primary development objective in the NADP is to reduce the costs of production and improve
quality of agricultural produce for both domestic and international markets. Transport costs are a
contributor to agricultural input costs and to marketing of the outputs. Reducing transport costs can
stimulate new production and extend the area of land that is viable for development, subject to other
constraints on labour, land suitability and tenure and investment capital.
Rural agricultural development is also seen in the NADP as an opportunity to improve the
recognition of women’s contributions to rural industries and to increase opportunities for women’s
decision making in agriculture. It also has the potential to reduce urban migration through providing
rurally-based income earning opportunities.
Environmental objectives in the NADP include the reduction of “slash and burn” shifting cultivation
that can be detrimental to soil fertility and land stability.
Section 2.7 of the NADP specifically identifies poor roads as a major impediment to agricultural
development. Also the perceived high costs of sea transport are suggested as another constraint
on production. The NADP states (Section 2.7.1.1)
“Current government and donor priorities appear to target only maintenance of

major national roads or highways such as the Okuk or Highlands Highway.
Most roads serving the rural sector are considered provincial roads and are
the responsibility of provincial governments. Except for the few resource rich
provinces, most provincial governments have very limited budget for road
maintenance and almost nil for construction of new roads.
The priority for the national transportation policy should be maintenance and
upgrading of existing roads instead of construction of new roads. Where
necessary, the NADP should identify important agricultural roads that could be
included as priority for maintenance to facilitate access for farm produce and
funded under the NADP.”
The NADP has not so far identified important agricultural development roads. However, the
implementation plan indicates projections of the main cash crops. The more significant crops in
economic terms, their main locations and reliance on transport services are:
 palm oil – overtook coffee in 2000 as the most important export crop by value in PNG.
Palm oil kernel after crushing also has by-product value as a stock food. The industry
involves four companies with large estate plantings and about 20,000 smallholder
producers. Oil palm is suited to relatively wet coastal and river plains. The main growing
regions are West New Britain (Kimbe - NBPOL and Bialla - Hargy), Oro (Popondetta -
Higaturu), Milne Bay, New Ireland (Poliamba) and Madang (Ramu) centred on palm oil
refineries and direct export by sea. While road networks in the immediate areas of
production around the estates and factories are relatively well developed, the condition
of the public road network is a constraint on smallholder participation and expansion of
the industry. Stakeholder consultation workshops organised by the Oil Palm Industry
Corporation in 2008/09 indicated poor transport infrastructure to be the third most
important of nine issues for industry stakeholders.
 coffee - is by value PNG’s second most important agricultural export and a major source
of rural income in the Highlands Region, with the 2000 Census indicating that 47% of
rural households are engaged in coffee growing. The PNG Highlands is particularly
23
suitable for Arabica coffee cultivation where production is concentrated, and lowland
areas for lower value Robusta coffee. Coffee is extensively grown as both a smallholder
and estate crop with Western and Eastern Highlands Provinces the largest producers.
Coffee relies on the transport network to bring the cherry or parchment coffee to
factories where it is husked to green bean and then further processed into roasted and
packaged products. It is a well differentiated product with several regional brands and
organic status giving premium value. The poor condition of rural roads has often been
cited as a reason why coffee gardens have become neglected and a constraint on
production and rural incomes.
 cocoa – is a bulk rather than differentiated crop gown primarily in the coastal areas of
the Island provinces and is dominated by smallholder production. Cocoa bushes are
often mixed with coconut trees for shade and combined production, although copra
values have been relatively low in recent years. East New Britain and Bougainville are
the largest producers. Inland transport costs typically make up 10 to 15% of the on-
board price at the export port. Again, the condition of rural roads in the growing regions
is a constraint on production.
 coconut products – the products from coconut trees are copra (dried coconut flesh),
coconut oil (from copra pressing), copra cake (stock food) and coir fibre (matting and
other uses). Coconut shell is used for charcoal and in the copra drying process. Other
uses of the tree include sawmilling the trunks of senile palms for decorative and
structural timber, making coconut trees a useful staple for coastal communities. Once
the most valuable agricultural export, the value of coconut oil for use in foodstuffs and
cosmetics has fallen behind other oils such as palm oil. Also there has been little
replanting with modern hybrid varieties in recent years, and the original coconut
plantations are now well past their prime with reduced production. Nevertheless, coconut
is still an important source of income to coastal populations, particularly when
underplanted with cocoa. Coconut exports have revived in the last five years, following
industry changes after a period of decline. By value coconut products are the fourth
highest source of agricultural export income. There are only two copra mills, in Madang
and Rabaul. Copra volumes depend upon collections by sea from widely dispersed
coastal communities either by villagers bringing copra to the mill by banana boat or by
organised collections by traders. Road connections from the mill locations along the
coast are also an important constraint on participation.
 horticulture - fresh fruit and vegetables, both traditional staples and introduced
varieties, are grown mainly for home consumption and for the domestic market, where
there is considerable scope in the larger centres for import substitution. Export
production faces demanding biosecurity requirements so is less significant. As many of
the introduced species are grown at higher elevations in PNG, there is a transport
requirement to bring them to market, including protection against bruising and
deterioration in transit, which in turn requires reliable and relatively smooth road
connections. Lack of reliable road connections to the main centres and poor rural road
condition have been recognised as one of the constraints on increased production.
3.5.2 Minerals Sector
Papua New Guinea is rich in mineral resources and mine development has had a significant impact
on the development of the transport network in those areas. Minerals make the largest contribution
to export earnings (see Figure 26).
The DSP sector goal is to “double mineral exports, while minimising the adverse impact on the
environment”. This is translated in the MTDP as targets for minerals development, including more
than doubling in the number of producing mines from 9 to 20 in 2030 and doubling in the real value
of mineral production from K9 billion to at least K18 billion.
24
The Mineral Resources Authority (MRA)’s Corporate Plan predicts a net increase in production
volumes of gold and copper over the 2010 to 2013 period of 50% and 150% respectively and
production continuing at these higher levels to beyond 2020. Details of current and projected
exploration and development activity together with transport implications are described in Sections
5.4.5 and 5.4.6 and this indicates many more prospects for mining that could be developed subject
to market prices remaining high.
Source: Mineral Resources Authority, Corporate Plan 2008-2013
Figure 6 – Projected Copper and Gold Production
While some existing mines will close or reduce production, the buoyant market is providing a
stimulus for extension plans at Ok Tedi, Tolukuma and Kainantu. Mines scheduled to be in
commercial production by 2015 include Ramu nickel/cobalt mine, Simberi and Sinivit gold mines,
Hidden Valley gold mine, Wafi-Golpu gold/copper mine, Woodlark gold mine, Solwara gold/copper
mine and the Yandera copper/molybdenum mine.
3.5.3 Petroleum Sector
After minerals, petroleum (oil and gas) is the second largest contributor to export earnings for PNG
(see Figure 26). Details of oil and gas ventures and their implications for the transport system are
discussed in Section 5.4.6.
The DSP oil and gas sector goal is to “build a world leading petroleum industry that maximises
benefits to PNG and landowners, minimises impacts on the environment and social welfare, and
provides PNG with energy security.”
The MTDP targets for the sector are:

 To maintain crude petroleum production and exports at or above 2009 levels of 13.7
million barrels/year through to 2030
 To implement three large LNG projects, with gas production and export volumes rising
from 3.6 to over 6.3 million tonnes/year over the period
3.5.4 Forestry Sector
The forestry sector is the third most important in export earnings after minerals and petroleum (see
Figure 26). Almost all production is logs for export from natural forests, with very little onshore
processing of timber other than for local market supply and a very small area of plantation forestry.
The DSP sector goal is to “build a forestry sector that is sustainable and highly profitable.”
25
The MTDP tasks the forestry sector with:

 increasing processed timber exports to 80% of all forestry exports by 2030 from the
current rate of 20%;
 have plantations produce all logs and manage forests by 2030; and
 increase plantation forests from 62,000 hectares to well over 150,000 hectares by 2030.
Details of forestry production and outlook are discussed in Section 5.4.4.
3.5.5 Tourism Sector

The DSP sector goal for tourism is to “increase the overall economic value of tourism to the nation
by nearly doubling the number of tourists on holiday in PNG every five years and maximising the
sustainable tourism growth for the social and environmental benefit of Papua New Guineans.”
This translates into MTDP targets of a rise in foreign visitor numbers from 125,000 to 1.5
million/year by 2030.
The Tourism Promotion Authority’s (TPA) Tourism Sector Review and Masterplan 2007-2017,
identifies transport facilities as one of the necessary conditions for an increase in tourism numbers
and revenue. Specific improvements are identified as:
 improved facilities for international visitor handling at the international airport gateway;
 demand driven improvements in airport facilities at key tourism provinces, due to the
long distances, difficult terrain and limited surface transport linkages;
 improvements in the regulation, safety and quality of taxis and tourist sightseeing buses;
 development of facilities to support cruise ships, including safe and secure navigation on
the PNG coast and harbours and terminal facilities suitable for tourist passengers at key
destinations;
 high costs for internal transport are seen as a disincentive for tourism
The Tourism Master Plan contains detailed criticisms of the cost and quality of taxis, PMVs and
domestic air services, with suggestions for price control and subsidy. Investigation by the ICCC into
the air transport, coastal shipping, PMV and taxi industries were partly at the request of the TPA,
but did not uphold claims of high cost and lack of competition. However, quality and safety issues in
the effective regulation of licensed taxi and PMV services are recognised as part of the constraining
factors limiting tourism development.
The TPA acknowledges cost recovery issues in providing facilities specifically to serve tourists,
such as cruise ship reception facilities, as additional costs will deter growth in demand, whereas
subsidies would ultimately be borne by other port users or the wider community.
3.6 Social Sector Strategies
The NTS will also support the Government’s strategies for social development in particular by
facilitating basic social services delivery to remote rural locations and providing a means for rural
populations to access social service concentrated in district and provincial centres. Health and
education are the two most important of these, with transport supporting the operation of
elementary and primary schools, aid posts and health centres, and providing transport access for
rural people to centrally located secondary schools, tertiary colleges and vocational training centres
and hospitals.
Social sector strategies taken into account include:
 Department of Health - National Health Plan 2011-2020 and Corporate Plan 2009-2013
26
 Department of Education – National Education Plan 2005-2014, Universal Basic

Education Plan 2009-2019 and Provincial Education Plans
3.6.1 Health
The National Health Plan contains targets for disease

11. Social Sector Strategies
prevention and improvement in vital statistics of the PNG
and Plans
population, including several indicators for maternal and
neonatal health, use of prophylactics, reduction in
The National health Plan 2011-
incidence of diseases such as malaria, tuberculosis
2020 and the National Education
HIV/AIDS and pneumonia.
Plan 2005-2014 and Universal
Achievement of the targets, several of which form part of Basic Education Plan 2009-2019
the MDGs, depends upon outreach services and the have informed the NTS
National Health Plan and MTDP includes the
rehabilitation, restoration and expansion of aid posts, Health and education at local
community health posts (replacement to aid posts), district rural level rely on the lower level
health centres and hospitals. The basic level services are transport infrastructure for
required to more than double in coverage per 1,000 building supplies, education and
population, which implies a higher increase once health materials, delivery of
population growth is also included. outreach programmes and to
recruit and retain trained staff.
In the risks and assumptions underpinning the health plan Connection of health and
is that “access roads are built and maintained”. The NTS education facilities has been
therefore takes account of how well the transport network included as a factor in
performs in providing linkages for the population at a local determining the functional
level to access their nearest primary health facility. The classification and desired
location of existing health facilities and intended location standard of rural transport links.
of new facilities are a factor in determining priorities for
rural access roads, small jetties and airstrips.
3.6.2 Education
The DSP deliverables of universal education access require a sufficient number of primary
secondary and vocational schools for full coverage of the population, and maintenance of the
physical infrastructure including school buildings and teacher housing.
The identified risks, as for the health sector, include the building and maintenance of access roads
so that the facilities can be accessed, supplied and be sufficiently attractive to retain staff and allow
contacts with the higher level institutions and the Education Department.
The NTS therefore takes account of how well the transport network performs in providing linkages
for the population at a local level to access their nearest primary and secondary schools. The
location of existing schools and intended location of new facilities are a factor in determining
priorities for rural access roads, small jetties and airstrips.
3.7 Safeguards and Cross-Cutting Strategies
Cross-cutting issues that have an influence on the construction of transport infrastructure and the
delivery of transport services, the responsible agencies and existing plans include:
 Department of Environment and Conservation (DEC) - environmental protection and

mitigation;
27
 Office of Climate Change and Development (OCCD) – mitigation of greenhouse gas

emissions attributable to the transport sector and adaptation of transport infrastructure to
the effects of climate change;
 The Office for Development of Women (ODW) – was established in 2007 as a stand-
alone offshoot from the Ministry of Community Development (MCD). Also the PNG
Economic and Public Sector Programme
(EPSP), a joint initiative between Australia and 12. Cross-Cutting Strategies
selected PNG government agencies to and Plans
improve service delivery has a remit to
promote gender equality; The NTS includes provisions for
cross-cutting issues including:
 Medium Term Development Plan (MTDP) – good governance and corruption
has set out goals, strategies and deliverables
prevention; gender equity and
for good governance and reduction in
women’s advancement;
corruption through all Government agencies prevention of disease
under the oversight of the Department of
transmission such as HIV/AIDS;
Finance and the Department of Personnel
consideration of those with
management; disabilities; environmental
 The National AIDS Council has published the protection and climate change
National HIV and AIDS Strategy 2011-2015. adaptation
 Medium Term Development Plan (MTDP) –
has also goals, strategies and deliverables for Environmental protection -
improving infrastructure for those with protocols and standards for
disabilities overseen by the Department of mitigating environmental impact
Family and Community Development (DFCD). are required in larger donor
funded projects and codes of
3.7.1 Environment environmental practice will be
promoted for all transport
The Department of Environment and Conservation (DEC) projects
is the responsible Government agency overseeing
environmental legislation and compliance. DEC has Climate change mitigation and
published its Strategic Directions 2007 document which adaptation – The NTS notes the
sets out how it intends to organise its future activities. climate compatible development
targets for PNG established by
The environmental impacts of transport include both
OCCD and the sector will be
construction and operational impacts, primarily run-off
encouraged to progress climate
and ecological impacts in rural areas, and noise and air
change adaptation and include
quality in populated areas. Protocols and standard
the targets in monitoring the
clauses for mitigating environmental impact during
NTS.
construction of transport infrastructure are observed by
the DOW and large scale projects will generally require environmental impact reporting, particularly
.
if donor supported.
3.7.2 Climate Change
The OCCD has published “Climate Compatible Development for PNG”, in which it identifies a
doubling of greenhouse gas (GHG) emissions from the transport sector over the 20 year plan period
under a “business-as-usual” (BAU) scenario based on an increase in the vehicle fleet from 150,000
to 600,000 vehicles. However, this is acknowledged to be a relatively small contributor to the
nation’s total GHG emissions and of greatest importance is the future of PNG’s forest cover and its
role as a greenhouse sink. Increasing land transport connectivity through remote forested land does
have some potential to accelerate deforestation unless well controlled.
28
The OCCD envisages that improvements in engine technology will improve upon the BAU
projection but that a shift to biofuels from cassava, coconut, sugar cane or other feedstocks has the
potential to significantly reduce the GHG emissions from the sector.
“Climate Compatible Development for PNG” gives targets for the million tonnes of carbon dioxide
equivalents (Mt CO2e) that could be saved through improved efficiency and the use of biofuels:
“In the transport sector, abatement will depend on

the gradual adoption of more efficient gasoline 12. Cross-Cutting Strategies
and diesel vehicles, but could be enhanced and Plans
substantially by a shift to biofuels:
Gender Equity – the MTDP
 Nearly 0.6 Mt CO2e can be saved at a includes deliverables for
negative abatement cost mainly due to development of entrepreneurial
continuous efficiency improvements of skills programmes for women
internal combustion engines. Another 0.3 Mt and public sector workplace
CO2e could be captured at a positive policies for gender equity.
abatement cost by future efficiency
improvements as well as hybrid and electric Good Governance – the MTDP
vehicles, but has not been included in the cost has set out goals, strategies and
curve. deliverables for good
governance and reduction in
 Biofuels can save approximately 0.2 Mt CO 2e,
corruption through all
based on sugarcane plus lingo-cellulose, but
Government agencies under the
abatement costs are difficult to estimate
oversight of the DOF and DPM
because no resource assessment has been
done for biofuel crops in Papua New Guinea. HIV/AIDS – The National HIV
There are several potential fuels, including and AIDS Strategy 2011-2015
straight vegetable oil (SVO) made from guide the NTS, in particular in
coconut in coastal and island regions, delivering prevention messages
jatropha (both as straight oil and methyl ester) to construction workers and
and bioethanol made from sugar cane, transport drivers/operators
cassava and sweet potato in highland
regions, where low temperatures make the Disabled and Disadvantaged –
use of straight vegetable oils infeasible. the NTS will advance the goals
Feasibility studies for some of these biofuels, of the MTDP for improving
including a full consideration of externalities infrastructure and utilities for
(such as the potential effects on food crop disabled and disadvantaged
production), are a high priority; if they are travellers
included, the full abatement potential from
biofuels may exceed 1 Mt CO2e.”
As well as GG emissions from transport, the effects of climate change will require adaptation by the
.
transport sector. Rising sea levels and coastal flooding, increased rainfall intensity, frequency and
inland flooding are threats to the physical infrastructure and require consideration when designing
transport infrastructure for the future.
3.7.3 Gender Equity
The DSP goal is that “all citizens irrespective of gender will have equal opportunity to participate in
and benefit from development of the country.” The MTDP acknowledges the importance of
addressing gender equity and improving the status of women as part of the country’s development
efforts. Other significant government initiatives include the 2006 establishment of the Office for the
Development of Women (ODW) and launch of a national gender equity policy (planned for 2011).
29
Specific deliverables of the MTDP are the development of entrepreneurial skills programmes for
women and public sector workplace policies for gender equality.
The NTS will assist in positively promoting the nation’s gender equity objectives through
encouragement of women’s participation in the construction and maintenance of transport
infrastructure (contracting), in transport services provision (PMVs, taxis, freight services), and
women’s employment in the line transport agencies and SOEs. This will include the development of
programmes and targets for skilled labour, vocational training, technical, professional and
management grade positions throughout the sector.
3.7.4 Good Governance
The MTDP sets out targets for four aspects of good governance: rule of law; regulatory quality;
public service effectiveness; and control of corruption. In each of these PNG ranks quite low in
international comparisons.
3.7.5 HIV AIDS
The DSP goal is a “healthy population free from sexually transmissible infections and HIV/AIDS
threats”. This is translated into MTDP targets to reduce the prevalence rate from almost 1% to
0.1% of the population by 2030.
The National HIV and AIDS Strategy 2011-2015 sets out ten interventions in three priority areas of
prevention, counselling and systems support. The role of the NTS in advancing this cross-cutting
initiative is by ensuring that HIV/AIDS and other communicable disease transmission prevention
messages are delivered to the transport sector workforce, particularly those groups which are more
likely to be vectors for disease transmission, such as construction workers and drivers/operators of
transport equipment.
3.7.6 Disabled and Disadvantaged Travellers
The MTDP recognises the need to give special consideration to those with impairments whether by
birth, or caused by disease, accident or other disadvantage. A deliverable of the MTDP, overseen
by the DFCD is to “improve infrastructure and utilities to cater for the vulnerable”.
In many countries, as transport systems become more highly developed, it has become a
requirement that transport agencies cater for persons who use mobility equipment such as
wheelchairs and scooters in the form of ramp access, passenger lifts, and low floored or “kneeling”
buses with space inside to accommodate mobility equipment. These facilities also have a dual utility
for mothers with young children in strollers.
Similarly, provision is made for those who have limited vision or hearing, so that they are able to
safely navigate their urban environment; for example by installing tactile paving and audible signals
at traffic controlled intersections, and improved visual signals for the deaf. Other design treatments
include more attention to ensuring that footpaths and crossings are smooth and sufficiently wide for
wheelchairs.
In Papua New Guinea the layout and condition of urban streets and footpaths is often poor and will
need to be upgraded to a higher general standard before some of these more advanced facilities
can be contemplated. Similarly the construction standards for PMVs and taxis are not highly
developed and are poorly enforced.
Nevertheless, it should be a longer term objective of the NTS to improve the facilities available to all
those less advantaged travellers, including those with young children, the elderly, the infirm and the
disabled. This will be part of the remit of the new Road Traffic Authority (RTA) and will be
considered when reviewing design standards as discussed later in this NTS (Section 11.7).
30
3.8 Provincial Development and Transport Plans
The detail and currency of provincial development plans

varies widely. Some provinces have up-to-date 13. Provincial Transport Plans
infrastructure plans at provincial level but many are either
still in preparation or have not been recently updated. The detail and currency of
These are embodied in the Provincial Development Plans provincial transport plans and
(PDPs), in provinces’ corporate plans and in a few cases the capacity of provincial
in Provincial Transport Plans (PTPs). administration to prepare and
implement plans varies greatly.
The NTS has used information available at the time of
preparation, but at the time of five yearly reviews or more The DOT, through PCD and the
frequently, there will be a need to also review the state of new RIDD will assist provincial
provincial, district and local level government plans so administrations in the
that there can be alignment between these and the preparation of their provincial
national level NTS and current MTTP. The new transport plans with the aim of
Intergovernmental Service Delivery Mechanism (ISDM) developing consistent
being developed by the Vision 2050 Development Centre approaches across provinces
will assist in this harmonisation between the three tiers of and good alignment between
planning and service delivery. The ISDM envisages that national and provincial level
the Province is the point at which the large scale top- plans.
down planning from national level is integrated with local
community needs generated by bottom-up .
representations from local communities.
The NTS sees an important role for the national agencies, in particular the Department of Transport
Planning and Coordination Division and the new Rural Infrastructure Development Division, to work
closely with and assist provincial governments with the aim of developing consistent approaches
and quality in the preparation of provincial transport plans (PTPs) and ensuring good alignment
between the MTTP and PTPs.
31
4 Profile of the Transport Sector
4.1 Physical Geography
Papua New Guinea occupies the eastern half of the island of New Guinea, bounded on the west by
the Indonesian province of West Papua, with several large islands and smaller island groups to the
north and east. The country is rugged, with high mountain ranges, fertile upland valleys, coastal
plains, and extensive swamps. It has a coastline of over 17,000 km and 17 million ha of reef-
covered coastal waters.
For administrative purposes, the country is divided into the four regions of Papua, Momase, the
Highlands and Islands. There are now 211 provinces and National Capital District, of which four (4)
are islands or parts of islands, nine (9) are coastal around the main island of New Guinea and five
(5) in the Highlands Region are landlocked. Bougainville has separate administrative arrangements
under its own autonomous government.
4.2 Population Distribution
The latest population census was in 2000 when the national population was 5.2 million. Population
growth in Papua New Guinea is relatively high at an estimated 2.4% p.a. and the national
population in 2010 is estimated to be 6.9 million and forecast to grow to 8.5 million by 2020 (ESCAP
Statistics). The MTDP has population targets of 7.3 million in 2015 and 9.8 million in 2030, which
includes a policy of reducing the growth to 2.0% over that period. There is also an intention to cap
the urban population at 20% of the total.
Population distribution, growth rates and migration are principal factors in the demand for transport.
Papua New Guinea has a low population density compared with most other countries, provincial
population densities varying between a low of 2 persons/sq. km in Western Province to 66
persons/sq. km in Eastern Highlands, with a national average of 15 persons/sq. km.
The largest concentration of urban population is in National Capital District which accounted for
35% of the urban population and 5% of the estimated total population in 2000. The urban population
officially is 12.5% of the total but is thought to be under-reported. Nevertheless, Papua New
Guinea’s population remains predominantly rurally based and widely distributed with many small
villages located in inaccessible mountain valleys, inland river tributaries and along the coastal
margins. Figure 7 illustrates the provincial populations and densities (for NCDC the population
density is 1,300 persons/sq. km) and Figure 8 gives the same information at a regional level.
The Highlands Region stands out as both a large population concentration and a relatively high
population density. Southern Highlands, one of the least accessible provinces, has the largest
population of any province, although the population densities in Western Highlands, Simbu and
Eastern Highlands are the highest in the country, between 50 and 70 persons/sq. km, so generate
more concentrated travel demand.
The Papua region, in particular the provinces of Western, Gulf and the northern parts of Central
Province remote from Port Moresby, have the lowest population densities as well as being crossed
by several large rivers with extensive coastal deltas. This presents a challenge for the economic
provision of transport infrastructure and services.
1 In 2012, Hela Province was formed from part of Southern Highlands Province and Jiwaka Province from part of Western
Highlands Province on 17 May 2012. However, data used in this Strategy relates to the old boundaries but will be changed
in future reviews when equivalent information becomes available. The provincial capital of Hela is Tari and of Jiwaka is Minj.
32
The Island provinces have the second highest population densities to the Highlands, with much of
the population around the coastal margins, making coastal shipping of particular importance as a
mode of transport both for inter-island services and for services around the island coasts.
1,000,000 100
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800,000 80
700,000 70
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Figure 7 – Provincial Populations and Population Density, 2010 Estimates
3,000,000 30.0
Population Density persons/sq km

2,500,000 25.0
2,000,000 20.0
Population
1,500,000 15.0
1,000,000 10.0
500,000 5.0
0 -
Highlands Momase Papua Islands
Population Population Density
Figure 8 – Regional Populations and Population Density, Estimated 2010
4.3 Economic Activity and Transport Demand

Efficient transport networks and services are a necessary underpinning to economic activity, for
overseas trade, for supply of the main urban domestic markets from centres of rural production, and
for distribution of consumer goods to large and small communities. Transport connections allow
traditional subsistence-based village economies new opportunities to increase the specialisation of
goods and services they provide through wider access to markets. This can take the form of the
sale of surplus produce, develop into smallholder cash cropping and then larger scale ventures.
While transport connectivity is a necessary input to development, other complementary inputs are
also needed in education and specialist training, and commercial services such as post and
banking.
4.4 Social Services Delivery and Transport
The delivery of social services, in particular basic education and health programmes, is facilitated
through good transport accessibility. Good access makes it easier and cheaper to recruit, retain
33
and support teachers and health workers in remote posts. It also lowers the cost of importing
building materials and supplies for the construction and operation of schools, aid posts and rural
hospitals. Good transport accessibility makes it easier for pupils to attend school and for patients to
access health services, and increases the effective reach of these services. Outreach programmes
such as vaccination, health education and disease prevention, pre- and neo-natal support are
facilitated by transport access. Other community interaction and support for youth, women, and
social and religious participation are strengthened. The net result is a population that is better
educated, healthier and more productive. Transport connectivity promotes social cohesion at local
and national level.
4.5 Transport Sector Institutions
4.5.1 Overall Structure
Figure 9 illustrates the general structure of the institutions in the transport sector at national level.
Figure 9 – Institutional Structure of the Transport Sector
The Department of Transport (DOT) has the primary responsibility for the transport sector, headed
by the Secretary for Transport under the Minister. The Secretary has a number of other roles as a
member of various statutory authorities, boards and committees. Within the DOT there are
divisions for policy development, planning and monitoring of sector expenditure, liaison with and
assistance to the provinces, and modal divisions for land transport, maritime, air traffic regulation
and air services licensing, aviation security and maritime security. The National Weather Service
(NWS) also currently falls under the Department of Transport.
The Department of Works (DOW) has responsibility within the Government for managing the
national road assets, in particular contract management for road construction and maintenance. It
also has responsibility for engineering standards, for some engineering technical services and
maintains a capacity for direct engineering works for emergency reinstatements and in remote
areas.
There are four statutory authorities in the sector, the National Roads Authority, which has
management responsibility for some national roads, the National Road Safety Council responsible
34
for road safety promotion, The National Maritime Safety Authority responsible for maritime safety
and marine pollution control, and the Civil Aviation Safety Authority, responsible for aviation safety.
Whereas NMSA and CASA are regulatory agencies, the NRA is in fact closer to an SOE, being
responsible for provision of road network services for which it will, in future, receive funding through
a system of road user levies. CASA reports to the Minister for Civil Aviation, the NRSC and the
NMSA to the Minister for Transport, and the NRA to the Minister for Works and in respect of certain
financial matters, to the Minister for Treasury.
Outside of the transport agencies, the Independent Consumer and Competition Commission (ICCC)
has responsibility for ensuring that there is fair competition in the markets for goods and services,
and does so through powers to declare price regulated industries and services, where there is
evidence of monopolistic practice. At present, the Government owned ports under PNG Ports
Corporation Ltd are price controlled, and there is a degree of price control in coastal shipping and in
PMV and taxi fares.
There are five SOEs in the transport sector, of which three (PNG Ports, Air Niugini and MVIL) fall
under the Independent Public Business Corporation, Government’s holding company for SOEs.
IPBC reports through the Minister for State Owned Enterprises. NAC and PNG Air Services Ltd
report through the Minister for Civil Aviation.
The SOEs are expected to operate on commercial lines, deriving their revenue from charges made
for the services that they provide. In practice there is a degree of reliance on Government financial
support for capital works and operations for most of the SOEs, as full cost recovery is not currently
achieved. In part this is due to the expectation by Government that the SOEs responsible for port,
airport and air services will support non-commercial parts of their operations by internal cross-
subsidy, as an informal community services obligation.
The private sector is responsible for supplying almost all road transport (PMV, taxi, road freight),
shipping and air services (apart from Air Niugini). Government has recently become involved in the
purchase of workboats and landing craft under the Border Development Authority and for use by the
PNG Defence Force. Depending on their size, private companies may be owner/operator
enterprises, small to medium size enterprises (SMEs) with a single owner or closely held
shareholding, up to larger private and public companies with a board and executive management
(such as Steamships and Airlines PNG).
4.5.2 Liaison Arrangements
Apart from direct contacts between agencies that are required as part of day-to-day operations, the
period of the last NTDP saw the establishment of the Transport Sector Coordination Monitoring and
Implementation Committee (TSCMIC), which brings together all of the heads of departments and
chief executives of the transport sector agencies at national level, and certain of the government
central agencies on a bimonthly basis to review activities in the sector. The TSCMIC has been
facilitated by the Transport Sector Support Programme (TSSP) an AusAID-funded initiative for
providing technical advisory support as well as funding for development programmes in the
transport sector.
The composition of the TSCMIC is:

 Secretary for Transport (Chair)
 Secretary for Works
 Secretary for National Planning
 Head, Prime Minister’s Department
 Chief Executive, National Roads Authority
 Chief Executive, National Road Safety Council
35
 Chief Executive PNG Ports Corporation Ltd

 Chief Executive, National Maritime Safety Authority
 Chief Executive National Airports Corporation
 Chief Executive, Civil Aviation Safety Authority
 Chief Executive, PNG Air Services Ltd
TSCMIC meetings are also attended by senior officials of AusAID and TSSP.
The other main channel of coordination is the Consultative Implementation and Monitoring Council
(CIMC), a private/public sector body serviced by the Institute for National Affairs (INA). The role of
the CIMC is to bring together civil society, the private sector and government to develop policy to
influence and monitor government decision-making for the long term development of Papua New
Guinea. The CIMC has a Transport and Infrastructure Sectoral Committee which deliberates on
current issues in the transport sector and proposes policies and actions. CIMC also supports annual
National and Regional Development Forums, which identify opportunities and constraints to
improving access to adequate transport and communication infrastructure and services.
4.5.3 Institutions in Land Transport
Figure 10 illustrates the present institutional arrangements for land transport at national level. The
Secretary for Transport is also the Superintendent of Motor Traffic under the Motor Traffic Act. The
DOT is responsible for policy development and overall regulation of transport and traffic on the
national road network, including the licensing and associated regulatory enforcement of vehicle
construction and use, driver and operator licensing, and transport services licensing (freight and
passenger transport services carried out for hire or reward).
Minister for Police Minister for Transport and Works Minister for SOEs
Secretary for Transport / Superintendant of Motor National Road Safety National Roads
Secretary for Works IPBC
Traffic Council Authority Board
Police Traffic Department of National Land Motor Vehicle

NRSC Executive NRA Executive Department of Works
Directorate Transport Transport Board Insurance Ltd (MVIL)
 Ministerial Advice  Network Manager for

 Road Fund
 Policy and Planning  PMV, taxi and hire car  Road Safety Declared Public Roads  3rd Party Insurance
Management
 Traffic Enforcement  Sector Monitoring licensing Coordination between except those assigned Administration
 Network Manager for
 Accident Reporting  Government Budget  Inter-provincial heavy Government Agencies, to NRA  Functions delegated by
Assigned Public Roads
 Driver Training & Coordination vehicle permits Community Groups and - Contract Management Superintendant of Motor
- Works Contract
Testing  Vehicle Regulatory  Freight rate and the Public - Asset Management Traffic in NCD only
Management
 Stopping Traffic for Enforcement passenger fare setting  Road Safety Research - Technical Services - Numberplate issue
- Heavy Vehicle
Transport Inspectors  Road Transport Industry in consultation with  National Road Safety - Plant & transport - Vehicle registration
Weighing
regulation ICCC Plans and Programmes - Own works forces - Driver license issue
- Safety Auditing
 Service the NLTB  TA to provinces
Figure 10 – Existing Institutional Structure in Land Transport at National Level
The National Land Transport Board Act (1968) gives the NLTB the power to direct DOT to issue
transport services licenses. The NLTB comprises the secretaries for transport, trade and industry,
the Attorney General and six non-government appointees, and considers licence applications at
national level and within NCD. The power to issue transport services licences at provincial level
has been delegated to Provincial Land Transport Boards where these have been established and
are operational. Provincial licenses include within-province route and service licences for freight
transport, as well as provincially-based PMVs and taxis.
The DOT Land Transport Division (LTD) includes a Road Transport Industry Branch and a Road
Safety Branch. The former branch services the National Land Transport Board, which licenses
freight and public transport, regulates and inspects motor car dealers and motor vehicle testing
36
stations, and is responsible for regional offices in Lae, Mt Hagen and Rabaul, while the latter branch
has responsibility for enforcement of inspection of motor vehicles for compliance with vehicle
construction and use safety regulations, and driver, public motor vehicle and freight licenses, and
vehicle registration. LTD provides technical advice and administrative services to the NLTB in
addition to its other functions.
Some of LTD’s functions have been assumed by the National Road Safety Council (NRSC), in
particular the analysis of Police traffic accident reports and road safety matters in general.
Enforcement weighing of vehicles by authorised weighing officers, either the Traffic Police or LTD
Traffic Inspectors, has not been carried out for some years due to budget constraints. The Western
Highlands Provincial Government has recently purchased a set of portable weighing scales and
intends to commence weight enforcement in the area. The NRA has installed two weighbridges on
the Highlands Highway on the outskirts of Lae but does not have the power to do weight
enforcement. Arrangements are being made for Morobe Provincial Government traffic inspectors to
assist NRA with this activity.
While the Provincial LTB in Lae is responsible for deciding on urban PMV routes, the responsibility
for this in NCD lies with LTD and NLTB although close collaboration is clearly required with NCDC.
It is more than 20 years since there has been any redesign of the PMV routes and this is now
overdue.
The Policy Research Division (PRD) within DOT is responsible for the analysis and development of
transport sector policy across all modes of transport and also acts as a coordinating agency for
annual national budget submissions by the transport sector agencies. PRD is responsible for the
preparation of the National Transport Strategy.
The Planning and Coordination Division (PCD) of DOT monitors the expenditure and delivery of
programmes financed under the national budget, the activities of the transport agencies in general,
and provides assistance to provincial governments in developing their provincial transport plans.
Provincial liaison is conducted through the Department of Provincial and Local Government Affairs
(DPLGA), specifically through the Provincial and Local Level Government Service Monitoring Authority
(PLLSMA).
The National Road Safety Council was established under its own act in 1997 although only became
operational in the last six years. It is self-funding from a levy on 3rd Party Motor Vehicle Insurance,
collected by Motor Vehicle Insurance Ltd (MVIL). The NRSC Board legally consists of the
secretaries of Transport, Works, Finance and Planning, Health, Education, Provincial and Local
Government Affairs, Lands and Physical Planning, and the Commissioner for Police, the Executive
Director of the NRSC and six appointees to represent NCD, the Motor Vehicle Insurance Trust (now
MVIL), Chamber of Commerce, the National Broadcasting Corporation, the University of Papua
New Guinea, and the University of Technology, or their nominees.
4.5.4 Institutions in Maritime Transport

Figure 11 shows the present institutional arrangements for maritime transport. The Secretary for
Transport is currently the departmental head responsible for maritime under the Merchant Shipping
Act and the Harbours Act, the two main pieces of governing legislation for the sector.
Maritime safety matters including the PNG register of ships, safety certification of all PNG registered
vessels over 10m length, port state control of the safety of visiting foreign flagged ships, adherence
to the international safety conventions of the IMO, certification of ship’s crew, control of marine
pollution, coordination of maritime search and rescue, maritime navigation aids and small craft
safety are now the responsibility of the National Maritime Safety Authority under legislation enacted
in 2003.
37
Minister for Transport Minister for Finance Minister for SOEs
NMSA Board Secretary for Transport ICCC IPBC
Coasting Trade DOT Maritime DOT Maritime

NMSA Executive PNG Ports Corporation Ltd
Committee (CTC) Division Security Unit (ISPS)
 Under the National  Under the Merchant  Ministerial policy advice  International Shipping  Delegated powers from  Ports as a regulated  Investment in, and
Maritime Safety Shipping Act on shipping matters & Port Security, the Secretary of industry manage infrastructure
Authority Act - advise the minister on  Administration of compliance with IMO Transport under the - regulated port tariffs assets at declared
- maritime safety coastal shipping coastal licensing and requirements for Harbours Act - implied CSO obligation national ports
regulatory enforcement matters permitting - Port security - declared port - minimum service  Management of the
and monitoring - report to minister on  Responsible for those - Cargo security operational control standards operation of declared
- act for the state in proposed regulations waterfront matters and - Ship security and infrastructure  Essential ports services national ports
international maritime affecting the coasting Government coastal  Procedures, physical provision/maintenance as regulated services  Provide a return on
agreements trade infrastructure not under inspections, audits, - determing suitability & - stevedoring price Government’s
- marine pollution - recommend maximum PNG Ports reporting and location of port facilities monitoring investment as required
regulatory enforcement rates for coastal  Licensing of ships and monitoring outside of declared by IPBC
- coordinate maritime shipping services liaison with shipping ports
search & rescue industry - and others
- consulting services
training & management
Figure 11 – Institutional Structure in Maritime Transport
The DOT Maritime Transport Division (MTD) is responsible for administering coastal trading
licences and permits required for vessels to trade on the PNG coast and to the recognised limits of
navigation on inland waterways. MTD also advises the minister on shipping matters and has
responsibility for coastal development of port facilities outside of the declared ports, except where
these functions have been delegated elsewhere by the Secretary of Transport.
Maritime security matters including PNG’s compliance with the International Ship and Port Security
(ISPS) regime of the IMO, is administered by a separate Maritime Security Unit within the DOT,
which acts as a coordinating agency for maritime security among the other Government agencies.
The Coasting Trade Committee (CTC) is a committee of advice established under the Merchant
Shipping Act and charged with advising the minister on coasting trade matters, reporting on
proposed legislation and recommending maximum freight rates on coastal services. It has also
customarily given advice on the issue of coasting trade licences and permits. The CTC is chaired
by an officer of the DOT and otherwise comprises two representatives of shippers of goods, one
representative of the coastal shipping trade and three holders of coasting trade licences.
PNG Ports Corporation Ltd (PNGPCL) is a state owned enterprise (SOE) falling under the umbrella
of the Independent Public Business Corporation (IPBC). IPBC acts as the keeper of the
Government’s interest and a holding corporation for several SOEs and on occasion assists in
raising finance. PNGPCL presently derives its powers by delegation from the Secretary of
Transport under the Harbours Act. Its primary responsibility is to manage and develop the
infrastructure at the Government’s declared ports. It also acts as port manager and provides certain
port services, such as harbour pilots and towing. Stevedoring and ancillary activities are provided
under licence to PNGPCL by the private sector. Under its present delegation, PNGPCL also has
regulatory powers over development in declared ports and outside of declared ports.
The Government ports are a regulated industry under the ICCC Act, and PNGPCL has a regulatory
contract with ICCC which specifies maximum berthage and wharfage tariffs and rates of tariff
increase tied to considerations concerning capital investment in port facilities and the implied
obligation that PNG Ports subsidise loss-making ports from its more profitable operations.
38
4.5.5 Institutions in Air Transport

Figure 12 shows the present structure of the government agencies in civil aviation. There has been
recent reform of the agencies, separating the safety regulation from delivery of air traffic and airport
services.
The ministers for transport and civil aviation are shown as different parties as this portfolio can be
combined with that of transport but also can be separate, or combined with other responsibilities.
The governing legislation is the Civil Aviation Act 2000, which is shortly to be amended to reflect all
of the institutional changes, for which the minister of civil aviation is the responsible minister.
The DOT provides ministerial advisory services and policy and planning input to the air transport
sector. The Air Transport Division (ATD) of DOT is responsible for the negotiation and
administration of international air service licensing agreements for overseas carriers to provide
services into and through Papua New Guinea. ATD is also responsible for issuing air services
licences to carriers.
Minister for Transport Minister for Civil Aviation
PNG Air Services Ltd National Airports Accident Investigation

Secretary for Transport CASA Board
- Board Corporation - Board Commission
DOT Policy & DOT Air Transport DOT Transport

CASA Executive PNGASL Executive NAC Executive AIC Executive
Planning Wing Division Security Unit
 Civil aviation safety

 Air Transport
regulatory enforcement
 Ministerial Advice Regulation (ATR) -
and monitoring  Maintenance,  Investigation of the
 Policy and Planning international air service  Policy and regulatory
- airport and aerodrome  Provision of air development and asset circumstances and
 Sector Monitoring agreement negotiation enforcement for aviation
operators certification navigation and airways management of national causes of air accidents/
 Annual budget round security
- air crew certification services government owned incident with a view to
coordination for  Air Services Licensing
- airlines certification airports future prevention
transport agencies (ASL) - administration of
- air traffic controller
air services licensing
training and certification
Figure 12 – Institutional Structure in Air Transport
The Transport Security Unit within DOT is responsible for developing security policy and for
ensuring that PNG complies with international conventions and agreements relating to aircraft, air
service, air passenger and air cargo security both externally and internally.
The recently formed Civil Aviation Safety Authority is the principal regulatory agency in the sector
and is responsible for safety certification of air operators, aircraft, air crew, air traffic controllers and
airports. It ensures that PNG complies with international air safety conventions under ICAO.
PNG Air Services Ltd is the SOE responsible for providing, maintaining and developing air
navigation and airways services infrastructure, comprising ground and satellite based navigation
systems and management of the upper, middle and lower airspace, including overflying. PNGASL
also coordinates aviation search and rescue.
National Airports Corporation (NAC) is the SOE responsible for the provision, maintenance and
development of the 21 national government owned airports, including aviation security, airport fire
crash and rescue services and control of ground movements of aircraft and other airport vehicles
and equipment.
The Accident Investigation Commission (AIC) is a recently formed body responsible for
investigation of the circumstances of air accidents on a “no fault” basis with a view to future
prevention.
39
4.6 The Transport Network as a Whole
The principles and outline of a functional hierarchy for the road network which grades each link
according to its importance in connecting between the main ports, airports, provincial and district
centres and important areas of economic production is discussed in Section 20.4 and is the basis
for the following regional maps of the PNG transport network, Figure 13 to Figure 21. The functional
classification reflects the existing connectivity of the road network before construction of the various
missing links envisaged in the Government’s DSP and MTDP.
40
Figure 13 – North Coast Transport Network
41
Figure 14 – Upper Highlands Transport Network
42
Figure 15 – Lower Highlands Transport Network
43
Figure 16 – Western and Gulf Transport Network
44
Figure 17 – Southern Transport Network
45
Figure 18 – New Britain Transport Network
46
Figure 19 – New Ireland Transport Network
47
Figure 20 – Manus Island Transport Network
Figure 21 – Autonomous Bougainville Region Transport Network
48
4.7 Roads and Road Transport
4.7.1 The Road Network
The roads in Papua New Guinea have developed around the provincial centres of population, many
of which are on the coast and linked nationally by coastal shipping. Local road networks have been
developed from these coastal centres, along the coastal plains and up river valleys and over
mountain passes to penetrate inland. The Highlands Region is landlocked, with the main centres
connected by air, and this spurred the development of the Highlands Highway, connecting the five
inland provinces with the coast and PNG’s main port at Lae.
This pattern of development has resulted in twelve separated road networks plus roads on the
smaller islands, linked together by sea and air. There has been a long held aspiration to link the
networks on the main island of New Guinea together, although making these linkages often involves
long lengths of high cost road through less populated parts of the country and over difficult
mountainous or swampy terrain. The travel time and cost for some of these missing links, if
constructed, will not always compare favourably with coastal shipping, and the economic rationale
for making the connections needs to be weighed against other priorities, so that only those links that
can be shown to have good economic and social benefit in relation to cost are constructed.
The public road network in PNG comprises declared national roads, the responsibility of national
government and other sub-national roads, the responsibility of provincial and local level
government. National roads are currently classified into national routes (NR), the main inter-
provincial connecting routes, national main roads (NM), national district roads (ND) and national
institutional roads (NI - access roads serving state institutions).
The road system has developed as a series of separates networks divided by the geographic
barriers of the sea, rivers and mountainous terrain, each network based on one or more main
centres of population, as described below.
Highlands Highway Network

The largest network is the Highlands (Okuk) Highway, NR0007, which provides the backbone
connector between the main port of Lae in Morobe Province and the five Highland Provinces, the
end point being Mendi in Southern Highlands, and is fully sealed.
The Highlands Highway passes through Morobe Province, the road to the old goldfields area of
Bulolo and Wau, now seeing a resurgence of mining, branching off southwest just outside Lae
(NR0004). The Highway crosses the braided floodplain of the Markham River and, at Waterais
Junction, turns southwest over the Kassam Pass to Eastern Highlands Province, through Kainantu
to Goroka in the Asaro River valley. From there the highway crosses another divide at Daulo Pass,
through geologically unstable country, to reach Kundiawa in Simbu Province and the Waghi River
Valley. The highway continues along the valley floor on flat to undulating terrain through to Mount
Hagen. The Baiyer River Road branches north from Mount Hagen.
West of Hagen, the road divides at Togoba into the Enga Highway to the northwest to Wabag, while
the Highlands Highway continues west to Mendi in Southern Highlands Province. Beyond Mendi,
the highway connects to Tari and Koroba linking with the oil and gas fields; and beyond Wabag the
highway connects through Laiagam to the Porgera gold mine.
In total, the Highlands Highway and its extensive network of feeder roads, serves 2.6 million people
in the Highlands, or 38.5% of the country’s population (excluding Madang and Morobe). The road
provides the export route to the coast for coffee from the Highlands and for produce grown in the
cooler high country. It is also a key road link for supporting the development and operation of
several mining ventures and the oil and gas fields.
49
Madang Network
The Highlands Highway connects to Madang Province via the Ramu Highway, NR0008, from
Waterais Junction, following the Ramu River Valley to Usino, then turning northeast through winding
hilly terrain to the Nuru River valley and meeting the coastal plain close to Madang. Parts of this
road over its central section remain unsealed and difficult in wet weather, so Madang and East
Sepik Provinces still do not have a fully reliable road connection through to Lae.
The Coastal Highway, NR0009, runs northwest from Madang along the coastal margin as far as
Awar, short of the Ramu River which act as a natural barrier. Inland from Madang, access roads
connect along the Gogol and Sogeram Rivers and at various points along the coast as far as the
Ramu River mouth and the East Sepik Border. South of Madang, a coastal road links through to
Saidor on the Rai coast but is in poor condition. Work is underway to bridge the first of many river
crossings out of provincial government funds.
Sepik Network
The Coastal Highway, NR0009, continues from Angoram on the north bank of the Sepik River,
across the coastal plain to the provincial capital of Wewak. From Wewak the road continues along
the coast to Aitape in Sandaun Province. Beyond Aitape access is poor and intermittent to Vanimo.
From Vanimo the highway connects to the Indonesian border crossing at Wutung.
Inland from Wewak, the Sepik Highway starts at Passam Junction with the Coastal Highway and
follows the northern edge of the floodplain of the Sepik River, linking to Maprik, Dreikikir and Lumi.
The highway is sealed as far as Mai, just west of the East Sepik/Sandaun border where an access
road leads south to Arkosame. At Hayfield junction an access road leads south to Pagwi on the
Sepik River.
Central and Gulf Network

The Hiritano Highway, NR0001, runs northwest from Port Moresby along the coastal plain of
Central and Gulf Provinces to Kerema. The road is sealed as far as Malalaua and work is
underway to complete sealing to the Gulf Province capital of Kerema. Apart from forming an
important connection for Gulf Province which is relatively isolated, the end of the Hiritano Highway
marks the starting point for two proposed new strategic links, one to Kopi on the LNG pipeline route
with a connection to the Southern Highlands via Samberigi and Erave, and the other the Trans-
Island connection from Malalaua to the Lae-Wau road either directly via Wau or through Kaintiba
and the Aseki road.
The Magi Highway, NR0002, runs southeast from Port Moresby along the coastal plain of Central
Province via Kwikila to Kupiano, as far as Ganai. There is at present no road linking the 129 kms
between Ganai in Central Province to Gadaisu in Milne Bay Province.
Milne Bay Network

The Magi Highway resumes at the provincial boundary with Milne Bay Province linking through to
Alotau which is the focal point for the Milne bay road network. Access roads support the various
plantation agriculture, mainly oil palm, and forestry to the west of Alotau, and access roads run to
the end of the island at East Cape and across to the northern coast. There is no continuous road
along the northern coast of Milne Bay, but a number of isolated lengths of track, including a track
leading inland to Agaun which is intended for development as one of the “missing links”.
Oro Network
This network radiates from the provincial capital, Popondetta. The Kokoda Highway, NM3601 links
Popondetta to Kokoda, an important tourist destination. To the east from Popondetta the Northern
Highway, NR0003, connects to Oro Bay port and along the coast, with an access road leading
inland to Afore. In the north, access roads serve large oil palm plantations. Future links are
proposed in the MTDP to connect the Oro network with Morobe and Lae in the north and Milne Bay
and Central Provinces in the southeast and south.
50
Huon Peninsular
The road network is focused on Finschhafen and extends south along the coast to Busiga, north
along the coast to Gitua, and inland to Pindiu. A separate road links Wasu on the north coast with
Kabwum and Konge in the interior. There are prospective road links along the south coast to Lae
and along the north coast to Saidor and Madang.
South Fly Network

A network of local roads, in varying states of repair, link villages in the South Fly district of Western
province. The main link is the Trans-Fly road running east-west between the Indonesian border
west of Weam, and linking Morehead, Wipim and Oriomo, with another road leading south to the
river at Bensbach. Bensbach, Morehead and Oriomo are on navigable rivers. New links are
proposed running north to Aiambak and Kiunga.
Kiunga to Tabubil Network

In the North Fly district of Western Province, the Tabubil Highway, NM3101, runs north from the
river port of Kiunga to the Ok Tedi mine site via Ningerum and Tabubil. The road was built for the
mine development and is maintained by OTML. Access roads from the highway serve local
communities. A new link is proposed as a continuation east of the road between Kiunga and
Nomad to connect with Southern Highlands Province.
New Britain Network

The New Britain Highway, NR0010, runs along the north coast of West and East New Britain. There
is a continuous link between the WNB provincial capital of Kimbe via Bialla as far as Ulamona, with
a spur road to Hoskins Airport. Eastwards the route is incomplete through Open Bay and is based
on lengths of logging road, with two missing sections. From Gaulim in ENB the road is constructed
to sealed standard through to Rabaul and Kokopo. West of Kimbe there is a sealed road leading
north to Talasea. There are further disconnected road sections radiating from coastal landing points
at Silavuti/Wuhu, Lauvore, and Cape Gloucester. The missing sections of the New Britain Highway
are relatively short and technically feasible to construct.
There is a dense network of roads at the eastern tip of New Britain focused on Rabaul and along
the north coast to Lassul Bay and down the east coast to Merai. Along the south coast of New
Britain, there are a number of isolated coastal road sections centred on Tol, Pomio and Jacquinot
Bay. The MTDP proposes a south coast route linking these to Kokopo and Rabaul.
From Jacquinot Bay there is a large gap with no existing road to the boundary with WNB. A cross-
island road at this point links Fullerborn and Gasmata with Kimbe. Then there are further breaks
westwards along the south coast to Kandrian and Cape Gloucester, but these are relatively short.
Many of the isolated road networks on New Britain have been developed for logging and oil palm
plantation development and need extensive upgrading to reach a desirable national highway
standard.
New Ireland Network

New Ireland is a long and narrow island province, including smaller offshore islands of Lavongai,
Mussau and Emirau to the north and several island groups to the east, including Lihir. The
Boluminski Highway, NM4701, runs along the coastal plain on the east side of the main island from
the provincial capital of Kavieng in the north as a sealed road to the district centre of Namatanai and
continuing as a gravel road almost to the southern tip of the island. There are cross links to the west
coast at intervals and the West Coast Road which runs along the northern half of the island.
Relatively flat terrain, few watercourses and coral gravel make road construction relatively less
costly on New Ireland than most other parts of PNG
51
Bougainville Network
The main route on Bougainville, the Buka Road NM5001, links the centre of Arawa and
neighbouring town Kieta with Buka Passage and Buka Island along the east coast. The road
crosses many rivers included braided shifting watercourses and links cocoa and coconut plantations
and smallholdings. Spur roads lead inland along river valleys, the longest being inland from
Wakunai. Buka Island is flat and has a network of coral gravel roads.
South from Kieta and the currently disused Aropa Airport, a coast road leads around the south of
Bougainville to the district centre of Buin and on to Boku and across the island via the Jaba River
Valley and the closed Panguna copper mine site to join the Buka Road at Tunuru near Arawa.
Down the western side of Bougainville the terrain is more difficult and a road links to Kunua and
towards Koripobi, regarded as a missing link through to Torokina to join with the cross island road in
the vicinity of Kono.
Manus Network
Manus island has a developed road network on the east side of the island centred on Lorengau,
linking in the east to Lombrum naval base and Momote Airport and inland via the East-West Road,
NM4604, to Mundrau and then to the north coast at Bundralis. There are plans to extend this road
to Sali’in at the west tip of the island.
4.7.2 Urban Streets
Apart from the declared national roads within urban areas, the urban street networks are the
responsibility of the urban local level government (LLG) councils, otherwise known as city and town
councils and, for Port Moresby, NCDC which is established under its own empowering legislation.
Port Moresby has by far the largest urban street network, followed by Lae which is considerably
smaller, and then by Madang, Mount Hagen, Rabaul/Kokopo, Goroka, Wewak, Kimbe, Alotau,
Kavieng and Kieta-Arawa which are smaller again, primarily residential subdivision roads and small
CBD networks around the central spine of a national road.
In Port Moresby, Hubert Murray Highway, the Poroporena Freeway, Waigani Drive, Taurama Road,
Hanubada Bypass, Wards Strip, Cameron Road and several others are national roads.
Maintenance responsibility for some of these has been transferred from DOW to the NRA.
However, in practice, it is NCDC that has assumed the maintenance and development responsibility
for the national roads within NCDC’s boundaries, as well as for its own street network. It has been
able to do so only by using its tax and rating revenue base, of which a substantial proportion is used
to support the physical infrastructure. In contrast to other provinces, NCDC does not have access to
a revenue stream from motor vehicle registration fees.
Lae has fewer national roads and a substantial street network, but does have the benefit of
relatively large revenue from motor vehicle registration, as many vehicles using the Highlands
network are registered in Lae. While most urban streets are flexible bituminous pavement or
unsealed gravel construction, Lae also has some concrete roads. Lae streets are in a generally
poor condition.
The Government has provided finance through the development budget for rehabilitation of the
urban street networks in several PNG urban areas in recent years. However, the overall situation
outside of Port Moresby is that urban streets are poorly maintained. Within NCDC, while the main
arterial network is in fair condition, many of the secondary streets in commercial, industrial and
residential areas are in poor condition.
Urban streets that carry heavy traffic such as port access routes and industrial area roads are more
susceptible to pavement and kerb damage, including from overloaded vehicles and this is reflected
in the generally poor condition of these routes. Damage from PMVs and other vehicles mounting
kerbs and footpaths is also common.
52
There are relatively few traffic signal controlled intersections in PNG cities and towns and in recent
years traffic planners have preferred to install roundabouts which do not rely on electrical systems
and rapid response when failures occur. The few traffic signals that are in use are commonly
ignored and there is no attempt at enforcement. There are very limited footpaths and crossing
facilities for pedestrians in the urban centres, particularly Port Moresby.
4.7.3 Land Transport Services
All land transport services are owned and operated by the private sector without any public subsidy.
Commercial passenger transport services are provided by urban and rural PMVs (public motor
vehicles, typically 15 seat minibuses) and taxis, mainly by individual owner/operators and small
transport companies under a system of service licensing. For PMVs the licensing includes the
routes and service frequencies to be run. Passenger transport services are also price controlled,
administered by the ICCC.
The PMV services are recognised to be substandard, many vehicles being old and poorly
maintained, and operators often fail to meet their timetables and to complete their routes. This
situation has come about through a combination of lack of enforcement capability and fare box
revenues that do not provide sufficient profit to allow operators to invest in new vehicles.
The PMV route network in Port Moresby was developed many years ago and is no longer fully
functional, several routes having been abandoned due to insufficient revenue or for security
reasons. While under the responsibility of LTD and the NLTB, there are no arrangements for day-
to-day inspection of PMV operations to ensure they are operating to their licence conditions and no
actions have been initiated to recover the abandoned routes or to redesign the route structure to
account for urban development and new road links.
A study on urban public transport in Port Moresby (Mell Consultants, 2005) indicated a severe lack
of capacity on bus routes and waiting times ranging up to 1¾ hours. The recommendations of the
study included proposed revisions to the route structure and various other measures which have yet
to be implemented.
Commercial goods transport services are provided by the private sector and are regulated by a
system of permits administered by the National LTB for inter-provincial routes and by the Provincial
LTBs for routes within provinces. The licences can specify the routes to be run and nature of the
service and the legislation provides for price control, although this is no longer actively
administered.
4.8 Maritime and Inland Water Transport
4.8.1 Declared Ports
PNG Ports Corporation is the agency delegated with the responsibility for maintenance and
development of the government-owned port facilities and for the general management of activities
within the defined port limits of the declared ports under the Harbours Act.
There are 22 declared ports, of which 16 are operated by PNG Ports Corporation, either directly or
through agents (Aitape and Samarai). There are four ports under PNG Ports that are not currently
operational - Kerema, Kinim (Karkar Island, Madang Province), Siassi (Morobe Province) and
Kupiano (Central province). The ports of Lihir (New Ireland) and Misima (Milne Bay) are also
declared ports under the Harbours Act but are developed and operated by the mining industry.
There are also leased and privately owned port facilities within the declared ports. The general
physical characteristics of the operational declared ports under PNG Ports management are shown
in Table 6. Ports are shown in rough order of cargo throughput. The table shows the general
53
hinterland area of the port served by road connections. Other areas must be served by small
coastal feeder services from the main ports.
The port facilities fall into three general types (a) marginal quay face backed directly by open
storage area for container stacking and other open storage, that allows maximum access to
shipside (b) marginal wharf structures connected to land by two or more bridging spans to allow for
flow circulation (c) wharf structures in T-head formation connected to land by access trestles and/or
causeway, with berthage on both sides of the wharf (d) finger wharves, with berthage on both sides
(d) for tankers, short T-head structures supplemented with mooring dolphins and discharge pipeline.
Port Moresby, Lae, Kimbe, Rabaul, Oro Bay and Madang have port facilities able to
accommodate vessels exceeding 150m length and drawing up to 10m.
The main wharves at Lae are a continuous marginal wharf structure with linking spans to the yard.
However, the capacity of Lae is currently limited by damage to part of the wharf face, which the
current Lae Port Development project will restore.
Table 6 – Physical Characteristics of the Declared Ports

Name Berth Usage Dimensions Storage Hinterland Directly
Province LxWxD Served from Port
Lae PNG ports:

Morobe 1. overseas 123 x 12 x 11
2. overseas 123 x 12 x 11 Lae, and the
3. overseas 184 x 37 x 11 14,600 m2 covered Highlands Provinces,
4. coastal 54 x 13 x 4.9 39,000 m2 open Morobe province except
5. coastal 35 x 13 x 2.7 for the Huon peninsular
tanker 100 x 10 x 13.7 and the Morobe Coast
barge ramp 12m width 1:8 which are not linked by
Private Wharves: Voco Point road
Lutheran Shipping
Port Moresby PNG Ports:

NCD 1. main wharf 106 x 18.2 x 7.6 5,300 m2 covered
2. main wharf 107 x 18.2 x 7.6 3,100 m2 open
3A. coastal 67 x 18.2 x 3.8
3B. coastal 113 x 18.2 x 4.5
barge ramp 1 6m width 1:8
NCD, Central Province
barge ramp 2 6m width 1:8
and parts of Gulf
4A. container 125 x 25.3 x 10.6 5,110 m2 covered
Province (as
4B. small ships 25 x 5 x 3 28,400 m2 open
Kerema port is not
Private Wharves:
operational)
Steamships
APC wharf
Motukea Isl Curtain 150 x 70 106 ha ind. park
Napa Napa tanker 39 x 12 +80m access trestle
berths, InterOil 39 x 12 +28m access trestle
Kimbe 1. main wharf 117 x 12.1 x 10.7 Kimbe, Talasea area
WNB 2. small ships 25 x 12.1 x 5.5 740 m2 covered of ENB, limited by
3. small ships 17 x 12.1 x 5.9 6,000 m2 open inland road
barge ramp 9m width 1:8 connections
Rabaul 1. Blanche St 122 x 12.1 x 7.9 10179 m2 covered Rabaul area of ENB
ENB 2. Bay road 152 x 15.2 x 10.2 20300 m2 open
54
Name Berth Usage Dimensions Storage Hinterland Directly

Province LxWxD Served from Port
Wewak 1. overseas 73 x 12.1 x 6.2 2250 m2 covered ESP coast and inland
E Sepik 2/3. coastal 30 x 12.5 x 3.0 11500 m2 open apart from the Sepik R
Oro Bay 1. main 70 x 12.2 x 11.4 740 m2 covered Popondetta area, rest
Oro 2. small ships 23 x 12.1 x 10.5 4650 m2 open of Oro limited by lack
3. small ships 23 x 12.1 x 10.5 of inland road
Madang 1. overseas 137 x 12.8 x 10.1 2590 m2 covered Most of Madang
2. small ships 30 x 4.5 x 1.6 8830 m2 open Province
Alotau 1. overseas 93 x 18 x 2.4 2430 m2 covered Alotau area only
Milne Bay 2. coastal 56 x 19.8 x 2.1 7640 m2 open limited by inland
barge ramp 8m width 1:12 road connections
Buka 1. main 31 x 5.2 x 3.6 165 m2 covered North Bougainville

Bougainville 2. small ships 15 x 3 x 0.5 1000 m2 open
Kavieng
New Ireland 1. main wharf 94 x 12.2 x 7.0 750 m2 covered Kavieng and E coast
2. small ships 12 x 3.8 x 1.5 3000 m2 open of NIP
Kieta 1. overseas 122 x 10.9 x 7.5 2780 m2 covered South Bougainville
Bougainville 2. coastal 58 x 8.2 x 4.8 14200 m2 open limited by inland
Vanimo 1. main 28.6 x 10 x 4.5 135 m2 covered Vanimo local area
Sandaun 9000 m2 open only
Lorengau 1. Nabu wharf 15 x 9.1 x 5.1 1000 m2 open Manus Island
Manus 2. Salasia Wharf 40 x 20 x 1.4
Samarai 1. main 28 x 12.8 x 2.7 950 m2 covered Samarai Island
Milne Bay 150 m2 open only
Aitape 1. main 18.2 x 6.2 x 2.5 125 m2 covered Aitape and border
Sandaun 2. small craft 8 x 4.4 x 2.5 1000 m2 open area to Wutung
Daru 1. main 30 x 12.2 x 2.4 1000 m2 open Daru Island only
Western barge ramp 6m width 1:8
(1) Note: length m x width m x water depth m below lowest astronomical tide (LAT); Source PNGPCL Port Information
Handbook
The container terminal at Port Moresby (berth 4A) is a marginal quay, the wharf face integral with
the container yard and joined to a later reclaimed area by a bridge. The original berths (1-3) are a
concrete wharf structure parallel to the shore with long link span to the yard in a T formation, with
several large cargo sheds. The smaller wharves are of the traditional finger pier type.
Kimbe has an arrangement similar, a marginal quay structure with berthing for small ships on the
shorter inner side and a broad working connection to an open storage yard.
Rabaul has two separated marginal berth structures with bridging links back to yard with fronting
cargo sheds and open storage to the rear.
Wewak has a relatively short overseas berth structure supplemented with mooring dolphins
connected to a yard with a centrally placed cargo shed by an elongated bridge link and causeway,
and a finger pier for coastal vessels.
Oro Bay is similar, although with two shorter links to shore and an open yard with cargo shed to
one side.
55
The berthage at Madang port is constructed at the end of promontory, with the overseas berth on
one side with two linking bridges and the coastal berth opposite. A circular access road links the
berths with open storage and cargo sheds located close to the old disused wharf, creating a rather
irregular arrangement.
Alotau has two separated marginal berths integral with the backup land, with a relatively large open
storage area and cargo sheds towards to front of the wharf.
Buka Port has been upgraded as part of the restoration process in the Autonomous Region of
Bougainville, where Kieta was historically the main port. The new wharf is on Buka Island in Buka
Passage and is a modern configuration of marginal quay integral with a reclaimed open storage
area and adjacent barge ramp. Cargo sheds and other port buildings are to the rear. However, the
depth at berth is only 3.6m. Kieta Wharf has a marginal main berth integral with the yard and two
large cargo sheds and extensive open storage.
Kavieng has a marginal berth connected with two linking spans to the yard, with two cargo sheds
and limited open storage area.
4.8.2 Port Traffic and Trends
Table 7 summarises the cargo handled, container numbers and ship calls at the declared ports in
2010. Lae is by far the most important port in terms of cargo volume
Table 7 - Traffic through PNG Ports Ltd Declared Ports

Port Province Operator/ Total % Inter- Containers Ship
Status Cargo m national TEUs Calls
RT ‘000s ‘000s
Lae Morobe PNG Ports 3.3 60 150 1.26

Port Moresby Central/NCD PNG Ports 1.5 62 80 1.43
Kimbe WNB PNG Ports 0.7 69 20 0.57
Rabaul ENB PNG Ports 0.4 37 18 0.46
Wewak East Sepik PNG Ports 0.2 18 6 0.86
Oro Bay Oro PNG Ports 0.19 61 5 0.25
Madang Madang PNG Port 0.17 73 4 0.48
Alotau Milne Bay PNG Ports 0.16 61 6 0.25
Buka Bougainville PNG Ports 0.09 N/A 3 0.25
Kavieng New Ireland PNG Ports 0.08 18 3 0.14
Kieta Bougainville PNG Ports 0.07 15 2 0.06
Vanimo Sandaun PNG Ports 0.05 6 0.05 0.19
Lorengau Manus PNG Ports 0.03 1 0.00 0.09
Aitape West Sepik Agent N/A N/A N/A N/A
Samarai Milne Bay Agent N/A N/A N/A N/A
Daru Western not in use - - - -
Kerema Gulf not in use - - - -
Kinim (Karkar) Madang not in use - - - -
Siassi Morobe not in use - - - -
Kupiano Central not in use - - - -
Lihir New Ireland Mining Co. N/A N/A N/A N/A
Misima Milne Bay Mining Co. N/A N/A N/A N/A
Total PNG Ports 6.8 60 265 6.33
Notes: TEU = twenty foot equivalent units, includes empty container movements; cargo is million revenue tonnes; figures
projected to 2010 and are approximate. Source: TIPS base data set.
56
Total cargo grew at 3.8% over the 2005-2009 period, international cargo at 3.0% and coastal cargo
at 5.3%. Container cargo grew at 5.7%, 2.9% for international cargo where general cargo is already
mainly containerised and 11.1% for coastal cargo reflecting a movement away from break bulk
towards more use of containers on coastal routes.
4.8.3 Other Ports and Landings
Other than the declared ports, there are a number of private port facilities on the PNG coast, mainly
established to support specific industries, such as mining, oil palm and logging. Important privately
operated ports include Kiunga (Ok Tedi Mining Limited), Bialla (Hargy Oil Palm), Basamuk (Ramu
Nickel), Lihir (gold mining) and several forestry ventures.
There are a large number of minor port facilities, including small wharves, jetties, ramps and
landings. Many of these are in poor condition and a number of ports of call that have been used in
the past have become disused for various reasons. Historically, over 500 locations were recognised
as places where cargo was collected or discharge in analysis of sea freight movements carried out
by the DOT.
The Community Water Transport Project and the associated programme of rehabilitation and
reconstruction of small jetties has identified about 120 minor ports of call on the PNG coast and
navigable rivers and the provinces’ development plans identify a similar number. The CWTP has
also put in place franchise routes for subsidised shipping services and has other routes planned.
The NEFC in its fieldwork to support the review of the Transport Infrastructure Maintenance Grant
has also identified boat routes in use. A number of the ports of call for the CWTP franchise routes
are prospective locations and likely to be amended following investigation. Ports with a non-
transport function, such as military bases (e.g. Lombrum), are excluded. There are also some small
jetty facilities proposed at or adjacent to the main ports.
4.8.4 International Shipping Services
Papua New Guinea is comparatively well served by international shipping lines mainly in north-
south services between Asia and Australasia. There are approximately 3,000 voyages per year and
300 voyage rotations between PNG, the Australian east coast ports and Asia. The traffic is mainly
general/container cargo vessels and bulk carriers for petroleum, mineral and log exports. This
equates with approximately 110,000 teu container slots available in the PNG international trade.
Table 8 below shows the services and frequencies.
Table 8 – International Shipping Services
Shipping Operator Frequency Overseas Ports

(days)
Swire Shipping 7 Australia, East Coast

Swire Shipping 18/20 China, Taiwan, Hong Kong, Japan
Swire Shipping 21 Indonesia, Thailand, Malaysia, Singapore
ANL Container Line 14 Indonesia, Malaysia, Singapore
ANL Container Line 16 Brisbane / tranship E Coast Australia+NZ
New Pacific Line 21 Korea, China, Hong Kong
Sofrana Unilines 16 Brisbane, Townsville and NZ ports
Consort Express Line 9 Townsville / tranship E Coast Australia
MBf Carpenters Shipping 17 Malaysia, Indonesia, Singapore
HUB Line 15 Malaysia, Singapore
Kyowa Shipping Co 21 Japan, Korea
57
The frequencies shown are approximate as intervals and vessels deployed combine in different
services over several routes. Several carriers share space share on each other’s vessels and
advertise under their own bill of lading (comparable with code sharing on international aviation).
Many shipping lines use Brisbane as a hub port where they centralise containers for other
Australian and NZ origin ports. Similarly the larger Asian ports such as Singapore are used as hubs
for linkages with services to South Asia, Europe, the Middle East and North America. Alliances
between international carriers are subject to constant adjustment to suit market conditions.
Up to 2010, none of the PNG ports operated quayside container cranes, and most of the container
vessels serving PNG have been self-supporting (ship-mounted cranes). The size of international
container vessels is typically between 600 and 1700 teu capacity, 120 to 200 m length and 6 to 10m
in draught.
4.8.5 Coastal Shipping Services
Coastal shipping in PNG ranges through a wide range and scale of services:
 International shipping operators who are permitted to carry coastal cargo, trading to
main ports;
 Coastal scheduled (liner) service operators serving main ports;
 Coastal scheduled and semi-scheduled operators serving main and secondary ports;
 Specialised operators including bulk carriers, towage and salvage;
 Project-related coastal shipping;
 Passenger services and tourist operators;
 Community-based organisations providing semi-commercial services mostly for their
own constituents;
 Subsidised provincial and border government services;
 Vessels operating under the CWTP shipping franchise scheme;
 Operators of small commercial craft providing general goods and passenger services;
 Small unpowered village boats carrying seasonal agricultural and other rural products
and passengers to local ports and market centres.
International cross-over operators: present an emerging trend on the PNG coast. They hold a
mixture of restricted and unrestricted permits and offer coastal services between PNG ports of call
on their regular international liner routes for carriage of both their own and third party cargo. They
include Hub Line (PNG) Limited, MBf Carpenters Shipping (WR Carpenters (PNG) Limited), ANL
Container line Limited, Swire Shipping and Sofrana Unilines Limited.
First tier coastal liner shipping companies: three companies provide scheduled (liner) coastal
shipping services on primary routes between main ports and hold unrestricted trading licences,
carrying containers and break-bulk cargo. They are: Consort Express Lines (now majority Swire
owned), Steamships Shipping/Laurabada Shipping (part of the Swire Group) and Bismark Maritime
Ltd (which also operates on secondary routes).
Second tier coastal shipping companies: Three operators, holding either unrestricted or
restricted trading licences, provide scheduled and semi-scheduled services with some route
flexibility to a mix of main and minor ports. They are: Hub Line PNG Ltd, Rabaul Shipping Limited
and Lutheran Shipping (Kambang Holdings).
Specialised carriers: A number of mainly regionally-based companies provide shipping services

either as part of their own business or to industry as specialised shipping operators on a regular or
charter basis. They include petroleum distribution, logging, mining, construction, towage and
salvage companies, agricultural product transport and storage, commercial and tourist passenger
58
services. Businesses involved in this activity include: Agmark NGIP, Coconut Oil Production
Madang Ltd, Curtain Brothers (PNG) Limited, Golden Shipping Ltd (Rimbunan Hijau - RH), Nivani
(PNG) Limited and Perpetual Shipping (PNG) Ltd. There are many more of these coastal operators
engaged in logging and construction in regional areas. Some also carry third-party cargoes on a
commercial basis where this fits with their core activity.
Project-related coastal shipping: The rise of project-related coastal shipping has been the major
contributor to a recent increase in applications for restricted and unrestricted coastal trade permits.
Tugs and barges operating under permit shuttle between the anchored ocean carriage vessel(s) in
Paia inlet (Gulf of Papua) to Kopi landing. The Government has granted special access to permits
for such activity for foreign flag vessels engaged in the LNG project. There are similar examples of
project activity that have been given special access to coastal permits in mining exploration and
coastally located industrial projects
Subsidised provincial and NGO sponsored non-commercial organisations: This emerging

category provides both passenger and freight services and include the vessels recently introduced
by the Border Development Authority (BDA) and operated by their business entity PNG Maritime
Transport Limited. In addition, there are several workboats of greater than 10 m length built and
funded by provincial governments under the direction and oversight of the Department of Provincial
and Local Level Government Affairs.
The Community Water Transport Programme (CWTP): is a subsidised franchise shipping

scheme designed to provide waterway transport to remote and disadvantaged communities, restore
water transport infrastructure, improve small-craft safety, and enable the affected communities to
maximize the benefits of the transport provided. By mid-2011, there were four CWTP franchise
routes in operation (Sepik, Huon/Oro, New Britain and New Ireland) and with several others in
prospect. The difference between the CWTP and the BDA and provincial government services is
that the ownership of the vessels lies with the private sector in the case of the CWTP, but lies with
Government in the case of BDA and provinces. The CWTP is designed to induce services to small
non-commercial ports of calls by offering a contestable top-up payment
Small boat services: small work boats for the carriage of passengers, agricultural production to
market and transportation of essential supplies to and between villages sustains the livelihood and
social network of PNG’s coastal communities.
Passenger services: the two main licensed firms engaged in the operation of coastal scheduled
passenger services are Rabaul Shipping (Starships PNG) and Lutheran Shipping (Luship). Some
vessels have a restricted trading range, typically to sheltered waters but engage on longer port-to-
port coastal routes when the weather conditions are suitable. The coastal passenger sector is an
industry that delivers essential services to remote locations and communities sustaining social and
economic activity.
4.8.6 Inland River Transport
There are two major river systems that allow access to ships of up to 3 metres draft more than
500km from the mouths, the Fly River system in Western province and the Sepik River in East
Sepik and Sandaun (West Sepik) Provinces. These river systems at once provide river access but
also present a substantial physical barrier to development of the road network.
Other navigable waterways with river ports are Western Province - Bensbach, Mai Kussa,
Morehead, Oriomo and Aramia Rivers; Gulf Province - Turama, Kikori, Era, Pie and Vailala Rivers;
and Madang Province - Ramu River.
59
4.9 Air Transport
4.9.1 National Airports
Port Moresby International Airport (PMIA or Jackson’s) is currently the only airport in Papua New
Guinea supporting international regular scheduled passenger services, although both Daru and
Wewak are denoted as international airports and, outside of PMIA, Mount Hagen receives the most
international passengers associated with international direct charters for the mining ventures. PMIA
currently accommodates aircraft up to B767-300 size, the second tier of airports F-100, although
only designed to F-80, and the third tier supports Dash-8.
PMIA and a further 20 national airports are operated by the National Airports Corporation (NAC). A
further six airports are certified in accordance with ICAO Annex 14 and PNG Civil Aviation Rules;
these include three airports associated with mining (Ok Tedi – Tabubil and Lihir - Kunaye) and oil &
gas (Kutubu – Moro) and three ex-national airports now operated by provincial governments (Milne
Bay PG - Kiriwina and Misima, and Gulf PG - Kikori). Leading characteristics of the national and
other ICAO licensed airports are shown in Table 9.
Not included in the list of national airports is Kieta (Aropa), which until 1989 was the main airport for
Bougainville and more centrally located close to the provincial capital Arawa, than Buka airport
which is on Buka Island at the extreme north of the province. Another airport located away from the
centre of its province is Daru which, although the capital of Western Province, is located on an
island off its south coast. All other airports are relatively well located with respect to both the
provincial capital and the main economic activity of the province.
Table 9 – Characteristics of the ICAO recognised airports

Airport Province Operator TODA(1) Runway Largest Hours of
Width Aircraft(2) Operation
Port Moresby IA NCD NAC 2,810 45 B767-300 24h
Nadzab (Lae) Morobe NAC 2,500 30 F100 24h
Mount Hagen WHP NAC 1,778 30 F100 daytime
Tokua (Rabaul) ENB NAC 2,250 30 F100 24h
Madang Madang NAC 1,570 30 F100 24h
Hoskins (Kimbe) WNB NAC 1,645 30 Dash-8 daytime
Wewak ESP NAC 1,629 30 F100 24h
Goroka EHP NAC 1,900 30 Dash-8 daytime
Kavieng NIP NAC 1,763 30 F100 24h
Moro (Kutubu) SHP CNG(3) 1,750 30 daytime
Gurney (Alotau) MBP NAC 1,559 30 Dash-8 daytime
Buka ARB NAC 1,735 30 F100 daytime
Girua (Popondetta) Oro NAC 1,870 30 Dash-8 daytime
Kunaye (Lihir) NIP LMC(4) 1,584 30 24h
Momote (Lorengau) Manus NAC 1,260 45 F100 24h
Tabubil Western OTML(5) 1,340 23 daytime
Kiunga Western NAC 1,460 30 Dash-8 daytime
Vanimo Sandaun NAC 944 30 F100 daytime
Daru Western NAC 1,057 30 Dash-8 daytime
Tari SHP NAC 1,820 22 24h
Mendi SHP NAC 1,540 23 Dash-8 daytime
Chimbu Simbu NAC 705 23 Dash-8 daytime
Misima MBP MBPG(6) 1,200 30 daytime
Kerema Gulf NAC 1,320 18 F100 daytime
60
Airport Province Operator TODA(1) Runway Largest Hours of

Width Aircraft(2) Operation
Kikori Gulf Gulf PG 1,630 18 daytime
Wapenamanda Enga NAC 1,230 23 Dash-8 daytime
Kiriwina MBP MBPG 1,760 30 daytime
Notes: (1) take off distance available, metres for the longest runway (Mt Hagen and Goroka have second runways); (2)
largest aircraft in use; (3) Chevron Niu Guinea Ltd; (4) LMC – Lihir Management Co.; (5) OTMC – Ok Tedi Mining Limited;
(6) MBPG – Milne Bay Provincial Government;
4.9.2 Other Airports and Rural Airstrips
Apart from the 27 ICAO certified and licensed airports; there are a large number of smaller airports,
ranging in strip length from as long as 1,700m down to small rural airstrips as short as 450m. The
total number identified from various sources, including airstrips that are now listed as inactive, is
620. The number currently listed as “active” from provincial data sources is 424, as shown in Table
10 below.
Of these active airports and airstrips, 11 (3%) are still identified as belonging to the national
government through the CAA. A further 92 (22%) are under provincial government ownership,
including a number that have been transferred from national government responsibility in the past.
Table 10 – Other Airports and Rural Airstrips classed as Active

Prov Local Comm- Not
Province CAA Mission Village Total
Govt Gov ercial Stated
Central 0 3 0 6 13 2 0 24
Eastern Highlands 0 4 1 7 5 0 5 22
East New Britain 0 1 0 1 3 4 0 9
Enga 0 3 1 1 1 0 3 9
East Sepik 0 1 0 7 6 3 3 20
Gulf 1 3 0 2 11 6 3 26
Milne Bay 0 7 1 1 1 3 0 13
Madang 0 8 0 11 8 0 3 30
Morobe 1 8 5 2 31 4 3 54
Manus 0 2 1 0 0 0 0 3
New Ireland 1 1 1 1 0 2 0 6
Oro 0 7 0 0 12 2 0 21
Bougainville 0 4 0 0 1 1 0 6
Southern Highlands 0 10 1 3 8 1 5 28
Chimbu 0 4 0 2 2 1 3 12
Western Highlands 0 0 2 2 2 0 0 6
West New Britain 1 4 0 3 0 4 1 13
Western 2 7 4 21 17 7 3 61
Sandaun 5 15 2 20 11 1 7 61
Total 11 92 19 90 132 41 39 424
Percentage 3% 22% 4% 21% 31% 10% 9% 100%
Source: airports and airstrips listed as active in provincial database (Geobooks)
The largest group, by form of ownership, is airstrips under the nominal ownership of village groups
(31%), followed by missions and churches (21%). Commercial organisations including timber,
mining, oil and gas and general business organisations account for 10%. By geographical
distribution, Western, Sandaun and Morobe provinces contain the largest numbers.
61
There are up to 200 inactive airstrips, including many that are redundant because of road
connections, or other airstrips opening close by, or have been developed for specific purposes but
are now obsolete and unlikely to be reinstated. However, this will still leave many inactive airstrips
that potentially could be reinstated in future, if a demand for service can be substantiated.
4.9.3 Air Traffic and Trends
The historic growth rates of air passenger and freight traffic and aircraft movements through the
ICAO recognised airports are shown in Table 11. Growth in the period 2001 to 2004 was subdued,
corresponding to a period of depressed economic growth in PNG. There was a sharp upturn in
traffic at several airports in the second half of the decade, in particular for Buka, reflecting post-
conflict development and in Tari reflecting strength in the resource sector. There are no historic data
for Moro, Tabubil and Kiunga which are focal points for the mining and petroleum industry.
Some airports experienced negative growth and, overall, growth in domestic passenger numbers
was only 1.0% p.a. over the period and -0.5% if Port Moresby is excluded. However, the upturn in
the last few years corresponded with a growth rate of 5.5% p.a. or 3.8% excluding Port Moresby.
Table 11 – Air Traffic at Main Airports and Trends

Airport Aircraft Air Passengers 2008 Passenger Growth Air
Movements Rate % pa (NASMP) Freight,
tonnes
2008 (NASMP) (TIPS) 2001-2008 2004-2008 2008
(NASMP) (TIPS)
Domestic Traffic
Port Moresby IA 28,786 694,427 459,000 3.1 7.2 8,850
Nadzab (Lae) 7,714 185,969 205,781 -0.9 5.3 1,473
Mount Hagen 6,479 118,204 143,767 1.3 9.4 860
Tokua (Rabaul) 4,421 134,022 146,815 4.3 8.7 851
Madang 4,501 103,133 113,597 0.4 0.9 680
Hoskins (Kimbe) 2,365 56,164 61,323 -8.9 15.4 378
Wewak 2,246 48,122 53,267 -2.1 -2.9 285
Goroka 4,104 44,595 49,809 -5.0 -0.0 201
Kavieng 1,590 41,453 45,185 3.5 12.8 296
Moro n/a n/a 41,697 n/a n/a 773
Gurney (Alotau) 2,159 34,453 38,798 0.3 3.2 258
Buka 717 32,732 35,722 10.3 15.3 274
Girua (Popondetta) 1,697 25,307 27,634 -2.2 -2.5 164
Kunaye (Lihir) n/a n/a 26,172 n/a n/a 185
Momote 467 22,395 24,433 -1.1 4.6 101
Tabubil n/a 19,971 19,971 n/a n/a 418
Kiunga n/a 8,536 8,536 n/a n/a 264
Vanimo 1,114 13,975 15,245 4.9 8.5 113
Daru 1,856 6,350 12,092 n/a n/a 218
Tari 1,148 9,552 11,204 -7.9 15.2 72
Mendi 1,032 7,934 9,346 -4.1 -4.7 51
Chimbu 511 6,874 7,499 6.3 2.0 47
Misima n/a n/a 4,131 n/a n/a 17
Kerema 1,745 1,905 3,609 n/a n/a 182
Kikori 3,558 n/a 3,178 n/a n/a 34
62
Airport Aircraft Air Passengers 2008 Passenger Growth Air

Movements Rate % pa (NASMP) Freight,
tonnes
2008 (NASMP) (TIPS) 2001-2008 2004-2008 2008
(NASMP) (TIPS)
Wapenamanda 52 0 n/a n/a n/a n/a
All except PMIA 49,476 921,646 1,108,811 -0.5 3.8 8,195
All Airports 78,262 1,616,073 1,567,811 1.0 5.5 17,045
International Traffic 341,000
Total (rounded) 1,957,000
Source: National Airports Strategic Management Plan (NASMP), Parsons Brinckerhoff et al for CAA, Dec 2009 and TIPS
baseline data collection. Note: NASMP compiled data only from Air Niugini and Airlines PNG excluding 3rd level operators.
4.9.4 International Air Transport Operators and Services
The main international carrier is the government-owned airline Air Niugini (ANG) which operates the
bulk of international services and routes. ANG currently operates B767-300AR, Fokker F100 and
Bombardier Q400 aircraft on its international services.
International scheduled services currently operating to Port Moresby are:
 Air Niugini operates daily services to Singapore, Brisbane and Cairns, six days a week
to Nadi and Honiara, alternate days to Hong Kong, and weekly to Manila, Narita and
Sydney (via Brisbane); Qantas code shares with ANG on some services;
 Qantas operates a link service between Port Moresby and Cairns;
 Pacific Blue (Virgin Australia) operates four times a week from Brisbane to Port
Moresby; Airlines PNG code shares on these services;
 Airlines PNG operates four times a week to Cairns
In the past other airlines have flown into Port Moresby, including Cathay Pacific and Philippine
Airlines.
4.9.5 Domestic Air Transport Operators and Services
Air Niugini and Airlines PNG operate domestic services primarily hubbed from Port Moresby.
ANG flies point-to-point services to 11 main domestic airports, two loop services to the Islands and
Momase regions covering a further nine airports and some interconnecting services from the
regional airports of Lae, Hoskins and Madang.
Airlines PNG operates first and second level services using mainly Dash-8, competing against ANG
but also serving smaller airports from hubs at Daru and Port Moresby covering Western and Central
Provinces using DHC-6 aircraft. Airlines PNG also flies on-demand and charter services to a
number of smaller airports, about 50 destinations in all.
A new entrant, privately owned Travel Air, based in Madang, was certified to commence operations
in November 2011 using four Fokker F50 turboprop aircraft. Initially operating daily scheduled
flights between Madang and Port Moresby, Hoskins, Rabaul it has signalled its intention to operate
to a number of other main centres and secondary airports. The Government, through DNPM,
provided startup financial assistance to Travel Air in the 2011 budget allocation described as an air
freight subsidy. The Airline fills a gap left by the closure of Airlink in 2007, also Madang-based.
The largest third level operator is Mission Aviation Fellowship (MAF), a church-sponsored airline,
based in Mount Hagen, with a fleet of 16 mainly DHC-6, Cessna 206 and GA8 Airvans with which it
63
serves remote rural airstrips throughout Papua New Guinea, but concentrated in the Highlands, for
community support, mission, and emergency relief purposes, as well as commercial passengers
and freight.
Other small fixed wing and helicopter charter operators include Central Aviation (Mt Hagen), Hevilift,
Islands Nationair, Niugini Helicopters, North Coast Aviation (Lae), Pacific Helicopters and Tropicair
(Port Moresby). Much of their work is in support of the resource sector but also general charter,
flying into small airfields and remote worksites.
64
5 Transport Demand and the Outlook for Growth
5.1 Population and Economic Growth
The two most important underlying determinants of transport demand are population and economic
growth.
5.1.1 Population Growth
While there has been a trend towards increasing urbanisation, the majority of the population is still
settled in rural areas. The urban population was just under 14% of the total in 2000 and, under the
MTDP, is planned to be contained to 20% by 2030. About a quarter of the urban population is in
NCD.
Over the period 1990 to 2000, national population growth averaged 2.8% per annum. Future
population projections are for an average annual growth of 2.2% to 2020 and falling below 2.0% by
2030. The projected regional populations are shown in Figure 22 and emphasises the importance
of transport connections to the landlocked Highlands Region where the population is expected to
increase relative to other regions to 40% of the national total.
Figure 22 – Projected Regional Populations to 2030, millions
The variation in population growth rates for each province, based on historic data, is projected to be
as shown in Table 12.
The recorded population growth of NCD between the 1990 and 2000 censuses averaged 2.6% p.a.
compared with 3.2% nationally and, overall, the statistics on urbanisation show a slight reduction
from 15% in 1990 to 13.2% in 2000 and an estimated 12.5% in 2010 (ESCAP Statistical Yearbook
for Asia and the Pacific 2011). So, although the relatively high rate of population growth for Papua
New Guinea is being reflected in a growing urban population, the amount of urban drift appears to
be contained. This is unusual internationally, and in the Pacific, where all other countries have
shown an increase the percentage of urbanised population. In fact PNG has the lowest degree of
urbanisation in the Pacific and is very low when compared with developing countries internationally.
How far reliance can be placed on the statistical data is unclear, as much of the urban drift occurs
as informal settlements on the urban periphery and may not be enumerated as within a recognised
urban area. So all that can be said is that the relatively high national population growth in PNG is
reflected in a high urban population growth but the degree of urban drift does not appear to be
particularly high.
65
Table 12 – Projected Population Growth Rates, per cent per annum

Province, Region 2010 - 2020 2020 - 2030
Western 2.7% 1.8%
Gulf 2.2% 1.3%
Central 1.9% 1.1%
Milne Bay 2.1% 1.3%
Oro 2.2% 1.4%
Papua Region 2.2% 1.5%
Southern Highlands 3.4% 2.3%
Enga 2.4% 1.5%
Western Highlands 2.1% 1.3%
Simbu 1.5% 0.8%
Eastern Highlands 1.8% 1.1%
Highlands Region 2.4% 1.6%
Morobe 2.3% 1.5%
Madang 2.2% 1.4%
East Sepik 1.8% 1.1%
Sandaun 2.0% 1.2%
Momase Region 2.1% 1.3%
Manus 2.2% 1.3%
New Ireland 2.4% 1.5%
East New Britain 2.1% 1.3%
West New Britain 2.9% 1.9%
Bougainville 1.3% 0.6%
Islands Region 2.2% 1.3%
5.1.2 National and Individual Income Growth
After population, income is the second most important determinant of transport demand. Increased
cash income generates a demand for consumption of goods and services as well as travel for social
purposes. In turn cash income depends upon the opportunities to grow cash crops or engage in
other home-based income generating activity, and the availability of wage or salary employment
outside of the home.
The projections of income and employment growth over the period of the NTS are therefore an
important underpinning to the growth in personal travel demand.
Government’s macro-economic projections in the MTDP are for an increase in real GDP of 52%
from 2010 to 2015, involving a 42% rise in export volumes and 62% rise in import volumes. Over
the longer term, the DSP anticipates a sustained annual increase in real GDP of 8.4% over the 20
year period, compared with a projection of historic performance of 2.6%.
The MTDP medium term forecast for growth in real GDP per capita, one broad measure of income
growth, is for a rise from K3,430 in 2010 to K4,681 by 2015, or an annual rate of increase of 6.4%.
Over the period of the DSP and NTS, real GDP per capita is anticipated to grow by a similar annual
growth rate, compared with only 0.8% per annum if the historic trend were followed.
66
5.1.3 Employment Growth
Job opportunities are also expected to rise under the MTDP, the medium term projection for 2015
being for an increase in employment of 97,000 compared with 17,000 on historic trends, and a long
term projection for 2030 of 2 million new jobs since 2010 compared with 360,000 on historic trends.
Figure 23 shows private sector employment trends for six areas of the country from surveys carried
out by the Bank of PNG since the series was last rebased in 2002. The series is an index, so shows
relative changes between regions.
The greatest increase has been for Morobe Province, followed by the other Momase Region
provinces most likely with an emphasis on Madang and East Sepik, and then the Islands Provinces.
The Highlands Provinces show the least change, despite a faster population growth rate and
concentration of some of the nation’s main export earning industry. The southern provinces apart
from NCD show similar low growth in employment.
Figure 23 – Employment Trends
5.2 Composition of Travel Demand
Travel demand can be separated into passenger and freight transport. While there is some overlap
between these two main demand subsectors, for example air cargo on passenger aircraft, mixed
passenger/freight domestic shipping and mixed passenger/freight carriage in rural road transport,
the majority of freight and passenger demand is served by dedicated vehicles and services and is
responsive to different underlying demand factors.
5.3 Personal Travel Demand
5.3.1 Domestic Passenger Travel Demand
The demand for personal travel arises from the wish to participate in activities that are not
immediately available close to home. For those living a self-contained subsistence lifestyle in
isolated areas, the demand to travel beyond the local area may be relatively low. Services such as
basic health and education are either not available or are supplied through village primary schools
and clinics, with some outreach from central and provincial government agencies.
67
The demand for transport increases as people interact with other communities, through trade and
social exchange, and seek services that can only be supported at a district or provincial level, such
as secondary education and hospital services. Trade also increase cash incomes and encourages
the import of consumer goods. The opening up of affordable transport access also allows people to
work away from home, travelling back daily, weekly or longer periods. This access to wider
opportunities for work, social interaction and trading, allows increased specialisation and also a
tendency towards concentration of population, industry and urbanisation to best locational
advantage.
The travel purposes that arise from these spatial interactions include (i) travelling between home
and the workplace (ii) travelling to access education, health and other social and government
services (iii) travelling on personal or employer’s business (iv) travelling for social, religious and
cultural participation.
Participation in these activities sets up the demand for travel. How that demand is satisfied depends
upon what public passenger travel modes are available and their cost, what travel arrangements
are made for those travelling for employers’ business purposes and, for those with sufficient
disposable income, the purchase and operation of private transport – cycles, motorcycles, cars, four
wheel drive vehicles, and boats. As incomes increase, private vehicle ownership and operation,
either on an individual or shared basis, become more possible.
Water transport, either by small boat or by commercial passenger ferry, can be an alternative to
road travel and in some cases the only mode available to coastal and river communities. However,
domestic air transport is largely a separate travel market due to the generally higher fares and
limited possibility for carrying goods although, due to PNG’s disconnected road networks and
isolated remote inland villages, it is still sometimes the only practical available option.
The main underlying determinants of personal travel demand are then (i) the state of transport
infrastructure (ii) the travel time and distance (iii) the availability of public transport services (PMV,
sea and air) (iv) incomes and income distribution (v) the costs of vehicle ownership and operation
where there is a choice between private and public transport and (vi) the location and extent of
employment, education, health, business and social activities, with more specialised activities and
opportunities in the larger provincial centres and the more common in local market centres.
There are complex inter-relationships between these factors, and the pattern of travel demand
develops over time with the development of settlements and other uses of land and the transport
network, one reinforcing the other.
5.3.2 Overseas Visitor Travel Demand
Travel attributable to overseas visitors is a relatively small component of total passenger demand
and is most evident in international and domestic air transport. Overseas visitors divide into
business and official visitors and tourists.
Tourism is still a relatively small industry in Papua New Guinea, although there is potential for it to
expand, particularly if the infrastructure and security status are improved. Tourism generates
transport demand in the international movement of visitors, transport to and from tourist attractions
and general excursion touring. The profile of tourism visitors to PNG has been people seeking
cultural, wildlife and adventure experiences, but there is a potentially large market in the rapidly
developing cruise ship tourism market, which is less demanding on inland transport and local
accommodation facilities, but has other requirements to be satisfied, particularly in the areas of
maritime safety, navigation and passenger reception facilities at the ports visited.
Road traffic demand for tourism is quite small compared with other trip purposes, although locally
important to communities that participate in the tourism industry, so does not significantly influence
road traffic demand projections overall.
68
5.4 Freight Transport Demand
5.4.1 Freight Growth with Economic Activity
The growth in freight volume is strongly correlated with, and generally increases at a rate equal to
or slightly above, the growth in real GDP. The DSP projection of sustained 8.4% growth in GDP
implies an annual growth in freight movement of around 8 to 10%. The MTDP outlook for the period
2011 to 2015 is for a 42% rise in export volumes and 62% rise in import volumes which is
consistent with the linkage between GDP and freight.
The MTDP/DSP envisages a five-fold increase in sea freight volumes between 2010 and 2050,
equal to equivalent to an average annual growth rate of 8.4%, again consistent with a similar size
increase in GDP. Only relatively few inland routes are used for export freight movement, as most
agricultural exports (palm oil, cocoa, copra, rubber) and forestry are from coastal areas. An
exception is the Highlands Highway, which is the main export outlet for coffee and tea although
imported freight greatly outweighs the export movement.
A more detailed analysis of freight traffic demand depends upon the location and growth of the main
export industries that rely on road freight, in particular agriculture and to a lesser extent forestry,
minerals and oil and gas. The freight demand from inland distribution of general consumer goods,
both imported and locally processed or manufactured, is linked to population and income growth,
similarly to passenger transport.
5.4.2 Growth in Main Export Commodities
The relationship between the main export commodities and transport is characterised by the relative
bulk of the commodity in relation to its value and any special transport requirements such as
protection against damage, spoilage and security. By volume, logs have been several times the size
of any other commodity export over the last decade and have been growing strongly, apart from a
dip in 2008/09. While a large proportion of logging is in lowland forest and exported from coastal
landings, a small proportion is cut inland and is reliant on road transport once outside of the forest
block.
Figure 24 – Main Export Commodities 2001-2010, Volumes
The growth of main export commodities, apart from logs and oil, is shown in Figure 25. Palm oil is
the second largest export doubled in volume over the 10 year period. By contrast other traditional
agricultural exports such as coffee, cocoa and copra oil have not grown at all. Gold, although one
69
of the most important exports by value, is very small in volume and where it is processed through to
a highly purified state is able to be exported by air so has limited impact. Copper is more significant
as the yield of copper from ore is higher, the commodity less valuable than gold and in some cases
exported as a concentrate rather than fully refined product.
Figure 25 - Main Export Commodities Excluding Logs and Oil 2001-2010, Volumes
In terms of value, individually gold, copper and oil are several times more significant in export value
than are logs and the key agricultural exports of palm oil, cocoa, coffee and copra oil (Figure 26).
However, mineral development is less reliant on transport infrastructure than are agricultural
exports, particularly those from land-locked provinces and coastal regions remote from main ports
and roads.
Figure 26 – Value of Main Exports, K2001 Constant Values
Commodity prices have generally grown over the last decade (see Figure 27) with the exception of
log exports which declined in real value between 2001 and 2005. Almost all commodities have
shown a high degree of price volatility, responding to global economic and financial conditions, the
drop from 2008 to 2009 being notable across the board apart from the gold price.
The viability of mining in PNG depends upon the world market prices of copper and gold. Resource
proving considers the mineral concentration so lower grade deposits can become viable when the
70
market price is high and cease to be viable if the price falls. This can result in mining operations
increasing or reducing in intensity over time and mines being mothballed or closed if prices fall too
low. At present the price of gold is historically very high as an effect of continuing global financial
uncertainty, which makes otherwise uneconomic resources viable. However, gold does not have
many industrial uses and demand is from those who seek it as a store of value and for jewellery
manufacture. So its price can vary over a wide range and quite rapidly. A return to growth and
financial confidence could lead to a significant fall in the gold price. Copper, nickel and molybdenum
on the other hand have important industrial uses and prices have been high mainly due to high
rates of economic growth in the BRIC (Brazil, Russia, India, China) nations. For these industrial
minerals, return to business confidence and growth should increase demand and prices.
Figure 27 – Commodity Price Indices, Adjusted for Inflation (2001 base)
5.4.3 Agricultural Products
Cash crop production is the main determinant of export freight traffic volumes. The principal
commodities by value are coffee, cocoa, and palm oil. Copra, copra oil and cake, and rubber are
other export crops which were historically significant but now contribute relatively small proportions
of export volume and value.
With the exception of coffee, which is the primary agricultural export from the Highlands Region and
relies on the Highlands Highway for export through Lae, the remaining cash crops are grown along
the coastal margins, where soil conditions are suitable and other production inputs are available.
Much of the resulting freight traffic travels only short distances by road to the point of primary
processing before shipment through one of the country's 13 export ports.
Agricultural production is sensitive to export prices, and to production costs. Transport of

agricultural inputs is a factor in production costs, and improved access to growing areas can lower
transport costs and stimulate production. However, other complementary inputs such as labour,
capital and extension services must also be present for these potential gains to be realised.
Coffee - coffee exports stood at 62,200 tonnes in the 2009. Export production has varied from year
to year but over the last 10 years the trend has not shown either growth or decline. The peak of
production was in 1999, when exports reached almost 80,000 tonnes and followed the year of peak
coffee prices. The real price has varied by  25% through the last decade, although there were
greater fluctuations in the 1990s. Coffee is the principal agricultural export from the Highlands
region accounting for some 50,000 tonnes of freight per year. This is transported initially in small
loads from estate and smallholdings to local factories, and after processing, by heavy truck to Lae
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for export. Production is sensitive to price, and some smallholders pick more or less berry
depending upon the factory gate price and their individual cash needs.
Cocoa - cocoa exports were 48,000 tonnes in 2009 and have been growing in volume at 5% p.a.
over the past 10 years. The bulk of production is from the Islands region where cocoa is mainly
grown in smallholdings but there is also some plantation cultivation along the coastal plains.
Bougainville was the largest source of production pre-conflict and volumes are recovering under the
new autonomous government. Land transport of cocoa is local in nature, with longer distance
movement to export ports by coastal vessels and workboats.
Palm Oil - Oil palm has shown consistent growth in export volumes over twenty years, standing at
428,000 tonnes of oil in 2009. Prices have fluctuated over a wide range and reached a ten year
peak in 2008. Oil palm estates have been developed in New Britain, Oro and Milne Bay. Fresh fruit
is transported to local processing plants where the oil and kernel are extracted and loaded directly
to ship.
Copra, Copra Oil and Cake - Copra production has declined steadily over many years and is now
only at a fifth of the export volume of the 1980s at about 20,000 tonnes. More copra is now exported
as copra (coconut) oil and copra cake which is used as an animal feed. The volumes of thee
commodities have remained level over the last decade at 20,000 and 40,000 tonnes respectively.
Copra oil prices have been very volatile varying  50% around the annual average. Copra is
exported mainly from the island provinces and all copra oil and cake are produced at a factory in
Rabaul.
Rubber - rubber prices have been increasing in real terms at 9% p.a. over the past decade.
However production is relatively small at 5,000 tonnes annually. Cape Rodney is the largest
growing area and there are also sizeable plantings at Galley Reach north of Port Moresby and at
Gavien in East Sepik.
Tea - tea is produced in small quantities of around 6,000 tonnes/year, the main growing area being
in the Western Highlands with a factory in Mt Hagen.
Sugar - sugar is produced at Gusap at the Ramu mill from surrounding cane fields and is
transported by road to Lae along the Highlands Highway. The mill supplies domestic consumption
and volumes are relatively small.
Fruit and Vegetables - are grown throughout Papua New Guinea, the varieties dependent on the
altitude and climate. Production is mainly from smallholdings as well as subsistence production from
gardens. There is a trade in fresh produce from the Highlands to the main urban centres, which
relies on refrigerated transport and smooth roads to avoid produce damage. There have been many
attempts, not always successful, to improve the reliability of fresh produce transport to encourage
growers into more production and to substitute for expensive foreign imports.
5.4.4 Logging and Forest Products
The present status of PNG’s forests, as reported in 2010, is a total forested area of 29 million
hectares (Mha), or 63% of the total land area. 15 Mha are in production forests and 14 Mha in
reserve forests. 12 Mha of the production forests have been acquired for logging and 10 Mha are
under timber permits. The national sustainable annual cut has been estimated at 3.5 Mm3
compared with a committed cut volume of 8.9 Mm3 and a further 1.5 Mm3 of logs from agricultural
land and other clearance, including for transport routes (source: presentation on the State of PNG’s
Forests, PNG Forest Authority, March 2010). From these figures it is apparent that committed cut
volumes are running ahead of sustainable yield and as timber concessions expire, the area of land
under permit is expected to fall.
However, the PNG Forest Authority (PNGFA) lists nine forestry projects currently under
72
development with an area of 2.0 Mha and volume of 40 Mm 3 primarily in Western, Sandaun and
Madang Provinces, with smaller blocks in Central, Milne Bay, Morobe and Southern Highlands
(source PNGFA website).
The extraction of logs, mainly indigenous hardwoods, has varied between 2.0 and 3.0 million cubic
metres a year over the past twenty years of which 90% is exported. Logs are by far the dominant
form of wood export, comprising 95% of the total, the remainder being mainly sawn timber and
veneers. There have been forestry development projects in several parts of the country, mostly
concentrated on lowland and lower montane forests, where there is direct access to coastal or river
landings for log export. However, some logging also occurs inland, requiring longer transport
distances by logging trucks. Roads that are important for logging include the Lae-Wau Road, the
Ramu Highway from Gogol River into Madang, and locally to saw mills serving the domestic market.
The export price of logs has varied widely and at K200/cu.m. is currently well below its early 1990s
peak.
By contrast, plantation forests are relatively small in area and production, only 63,000 ha in total
under PNGFA management, mainly of pine, acacia, eucalypts, teak and balsa.
The PNGFA’s stated policy is to progressively reduce logging from natural forests to a low level
within five years, with those Provinces where the resource is already heavily depleted being the first
to cease logging. The intention is that production will gradually refocus on sustainable plantation
forestry and domestic forest product processing.
Up to 1991, timber companies were able to deal directly with landowners for timber rights
purchases which often resulted in uncontrolled clear felling. The extensively logged-over areas are
New Ireland, coastal New Britain, Western Province along the Upper Fly and basin of the Baimuru
River, parts of Central Province, the south coast of Milne Bay and coastal Sandaun province
towards the border with Indonesia. Through the late 1980s there was an effort to better regulate the
various private dealing in timber rights and bring all substantial timber concessions under the
umbrella of Government through the PNGFA negotiating Forestry Management Agreements
(FMAs) with landowners and managing the tender process under the provisions of the Forestry Act
1991.
The Southern Region (South Papuan coast from Western to Oro) is the dominant area of existing
timber production at 52% of the national total followed by the Islands Region and Momase at 25%
and 22% and the Highlands Region only 1%. All logging under FMAs is now required to be on a
selective basis under the sustainable forestry management principles being followed; however there
is acknowledged to be a lack of capacity for regulatory enforcement. The logging industry is
dominated by a few Asian-owned companies who control 80% of logging, processing and marketing
operations, with one particular company controlling 45% of the market. Exports are as roundwood
predominantly to South, East and Southeast Asia.
As the economic stands of forest accessible from the coasts and rivers are exploited, new
production areas are becoming costlier to access and develop. While public roads can assist in
timber exploitation, most new forest areas are remote and the forestry companies develop access
roads and tracks suited to log extraction, which can be of a temporary nature.
The general outlook for forestry is for continued reliance on annual roundwood exports of around 3
million m3 from existing timber concessions and the new developments above. However, on top of
this, land clearance for agriculture and for roads has doubled the annual harvest in some years.
5.4.5 Minerals
Papua New Guinea is rich in metallic mineral resources, in particular copper (Cu), gold (Au) and
nickel (Ni). Silver (Ag), molybdenum (Mo), cobalt (Co) and rhenium (Re) are other metals extracted
as by-products or co-products to copper, gold and nickel mining. With commodity values high, the
73
mining sector has been very active in recent years and indications are that it will continue to be an
important contribution to the economy in future.
At present, there is extensive exploration and development activity in Papua New Guinea with
several large mines in the development phase and expected to commence production in the next
few years and others in advanced exploration. There are large open pit operations of similar scale
to Ok Tedi, including: Frieda River which will involve a pipeline and slurry barging down the Sepik;
Ramu Nickel and Yandera copper/molybdenum mine which both involve slurry pipeline to coastal
processing plants and marine tailings disposal and Golpu/Wafi located off the Wau Road with the
possibility of a slurry pipeline to the coast.
Available data on future mining production, locations and associated transport infrastructure are
shown in Table 13. The data have been drawn primarily from published mining company
information and, to a lesser extent, data from the Department of Minerals and Energy. In this table,
mineral reserves are estimates of economically mineable material derived from a measured and/or
indicated mineral resource resulting from feasibility studies of life-of-mine operations. They are
lower than mineral resources, which include measured, indicated and inferred resources, and are
an estimate of the quantities with reasonable and realistic prospects for eventual economic
extraction. As exploration proceeds, the total size of the resource becomes more clearly defined
and a greater proportion is classified as measured or indicated. As mining studies proceed an
increasing proportion of the resource is recognised as reserve. Both reserves and resources involve
some judgement as to the long term market price of the refined mineral. The definitions and
assumptions may vary between mining companies.
Mine development in itself creates a substantial, although relatively short lived, transport demand
through the delivery of construction equipment and materials to the mine site. This can require
heavy-lift air support for large items if road access is impractical.
The transport demand during a mine’s operational phase includes transport of the workforce
between the on-site accommodation and the main centres or overseas for foreign workers, and the
delivery of mine and workforce supplies.
Transport of mine output depends on the configuration of the mining operation. This varies from
self-sufficient mine sites where all processing is carried out at the mine and only the refined product
leaves the mine site; for example gold is taken out by air from Porgera and Tolukuma gold mines.
The mining operation can involve either open pit stripping of overburden and excavation and
processing of ore, or underground mining which is less environmentally intrusive.
For the larger scale open-pit operations such as copper/gold and nickel mining, the processing
involves stages of ore crushing, ore concentration and then extraction of the mineral. Process
requirements, site suitability, environmental considerations, landownership issues and economics
determine the location of each stage. Transport from the immediate area of the excavation is by
mine vehicle and may also involve conveyor or ropeway transport over short distances of up to a
few kilometres. At some point the ore will be concentrated to reduce its bulk, with the tailings stored
locally, typically in a dam, and the concentrate usually transported to a river or coastal location by
slurry pipeline. The concentrate may be shipped directly overseas or processed in PNG to the
refined mineral, again with a tailings residue to be disposed of locally, in some cases involving
discharge to sea; examples are Panguna when in operation and the developing Ramu nickel and
Yandera copper projects.
Panguna copper/gold mine on Bougainville, Ok Tedi copper/gold mine in the Star Mountains in
Western Province, Porgera gold mine in Enga and Lihir gold mine in New Ireland have been the
four largest producing mines in Papua New Guinea. Panguna has been closed since 1989 due to
conflict in Bougainville but could re-open, Ok Tedi is well through its life but is being extended and
Porgera and Lihir still have another 12 years or more of reserves.
74
Table 13 – Mineral Development and Production Outlook

Mine Ownership Location Minerals Status and Life Reserves Resources Annual Transport Infrastructure
and Production
Type
In Operation
670,000 t/y
opened 1984-87, now
now 100% concentrate mine access road to Tabubil, Tabubil
Ok Tedi, Ok Western depleted, mine life Cu – 0.7 Mt
PNG owned Cu, Au, containing airport, Tabubil to Kiunga Road, Kiunga
Tedi Mining Ltd Prov, 20km extension to 2022 Au – 65 t
(PNGSDPL/ Ag o/p Cu - 190,000 t/y, (mine) Wharf and river barging of
(OTML) N of Tabubil from present closure (extension)
Govt) Au – 16 t/y, concentrate.
date of 2013 planned
Ag – 50 t/y
Enga PG, Access Road, Porgera airport (Kairik,
landowners private); numerous road projects
Porgera Joint Au, Ag opened 1990, life to Au – 230 t Au – 17 t/y,
(5%) and Enga Prov constructed as part of tax credit,
Venture (JV) o/p & u/g approx. 2023. (2009) Ag – 2.6 t/y
Barrick Gold infrastructure development programmes
(95%) and community facilities grants
Lihir Island,
Newcrest opened 1997, life to Lihir wharf and airport (private); geothermal
Lihir New Ireland Au Au – 800 t Au – 22 to 28 t/y
(100%) 2023 power station
Prov.
Chinese
Metallurgical
Group Co 143 Mt ore,
74km SW of Mine access road, Basamuk Bay port
(MCC) 85% opened 2010, life to Ni – 1.4 Mt Ni – 31,150 t
Ramu Nickel Madang at Ni, Co access road, 134 km slurry pipeline to
Highlands 2030 (20y) Co – 143,000 t Co – 3,300 t
Kurumbukari Basamuk port (private)
Pacific 9%
Landowners
2.5%
(50% opened 2010, life to Au – 3.1 t/y
near Wau, Au, Ag Au – 171 t
Hidden Valley Harmony, 50% 2023 with possible Ag - 20.9 t/y access road to Lae-Wau Road
Morobe o/p
Newcrest) extension (2011)
Tolukuma Gold
near
Mine Ltd Au,
Woitape,
Tolukuma owned by mainly opened 1995 Au – 40 t Au – 2.3 t/y processed on site, air access only
Goilala,
Petromin u/g
Central prov.
(GoPNG)
Simberi Isl.,
Ore – to 3.5 Mt/y 1400m airstrip (private); Pigiput Bay wharf
Simberi Allied Gold New Ireland Au, o/p opened 2008 Au – 100 t
Au – to 7.5 t/y (private)
Prov
New Guinea East New
Gold (90%), Britain, 50 opened 2007; mining
Au, Cu,
Goldmines of km SSW of of gold cap with no current Ore – 2.1 Mt public road access; air via Kokopo.
Sinivit Ag, Te not available
Niugini Rabaul, further resource estimate Au – 7.1 t processing on site.
o/p
Holdings Baining proving
(10%) Mntns
75
and Production
Type
Possible Reopening
Bougainville
Copper Ltd
Bougainville
(BCL, owned opened 1972, closed
AP, inland 1,000 Mt ore Cu – 170,000 t/y
by: Rio Tinto Cu, Au 1989 due to conflict. concentrate by access road to coastal
Panguna from Arawa- Cu - 3.5 Mt Au – 13 t/y
(54%); GoPNG o/p Possible re-opening concentrate load-out
Wakunai Au - 250 t
(19%); public ca 2015; 20 year life
Road
shareholdings
(27%)
Kainantu, put into care and Au – 3 t/y in
Kainantu Barrick (100%) Au Au – 140 t possible re-opening depending on Au price
Simbu maintenance 2009 2006/07
Development
Stage
Cu, Au, mine feasibility study Existing 38 km project road to Lae-Wau
near Ore – 870 Mt
Harmony and Mo. stage; production ca Cu – 0.8 Mt 20 – 30 Mt/y ore Road at Timini. Development may involve
Golpu/Wafi Mumeng, Cu – 9 Mt
Newcrest probably 2015 for 30 years to Au – 39t processing slurry pipeline to Morobe coast processing
Morobe Au – 601 t
u/g 2045 plant.
Frieda River, Ore – 2,000 Mt
production 2016-2041 40 Mt/y
Horse-Ival- Xstrata (74%), na Cu – 10.2 Mt
(26y)
Trukai Highlands Au – 603 t
Sandaun/
Pacific (16%), Ore – 72 Mt No significant infrastructure developed so
East Sepik production 2016 – 3 Mt/y
Frieda River – Overseas Cu, Au na Cu – 1.4 Mt far. Slurry concentrate pipeline to new river
Border, 2035 (20y)
Nena Mineral o/p Au – 25 t port facility on the Sepik River planned and
Telefomin details subject to
Resources barging to coast.
District feasibility study
Dev. OMRD Ore – 274 Mt
Frieda River - expected Jan
(10%) exploration/ proving nan. Cu – 1.1 Mt
Koki 2012
Au – 82 t
Cu, Mo, Access/pipeline road to Ramu Highway ;

Marengo 95km SW of production 2015 – Cu eq – 4 Mt
Yandera Au, Ag, Cu and Mo ore slurry pipeline to coastal
(100%) Madang 2034 (20 y)
Re. o/p concentrate plant on Rai Coast
Exploration
drill testing and
Indochine Ore – 25 Mt
near resource statement not yet not yet No existing road access ; 7 km from
Mt Kare Mining (newly Au, Ag Au – 53 t
Porgera from previous 1997 determined determined Porgera access road.
acquired) Ag – 380 t
exploration
Cu, Au, not yet not yet
Amanab Harmony Sandaun surface exploration unknown
Mo determined determined
76
and Production
Type
20 km NNE
surface exploration, not yet not yet Probably accessible from Western
Kurunga Harmony of Mt Hagen, Cu, Au unknown
initial drill testing determined determined Highlands road network
W Highlands
Tari Harmony S Highlands Cu, Au

20km from
Highlands Ok Tedi, not yet if developed, possibly road link to Ok Tedi
Olgal Cu, Au exploration drilling unknown
Pacific (100%) Star determined infrastructure
Mountains,
Tatu Isl.
not yet
Tatau Allied Gold New Ireland exploration drilling unknown
determined
Prov.
Tatu Isl.
not yet
Tabar Allied Gold New Ireland Au exploration drilling unknown
determined
Prove
New Guinea
Normanby Au, Ag Ore – 1.8 Mt
Imwauna/ Gold (50%), Similar geological structure and mining
Isl, Milne o/p and exploration drilling unknown Au – 22t Ore – 1,200 t/d
Weioko NMC Mining arrangement to Misima. 4 km from coast
Bay Prov. u/g Ag – 36t
(50%)
JV - New
Simbu/EHP
Guinea Gold,
border, 50 not yet 8km project track access; helicopter
Crater Mountain Gold Anomaly Au exploration drilling unknown unknown
km SW of determined support
Ltd, Triple
Goroka
Plate Jnctn
Vangold, New W New Ore – 1.5 Mt not yet
Mount Penck Au, Ag exploration drilling unknown
Guinea Gold Britain Au – 4 t determined
Closed
Placer Dome
Milne Bay, Au, Ag opened 1990, closed wharf and airport (now public). Processing
Misima (80%), Origen nil none
Misima Isl. o/p 2001 was on site.
Minerals (20%)
Key: Ag – silver, Au – gold, Co – cobalt, Cu – copper, NI – nickel, Mo – molybdenum; o/p – open pit, u/g – underground.
77
In some cases the transport infrastructure is reserved for mine operations and in others is also
available for public use. On conclusion of mining there is a potential legacy benefit of the transport
infrastructure to the areas concerned, although upkeep then reverts to either the provincial or
national government. Also, local transport infrastructure has been built or maintained as part of
landowner and Government agreements with mining companies and through various schemes such
as Tax Credit.
Both Ok Tedi and Porgera mines prompted and/or support the development and upkeep of
transport infrastructure.
This infrastructure includes:

 Airports at Tabubil, Porgera, Lihir and Misima (the Misima mine is now closed)
 The Ok Tedi mine has also supported coastal and river transport along the Gulf and
Papuan Coast and up the Fly River to Kiunga, and access road to Tabubil.
 Panguna mine included the development of a main access road and a cross-island
connection at Jaba River.
 The Ramu Nickel project has included the development of an access road from Usino
and another to a new port at Basumuk Bay.
5.4.6 Oil and Gas
The oil and gas sector has been an important contributor to PNG’s economy since independence
and, with the commencement of the LNG projects, is expected to have an equal or greater impact
over the period of the NTS.
The establishment of wells, processing plants and export terminals requires the development of
new transport infrastructure for construction, operation and servicing of these facilities, and/or
upgrading of existing infrastructure, depending on location. As with mining, this infrastructure may
in some cases be developed for public use as well as for project purposes or can become a legacy
of the project for the benefit of the local area. In addition, government and landowner agreements
can involve development of community services in the area of the projects, including local access
roads.
Oil and gas development involves the construction of pipelines to move raw and processed oil, gas
and gas liquids, sometimes hundreds of kilometres. Laying and servicing the land-based pipelines
requires access by road and/or air, so a pipeline access track will commonly run close to the
pipeline alignment. However, this will not necessarily result in a continuous road route or one
suitable for public access. Nevertheless, construction of a pipeline with connections to oil/gas
fields, airstrips, river ports and processing facilities along its length can form the basis for the
development of new road routes and other legacy transport infrastructure.
As with minerals, much of the freight movement associated with the oil and gas industry occurs
during the development stage. Once in production, the facilities have ongoing servicing needs and
movement of personnel, although much of this is supported by air.
The Department of Petroleum and Energy (DPE), issues licences for petroleum prospecting (PPL),
retention (PRL) and development (PDL), as well as specific licences for production and processing
facilities and pipelines. PPLs cover most of the country and permit drilling to explore for and
appraise a potential resource. PRLs are issued for blocks declared to be a petroleum location, and
provide for further exploration and resource proving. PDLs are the final stage and are issued for
petroleum production and sale.
The producing oil and gas fields and likely prospects are located in a band running between Tabubil
southeast through Western, Southern Highlands, Gulf Provinces (including offshore) and into
78
Central Province. There are also identified oil and gas leads (potentially oil and gas bearing
geological structures) within Petroleum Prospecting Licence areas along the western border of
Western Province south of Kiunga, around Aiambak and in South Fly District. While the existing oil
fields are well through their life, natural gas discoveries and development are becoming more
important.
The LNG projects and existing oil production have had a large impact on Southern Highlands,
Western and Gulf provinces, and have concentrated Government’s development priorities on the
PRAEC corridor.
Details of producing and developing oil and gas resources are shown in Table 14.
Producing Oil Fields: the oil fields of Agogo, Moran, Hedinia/Iagifu, Mananda and Gobe are
located to the west and south of Lake Kutubu in Southern Highlands, and together yield blended
light sweet crude. Road access is from the Mendi to Kutubu Road and from Kikori in Gulf Province
for the Gobe field. The privately operated Moro Airport provides the main air access to the Kutubu
area. A crude oil pipeline runs from Kutubu southeast to Gulf province, where it is joined by a spur
line from Gobe, and then via Kikori to the offshore Kumul marine loading terminal operated by
Chevron New Guinea. The road between Kikori and Gobe now constitutes part of the developing
Gulf to Southern Highlands Highway. The service road from the Gobe junction to Kutubu is only for
access to the pipeline.
ExxonMobil LNG Project: this major project will aggregate the natural gas from several
established and new wells in the Juha, Hides and Angore gas fields which lie to the northwest of the
Kutubu oil fields, together with gas liquids from the Kutubu fields, and will pipe the conditioned gas
to a scraper station at Kopi, then to the coast at Kikori, and then by undersea pipeline to a
liquefaction plant near Port Moresby from where specialised LNG bulk carriers will export the
cryogenically stored LNG to Asian markets.
Much of the freight movement associated with the LNG development is taking place during the
establishment phase of the production facilities. For the LNG plant, Port Moresby is the main import
gateway, with materials being imported across the privately operated Motukea port facility. For the
Highlands production facilities, some materials are imported through Kopu, near Kikori in Gulf
Province and other along the Highlands Highway. There is also a proposal to develop a new
permanent main port facility at Wowei near Kikori to serve the new Gulf to Southern Highlands road
link the development of which has been assisted by oil and gas development. A new airfield has
been constructed at Komo with linking heavy haul road to Hides Gas Conditioning Plant.
The project developers are making arrangements to ensure that the Highlands Highway is able to
accommodate the sizes and number of shipments necessary, through new and strengthened
bridges and maintenance of the existing road surface. Once the project is in its operational phase,
the demand for freight to sustain the operation will reduce and the full maintenance responsibility of
the Highlands Highway will fall back on Government.
InterOil Gulf LNG Project: this second similar production scale LNG project will draw on the large
Elk/Antelope gas field in the east of Gulf Province, with a pipeline southeast to a gas conditioning
plant near Orioli on the Purari River and then due south to a coastal liquefaction plant to the west of
Ihu, linked to a floating marine loading terminal. Both LNG projects are scheduled to come online in
2014-15.
79
Table 14 – PNG Oil and Gas Development

Annual
Status and Remaining
Field Interest Location Product Productio Transport Infrastructure
Life Reserves
n
In Production
opened 1991.
Hides including Gas to Gas supply natural gas piped to gas fired power plant and
natural gas 59.6 bscf gas and 1.4
Electricity (GTE) Project Oil Search (100% SHP 80 km contract likely power transmission to Porgera mine. Condensate
and Mbbl condensate for 5 to 7 bscf
(PDL1, PL1, PRL7, GTE) and others NW of Kutubu to be extend to processed to diesel and naptha and sold locally or
condensate GTE; remainder to
PRL12) match Porgera used as back up fuel for power generation
LNG project
mine life
served by Moro airport (private), Mendi-Kutubu
light crude oil opened 1992,
Oil Search (60%), SHP near 90% depleted 3 to 4 Road, shared processing facility and 256 km
Kutubu (PDL2, PL2) but mainly licensed to
Exxon Mobil Kutubu 32 mmbbl reserve mmbbl pipeline to marine loading terminal at Kikori, Gulf
gas remaining 2035
Province
Oil Search (60%),
Moran (PDL2, PDL5, 60% depleted 2 to 3 shared processing facility and 256 km pipeline to
Exxon Mobil (11%), SHP light crude oil opened 1998
PDL6)) 43 mmbbl reserve mmbbl marine loading terminal at xxx, Gulf Province
Merlin and others
Oil Search (72%),
Merlin (20%),
SHP 10 km 77% depleted
SE Mananda (PDL2) Petroleum light crude oil opened 2006 0.10 mbbl oil pipeline linking to Kutubu; no road access
NW of Kutubu 0.8 mmbbl reserve
Resources Kutubu
(8%)
SH Petroleum
(40%), Oil Search 90% depleted
Gobe (Main) (PDL4, PL3) 0.05 mmbbl
(36%) Santos (16%) 3 mmbbl reserve airstrip at Gobe base camp on Kikori River and
Gulf/SHP
and others access road to fields and to Kopu landing and
border NW of light crude oil opened 1998
Merlin (73%), Exxon Kikori. 8km spur connection from Gobe Processing
Kikori
Gobe (SE) (PDL3, PDL4, Mobil (15%) , Oil 93% depleted Facility to the Kutubu oil export pipeline.
0.25 mmbbl
PL3) Search (10%) and 3 mmbbl reserve
others
In Development
new gas fields 60km gas and liquids pipelines from Juha to Hides
Angore (PRL11 ) Gas Conditioning plant; New Komo airstrip and
Juha (PRL2) Western LNG Project:
linking heavy haul road to serve the Hides plant ;
+ Hides (PDL1) exc. GTE Exxon Mobil (42%) (Juha), gas and
opening 2014, 9,000 bscf of gas and 100 km condensate pipeline from Hides to Kutubu;
+ gas from existing oil Oil Search (34%), Gulf (Gobe) condensate
for estimated 200 mmbbl of gas 6.6 Mt LNG 300 km gas pipeline alongside the existing oil
fields Santos (18 %) and and S. aggregation
30 years liquids pipeline from Kutubu to Kopi ; and 415 km sub-sea
Agogo/Moran (PDL2) others Highlands from gas and
gas pipeline to liquefaction plant located on a
Kutubu (PDL2, PL2) (other fields) oil fields
greenfield site 20 km NW of Port Moresby on the
Gobe (PDL3, PDL4) Vaihua River mouth; export by LNG carrier.
80
Annual
Status and Remaining
Field Interest Location Product Productio Transport Infrastructure
Life Reserves
n
land gas pipeline south overland to a condensate
“Gulf LNG
6 to 9 Mt shipping plant and then a gas line to the coast west
Project”
LNG of Ihu in the vicinity of the Purari River mouth; LNG
projected
InterOil (50%), Gulf, inland gas and 8,000 bscf gas exports probably via an offshore floating marine
Elk, Antelope (PPL238) opening
Pacific LNG (50% ) NW of Ihu condensate 156 mboe condensate or terminal operated by Petromin/Hoegh JV (previous
2014/15;
intention was via submarine pipeline to a
approval
5 Mt LNG liquefaction plant at next to the Interoil Refinery at
status unclear
Napa Napa, Port Moresby).
Approx 100km no transport links determined but would probably
Talisman (76%), Oil gas and
Pandora (PRL1) Offshore Gulf be linked to the ExxonMobil submarine gas pipeline
Search (24%_ condensate
Province to Port Moresby
Exxon Mobil (61%), gas and Condensate barged down Fly River from
P’nyang (PRL3) Oil Search (39%)
SE of Tabubil
condensate Drimdemasuk. Gas pipeline via Ok Menga,
Horizon (50%), Western, N of gas and Drimdemasuk through Western province to the
Stanley 1 (PRL4) under evaluation
Talisman (50% Kiunga condensate coast in vicinity of Borabi in Bamu District
gas and Gas pipeline through Western province to the
Kimu (PRL8) Oil Search (61%)
condensate coast in vicinity of Borabi in Bamu District
Oil Search (45%), gas and
Barikewa (PRL9) Santos ( ) condensate
offshore from
gas and
Uramu (PRL10) Oil Search (60%) Kikori, Gulf
condensate
Prov
Oil Search (53%), gas and
(PRL11) Exxon Mobil (..%) condensate
gas and
Kuru (PRL13) LNG Energy
condensate
gas and
Cobra, Iehi, Bilip (PRL14) Oil Search (63%)
condensate
Reservoir
evaluation and Access via Kiunga airport and local access roads
Horizon (45%), 480 bscf gas
Elava and Ketu (PRL5, Western, E of gas and shipping on each side of the Fly River. Gas pipeline through
Talisman (35%), 25 mmboe
PRL21) Kiunga condensate planning in Western province to the coast in vicinity of Borabi
Kina (20%) condensate
progress. 10 in Bamu District
year life
Offshore, Gulf, no transport links determined but would probably
gas and
Pasca (PPL24) Oil Search SE of Kumul be linked to the ExxonMobil submarine gas pipeline
condensate
terminal to Port Moresby
Abbreviations: PRL = Petroleum Retention Lease; mmbbl = million barrels (oil); bscf = billion standard cubic feet (gas); mmboe = million barrels of oil equivalent.; Mt = million tonnes (for LNG);
oil industry abbreviations are m = 1,000, mm = 1,000,000, b = 1,000,000,000.
81
Gas Fields around Kiunga: the gas fields of P’nyang near Ok Menga, Stanley north of Kiunga and
Elevala/Ketu east of Kiunga are proposed to be connected by a gas pipeline with a conditioning
plant at Drimdemasuk and gas liquids barged down the Fly River. The gas pipeline will run from
Elevala southeast across Bamu District of Western Province, linking other smaller gas fields of Puk
Puk, Douglas, Koko and Kimu and will reach the coast on the Western/Gulf border around Borabi. A
road corridor along this route is also a possibility. This project is at an earlier stage of development.
Mid and South Fly Gas Fields: New Guinea Energy holds PPLs over a large number of gas leads
and prospects located south of Kiunga, around Lake Murray, Aiambak and in the western half of
South Fly District (Moehad area). There is potentially a gas pipeline, power and road corridor
linking from Drimdemasuk south to Morehead and then east on the Trans-Fly Road to Wipim,
Oriomo and Daru. This corresponds with the southern section of the Border Corridor in the MTDP
and with the Western Province Transport Plan. Aiambak would likely assume increased importance
as a port in such a development.
5.5 Road Transport Demand Growth
5.5.1 Road Traffic Composition
While relatively few roadside traffic counts have been made in recent years, historical data on traffic
composition counts shows that heavy vehicles account on average for one third of the traffic on
rural highways, although this can vary between 20% and 50%. PMVs account for about 20% of
traffic, with a typical range of variation between 10% and 30%, Government vehicles for 10% to
15% and private vehicles from about 65% with a typical range between 55% and 75%.
When considering the future growth in traffic, a basic division between passenger and freight traffic
is desirable, to take account of the varying demand profile on rural roads.
Population, income and employment are the main factors underlying the demand for personal
travel. As incomes rise, the opportunity for higher income earners to afford private transport
increases and over time this is likely to affect the composition of road traffic, with a rising proportion
of private vehicles in comparison to PMVs.
5.5.2 Private Vehicle Ownership
The total number of cars, utilities and motor cycles is estimated at approximately 46,000 in 2010, or
one vehicle per 147 people, although official records are poor due to the fragmentation of
responsibility for vehicle licensing since devolution of responsibility to provincial governments.
Growth over the past decade appears to have been low, less than 1%, which is below the growth
rate in population and appears to be at variance with common observation. This total will also
include cars owned by businesses, public agencies and taxis, so that vehicle ownership by private
households and village groups will be even lower, possibly only 50% of the total. This is a very low
level of motor vehicle ownership in comparison with other Pacific states and internationally.
5.5.3 Public Passenger Transport
The numbers of licensed urban and rural PMVs is not accurately known due to fragmentation of
licensing authorities and lack of centralised collection of data. There are an estimated 9,000
minibuses, the majority of which perform public passenger services. Historic data indicate that
those provinces with well-developed road networks and a relatively large population each support
between 300 and 500 licensed mainly rural PMVs, and that there are approximately 600 PMVs in
NCD.
82
5.5.4 Passenger Traffic Demand Growth
As noted, in the absence of reliable direct traffic volume count data, there are no clear historic
trends on which to base future traffic demand growth, even though this is an important input to both
investment strategy and road user charges funding projections. However, past trends will not
necessarily be a good guide to future growth, particularly if the projections in the MTDP are borne
out.
The growth in road passenger transport demand can be expected to increase, all else being equal,
with the growth in population. On the main road network, the Provincial population growth rate
should be a reasonable guide to the underlying growth in road traffic. Where a road connects
Provinces then the average of the growth rates of the two can be assumed. For roads with a feeder
or access function, then local influences on population growth and demand may need to be taken
into account. So, from Table 12, the underlying road passenger traffic growth rates due to
population increase over the next 10 years can be expected to vary between a low of 1.2%
(Bougainville) and 3.4% (Southern Highlands).
Overlaying this basic rate of traffic growth are the effects of real income growth and, in particular,
real income growth relative to the costs of road transport, which can be expected to lead to an
increase in road traffic. In part this will be traffic generated by the economic activity supporting the
higher incomes but will also be due to effects such as increasing ownership of private vehicles, and
increased traffic demand for social interaction, whether by PMV or private transport.
Statistical data on household incomes at a provincial or lower level as an indicator of geographic

variation, together with the projected growth rate in GDP under the MTDP or alternative future
growth profiles, can be used as a factor on traffic growth rate. In the absence of better information,
a demand elasticity of 1.0 can be assumed, so that a 1% growth rate in real per capita income
generates a 1% increase in traffic volume.
Combining a national population growth of 2.1% projected over the next 10 years, then falling to
1.9%, together with a continuation of the historic trend in GDP/capita of 0.8%, would give an
average traffic growth rate of just under 3%, which is in reasonable agreement with observation and
with growth assumptions in road feasibility studies and with expectations of the rate of increase in
the vehicle fleet. The growth rate under the DSP projection of 6.9% annual increase in GDP/capita,
implies a 9% average traffic growth rate across the road network, which would be a radical
departure from past trends.
5.5.5 Road Freight Demand Growth
Export production generates a demand for coastal and overseas shipping but only limited land
transport as many of the export commodities are shipped out directly from coastal locations
(timber), or are grown relatively close to an export port (cocoa, copra). Bulk ore handling is largely
by pipeline and barge and oil and gas are also transported by pipeline.
Imported construction and consumer freight outweighs export production on the Highlands Highway
and similarly accounts for a large proportion of coastal cargoes. Principal commodities are fuel,
building materials, machinery and equipment, beer and soft drinks, and general trade store
supplies, including rice and tinned fish and beef. Where there is a concentration of resource
development, this may generate significant volumes of road freight traffic on specific routes during
the establishment phase and, for sectors such as forestry, a concentration of traffic over the period
of extraction.
The volume of imported freight and road traffic demand growth can be linked to population growth in
the catchments served and incomes, similarly to passenger demand. Typically, the demand
elasticity for road freight with respect to incomes can be assumed to be greater than 1.00, and for
83
planning purposes a figure of 1.25 is used (i.e. a 10% increase in GDP generates 12.5% increase in
road freight).
5.5.6 Urban Travel Demand
The last urban transport study in Papua New Guinea was that undertaken for Port Moresby in the
1990s. Since that time there has been no survey of urban travel demand. For the majority of the
population, foot travel and PMV supplemented by taxi are the main modes of personal
transportation. PMVs were estimated to account of 65% of person-trips in Port Moresby when last
estimated. Car and 4WD travel is dominated by company and official vehicles, with a relatively
small proportion of workers owning and driving a private vehicle to work. Walking to access PMV
services can involve long distances and services to certain areas and at night are almost non-
existent due to security problems. Two-wheelers (motorcycles and bicycles) have not been a
feature of private transport in Papua New Guinea, or in the Pacific Islands in general.
Apart from the general observation that vehicle travel demand is increasing, there is a severe
absence of baseline data and analysis on which to project future urban travel demand and an
urgency that such studies be undertaken to better understand trip patterns and travel choices to
support the orderly future planning of the urban road networks, and Port Moresby and Lae in
particular. The same applies to goods vehicle travel demand, and the pattern of goods vehicle
routing between wharves, container depots and industrial sites.
While the responsibility for urban land use and transport planning rests primarily with NCDC and the
city and town councils, this NTS includes comprehensive land use and transportation studies for the
main cities as a near-term priority, and traffic management studies for the smaller urban centres.
5.6 Overseas and Coastal Shipping Demand Growth
The Government’s planning targets through the DSP and MTDP are for a fivefold increase in cargo
through PNG main ports between 2010 and 2030, supported by a threefold increase in port
infrastructure, that is berth length and storage/working areas, with the remaining port capacity
supplied by improved efficiency in ship working and utilisation of wharf storage. This projection
requires overall cargo growth rates of over 11% in the early years falling to 6% towards the end of
the 20 year period. The DSP projections were shown in Figure 3.
TIPS 2010 anticipates a lower growth path of 7% falling to 2% for the large commercial ports and a
more modest 3% falling to 1% for the smaller ports. A comparison of the DSP/MTDP projections
with TIPS is shown in Figure 28.
Figure 28 – Comparison of TIPS and MTDP Port Cargo Projections
84
The TIPS projections are for a doubling of cargo throughput at Lae and Port Moresby between 2010
and 2030, an increase 70% for Madang, Wewak and Rabaul and 50% for most other smaller ports.
The increase in vessel calls is projected to be lower, 30% over 20 years, with an increase in ship
length and container capacity. So an increase in berth length of around 50% will be needed and
cargo throughout and container handling of 100% for Lae and Port Moresby.
Master planning studies to be carried out by PNGPCL are expected to review the potential for
generating cargo demand for each port individually, taking account of the hinterland served, new
developments planned and the potential for future trade growth. Future reviews of the NTS will
incorporate the results of such studies and others that may be initiated by other Government
agencies, including the DOT.
5.7 Air Transport Demand Growth
The DSP and MTDP have identified future roles for the main airports in terms of design aircraft,
flight range and international/regional/domestic function, either as long haul international (Port
Moresby and an alternate, B787), medium range Pacific regional (B737-800), domestic jet
(F100/Q400) and domestic turboprop. The DSP anticipates a two to threefold increase in air
passenger numbers as shown by PNG region in Figure 29. This equates to an average annual air
passenger demand growth of 6.8% over the period.
Figure 29 – Comparison of Air Passenger Growth Projections
However, these traffic projections are not based on an airport-by-airport demand assessment for
the classes of traffic proposed or by aircraft capacity/frequency. It is the position of the NTS that the
proposed facility upgrades, particularly where these involve lengthening the runway to a higher
capacity aircraft type or changing the role of the airport in the domestic and international network,
need to be carefully assessed individually and as incremental development to the PNG aviation
network, so that the facilities provided are well matched to the aircraft types, frequencies and
loadings that they are likely to attract.
The NASMP developed projections for domestic air passengers to 2018 and the PMAMP for
domestic and international passengers to 2030. The TIPS 2010 study assumed default values for
passenger and freight traffic growth of 4.25% from 2011 to 2015 and 2% for 2016 to 2020 in lieu of
demand forecasts from NAC. The response to upgrading individual airports was through demand
elasticities with respect to transport cost of -0.50 for air passengers and -0.35 for air freight. The
overall growth over 20 years from these assumptions is around 50% or 2.1% annually which is
lower again than the NASMP/PMIA mid projection.
85
Part B – Transport Sector Policy and Institutions
6 Introduction to Part B
Part B of the National Transport Strategy provides the regulatory policy statements for the transport
sector as a whole and for each modal subsector of land, maritime, air, and for modal integration.
This Part also sets out the further institutional reforms and supporting legislative changes required
to achieve the policy goals, including the ownership, maintenance, funding and administration of the
transport system between national, provincial and local government levels.
The policy on infrastructure investment is contained in Part C.
Part B contains the following sections:

7. Recent Transport Policy
8. Transport Sector Policy Statement
9. Policy for Cross-Cutting Issues
10. Institutional Reforms
11. Land Transport Policy Statement
12. Maritime Transport Policy Statement
13. Air Transport Policy Statement
14. Policy on Modal Integration
15. Transport Industry Training and Development
16. Supporting Legislative Programme
The existing transport policy is first described as it forms the starting point for the changes
envisaged by the National Transport Strategy. Next, the overall policy principles for the sector is
described, followed by policy on cross-cutting issues such as environment, governance, gender and
social impacts. Next are the institutional reforms which will be made mainly to achieve the
principles of separation of functions, as well as to ensure that delivery of public services in the
transport sector are matched to the agencies with the appropriate expertise and authority. Then
specific policies for each transport mode are discussed, followed by policy on achieving transport
integration between modes and levels of government. General policies for building institutional
capacity are noted and finally, the supporting legislative programme needed to achieve the
proposed policy and institutional changes.
86
7 Recent Transport Policy
7.1 NTDP Policy and Ministerial Statement 2009

The most recent statement of transport policy was presented to Parliament in March 2009. This set
out the infrastructure investment requirements for the sector as embodied in the NTDP, the
importance of maintenance funding and policies on deregulation, competition, institution building
and reform, financing, safety and security, transport corridor management, private sector capacity
building and specific policies in aviation and shipping regulation.
The following subsections summarise the existing policy, first for the sector as a whole, then for
each mode, and lastly for cross-cutting issues. After each summary the way in which the policy
statement has been treated in the in the following sections 8 to 9 of the NTS is briefly described.
7.2 Existing Policy Applying across the Transport Sector
7.2.1 Corridor Protection

There will be protection of transport corridors from encroachment, damage and claims for
compensation that cannot be legally justified; and the ability of Government to acquire land, water
and air space for the development of transport infrastructure. Legislation has since been enacted to
enable implementation of this policy.
7.2.2 Transport Safety

Assuring a safe transport system was recognised as major national priority and an important
element of policy, in both international and internal transport. Ensuring adherence to international
safety conventions is important to the nation’s ability to attract international visitors and for its
airlines and shipping to be welcome in overseas destinations.
While Papua New Guinea’s aviation safety record is generally good, there have been a number of
recent third level air accidents and the capacity for accident investigation is limited. The safety
record for domestic shipping and for road transport both leave room for substantial improvement.
The policy statements in regard to safety provide for an institutional structure and funding regime
better able to deliver on safety objectives.
7.2.3 Transport Security

Particularly in international aviation and maritime transport, transport security is recognised to be of
increasing importance and there is a pressing need for Papua New Guinea to ensure that it fully
complies with international obligations so it can continue to trade with the rest of the world and
contribute as a responsible sovereign state within its local region and more widely internationally.
A Transport Security Unit has been created within DOT, responsible for developing policy in
transport security matters and acting in a coordinating and monitoring role across the transport
modal agencies and the sector. The institutional changes for delivery of improved transport security
for each transport mode are addressed in the NTS policy statements.
7.2.4 Cost Recovery and User Charges

A central policy goal is improved cost recovery for the publicly funded provision, maintenance and
operation of transport infrastructure and services. The intention is that the people, companies and
industries using the transport infrastructure investments should contribute to their provision and
upkeep either through direct charges for access and use or, in some cases, through indirect
mechanisms.
87
Some progress has been made towards cost recovery through user charges in the road, maritime
and aviation sectors. However, in the roads sector in particular, this has been in a very partial
fashion and much remains to be done. General principles for the application of user charges and
specific policies for each mode are given in the policy statements, recognising that full cost recovery
may not be achievable in all cases, and that alternative funding mechanisms will also be needed.
7.2.5 Community Assistance and CSOs

The existing policy recognises that rural communities are limited in their capacity to fund local
infrastructure and transport services and that Government will need to continue to financially assist
communities but within policy limits, since subsidising rural transport imposes a cost to PNG in the
reduction of services elsewhere. The development of the NTS examined the current arrangements
for Government’s financial support, which are through Community Services Obligations (CSOs) built
into the service agreements with the state owned enterprises of PNG Ports and the NAC; also
through the Community Water Transport Project, rural jetty programme, function grants to
Provinces for maintaining provincial transport infrastructure and the District Services Improvement
programme (DSIP).
In the NTDP 2006-2010, the CSO policy was to apportion approximately 5% of transport
expenditure to CSOs, delivered as follows:
 Roads - through the District Road Improvement Program (DRIP), subsequently

incorporated into the District Services Improvement Program (DSIP);
 Water Transport Services - through the Community Water Transport Project (CWTP)
subsidised shipping franchise scheme;
 Minor Ports - also funded through CWTP as 100% capital funding for small wharves and
jetties
 Main Ports - a CSO obligation placed on PNG Ports Corporation to maintain the
unprofitable main ports (all declared ports apart from Port Moresby, Lae and Kimbe)
 Main Airports - 75% funding by Central Government for capital works, maintenance and
operating costs of the 21 national airports, excluding Port Moresby International Airport,
incurred by NAC
 Aviation Regulation - 80% of the regulatory, inspection, audit etc. costs incurred by CAA
 Rural airstrips - capital, maintenance and operational funding from DRIP for small airstrips
in remote areas not served by road
This existing policy did not clearly define the cost of CSOs in each transport subsector or provide a
rationale for the disposition of CSO funds. There was no central monitoring of what CSO funds had
been allocated or for acquittal of the spending.
The following policy sections of the NTS set out principles and proposed arrangements for
improving the delivery of community assistance and CSOs in each of the transport modes.
Requiring SOEs to partially fund social obligations by cross-subsidy from their commercial
operations is recognised to have limits and to constrain their ability to be profitable and competitive
in the market. Proposals for making the cost of CSOs more transparent, delimiting the extent of
commercial operations, and for deciding on where and how community assistance should be
delivered, are included in the sector transport policy and modal statements.
7.2.6 Public and Private Sector Roles
Existing policy is to explore the scope for various forms of partnership between the public and
private sectors including outsourcing functions of state transport agencies, new forms of
procurement that transfer risk away from the public sector, introduction of private/public market
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competition, part or full privatisation through shareholdings, and various forms of private concession
for investment in new large infrastructure projects.
The transport policy statement sets out policy principles for Government’s involvement in the
transport sector and the conditions under which further involvement of private sector capital,
ownership or management will be considered in the best overall interests of the PNG economy and
people.
7.2.7 Building Contracting Industry Capacity

The need for a long term approach to developing capacity in the PNG construction industry is
recognised in current policy. Possible solutions include: greater investment in training more locally
based engineers and construction personnel; support for the development of locally based
engineering and construction companies; and the development of strategic alliances with overseas
firms to assist local companies to gain the experience and capacity needed to handle the full range
and size of infrastructure projects.
The NTS recognises that there is limited capacity in the domestic construction industry and that
firms have faced an uncertain and variable forward workload which creates risks to investing in
plant and staff capacity. Also, expertise for the development of public infrastructure of roads, ports
and airports faces competition from the mining and petroleum sectors in the short to medium term.
In fact the ability of the PNG economy to support increased investment in public transport
infrastructure may rely on an ongoing high level of activity in these two sectors, so the challenge is
to create capacity in the public infrastructure sector in parallel with buoyant private mining and oil &
gas sectors. Private sector capacity building for transport infrastructure construction and
maintenance also remains an area where strong policies backed by funding and effective
implementation are needed.
7.3 Recent Land Transport Policy
7.3.1 Market Entry and Competition Regulation
Present policy is for controls on the number and routes of commercial vehicles performing “hire or
reward” road freight services to continue with National and Provincial Governments maintaining
their present control over fares, in conjunction with ICCC, although this is contrary to the NTDP
2001-2010. Similarly, route licensing was proposed to continue for buses providing hire or reward
passenger transport services on both urban and rural services, although the NTDP policy was for
deregulation of rural PMVs.
The need to continue route licensing for road freight and for rural PMVs have been reviewed in the
new land transport policy statement in favour of regulating by quality and national ownership
attributes and otherwise allowing open market competition. Route licensing for urban PMVs will be
continued, but the policy details require ongoing review and monitoring to better provide safe,
reliable and sustainable urban transport services.
7.3.2 Protection of Road Corridors
Targeted legislation has been enacted for the designation and classification of all roads and to
create appropriate offences and penalties to protect road corridors against encroachment,
obstruction and unlawful requests for compensation or other payments. The NTS policy recognises
that this legislation provides a strong legal mechanism for assuring access by the transport sector
agencies to land and water space required for infrastructure development. However, there are steps
to be taken to operationalize the legislation, and some of the more forceful legislative provisions
may prove difficult to apply in practice.
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7.3.3 Community Assistance Policy
The District Road Improvement Program (DRIP), and the subsequent District Services Improvement
Program (DSIP) were initiated with the objective of improving rural road access to remote and
isolated populations and to open up agricultural land for productive use. These were recognised as
the CSO component of land transport in the existing policy. The Transport Infrastructure
Maintenance Grant (TIMG) from national to provincial government also recognises the extent of the
sub-national road network and makes a contribution to maintenance costs.
The NTS policy aims to streamline and improve the management and acquittal of government funds
provided to assist communities to develop and maintain infrastructure at provincial, district and local
level. The aim is for a more transparent system that is responsive to local priorities and applies an
appropriate level of technical, financial and administrative management through partnerships
between the national agencies of DOW and DOT, the provinces and districts, and NGOs.
7.4 Recent Maritime Transport Policy
7.4.1 Regulation of Market Entry and Competition
Existing policy is that all controls that regulate the number of coastal vessels trading on specific
routes within PNG waters be reviewed with the intention of encouraging competition while
maintaining strict control over the safety and security of all PNG registered vessels and monitoring
the total number of vessels trading in these waters. The current practice of generally prohibiting
overseas vessels from carrying domestic cargoes (cabotage) is also to be reviewed. It was
intended that alternatives to the coastal licensing and permitting scheme would be considered such
as direct chartering of vessels, with or without crew (bareboat and demise charters), from national
and potentially foreign ship owners.
This regulatory review was not completed within the term of the NTDP. An initial review was carried
out during the preparation of the NTS. However, further consideration is still needed in view of the
potentially detrimental effects on the domestic shipping industry from inappropriate or premature
deregulation of this market. The policy statement for Maritime sets out the conditions within which
further deregulation will take place.
PNG Ports Corporation operates under a regulatory contract with the ICCC that requires it to
maintain specified minimum service standards and to provide essential port services to all of the
declared ports under its ownership, with an approval process for port closures if no longer required
by users or if alternatively provided in the same location. There is a regulated schedule of maximum
tariffs that divides ports into two groups, the generally larger and more profitable ports, and the less
profitable ports for which a marginally greater tariff can be charged. Arrangements through to 2014
provide for a higher rate of increase on the tariffs to this second group of ports with the aim of more
closely aligning revenues with costs at each port, rather than the almost level tariff (postage stamp
pricing) that has prevailed to date, with its inherent cross-subsidy. The real increase in maximum
port tariffs allowable under the regulatory contract, if fully implemented, will provide for 10% and
20% annual tariff growth for the two port groups, which should allow the port company to recover
costs on the commercial ports.
The NTS recognises the existing contract arrangements and the aim of increasing the overall
commercial viability of PNG Ports’ operations. A general policy for delivering CSOs through
Government agreements with SOEs across all sectors is under development but has yet to reach
firm conclusions applicable to PNG Ports’ situation. The NTS also recognises the desirability that
each main commercial port be capable of independent accounting and management to facilitate
possible future PPP investment.
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The Community Water Transport Project (CWTP) delivers community assistance through providing
new infrastructure in minor coastal and river jetties and landings, and subsidised shipping services
under a competitive franchise scheme. The NTS sets out a strategy for putting the infrastructure
and operations developed under the CWTP and other jetty construction programmes on a long term
sustainable basis for operation, maintenance and renewal. The ownership and upkeep
responsibility for the infrastructure is clarified and the funding for the service subsidies become part
of an overall community assistance policy and delivery structure.
7.5 Existing Civil Aviation Policy
In addition to the 2009 Ministerial policy statement, the Civil Aviation Policy 2000 was prepared at
the time of the legislative changes in the sector that gave rise to the Civil Aviation Act 2000. Aspects
of this earlier policy are also listed below where they have not been superseded by later statements.
7.5.1 Market Entry and Competition Regulation
There is an “open sky” policy of full competition on all domestic routes with airlines being permitted
to use aircraft of their choice on these routes, subject to safety and airport capacity and capability
requirements. This is continued in the new policy statement.
A phased approach to competition was adopted, first allowing free competition on international
routes, followed by free competition on domestic routes by national owned airlines and finally entry
of foreign operators into the domestic market, which has not so far been permitted. Fifth freedom
rights to foreign airlines were promoted when in the economic interests of PNG. The policy
committed to continuing support for the APEC and Forum policies and the Forum States’ plans for
joint deregulation within their group of countries.
Bilateral air services agreement were to be negotiated incorporating features of: multiple
destinations; multiple carriers; airlines to determine capacity; “double disapproval pricing” of
airfares; liberal charter arrangements; and practices that support fair and equitable competition.
Non-scheduled air services for the carriage of passengers, freight and mail were to be decided on a
case-by-case basis, having regard to the need to strike a balance between the commercial interests
of the existing operators in the market and those of the non-scheduled operator and their clients,
while taking into account the overall economic interests of PNG.
International non-scheduled services of a regular or periodic nature conducted by a majority foreign

operator were not to be approved unless authorized by law or permitted under an agreement with
the Government.
7.5.2 Foreign Ownership in Aviation
Under the existing policy, foreign-owned companies operating domestic scheduled services were
given five years to achieve majority PNG citizen ownership, which had been met for airlines
operating at the end of 2010. The foreign ownership of Air Niugini was also limited to a maximum of
49%.
The ICCC has studied market competition in domestic civil aviation and found that domestic air
fares are competitive against international benchmarking and there is no evidence that the domestic
market is suffering from a lack of competitive interest as a consequence of the ownership policy.
Consequently, there is no pressing requirement to open up the domestic market to competition, and
the policy statement for aviation retains the requirement for majority national ownership.
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7.5.3 Price Control
Price control over domestic air fares was lifted as part of the Civil Aviation Policy 2000. There is no
price control over international airfares and freight rates and air fares remain undeclared under the
ICCC Act although the power remains for this to be imposed should the situation change. Periodic
review by the ICCC has shown air fares these to be competitive, and the future policy statement
makes no change in this regard.
The existing policy articulated in the NTDP was that Government should fund: (i) 75% of all upkeep
and improvement costs at the 21 national airports, excluding PMIA; (ii) 80% of the operating costs
of inspections, audits and regulatory functions now largely performed by CASA; and (iii) an
unquantified amount for rural airstrips inaccessible by road through DRIP, now DSIP. This was a
more definitive policy than that adopted in year 2000 which envisaged a system of local airport
authorities with CAA acting as a collection agent for landing fees to be held in trust for expenditure
on the non-commercial airports.
To the extent that Government has supported national airport maintenance and upgrading through
budget appropriations to the CAA and, more recently to NAC through the CADIP, the policy has
been implemented in respect of national airports.
With the restructuring of the CAA into three agencies, there is a need to consider the extent to
which NAC and PNGASL take on CSO responsibilities on behalf of Government for the
infrastructure under their ownership, and how such responsibilities are reflected in the tariff
structure for airport and air navigation services. The NTS also sets out a policy for the ongoing
management, funding and maintenance of the airports and rural airstrips not under NAC ownership
under the new civil aviation structure.
7.6 Recent Policy on Modal Integration
The aims of modal integration as set out in the NTDP 2006-2010 are to adopt common policy
principles across the transport modes and to harmonize the provision of infrastructure, freight and
passenger services so that:
 there is efficient inter-modal transfer and matching of capacity at the modal interfaces, such
as between sea and road at the port interface and between air and road at the airport
interface;
 there is integration of service provision to remote areas so that communities receive a service
by at least one transport mode; and
 coastal and river landings are linked by access roads into the immediate hinterland; and
similarly there are road linkages for rural airstrips.
The policy statement on modal integration builds on these three themes in the context of provincial
transport planning and the funding of local transport infrastructure and services, including through
policy on CSOs.
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8 Statement of Overall Sector Policy
8.1 Public and Private Sector Roles
8.1.1 State to Retain Ownership of Core Transport Assets

The state will retain ownership of the core transport
infrastructure, including all of the public road network, the
14. Ownership of Assets - The
public ports and airports serving significant centres of Government will retain
population, including the declared ports under PNG Ports ownership of the national roads,
Corporation Ltd and the airports under National Airports
ports and airports and the
Corporation, and the airways and maritime navigation supporting air and maritime
systems. navigation infrastructure.
Private ownership and development of new transport and Privately owned facilities may be
related facilities within the main ports and airports will be established within the
permitted within the prevailing regulatory framework and boundaries of the main ports
in accordance with port and airport master plans. and airports in accordance with
Privately developed and operated airports and ports to their master plans and the
serve specific economic development, such as mining, oil prevailing regulatory framework
and gas and large scale agriculture will continue to be
permitted, provided they meet all regulatory standards and requirements.
8.1.2 Public Private Partnerships

The mobilisation of private finance through public private
partnerships (PPPs) is recognised by Government as a 15. PPPs - Private financing of
potential additional source of funding for major transport infrastructure through public
infrastructure developments which meet the necessary private partnerships (PPPs) will
criteria, to be developed under the National Public Private be considered for new transport
Partnership Policy 2008 by the proposed PPP Centre in infrastructure on a case-by-case
conjunction with the responsible transport sector basis.
agencies.
The long-term ownership of all
Papua New Guinea is a new entrant to PPPs, and any of transport assets remaining with
the transport agencies contemplating such an or reverting to the Government
arrangement must proceed with due care and take advice and its state owned enterprises.
from the PPP Centre or other independent,
knowledgeable and experienced source, to avoid the PPPs must demonstrate value
many pitfalls. for money and clear advantages
to PNG over conventional
In general, a PPP requires technical and financial funding mechanisms of direct
feasibility studies to be carried out to a much higher level Government appropriation or
of certainty to give a “bankable” PPP proposition than are pay-as-you-go user charges.
required for normal government budget funding. Studies
are likely to be carried out separately for Government and the private consortium and are used by
each side in the contract negotiation process. If the Government’s information is limited or
uncertain, its ability to negotiate a fair contract will be affected.
Private capital is generally more expensive than Government’s own borrowings through the
international debt markets or through concessionary loans from the multinational development
banks (World Bank and ADB) and bilateral government-to-government arrangements. This is
particularly the case if the capital is borrowed through individual agencies of Government on their
own balance sheets and asset base, rather than being underwritten by the State. Also the
Government’s borrowing capacity is limited, particularly in the present global economic climate, and
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there is a risk that higher cost borrowing may crowd out opportunities for lower cost borrowing for
another agency in another sector.
Private financing is useful to bring on stream wealth-generating infrastructure at an earlier date than
might otherwise have been possible. However, it expands the Government’s borrowing and debt
exposure, and influences the Government’s capacity to take on borrowings from other sources, so
has to be used sparingly and only for projects with high financial and/or economic return.
PPPs may be considered for the establishment of new main port and airport infrastructure, and
possibly, although less likely, for selected road projects, with Government retaining development
planning and regulatory controls. Where new facilities are developed using PPPs under a Build
Operate Transfer (BOT) or similar arrangement, ownership will either remain with the Government
throughout or will revert to Government at the end of the concession period.
Arrangements where the public agency contracts with a private company (or with a foreign state-
owned company) to both finance and construct a project on a sole-provider basis introduces risk
that the project may be over-priced and leaves the public agency beholden to the private company
which makes it harder to ensure good quality delivery and ongoing maintenance of the asset. It is
better for the financing and the delivery to be completely separate or at least that there is an
effective competitive tendering process for such PPP arrangements.
Care must be taken in the currency denomination of the borrowing, and the calculation and
payment of interest, particularly if over an extended term. If the denominated currency appreciates
with respect to the PNG kina over time, the effective borrowing cost increases and could become
unsupportable. Also, the need to hedge against such risks must be considered.
8.1.3 Outsourcing by Government Transport Agencies

The transport agencies owning, managing and regulating
the national transport infrastructure are encouraged to 16. Outsourcing - The
competitively outsource services delivery under contracts Government transport agencies
with the private sector where cost-efficient to do so and will competitively outsource
without compromise to performance standards. This services delivery to the private
includes: civil engineering design, construction and sector where this is cost-efficient
maintenance works; network management and monitoring and does not compromise the
activities; vehicle, driver, operator and transport training, core competencies of the sector
testing and licensing services delivery. agencies
However, it is important that these agencies maintain core competencies in their technical fields of
operation and the ability to respond to service needs in situations where the private sector is not
able to deliver, such as for certain emergency reinstatement of damaged infrastructure and in
remote areas where private sector capacity is absent or uncompetitive.
8.1.4 Development of the Private Sector

The Government wishes to encourage the development
of PNG citizen and national owned companies through 17. Development of the private
providing opportunities to participate fully in the transport Sector - The Government will
sector. Where existing private sector capacity is yet to be actively assist the development
developed, partnership with overseas companies is of PNG national firms and
recognised to be necessary to meet PNG’s development individuals to increase their
goals. The Government transport agencies will be participation in the transport
supportive of the development of the domestic private sector.
sector in engineering design, construction and allied
services, through suitably packaged contracts, assisting a predictable and even flow of construction
and maintenance work, and through term contracts for asset maintenance.
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8.1.5 Government Competition with the Private Sector

National and provincial government agencies will
generally not engage directly in engineering construction Government Competition -
and maintenance activities through use of their own
The Government transport
forces, in the operation of transport services or in the agencies will generally not
ownership of plant, equipment and transport vehicles, so directly participate, through use
as not to crowd out the private sector.
of their own resources, in
transport infrastructure
The Government however recognises that due to construction, maintenance or in
remoteness, thin markets, and lack of financial and the provision of transport
technical capacity, it is not always practical to rely on the services.
private sector for provision of infrastructure engineering
and transport operations services. There will be a policy Exceptions will be made in
of careful intervention by the public sector where these specific situations where private
conditions exist for the purposes of: (i) supplying a sector capacity does not exist
demonstrated need where there is no private sector and cannot reasonably be
interest; (ii) providing competition on a commercially developed.
costed basis where the private sector is uncompetitive
through a monopoly or market dominant situation; and (iii) Government and provincial
facilitating centres of technical capability and resource agencies outside of the transport
sharing in remote areas. sector will similarly be
discouraged from operating
Examples of public sector provision in such situations are: subsidised or free transport
 Establish and maintain construction plant and services that crowd out or
transport depots in rural districts, allowing undermine the private sector.
equipment to be hired to local contractors at
commercial rates; such depots to be self- Where there is a shortage of
accounting units with the possibility of eventual private sector supply of transport
privatisation; services, such as on thin routes
and remote areas, the
 Maintain a public sector capability for undertaking
community services obligation
construction and maintenance work at rural district
(CSO) mechanisms will be used
level for the purposes of (i) providing a first
to fill gaps, where this can be
response capability for emergency reinstatement
done at acceptable cost
of damaged infrastructure (slips, washouts etc.);
(ii) engaging in small scale construction and
maintenance work where there is no private contractor interest or where there is evidence
of uncompetitive pricing. Such capability may be established within those transport
agencies with an engineering capability (DOW, PNG Ports, NAC and some provincial
governments) but as arms-length self-accounting entities operating on a commercial basis;
 Assist the establishment of transport enterprises through underwriting the provision of seed
capital for transport equipment or by purchasing transport equipment and making it
available for hire at commercial rates;
In response to the needs of remote communities, some provincial governments and ministers in
their electorates have assisted in various ways the establishment and operation of transport
services, most frequently coastal small boat services. This includes purchase of vessels,
arrangements for gifting of vessels from overseas donors, and operation of services at reduced or
zero tariff. Other Government agencies outside of the transport sector have also become involved,
such as the Border Development Authority and the DNPM. Freight rate and passenger fare
subsidies are other ways in which financial support has been proposed.
Government and provincial agencies should avoid acquiring vessels, aircraft or road vehicles and
either operating these directly or contracting their operation at less than fully commercial terms,
including amortization of the equipment’s market value. Apart from potential unsuitability of the
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transport equipment, whether through safety compliance or operational suitability, such initiatives
undermine the local transport market.
Such government subsidised competition should not occur in areas where there is an existing
competitively priced private sector service or on thin routes in opposition to an established
competitive franchising scheme such as CWTP. Where Government or provincial agencies wish to
assist transport services in remote areas, this can be done through supporting new private sector
entrants to participate in the CWTP or to supply commercially competitive services.
The NTS policy is that all financial or in-kind support to non-commercial transport services should
be coordinated for best use of scarce resources, encouragement of private sector entrepreneurship,
and equitable service delivery within and between provinces.
8.2 National, Provincial and Local Level Government Roles
8.2.1 Provisions of the Organic Law and Other Legislation

Over the past 15 years, Government has devolved
19. Organic Law - The National
functions and powers to provincial and local level
Transport Strategy supports the
governments through the Organic Law on Provincial
division of roles between
Governments and Local Level Government.
national and provincial
The legislative powers and administrative responsibilities government as established by
of provincial and local level governments are set out in the Organic Law.
the Organic Law. In addition, the Organic Law provides
for Government to delegate certain functions that it Certain institutional, legislative
exercises to provincial governments, on a general or and administrative changes are
selective basis. proposed to provide for the more
efficient and effective discharge
Provincial governments have powers: to impose fees for of responsibilities and
motor vehicle registration licences; impose charges on administration of the transport
users of non-national roads (defined as road user taxes); sector between national,
and fees for the registration of non-traditional commercial provincial and local levels.
vessels under 10m length. National roads are those
declared under the Road Maintenance Act 1971, all These include matters of sector
others being by implication, the responsibility of provincial funding, user charges and asset
or local level governments. Provincial governments have transfers described late in the
not been given law-making powers in respect of transport NTS
or transport infrastructure.
Under the inter-governmental financing arrangements that came into full effect in 2009, provincial
governments receive a series of grants that are designed to encourage self-sufficiency, to reflect
each province’s financial capability, revenue sources and level of development, and to address
economic and development disparities between provinces. These specifically include disparities
that may result from a lack of infrastructure or poor state of repair of infrastructure. The structure of
grants also take account of development needs which may include: the wealth of the population;
health indicators; education levels; remoteness; potential threats to food security; and any other
factor. The structure of the legislation and framework for inter-governmental financing is therefore
well-developed and is able to be used as a flexible tool of Government’s economic and social
development policies for infrastructure funding at sub-national level.
The Secretary of the Department of Transport, as the Superintendent of Road Traffic, has
delegated various functions of motor vehicle, driver licensing and transport services licensing to
provincial government administrations which now rely on revenue from these functions as part of
their income.
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Under the Harbours Act, the Departmental Head with responsibility for Transport has the power
through gazette notice to declare any port a “declared port”. Once declared, the responsibility for
the port infrastructure lies with the Departmental head and this has been delegated to the PNG
Harbours Board, now the PNG Ports Corporation Ltd. All other non-declared ports are either
privately owned or in provincial or LLG ownership with management and financial responsibilities
resting with the owners.
Schedule 2 of the Civil Aviation Act 2000 lists the airports originally under the control of CAA and
now transferred to NAC, with the legislation allowing the Minister to establish other national airports
either owned by Government or on a joint venture basis. Some airports not on the schedule that
were originally national assets have been transferred to provinces. Provinces are able to establish
airport authorities under the legislation, which gives them powers to manage airports and collect
fees for airport services.
The policy provisions of the National Transport Strategy have been developed to be in accord with
the Organic Law and with the above established arrangements for owning and managing publicly-
owned transport infrastructure at national, provincial and local levels of government.
8.2.2 Giving Effect to Vision 2050 – Asset Transfers

Except where declared as national assets, provincial
governments have the primary responsibility for planning, 20. Asset Transfers - Over the
developing and funding transport infrastructure at period of the NTS, the more
provincial level. However, they have not been provided important provincial roads, ports
with sufficient financial resources to undertake this task and airports will be declared as
effectively and their technical and administrative capacity national assets and become the
to do so is, in many cases, very limited. They have been funding and maintenance
assisted in their task by central government agencies, but responsibility of the Government
such assistance has at times been informal and without transport agencies.
cost recovery.
Declaration of transport
Vision 2050 has set out Government’s intention to bring infrastructure as national assets
25,000 kms of the public road network under DOW will recognise the technical and
ownership for more effective management of financial capacity of each
maintenance, upgrading and new construction. As province to maintain and
institutional change progresses in the road sector, the develop its transport network
National Road Authority will become increasingly and will aim to better align
responsible for funding (from road user charges), technical capacity and funding
managing and maintaining a core road network of about availability between national and
8,000 kms once this is brought up to a good maintainable provincial level in each transport
standard. mode.
This policy recognises the present imbalance between This policy will also be
the limited funds and capacity available to the provinces contingent on the development
compared with national government. It will require over of user charges funding at
the period of the MTDP and NTS that some 17,000 kms national level and the
of new links and upgraded provincial roads become progressive transfer of the core
declared national assets and the responsibility of central national road network to the
government in regard to funding. There will still remain NRA.
approximately 12,000 kms of road under Provincial and
LLG ownership, but down from the present approximately 20,000 kms.
In order to maintain a consistent approach across the transport modes, Government will also review
the maritime and air transport infrastructure that are currently provincial and LLG assets, with the
intention of declaring the more important of these as national assets bringing them over time under
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the ownership of PNG Ports Ltd and National Airports Corporation, to better align technical capacity
and funding availability between national and sub-national level in these modal subsectors.
Conversely, some national assets that have become less used, may revert to provincial or local
ownership, or be closed.
Conditions for bringing specified provincial transport assets under national control will include:
 assurance of sustainable funding for asset maintenance from national government budget
appropriations, including funding of recognised CSO obligations where these exist;
 agreement by the provincial or local level government owners of the assets to be
transferred;
 the development and ongoing maintenance and operation of the assets will conform to the
provincial development plans and transport plans.
8.2.3 Management Agreements for Provincial Transport Assets

The national level transport agencies of DOW, NRA, PNG
21. Management Agreements -
Ports Ltd and NAC have the best-developed technical
It is recognised that many
capability for management of transport assets for roads,
provinces have limited technical
ports and airports. Similarly the NMSA and PNGASL have
and management capacity for
these capabilities for maritime and air navigation
infrastructure planning,
infrastructure. While some provinces are relatively
development and maintenance.
advanced in their asset management capability, others are
not. The human resources available within the state
The Government will encourage
sector in professional engineering and technical trade
provinces in this situation to
skills is limited, susceptible to leakage to the private
enter into management
sector, and these resources need to be conserved,
agreements with the transport
developed and used to best effect in the national interest.
sector agencies on a fee-for-
Accordingly, a policy of the NTS is to make the technical service basis to act on behalf of
knowledge and management capability within the national the provinces as asset
agencies available to assist provincial governments managers for provincial roads,
through establishment of regional and provincially based ports and airports.
centres of expertise, combining national and provincial
resources to provide for management of transport An aim of this policy is to
infrastructure assets at sub-national level. coordinate and concentrate
technical resources in the
It is envisaged that management agreements will be made provinces to provincial or
between provincial government and the relevant national regionally based centres of
agencies for the management of provincial transport expertise, to make best use of
assets on a fee-for-service basis, consolidating the various the combined provincial and
channels of funding at provincial and local level and national resources to better
making the national agencies responsible for the best manage transport assets at sub-
application of the funds to maintenance and capital national level.
projects for local roads, small wharves and jetties and
provincial airports and rural airstrips.
8.2.4 Delegations of Motor Vehicle and Driver Licensing

Where the Superintendent of Motor Traffic has delegated
22. Delegations - The existing
responsibility for motor vehicle registration, licensing and
delegations to the provinces of
driver licensing to provincial governments and, in other
motor vehicle registration and
cases to MVIL, these delegations will remain and be
licensing will be formalised
formalised where necessary in legislation to be prepared.
through legislation with
obligations and responsibilities
on each side.
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Provinces will retain the revenue from these activities as a fee-for-service.
Provinces and the MVIL will collect accurate records of licences issued and make returns to the
Department of Transport for statistical purposes under the provisions of the Transport (Collection of
Information) Amendment Act.
8.2.5 Road User Charges Collection

Under the National Roads Authority Act, the NRA is 23. Road User Charges
responsible for maintaining certain national roads with Collection - The provinces and
revenue derived from road user charges, these being MVIL will act as collection
charges on fuel and vehicles. The provinces and MVIL agents for vehicle-based annual
will in future be required to act as collection agents for charges under the road user
the NRA for the vehicle-linked component of these charges provisions of the
annual charges, on a fee-for-service basis. National Roads Authority Act.
8.3 Market Entry and Competition Regulation

Transport policy will continue to be one of market
liberalisation, recognising that restrictions on market 24. Market Entry - Government
entry can reduce incentives for cost efficiency through will continue with its existing
lack of competition, excessive profit margins and high policy of liberalisation in the
prices. Apart from situations where there is a need for domestic transport market to
certainty and stability of service provision, Government encourage competition,
will not regulate market entry or the routes and traffic to regulating primarily for safe
be carried by domestic transport operators. Government operation, service quality and
will regulate only for safe operation, service quality and fair pricing.
fair pricing.
25. Foreign Competition -
The PNG transport sector is already well down the track Selective protection of the
of liberalisation so further relaxation will be subject to coastal shipping and domestic
tests and safeguards against unintended and unwanted aviation industries will remain,
consequences. as discussed under the modal
policies
Present transport regulation requires road freight
operators and domestic shipping operators to hold
transport services licences based partly on the size of the market and the services provided by
incumbent operators. In future the policy will be, where economically beneficial, to remove
quantitative transport licensing for hire-or-reward transport services subject to the following:
 safeguards against monopolistic and market dominant behaviour;
 safeguards against competition from directly or indirectly subsidised services, such as from
public funding or “free” provision of transport equipment and services, except as provided
for under the CSO policy;
 assurance of acceptable levels of service quality, safety and security;
 good character, financial competence and long term intention of new operators;
 that the delivery of transport services to communities not able to sustain commercial
services is not compromised by market competition;
 ensuring reliable and orderly public passenger transport services in urban areas;
 fostering the development of a PNG citizen-owned companies and PNG citizen skills base
in the transport services and supporting industries and participation at all levels.
The Government will retain the option of prohibiting or selectively regulating overseas transport
operators who wish to operate in the PNG domestic transport market by linking their international
services to, from or through PNG with the carriage of domestic passengers or cargo, where the
99
economic benefits of such competition are likely to be outweighed by the economic and social costs
to the local industry, employment and the PNG economy in general. Specific policies are set under
Section 12 Maritime and Section 13 Air Transport.
8.4 Cost Recovery and User Charges

The transport sector does not recover its full costs through charges made to users. Operational
costs of the main ports and airports are largely recovered, but maintenance costs of infrastructure
across all modes are only partly recovered and capital expenditure on infrastructure is almost
entirely unrecovered.
Almost all capital expenditure for roads, ports and airports is administered through Government with
the ultimate sources of funding being from Government’s general revenue or from grant and loan
funding by bilateral donors and the multinational development banks. The channels for Government
funding of transport infrastructure are: (i) direct appropriation to programmes and projects of
Government departments, statutory authorities and SOEs; (ii) through inter-governmental funding
arrangements to provinces, districts and local level government councils; and (iii) through the tax
credit scheme and other arrangements with landowners and Government where private companies
fund transport infrastructure as part of overall resource development agreements.
The reliance primarily on National Government appropriations for funding, which have been limited
and variable, has resulted in decades of under-investment in the transport infrastructure, well below
the level that would minimise the total economic cost. This underfunding of infrastructure has
caused much higher costs to fall on transport operators and users than would otherwise have been
the case. The high costs to transport operators and users has increased the costs of goods and
services and constrained growth in productive sectors of the economy, particularly in the agricultural
sector and for business development.
Any public costs not recovered from transport users must

26. User Charges - The
either be met from general revenue, limiting the
Government will, over time,
Government’s scope for funding other programmes, or
reduce the proportion of
require a higher level of general taxation, from income,
transport infrastructure and
corporate tax, value added tax and duties which has a
services costs that it funds
dampening effect on the economy. Consequently it is
directly through Budget
desirable that, where possible, cost recovery be from
appropriation in favour of
within the transport sector, subject to considerations of
transport user charges
user affordability, minimising evasion and avoidance,
transport investment as an agent of national and regional 27. SOEs to Operate
economic growth and the delivery of basic transport Commercially - The transport
access to rural communities. SOEs and statutory authorities
The Government will aim to increase the proportion of will be required, to the maximum
publicly funded transport infrastructure and services costs extent possible, to operate on a
that are recovered from transport users, either by direct fully commercial basis and with
charging for use of the services provided or indirectly a minimum of price regulation
through levies on vehicle, operator and services licensing, provided that the CSO
compulsory insurance and purchase of vehicles, spare obligations of each SOE are
parts and fuel. explicitly recognised and are
separately funded.
For Government owned transport organisations under the
IPBC, the objective will be that these operate 28. International Obligations -
commercially, with any CSO obligation recognised and Certain international obligations
separately funded, and with a minimum of price limit cost recovery in
regulation. For the regulatory agencies, the extent of cost international transport by the
recovery from user charges will be case-specific and will regulatory agencies in aviation
and maritime and exceptions will
be made in such cases.
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be influenced in some cases by international agreements to which PNG is a signatory and the
public good element of the services.
It is recognised that this policy objective will take some time to achieve, particularly in the roads
subsector, and the NTS sets out an action plan and time frame.
8.5 Priorities for Call on Available Funds

However good the forward planning, the financial circumstances of Government and its agencies
change and are not fully predictable. Planning will have identified transport investments that exceed
the available funds, and decisions have to be made on the priorities for spending if and when the
expected funding is not available.
Investment in infrastructure can be classified into types of work: maintenance (in various categories
described below); upgrading which involves improving the standard of design; and new construction
- creating assets where none previously existed.
8.5.1 Maintenance
Maintenance is classed into the following groups:
 Emergency reinstatement – as its name suggests, emergency maintenance and

reinstatement involves either the loss or extreme degradation of service of a transport
facility; as discussed elsewhere, provision will be made to accumulate funds for emergency
works so that these can be called upon when needed so as not to draw funding from
planned work;
 Routine maintenance and operation – the day-to-day costs of operating and maintaining
transport facilities, which are usually relatively low level but continuing costs that, if attended
to regularly, will offset or delay more costly heavy maintenance;
 Periodic or specific maintenance – needed at intervals of years to restore service levels
of the infrastructure;
 Rehabilitation – needed at longer intervals, involving partial renewal of parts of the facility
that are subject to traffic-based and environment-based long term degradation, but short of
full renewal or reconstruction; and
 Renewal and reconstruction – needed when facilities reach the end of their economic
service life, or are damaged beyond economic repair
An asset manager such as DOW, PNG Ports or NAC will aim for a maintenance regime that
combines these various types of maintenance to give the most cost-effective outcome over the life
cycle of the asset, taking account of expected traffic growth and escalation in input costs.
For facilities that handle low levels of traffic, the asset management regime will be that which
preserves the minimum agreed levels of serviceability at the lowest cost to the agency. This may
involve maintenance costs that cannot be recovered from either user charges or are viable when
compared to the economic benefits, in which case there is a CSO component to the maintenance of
the asset. For infrastructure handling levels of traffic which render the facility economically viable,
the asset manager may choose to maintain the assets at a level that minimises agency costs if
funds are constrained, but should aim for a level of provision that maximises the net national
economic benefit by minimising the costs to users and the agency combined. In Papua New
Guinea the past experience is that assets have not been maintained either at a level that maximises
national economic benefit or even minimises agency costs, as large amounts of deferred
maintenance have been allowed to build up, requiring more costly later intervention.
The implication of not fully funding lifecycle asset maintenance at the optimum level while at the
same time still making investments in upgrading and new infrastructure is that some existing assets
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will be allowed to deteriorate or will be closed and abandoned. This is only justifiable if the new
assets are greatly superior to those being discarded.
8.5.2 Upgrading
Upgrading involves improving the design standard of the asset. For a road, examples are widening,
realignment, surface sealing and strengthening to carry heavier loads. For airports, upgrading can
involve adding or widening taxiways, increasing apron areas, lengthening and strengthening
runways, either to carry larger aircraft or to provide for
higher throughput. For ports, upgrading can involve 29. Order of Funding Priority -
deepening and lengthening of berths, increasing and will generally be:
strengthening wharf working and storage areas and new  Emergency reinstatement
or additional handling equipment such as cranes.
 Upgrading of essential
Upgrading is required in some cases to satisfy infrastructure required to
international standards and conventions to which PNG is meet mandatory standards
signatory. These are mainly in aviation but also  Maintenance of existing
increasingly in maritime and relate to safety, security and infrastructure assets
environmental protection. These are noted as “upgrading
to meet mandatory standards” in Section 8.5.4 below.  Upgrading of existing
infrastructure assets
Upgrading to satisfy a minimum policy standard that
cannot be justified economically involves a CSO
 Construction of new
component, as discussed below. Certification upgrading
infrastructure
may involve a CSO component if the work required does 30. Maintenance - should be
not produce identifiable economic benefits to justify the fully funded across the network
extra costs; for this reason certification requirements before considering any
should be sensitive to the scale and use of the facility, so upgrading or new construction;
that onerous costs are not imposed unnecessarily on
Funding of asset maintenance
small facilities, such as provincial ports and airports.
should be at a level that
8.5.3 New Construction
minimises total transport costs
(maintenance + transport user
New construction involves expanding the transport costs) over the lifecycle of the
network, by additional road length, new ports and asset;
landings, new airports and airstrips and new associated
navigation infrastructure. Failing this, the aim should be to
minimise asset maintenance
The functional classification of the transport network (in costs over the lifecycle of the
Section 20) draws a distinction between infrastructure asset.
that provides the main or sole access to an area and
infrastructure that adds cross-connections between
31. New Construction - funding
provinces and districts. In terms of priority, all else being
should prioritise provision of
equal in terms of the size and importance of the area
primary access to rural areas
served, the first call on funds should go to infrastructure
over the provision of secondary
that provides the primary means of access to an area
or cross linkages
over that which provides a secondary link. 32. CSO Funding - Projects that
serve basic access but which do
New construction projects should achieve a benefit/cost not achieve a BCR of 1.0 will be
ratio greater or equal to 1.0 for economic viability. considered under CSO funding
Projects that are required to satisfy policy on basic levels policy
of access but which have a BCR less than 1.0 will be
dependent on CSO funding support to proceed.
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8.5.4 Order of Call on Funds

The order in which calls on transport expenditure from a particular pool of funding will then be
generally as follows:
 Emergency reinstatement
 Upgrading required to meet mandatory standards
 Maintenance of existing assets
 Upgrading of existing assets
 New infrastructure
The policy on funding priorities recognises that there are several pools of funding in the transport
sector and funds are not fungible across the entire sector (i.e. the pools are separate with limited
ability to swap funds from one area to another).
However, it is desirable that there should not be large discrepancies in the sufficiency of funding
across funding pools, otherwise this will give rise to a sub-optimal allocation of resources. For
example it is not desirable that one agency should have funds sufficient only for maintenance
activities whilst another has funds available for new infrastructure. Similarly, it is desirable that the
maintenance funding of a transport facility be drawn from the same funding pool as that for
upgrading and new infrastructure, so that rational decisions are made for the upkeep of projects –
for example if one agency is responsible for maintenance and another for capital development, and
the former has insufficient funding while the latter creates new infrastructure without regard to
ongoing maintenance costs.
8.6 Community Assistance, Subsidies and CSOs
8.6.1 Definition of the CSO and Policy Rationale

In the context of this National Transport Strategy, the term community services obligation (CSO) is
used in a broad sense as the extent to which Government is prepared or obliged, under its policies
on social welfare and income distribution, to fund a shortfall in the economic viability of transport
infrastructure or a transport service. As noted in Section 8.5, expenditure on maintenance,
upgrading and new construction can each involve a CSO component.
The policy rationale for Government to fund a CSO, or require an SOE to deliver one, can be either:
 the service is expected to develop demand over time to a level where it becomes economic
which justifies a “start-up” funding injection by Government; or
 the service will continue to be uneconomic but is funded for other reasons (for example a
policy decision to provide a basic level of access to population concentrations of a certain
size or to local level administrative centres)
As the second of these relies on a continuing subsidy which removes investment from alternative
spending, the extent to which Government is prepared to fund long term sub-economic services
becomes a matter of income redistribution and welfare policy as much as transport policy.
The reason for targeting social welfare objectives through transport spending is that the alternative
of directly distributing benefits through the tax system may be impractical for the rural population,
many of whom are not formally employed, and provision of direct financial benefits to the potential
users of transport services (such as rebates or subsidies on passenger fares and freight) does not
ensure that either the infrastructure or services will be available. Also, conventional benefit cost
analysis seldom makes any allowance for differences in marginal utility of income (that the value in
use of an extra kina to a poor person is greater than to a rich person).
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8.6.2 Definition of Economic Benefits

In a comprehensive economic analysis of a transport investment, if the net benefits are less than
the net costs, when discounted over an appropriate time horizon and public sector discount rate,
then such a project would normally not be recommended for funding. Economic benefits include
resource cost savings of vehicle operation, the economic value of travel time savings and improved
reliability and can also include the social costs of transport accidents and the economic benefits
from new induced production and travel demand. The economic benefits may include those to non-
users of the services in some situations. They can be further widened to include a valuation for
other non-market effects such as environmental impact.
In relation to the evaluation of economic benefits, the 2010 TIPS Study included what it referred to
as “social benefits” as part of the economic benefits and for ranking of individual project by BCR. In
this case the social benefits are an approximation for otherwise unquantified economic benefits
from delivering social services such as basic education, health and access to markets to
communities that do not have the ability to afford transport services at commercial rates. The
rationale is that there is a national benefit to be gained in the long run by investing in a better
educated and healthier population, and that this should be recognised by raising the priority of
investment in transport services for otherwise disadvantaged groups.
8.6.3 CSOs and Transport SOEs

For a state owned commercial enterprise (SOE), the CSO is generally recognised as the shortfall in
financial viability of community services that the Government requires the SOE to provide under
some form of charter or contract, either for a financial consideration or by internal cross-subsidy.
Financial viability applying to a Government commercial enterprise is therefore more narrowly

defined than the economic viability of a CSO and requires that the transport investment recover its
financial costs through revenue raised, discounted at an appropriate weighted average cost of
capital (WACC) and over a time horizon related to the useful asset life, or other commercial
investment target. The WACC is generally higher than the public sector discount rate and the time
horizon shorter. Also, from the SOE’s viewpoint, financial benefits to non-users of the service are
not a consideration.
To compensate an SOE for constructing and maintaining transport assets that do not provide a
financial return to the SOE so as to avoid internal cross-subsidies, requires the Government to
make available funds to bridge the gap between the costs of service provision and the revenues
obtained. In doing so, Government must take account of the potential for efficiency gains in service
delivery by the SOE and for increasing demand for the services.
8.6.4 Community Assistance and Sweat Equity

The term “community assistance” is used in this NTS to refer to Government funding support
directed at a local community, to supplement the community’s own funding efforts to pay for
infrastructure or a service, in money or in kind. Community assistance is therefore another term for
a particular form of CSO where the community indicates its support for the facility through a cost
sharing arrangement.
Communities are encouraged to reduce the cost to Government through free supply of labour or
materials to a project, so-called “sweat equity”, or through a financial contribution, enabling
transport projects that would otherwise miss the cut-off for a CSO contribution to receive funding by
being ranked higher in the priority order (see 8.6.6 below).
8.6.5 Quantum of CSO Funding and its Distribution

In the NTDP, the declared policy was that 5% of transport funding should be allocated to CSO
projects, although it was not clear whether this referred to the total project cost or the CSO
component of cost. However, it is reasonable that this percentage should be relatively small, as
104
any funds devoted to CSOs will displace funds that could otherwise be allocated to transport
projects with a positive economic rate of return, at the level defined by the available funding
envelope.
Ideally, the total quantum of CSO funds for the transport sector would be determined in advance
through an annual review process, and would then be allocated by Government to those agencies
responsible for delivering CSO investments. The NEFC may be a suitable agency to develop the
framework and carry out the annual analysis, assisted by the DOT and transport line agencies with
technical information.
8.6.6 General Policy for CSO Funding

The overall policy for CSO funding proposed under the NTS is:
1. Determine the total quantum of CSO funding to be made available each year – this should
be decided broadly by Government, but as a starting point, an estimate of the percentage
of transport funding that can be classified as CSO support in recent years can provide a
benchmark.
2. Broadly apportion the funds by transport mode and by funding pool, but taking account of
the desirability of equal treatment across modes.
3. For existing transport infrastructure and for Government supported transport services,
estimate the cost of the CSO component – that is the excess funding provision or “top up”
that cannot be justified through economic benefits – as a percentage of the total cost
4. For potential upgrading, new construction and new transport service projects, similarly
estimate the excess funding provision as a percentage of total cost
5. Priority rank the CSO projects by increasing percentage “top up” requirement – this will
result in those projects that are closest to achieving a BCR of 1.0 having first call on funds.
However, maintenance of existing infrastructure should still have priority over upgrading
and then new construction.
6. Allow the beneficiaries of the spending to supply part of the funding either in kind (sweat
equity) or in cash, to raise the project’s ranking to give it more likelihood of funding under
the CSO policy. This is called the beneficiary contribution.
The ranking process for economically viable projects CSO Policy Summary:
(BCR > 1.0) and CSO projects can be combined and is
compatible with the TIPS methodology. The descending 33. Adopt a common approach
order of priority is B / (C – beneficiary contribution). It is across transport modes and
reasonable for the Government to include provincial level of government based upon
government cost sharing as a beneficiary contribution to an agreed total of Government
nationally funded projects, on the grounds that this is an CSO funding for the sector and
indication of the local priority given to a project, which may method for apportioning to
differ from the national priority. modes, agencies and projects
34. Each agency to provide a
The CSO component of the project is (C – beneficiary
prioritised list of projects seeking
contribution – B). Note that the CSO component is not
CSO top-up funding from
the same as the CSO financial support which for revenue
Government using TIPS
earning (R) transport infrastructure is (C – R) and for non-
methodology
revenue earning infrastructure, such as local access
roads, is C. 35. Allocate a portion of
Government CSO funding on a
Possible sources of CSO funding, other than through provincial basis using the TIMG
direct Government appropriation are discussed under the and DSIP or similar mechanisms
policy for each transport mode.
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8.6.7 Delivery of CSO Funding to Provinces

It is envisaged that a portion of CSO funds would be allocated on a provincial basis, and that
provinces would identify the transport infrastructure and services potentially eligible for a CSO
contribution. At present this allocation is done through the TIMG and development grants such as
DSIP which ideally would be combined into a single channel of funding to the provinces for
transport infrastructure.
The agreed CSO funds to be applied to sub-national transport infrastructure would be allocated
through the inter-governmental financing arrangements as grants for transport infrastructure capital
and maintenance funding on a province-by-province basis. Each province would provide the NEFC
and DOT in advance with a prioritised list of projects ordered by benefit/cost ratio using the TIPS
methodology, showing which were proposed for funding in the year as economically viable projects
and which we being proposed as partly CSO funded
projects to meet basic access criteria, again ordered by CSO Policy Summary:
BCR. 36. Allocate a portion of CSO
funding to low volume national
8.6.8 Delivery of CSO Funding to National roads under DOW responsibility
Roads
37. Provide external funding to
Some national roads may be considered for CSO
compensate SOEs for delivering
funding. These are most likely to be low traffic roads
an agreed level of CSO funding
under the responsibility of DOW, where the minimum
to sub-commercial national ports
design standard corresponding to their functional
and airports; this external
classification and traffic level requires investment that
funding to be either direct
does not meet a minimum economic rate of return.
Government allocation or raised
8.6.9 Delivery of CSO Funding to SOEs and
through a wider industry levy, to
Statutory Authorities
be determined
In the case of SOEs and statutory authorities which are 38. The CWTP franchise
required implicitly, or explicitly through legislation/service shipping and jetty scheme will
agreements, to cross-subsidise between their form part of the overall CSO
commercial and non-commercial operations for delivery funding envelope
of CSOs, these would in future be directly funded to the 39. Government will develop a
difference between user generated revenues and the similar scheme for remote rural
costs of provision of the infrastructure or service. The airstrips and services
agencies to which this applies are PNG Ports, NMSA,
NAC and PNGASL. As NRA is to be responsible only for 40. PNGPCSL and NAC will be
core roads, these are unlikely to attract CSO funding. considered for managing the
construction and asset
There would be independent audit and some commercial management of rural jetties and
incentives applied to encourage efficiency improvements airstrips respectively under a
within agencies receiving CSO funding, with the aim of fee-for service arrangement;
improving the commercial and economic viability of the
41. The establishment of a
service provided through productivity improvements and
Community Transport
raising demand for the services, to reduce the CSO cost
Infrastructure and Services Fund
over time.
will be considered to hold the
8.6.10 Delivery of CSO Funding to Government-
CSO funds with allocations
Subsidised Transport Operations
approved through DOT
Government currently provides CSO funding to water
transport services under the Community Water Transport project (CWTP). The funding is delivered
through a competitive shipping franchise scheme, where operators bid for a CSO payment to supply
a service, the lowest conforming bid being accepted. This allows the service to be delivered at
passenger fares and freight rates that are within the communities’ ability and willingness to pay.
106
The NTS confirms the CWTP shipping franchise scheme as the method for delivery the
Government’s CSO to remote coastal and river communities and is preferred to the alternative of a
shipping freight rate/passenger fare subsidy scheme. A second phase of the CWTP will be operated
through the first five years of the NTS and the scheme fully reviewed by 2015 for a decision on
continuation, amendment or termination.
Services to remote communities accessible solely or primarily by air using small fixed wing aircraft
and short bush airstrips exhibit very similar needs as do water transport services to remote coastal
communities. At present there is no Government financial support for third level aviation to these
communities but reliance on church-supported aviation services primarily through MAF.
The Government, through DOT in conjunction with NAC and industry stakeholders, will consider
alternatives to provide CSO funding support to sustain third level aviation services to remote
communities at a level comparable to transport services available to remote communities connected
solely by road or by water transport. Alternatives could include combinations of a franchising
arrangement, similar to CWTP, freight and passenger fare subsidies and subsidy of tariffs paid by
air operators for air navigation and airport services. The development of CSO policy in this area will
also consider the source of funds and the desirability of establishing a trust fund, similar to the
CWTP as discussed below.
8.6.11 Funding Sources and a Proposed CTISF

Sources of CSO funding may include direct Government appropriation through the annual budget
but, to avoid the uncertainty of funding continuity, various other funding mechanisms will be
considered. Ideally the various sources of CSO funding through DSIP, TMIG, cross-subsidies
within the transport SOEs, CWTP etc., would be pooled into a single fund, a suggested name being
the Community Transport Infrastructure and Services Fund (CTISF), and the apportionment to each
transport mode and national/provincial level administered centrally, with technical advice from the
transport and central agencies, and financial management through trustees of the Fund. It is
envisaged that centralised administration of CSO funds with greater monitoring and accountability
will achieve better value for money than the present system. This centralised CSO funding model
will, over time, replace the rather fragmented approach to CSO funding that currently applies.
Payments from the fund would be authorised by the Department of Transport against programmes
and acquittals of expenditure by those agencies charged with delivering infrastructure capital works,
infrastructure maintenance and CTISF assisted transport services. The CTISF would be held under
prudential management in a similar way to the Community Water Transport Fund. The CWTF may
in fact become part of the CTISF. Grant assistance from
PNG’s development partners would also be eligible for 42. Transport Corridor
payment into the Fund. Protection:
8.7 Transport Corridor Protection and Land Develop implementation

Acquisition mechanisms and protocols for
the Protection of Transport
The Government recognises the need to protect transport Infrastructure Act including:
corridors for future development, to ensure that access to
land, water and air space required for transport - Carrying out an audit of
infrastructure is not compromised by development, and to land compensation procures
give the owners and occupiers of land certainty regarding - Developing a Community
Government’s future intentions. Economic Involvement and
To this end the Government has enacted the Protection of
Education Programme
Transport Infrastructure Act 2009 to ensure that land - Developing a policing and
required for all transport infrastructure (i) is available to be enforcement strategy
used for national, provincial and local-level transport; (ii) is
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secure and protected; and (iii) is free from encroachment, deliberate damage and excessive and
unjustified land compensation demands.
The practical implications of the new Act, implementation mechanisms and protocols will be
developed by those transport sector agencies most directly involved in securing land and water
space for transport infrastructure, namely:
 Department of Lands and Physical Planning

 Roads – DOW
 Main Ports – PNG Ports Corporation
 Main Airports – NAC
 Ground-based air navigation facilities – PNGASL
 Ground and water based maritime navaids – NMSA
An audit of land acquisition and compensation procedures will be undertaken to ensure the
Government is not inadvertently contributing to the problem by unjustly acquiring land for transport
infrastructure projects and/or paying inadequate compensation.
A Community Economic Involvement and Education programme will be designed to ensure
communities and their leaders who live alongside or adjacent to land used for transport
infrastructure projects are:
 provided with an economic stake in the protection and maintenance of transport
infrastructure through the development of construction and maintenance contracts with
those communities;
 made aware of their responsibilities and rights concerning roads and other land used for
transport infrastructure and the need to act accordingly; and
 held legally responsible for any breaches of the law concerning the traveling public and their
use of the roads and other transport infrastructure.
A policing and enforcement strategy will be developed by DOT in consultation with the Police, that
effectively respond to breaches of the law and thus provides ongoing protection for all transportation
and related infrastructure.
8.8 Service Quality Standards and Monitoring Service Quality Standards:

Transport service quality has suffered, particularly in land 43. Freight and passenger
transport but also in maritime, from shortcomings in the services will include service
regulation and enforcement of transport service quality. standards in licencing conditions
This has been through a combination of lack of capacity
44. ICCC will retain a monitoring
in the responsible agencies, equipment limitations,
role for service standards in hire-
funding limitations, unclear demarcation of
or-reward freight and passenger
responsibilities, outdated fines and penalties and
transport services
outdated legislation.
45. The Government
Government’s policy will be to regulate transport freight infrastructure agencies (DOW,
and passenger services carried out for hire or reward on a NRA, PNGPCL, NMSA and
quality rather than quantity licensing basis, subject to NAC) will formalise and maintain
certain safeguards (see Section 7.3.1). guidelines of good practice over
The ICCC has a mandate to oversee service quality their area of operations based
standards in publicly provided transport services, and a on international best practice as
system for monitoring, reporting and improvement. applicable to PNG local
conditions.
Developing and enforcing quality standards for the
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design, construction and maintenance of transport infrastructure has been the responsibility of the
implementing agencies, in particular the DOW for roads, PNG Ports Corporation Ltd for port
infrastructure, NMSA for maritime navaids and CAA (now CASA, NAC and PNGASL) for airports
and air navaids. These agencies have, from time to time, developed in-house guidelines and
manuals for the purpose, generally based on international or other regional practice. Outsourced
consulting and contracting services engaged by the transport implementing agencies have used a
mixture of these in-house guidelines and recognised overseas practices.
Government will seek to review and formalise these
existing practices, to ensure that clear, consistent and Service Quality Standards:
appropriate guidelines and standards are applied across 46. An oversight working party
the transport implementing agencies and the private will be formed from the public
sector. In doing so it will seek to form an oversight and private sector under CIMC
working party drawing on the resources of the public and and IPEPNG auspices to review
private sector, including the CIMC, the Institute of and endorse proposed industry
Engineers of PNG, and engineering consulting and standards.
contracting associations.
47. All transport agencies will be
All transport sector agencies, including SOEs, will be required to develop measure
required to develop, measure and report on key and report on KPIs for their
performance indicators for their activities and for the activities and the performance of
performance of the transport infrastructure, services and transport assets under their
their use under their regulation, administration, control, including public
management or service delivery. As part of the KPIs, satisfaction surveys
agencies will be encouraged to carry out and publicly
report customer satisfaction surveys.
8.9 Transport Safety

Transport safety has been a main priority in the NTDP
and will continue to be an area of high priority with the Transport Safety:
objective of continuous improvement. It is recognised that 48. Develop Safety
transport safety has failed to achieve these objectives in Management Systems (SMS) in
the past and that a major effort will be required for the each mode
situation to be improved.
49. Develop safety databases
This will be done through a number of policy initiatives and Safety Action Plans
including:
50. Better coordination of safety
 development, maintenance and continuous functions through reorganisation
improvement of Safety Management Systems of responsibilities
(SMS), including safety standards where these do
not already exist and more effective enforcement; 51. An improved enforcement
and penalties regime will
 development of safety action plans in each
improve safety performance
transport mode backed by improved databases of
accidents and incidents with monitorable targets 52. Additional financial
and reporting of achievement; resourcing
 some reorganisation of safety functions among 53. Government and industry
agencies and improved coordination; safety training
 an improved level of enforcement of existing
54. Improved first response,
transport legislation, updated legislation and
SAR and disaster management
penalties regime;
services
 improved financial resourcing for safety; and
 Government, industry and driver/operator training
programmes.
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 Improved first response capability to transport accidents, improved search and rescue and
disaster management services and inter-agency coordination
8.10 Transport Security

The Government is committed to ensuring that PNG complies with international codes for aviation
and maritime security so that it maintains and enhances its international reputation and ensures that
its international transport connections to key markets are not jeopardised. This requires that a high
priority be given to funding of security infrastructure and operational programmes.
Transport security at the land borders is similarly Transport Security:

important and the transport agencies will work in concert
with the Border Development Authority to facilitate legal 55. Compliance with
cross-border trade and guard against illegal movement of international air and maritime
people and goods. security codes and investment
priority for security-related
Within PNG’s air and water space, the Government will infrastructure
enhance the security of domestic and transit traffic,
through improvements to air and marine navigation
56. Safeguards against illegal
infrastructure and services and response systems for
cross-border movement of
incidents and emergencies.
people and goods
57. Improve security of domestic
Security is also an issue on PNG roads and public and transit traffic in PNG’s air
transport where illegal road blockages, hold-ups, theft of and maritime space
goods, intimidation and danger to travellers are too
frequent occurrences. Effectively implementing the 58. Increased security
Protection of Transport Infrastructure Act 2009 will go surveillance and response by
some way to improving road security. DOT and, once RTA and the Police
formed, the RTA, will also work with the Police, Justice 59. Personal and goods security
Department and other central agencies and community as well as accident and injury
groups to increase the level of security surveillance and reduction to be incorporated into
effectiveness of response to incidents as they occur and safety action plans
act as a deterrent. NRSC and the RTA will incorporate
passenger and goods security into their safety action
plans.
8.11 Transport Integration
In the past, road, air and sea transport infrastructure and

services have developed largely independently. This Transport Integration:
separation has been encouraged by the establishment of 60. Improve road approaches,
the main ports and airports as SOEs required to operate new and upgraded links and
on a commercial basis, while roads remain partly under local traffic management at the
Government departmental control and partly statutory main ports and airports
authority, with each mode having separate reporting
responsibilities to Government. 61. Consider relocation of port
facilities and inland freight
The NTDP 2006-2010 identified the desire to move terminals in selected cases
towards a more integrated approach to transport planning
62. Coordinated provision of
in PNG. The establishment of the TSCMIC was a step
basic access to remote
towards closer coordination between the modal transport
communities by either road,
agencies, under the chairmanship of the Secretary, DOT.
water or air
In the NTS, the process of integrated planning and
funding will be taken further by the following policies for the physical infrastructure:
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 integration of transport at the main gateways – the NTS aims to better coordinate the land
connections with the main ports and airports, in particular Port Moresby and Lae ports, and
Jacksons and Nadzab airport; existing arrangements are confined by urban congestion and
new port facilities, selective port relocation and
inland freight terminals are seen as part of the Transport Integration:
solutions; 63. Provide appropriate
 integration of basic transport access to remote standard road links to ports and
areas – the NTS aims to coordinate the provision airports
of basic access to remote communities, so that 64. Construct missing links
all those of significant size are connected either between provinces for overall
by road, sea/coastal jetty or rural airstrip, with network integration where
higher priority given to those areas with fewer economically attractive and
such connections; technically feasible subject to
 in addition the NTS aims to better ensure that funding availability
new or existing airports and ports are linked to
local and district centres by roads of appropriate
65. Provide consistency of
standard;
design treatment along transport
routes, with heavy traffic
 where economically feasible and in agreement provisions suited to road
with the MTDP, the NTS promotes new road function and nature of traffic
linkages between the several separated road
networks that exist in PNG; in particular 66. Balanced investment
connections between the Highlands road system between roads, ports and
centred on Lae and Mt Hagen with the Papuan airports in relation to benefit-cost
coast centred on Port Moresby, linkages along performance
the Momase coast between Popondetta, Lae,
Madang, Wewak and Aitape, and connecting East and West New Britain along both north
and south coasts.
 There is also a need to ensure that PNG roads and bridges along the main economic
corridors are to a sufficient structural and alignment standard to carry the heavy traffic
generated by resource development and general freight demand, recognising that improved
capacity will provide benefits in lower freight costs and improved road standards will give
better reliability for import and export freight connections with the main ports.
 In regard to investment, the TIPS Study 2010 has confirmed expectations that investment in
ports has lagged behind investment in roads. A better alignment of priorities for
infrastructure project evaluation across modes will give an improved balance of funding
priorities in the future.
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9 Statement of Policy for Cross-Cutting Issues
9.1 Introduction
These are issues that cut across all infrastructure and resource development sectors of the
economy. A number of them correspond to the Millennium Development Goals and all relate in
some way to the objectives of Vision 2050 and the Development Strategic Plan.
This statement sets out how national policy for the following issues will be implemented through the
National Transport Strategy. Detail of specific treatment is also given under the policies for each
transport mode.
 Good governance and policies against corruption

 Environmental protection and enhancement
 Climate change adaptation
 Poverty alleviation
 Gender equality and women’s development
 Control of communicable diseases, in particular HIV/AIDS
9.2 Good Governance and Policies against Corruption
The NTS notes Government’s intention to establish an Independent Commission against Corruption
and the preparation of legislation to establish this body. Good governance involves measures to
both avoid inefficiency and provide good structures for decision making and management as well as
safeguards against deliberate attempts to subvert or
corruptly influence or benefit from the decisions that are SOE and Statutory Authority
made. Strategies for raising the level of governance in the Boards
transport sector are discussed below. 67. Transport SOEs and SAs
are not to operate without
9.2.1 Composition of the Boards of SOEs and
appointed or elected board
members as required in their
Good governance of the sector requires appropriate top- legal establishment
level institutional structures in the government 68. Governance boards should
departments, statutory authorities and state owned include an appropriate mix of
enterprises. For statutory authorities and SOEs, the technical, administrative and
governance boards should be composed so as to bring legal expertise rather than
the right mix of technical, commercial, administrative and political or departmental
legal expertise to the board table rather than political or representation
departmental representation.
69. Oversight of governance of
For the SOEs in the transport sector the oversight of the SOEs to be through IPBC and
IPBC will be the main means of ensuring good Auditor General
governance of PNG Ports Corporation and Motor Vehicle
70. Competition and market
Insurance Ltd, the existing SOEs, and this will extend to
entry regulation through ICCC
other newly created SOEs that Government may decide to
rather than through SOEs or
place under the authority of the IPBC.
For the statutory authorities, at present the NRA and the 71. Maintain appropriate
NRSC (and in future the RTA), it is important that correct separation between ministries,
relationships be maintained between the Ministers of their departmental heads and
Government, the permanent secretaries responsible for the boards of SOEs/SAs
transport matters, and the various boards and executives
of the statutory authorities.
112
For example it is not desirable that the Secretary of

Transport be on the board of a statutory authority that SOE and Statutory Authority
reports to the Minister, as the Secretary must maintain the Boards
distance necessary from the authority to be able to give 72. Governance boards
frank and impartial advice to the Minister on the affairs of responsible for regulation not to
the authority. include members with
commercial interests in the
In general the boards of SOEs, statutory authorities or
regulatory decisions
special purpose committees should not include
representation from individual commercial interests in the 73. CEOs not to be voting or ex-
transport industry that it is their responsibility to regulate, officio board members
where regulation includes matters such as market entry
74. The terms of board members
and competition regulation. For this reason, most such
to be limited to a maximum of
regulation of the transport sector will be vested in the
four years with a minimum of
ICCC.
four years separation before
Oversight of the operation of SOEs and statutory eligibility for a further term
authorities will be improved, through the Auditor General’s 75. The composition and
office, to ensure that Board appointments are made in a appointments to all SOE and
timely fashion so that agencies do not operate without a Authority boards to be reviewed
functioning board. In general, it will not be policy that the with legislative changes if
chief executives of SOEs and statutory authorities also be needed to give effect to these
voting members of their boards, or be ex-officio board policies
members.
Board members and chairpersons should be limited in the maximum time served in a single of
consecutive appointments, proposed to be four years, with a similar stand down period before
eligibility for reappointment.
The composition and appointment procedures for the boards of SOEs and statutory authorities will
be reviewed, with legislative changes if necessary, to give effect to these polices.
9.2.2 Collection of Fares, Fees and Fines
The collection of fares, fees, levies and fines offers the

Fares, Fees and Fines
opportunity for corrupt practice. The main risk lies in road
transport through practices such as: 76. DOT and when formed, the
RTA, will work with Police and
 PMV drivers collecting the incorrect fare, not Department of Justice to
issuing tickets or not completing the route eliminate corrupt and illegal
 Instant fines being collected at the roadside, practice in the handling of public
without the proper issue of infringement notices, transport fares, transport licence
requiring direct cash payment to the stopping service fees and transport fines
officer which may be in excess of the correct fine
77. Fine and penalty regime to
or be a payment to avoid a fine
be reviewed and updated with
 Collection of fees for vehicle registration, driver inflation-linked provisions
licensing, transport services licensing and vehicle
roadworthiness certificates without issue of the 78. Monies from fines to accrue
correct stickers or certificates, or without carrying to the Government through the
out the legally specified examinations and tests Department of Justice and not
(driver testing vehicle testing) or being in as operating revenue for use by
possession of the correct submitted proofs (of the administering agencies
identity, age etc.)
113
 Failure to pass on fees and penalties to the correct recipients, or withholding part of the
monies without legal authority, or applying the received fees and penalties to the prescribed
expenditures (such on road safety, road maintenance etc.)
 Use of threats and intimidation to either to make collections (legal or illegal) or to avoid
payment.
The unfortunate prevalence of such activities undermines the respect for public and private
agencies and personnel working in the transport sector, and respect for the rule of law and fair
treatment more generally in society.
Through the term of the NTS, the Department of Transport, in conjunction with the other transport
agencies, the Police and the Justice Department, will work to eliminate corrupt practice in the
handling of fares, fees and fines throughout the transport sector.
The strategy towards this end will include the establishment of a Road Traffic Authority as a self-
funding agency operating on commercial lines, with oversight from ICCC and the Auditor General to
better organise and transparently and impartially administer PMV and taxi licensing, issue of vehicle
registration, driver and operator licences, oversee motor vehicle roadworthiness inspections and
testing stations, and carry out on-road enforcement of traffic and transport regulations in conjunction
with the Police. The RTA will report in detail on its operational activities, sources and disposition of
revenue and effectiveness in improving regulatory compliance.
The regime of fines and penalties for traffic and transport infringements and offences will be
comprehensively reviewed, with a view to bringing these up to date and building in provisions for
inflation indexing. With a stricter penalty regime will come increased need for diligence and honesty
in its administration. In general, to avoid perverse incentives and outcomes, the revenue from fines
and penalties will not accrue as revenue to the administering authorities but will be directed to
Government’s general fund through the Justice Department. Agencies administering the regulations
will as far as possible derive their revenue from user charges, such as license fees, to cover the
costs of regulatory enforcement, supplemented where appropriate from Government appropriation.
9.2.3 Countering Corrupt Practice in Administering Construction Work
Infrastructure construction and maintenance contracts and

own account work by the Government transport Anti-Corrupt Practice in
infrastructure agencies undertaken by offer opportunities Construction Work
for corrupt practice and diversion of cash and materials 79. Transport infrastructure
from their intended use. Problems that can occur include: agencies to introduce anti-
awarding of contracts to related parties or in return for a corruption checking and public
corrupt payment or other advantage; sale or use of reporting procedures
materials intended for construction projects for illegal gain;
and certification of contracted works that have not been
80. Transport agencies to
carried out to specification, or at all. inculcate a culture of honesty,
integrity, recognition of staff
Countering corrupt and illegal practices relies on a culture effort and fair reward, leading by
of honesty and integrity being inculcated throughout the example from the top
staffing structure of the organisations concerned and
81. Improved tracking and cost-
“leading by example”. This will be facilitated where good effectiveness monitoring of
practice is recognised and rewarded and corrupt and
national works undertaken under
illegal practice is identified and punished. Corrupt practice
contract, by own forces and
is less likely to occur where staff efforts are recognised under inter-governmental
and fairly remunerated and where agencies take a pride in
funding to provinces to improve
their efficiency and self-improvement. To this end, each
value-for-money and to reduce
transport agency will be encouraged to institute formal corruption
internal programmes for inculcating a culture of honesty
114
and integrity within their organisations.
Diversion of financial and other resources away from their

intended purpose is made harder where all project Anti-Corrupt Practice in
expenditure is closely recorded and reported, with Construction Work
independent oversight from outside the directly 82. As part of this, introduction
responsible organisation. Tracking and benchmarking of of exception reporting, diagnosis
the unit costs for types of work undertaken under contract and corrective action
and by own forces will be encouraged, including the
works undertaken by Provinces under the TIMG, DSIP 83. Provincial governments to
and similar inter-government funding streams. Exception introduce anti-corruption
reporting where work executed does not match value-for- checking and public reporting
money expectations, diagnosis and corrective action procedures for inter-
should form part of expenditure tracking. governmental funding intended
for transport infrastructure
The DOT will work to improve its ability to monitor the
84. Oversight agencies for
integrity and cost-effectiveness of work undertaken by the
national and provincial transport
transport infrastructure agencies and will require
infrastructure expenditure to
monitoring data under the Transport (Collection of
monitor transport agency
Information) Amendment Act 2009. The transport
integrity performance
agencies will be encouraged to institute anti-corruption
internal checking and public reporting procedures on a
continuing basis; the same will be expected of provincial governments in their accounting for
revenues provided through inter-governmental funding and monitored through the NEFC, DNPM,
ORD and DPLLGA.
9.3 Environmental Protection and Enhancement
The construction and maintenance of transport

infrastructure and the operation of transport vehicles and Environment
associated equipment will be subject to practice 85. Practice guidelines and
guidelines and, where necessary, regulations aimed at procedures will be tailored to
safeguarding the natural and built environment and each transport mode to
minimising adverse environmental and social impacts on safeguard the natural and built
people and communities, considering both direct and environment and to minimise
indirect, consequential and cumulative effects. Transport social and environmental
infrastructure will be required to observe environmental impacts to people and
laws and regulations enacted by national and provincial communities
Government from time to time and the legal requirements
86. Environmental impact
and procedures laid down by the Department of
assessments will include direct
Environment and Conservation.
and indirect environmental
The direct adverse effects of transport include noise and effects of transport, including the
polluting emissions to air, land and water from transport incremental effects of multiple
operations and construction equipment. Other direct projects over time
effects are severance of areas crossed by transport 87. Each transport agency will
routes and traffic flows, of communities and for wildlife. be required to prepare, maintain
Transport can also act as a vector for the spread of and adhere to a Code of
disease and invasive species. All of these effects can Environmental Practice written
cause temporary or permanent degradation of the living for the context of its operations,
environment for people and the natural environment for with the aims of best practice
plants and animals. and continuous improvement
The opening of previously inaccessible areas can provide
access for undesirable exploitive and disruptive human activity, such as hunting pressure on wildlife
115
and illegal logging and mining, and adverse effects on the traditional culture of isolated
communities. Development of new transport routes through pristine or thinly populated areas must
therefore have regard for balancing development advantages with environmental and social costs.
The construction and maintenance of transport infrastructure and the passage and emissions from
transport vehicles can adversely affect the natural environment, cause disturbance to people from
noise and fumes, and damage to health. Sensitive
planning of transport infrastructure and the management Environment
of surrounding land and water space use can mitigate 88. Transport agencies will
adverse effects. comply with the requirements of
the Department of Environment
Maritime transport includes environmental risks from oil
and Conservation, and the
spills and spills of other hazardous cargo, both from
governing environmental
vessels and port storage areas. These are managed by
legislation
NMSA and PNG Ports as noted in Section 12.10.
89. Transport agencies comply
The transport agencies will be required to maintain codes with the environmental and
of environmental practice to guide their day-to-day social safeguard practices and
operations and those of contractors that they engage to procedures of the international
construct and maintain transport infrastructure. In addition and bilateral donor agencies for
to compliance with the requirements of DEC and PNG donor-funded projects
Law, the transport agencies will observe the
environmental assessment, reporting and mitigation safeguards required by multinational and
bilateral funding agencies where they contribute to project funding.
Specific modal policies for environmental protection are included in the Sections 11.9, 12.10, and
13.10.
9.4 Climate Change
Strategies for limiting carbon emissions and adapting to

the effects of climate change will be developed and CO2 Emissions Reduction
implemented under the NTS in recognition of the 90. Progress the transport
Government’s international commitments and domestic objectives of the PNG Climate
policy in these matters. In a commitment made to the UN Compatible Development Plan
Framework Convention on Climate Change Secretariat,
Government has agreed to mitigation objectives of a 50% 91. Encourage the introduction
reduction in greenhouse gas emissions before 2030 and of fuel-efficient transport
carbon neutrality by 2050, subject to conclusion of a equipment
legally binding treaty and actions by other governments. 92. Encourage sustainable
The Climate Compatible Development Plan (CCDP) for substitution of fossil fuels with
PNG was approved by the NEC in December 2009 with biofuels
transport as one of three key mitigation areas. The
93. Monitor vehicle fleet-
carbon intensity of transport is targeted to reduce by an
average of 3 per cent per year between 2011 and 2030
weighted fuel and CO2 efficiency
under the CCDP and strategies to achieve this target will
be developed under the NTS.
NTS policies to limit greenhouse gas emissions from the transport sector are:
 Encourage the introduction of fuel-efficient transport equipment and engines able to operate
on biofuels from sustainable sources;
 In conjunction with other agencies, assist in the development of domestic biodiesel and
bioethanol for the transport sector;
116
 Encourage the operation and maintenance of transport equipment in a manner that

minimises consumption and CO2 emissions;
 Monitor the size of the domestic vehicle road vehicle fleet, kilometres travelled and fuel
consumed, so that fleet-weighted fuel and emissions efficiency can be reported annually
NTS policies to adapt to future climate change are:

 The transport agencies responsible for
developing and updating design codes for Climate Change Adaptation
transport infrastructure will review the provisions 94. Transport infrastructure
for: (i) drainage including bridge and culvert agencies will review and adjust
waterway design; (ii) height of wharf and jetty design code provisions for
decks and protection against storm damage; (iii) climate change adaptation
identify coastal infrastructure at future risk and including for sea level rise and
long term plans for coastal protection or increased rainfall intensity and
managed retreat from areas at risk of inundation; duration
 The National Weather Service (NWS) will include 95. National Weather Service
climate change projections as part of its activities (NWS) will develop a network of
to inform the transport agencies on design land and sea-based automatic
parameters such as allowance for sea level rise, weather stations to advise the
storm surge, rainfall intensities and durations; the transport infrastructure agencies
NWS will develop a network of automatic on rainfall intensity/duration
weather stations (AWS) on land and on coastal monitoring and projections
buoy floats to gather data on rainfall intensities
and durations for catchment management and 96. NWS will also develop a
drainage design purposes. network of Lidar stations for
monitoring CO2 and other
 The DOT will work with the Department of
atmospheric pollutants, including
Conservation Hydrology Section to reinstate a
volcanic ash clouds
network of river gauging stations, tide gauges
and wave rider buoys so that a time series of 97. DOT will work with DEC
river flood levels and coastal tidal ranges can be Hydrology Section to reinstate a
collected for coastal land use planning and network of river gauging
coastal protection design purposes. The coastal stations, tide gauges and wave
stations will also monitor extreme events such as rider buoys for provision of
storm surges and tsunami. hydrological design data for the
 A monitoring network of Lidar remote sensing transport infrastructure agencies
stations will be developed by NWS to monitor
levels of carbon dioxide emissions, volcanic ash
clouds and other atmospheric pollution
9.5 Poverty Alleviation
The lack of access to markets and social services can contribute to income poverty, food poverty
and poverty of opportunity. Isolated populations without transport connections are confined to a
subsistence lifestyle, dependent on the fertility and availability of cultivable land and on local hunting
and gathering. Reduction in soil fertility from shifting cultivation and slash-and-burn practices,
together with a growing population put pressure on resources. Difficulty in accessing education and
health services limits human development.
The aim of the Integrated Provincial Development Plans (IPDPs) to be prepared under the ISDM is
that each village should be connected by 2m track to service facilities at district ward level, which
include an elementary school and community health post, and from the ward centre to district
centres. All district and LLG administrative centres are then to have reliable transport access to the
main transport network.
117
Proposals for village level access are envisaged under

the ISDM to be initiated by LLGs, and incorporated into Poverty Alleviation
the IPDPs. The DOT Planning and Coordination Division, 98. Through the Provincial
in conjunction with DOW, has a role to assist Provinces in Development Planning process
preparing the transport component of the IPDPs, to a and ISDM, DOT and DOW will
common project assessment framework using the TIPS work with Provincial
methodology. This will enable Provinces to prioritise basic Governments to appropriately
transport access projects to fit within the available funding prioritise and implement basic
and make maximum impact on poverty alleviation. transport access within available
funding
The extent to which the NTS targets isolated and poor
communities by funding maintenance, rehabilitation and 99. The overall funding directed
new infrastructure will also be a function of the community to improving access for remote
services obligation (CSO) component of overall funding, poor communities will be
that is funding for projects on thin transport links that do determined through the CSO
not provide an economic rate of return by conventional funding policy
analysis, but which are desired as an instrument of
income redistribution (see Section 8.6)
9.6 Gender Equity and Women’s Development
The NTS will assist in positively promoting the nation’s

Gender Equity
gender equity objectives through encouragement of
women’s participation in the construction and 100. The NTS will actively
maintenance of transport infrastructure (contracting), in encourage women’s
transport services provision (PMVs, taxis, freight participation throughout the
services), and in the line transport agencies and SOEs. transport sector through skills
development programmes,
This will include the development of programmes, time- targets and monitoring
bound targets and monitoring for skilled labour,
vocational training, technical, professional and
management grade positions throughout the sector.
9.7 Communicable Disease Control, HIV/AIDS
The role of the NTS will be to promote the dissemination

of messages on the prevention of HIV/AIDS and other Communicable Diseases
communicable diseases to the transport sector workforce, 101. The transport agencies will
particularly those groups which are more likely to be be expected to disseminate
vectors for disease transmission, such as construction HIV/AIDs and other
workers and drivers/operators of transport equipment. communicable disease
When awarding construction contracts, each of the
prevention messages to, in
transport agencies will be requested to develop standard
particular, the construction
conditions for insertion in contracts that guard against
workforce and transport drivers
disease transmission between workers in construction 102. These will include standard
site camps and the local population. inclusions within contracts and
transport licencing conditions
Those transport agencies responsible for licensing
commercial transport services will similarly be requested
to disseminate educational material on HIV/AIDS prevention to drivers and operators and to
cooperate in industry surveys aimed at identifying disease status, knowledge and practices.
118
10 Statement of Policy for Institutional Roles and Reform
10.1 The Need for Reform
The last decade has seen the establishment of several

new agencies in the transport sector, with the objectives
The Need for Reform
of separating conflicting regulatory and service delivery 103. There is a need for
roles, and with putting Government provision of services comprehensive reform of the
on a more business-like and responsive basis. agencies responsible for road
traffic and transport
The civil aviation agencies have been reformed into the
Civil Aviation Safety Authority and two commercialised 104. The respective roles of
agencies PNG Air Services Ltd and National Airports DOW and NRA will be more
Corporation. NAC has also established a fully owned clearly defined and developed,
subsidiary Airport City Development Ltd for the purpose together with their funding
of realising best value from NAC’s land holdings as a arrangements
supplement to aviation revenues. Apart from 105. Further reforms will be
establishment of the Accident Investigation Commission, made in maritime transport to
no further institutional reform is envisaged in the aviation clearly separate commercial and
subsector. However, it is noted that some aspects of the regulatory roles
roles and interface between NAC and CASA remain to be
resolved. 106. No further structural reform
is proposed for the air transport
In the maritime subsector, the NMSA has been agencies.
established as the safety regulator. However, PNG Ports
Corporation retains some regulatory functions that are inconsistent with its role as a commercial
port operator and the market regulation of coastal shipping remains unreformed, despite prior
reviews and advice to do so.
In the roads subsector, the National Roads Authority has been established but not as originally
envisaged and without the full benefit of a road user charges system and dedicated Road Fund.
The future roles of NRA and the DOW are not fully agreed. The agencies governing economic and
safety regulation for vehicles, drivers and transport services are unreformed, somewhat fragmented
and structured on an out-dated model. There are also unsatisfactory arrangements for delegation of
functions to provincial governments.
Outside of the transport sector agencies, there are various other state authorities which intervene in
various ways in transport sector investment and operational decisions, together with multiple
channels of funding. This fragmentation does not allow a sector wide approach to be taken by the
Department of Transport as the senior policy and planning agency for the sector and, if not
corrected, will perpetuate a lack of cohesive development planning that has marred the sector in the
past.
In looking forward 20 years or more, it is important that an institutional structure based on well-
accepted principles and conforming to Government policy be the model for the transport sector and
that the process of institutional reform be completed expeditiously.
10.2 Principles for Institutional Reform
In setting out a new structure for the sector, the following principles for institutional reform have
been followed:
 Separation of functions to avoid conflicting objectives within the governance agencies
119
o agencies should not be responsible for regulating their area of operations and at
the same time for delivering services in the same area, to avoid conflicts of interest
o for the statutory authorities that have dedicated lines of funding from Government to
support their operations, there should either be an arm’s length arrangement with a
funding agency which approves, monitors and audits expenditure or, where the
authority manages its line of funding
internally, there should be a robust Principles
external auditing process to ensure that
funds are managed effectively and
107. Separate regulation from
efficiently;
service delivery in Government
agencies
 Regulatory policy in the transport sector will be
implemented by statutory regulatory 108. Clear accountability and
authorities with dedicated lines of funding, with auditing of Government provided
the Department of Transport responsible for funds and self-generated
developing, advising and monitoring that revenues
regulatory policy; 109. Agencies that are best
 Agencies that are best technically equipped to technically equipped to provide
do so should undertake particular functions – services do so
in some cases this may require delegation or
110. Government agencies not
outsourcing between one state agency and
to crowd out the private sector
another on a fee-for-service basis, including
between levels of government (national, 111. Government agencies may
provincial and local); deliver services where there is
 State agencies and investments should not no private sector interest either
undermine the private sector by crowding out on a fully commercial basis, or to
opportunities for the private sector to compete, fulfil a community services
and structures and powers should reflect this. obligation under a transparent
On the other hand, due to the thin transport and contestable CSO funding
market in PNG, there is a need for safeguards policymarket dominance by one or a
against
few private operators in the transport subsectors and in regions of the country. In such
cases, the presence of an implementation or operating arm of a Government agency
operating on a fully commercial basis may be
useful or necessary to achieve competitive Delegation
prices.
112. Delegated functions to
 In some situations, where there is no private
have legal instruments
sector interest or where there is an overriding
national interest that may not be served by a 113. Instruments to identify:
private sector operator, Government may functions delegated; period
provide services on a fully commercial basis, covered; asset transfers and
subject to any transparent CSO policy, but ownership; arrangements for
should aim to withdraw or privatise such internally generated revenues;
services if and when they become attractive to reporting requirements; and
the private sector. procedures for reversing the
delegation
10.3 Delegation and Outsourcing of Functions
114. Delegating agency to retain
overall responsibility for the
10.3.1 Delegation
functions delegated
Government departments, statutory authorities and SOEs 115. Irregular and illegal
with residual regulatory powers in the transport sector delegations to be withdrawn or
may delegate functions only within the provisions of their regularised
governing legislation. Where delegations are made, the
120
legal instruments of delegation must provide for, at least, the following:
 A clear definition of the functions and activities being delegated;

 The period of delegation, which must not be indefinite, but which can be subject to
extension or renewal;
 The fees payable by the delegator to the delegatee for the activities being delegated,
and with adequate provision for funding;
 The ownership of assets and intellectual property created from fees and other payments
made to the delegate for services provided;
 A practical process for the delegator to resume the delegated functions and activities,
should the delegation prove to be unsatisfactory;
 Reporting of the execution of the functions delegated, together with such statistical
reports, financial acquittals and independent audits as may be deemed necessary.
The delegating department or authority will remain responsible for the functions that have been
delegated.
All irregular delegations, and delegations made without legal instruments complying with the above
conditions will be withdrawn and new complying arrangements made.
10.3.2 Outsourcing
All Government departments, statutory authorities and

SOEs in the transport sector will be encouraged to
Outsourcing
competitively outsource services delivery to the private 116. Transport agencies will
sector or to other government agencies (at all levels) competitively outsource service
where this can be done cost-efficiently and without risk to delivery where cost-efficient and
service quality and safety. without risk to performance
Outsourcing will take many forms, including output

117. Outcome (performance)-
specified contracts, outcome (performance) specified
specified contracts and PPP
contracts and forms of public private partnership.
arrangements as well as
Outsourcing should be done with the objective of
conventional output specified
obtaining best value for money in service delivery, both in
contracts will be considered
terms of the Government’s finances and the costs 118. Outsourcing should aim to
imposed on users of transport infrastructure and services. build the capacity of the
Outsourcing should also be undertaken with a view to domestic private sector
positively building the capacity of the domestic private
sector, so will take into account contract packaging, and
use of associations with overseas companies to build local experience.
10.4 Role and Functions of the Government Transport Agencies
The roles and function of the Government transport

119. Role of the DOT
agencies are outlined in the following paragraphs. Where
institutional reforms are proposed these are briefly Lead Government department in
identified and are discussed in more detail elsewhere in the transport sector
the NTS, with reform action plans in the MTTP.
Responsible for development of
national transport policy and
10.4.1 Department of Transport
infrastructure planning
The Department of Transport will continue to be the lead Review monitoring and updating
Government department responsible for: of the NTS and MTTP
 the development of high level transport policy
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and national level transport planning across the transport sector, liaising with the central
agencies and with those line agencies in sectors contributing to transport demand,
including agriculture, forestry, minerals, oil and gas, commerce and industry, and urban
and rural development; including the preparation, review, monitoring and updating of
national strategy, policy and planning
119. Role of the DOT
statements such as this NTS and MTTP;
 assisting and coordinating with provincial Coordinate with and assist
administrations, LLGs, local communities and provincial administrations, LLGs
others in the preparation and implementation and communities to prepare and
of Provincial Transport Plans, encouraging implement provincial transport
consistency and integration across the plans and integrate with national
provinces and with national level plans and level planning
strategies. Establish a Rural Infrastructure
 To facilitate this planning and coordination Development Division (RIDD) to
role, DOT will establish a Rural Infrastructure support the above
Development Division (RIDD) within the DOT
Define and lead implementation
responsible for planning and coordinating the
of CSO policies and forms of
provision and operation of local level rural
assistance in the transport
transport infrastructure (local road access,
sector
minor wharves, jetties, landings, marine
navigation aids, rural airstrips and associated Administer the Shipping
air communications and navaids) in Franchise Scheme on
conjunction with provincial administrations, the completion of the CWTP
DPLLGA and the national level transport Chair of TSCMIC and inter-
sector agencies; agency coordination
 DOT will take a lead role in defining and
implementing Community Services Obligation
Monitoring of the activities and
performance of transport sector
(CSO) policies and forms of assistance in the
agencies
transport sector, including, on an interim basis,
administration of the shipping services Coordination of national budget
franchise scheme, currently undertaken by the submissions
Community Water Transport Project (CWTP)
Preparation and administration
office, once that project closes (the Shipping
of transport legislation
Franchise Scheme to eventually transfer to
NMA). Administrative responsibilities for
 inter-agency coordination through vehicle, driver and transport
chairmanship of the TSCMIC by the Secretary licencing, vehicle construction
for Transport and through day-to-day and roadworthiness standard,
relationships between DOT and other agency motor vehicle dealers and
staff; testing station licensing
 monitoring of the activities and performance of
the transport sector agencies;
 coordination and submission to Government of the Recurrent and Development Budget
applications prepared by the transport agencies, ensuring that projects and programmes
are consistent with the NTS and MTTP, are consistent from year to year and include
multi-year forward budgets based on well-founded cost estimates and accompanying
specifications;
 preparation of transport sector legislation in conjunction with the Solicitor General’s
office for consideration by the Minister, the NEC and Parliament;
 administration of all transport sector legislation under the responsibility of the Minister
and the permanent secretary responsible for transport matters;
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 until and unless changed through the proposed institutional and legislative reforms that
will establish the RTA, DOT Land Transport Division in conjunction with the National
Land Transport Board will remain responsible for motor vehicle registration, driver
licensing, transport services licensing, vehicle roadworthiness certification and
inspection station licensing, and licensing of motor car dealers; DOT will also continue to
provide administrative support and advice to the National Land Transport Board;
 until and unless changed through proposed
119 Role of the DOT
institutional and legislative reforms that will
establish the NMA, DOT Maritime Transport In the interim until establishment
Division will remain responsible for the of the proposed NMA,
regulation of coastal shipping and, through the administer coastal shipping
Maritime Security Unit, for policy and its regulation and operate a
administration for international shipping and maritime security unit ISPS
port security;
In the interim, administer air
 until and unless changed through institutional transport regulation and
and legislative reforms yet to be proposed, international air service
DOT Air Transport Regulation Division will agreements
remain responsible for international air service
agreements and international and domestic air Collection, analysis and
traffic regulation; publication of statistical data
 collection, analysis and publication of Providing ministerial advice and
transport statistical data needed for planning reporting to parliament
and monitoring the performance of the
Monitor and advise on
transport sector, including the reinstatement of
expenditure priorities across the
a national road traffic survey programme;
transport sector, across regions
 providing advice to the minister on all of the and provinces, between national
above matters and preparing reports for the and provincial level and for all
NEC and parliament as required. Government agencies involved
 DOT will seek to extend its monitoring and in transport infrastructure or
advisory role on public expenditure on transport services provision
transport infrastructure, equipment and
services to include those other Government agencies and state owned enterprises which
include these expenditures in their budgets, so as to present a sector wide overview to
Government. These will include the Department of National Planning and Monitoring, the
Border Development Authority and other economic corridor authorities that Government
may establish pursuant to the Development Strategic Plan.
 DOT will seek to extend its administrative mandate to require all agencies that expend
public funds on transport infrastructure, equipment and services, including the above
named agencies, to ensure that their programs are consistent with the National
Transport Strategy and Medium Term Transport Plan, so that it is a condition of such
expenditure that it has been reviewed and accepted by the Secretary for Transport prior
to inclusion in any budget or forward programme. The DOT will not exercise expenditure
control over the autonomous funding of the transport statutory authorities and SOEs but
may provide advice on financial matters concerning these agencies to the Minister.
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10.4.2 Department of Works and Implementation
The future role and responsibilities of the Department of Works in the transport sector will include:
 Programme and oversee the implementation

of construction and maintenance works on the 120. Role of the DOW
declared national road network, except for Programming and contract
those national roads for which responsibility management for national road
has been transferred to the National Roads and bridge construction and
Authority; maintenance except where such
 Implementation will be through private sector responsibilities have been
engineering contracts except that DOW shall transferred to the NRA;
maintain provincially-based works units for the
Implement construction and
purposes of emergency reinstatement of road
maintenance works through
and bridge closures, and for providing a last
private sector contracts
resort road and bridge works implementation
capability where the private sector does not Maintain provincial works units
provide cost-competitive and technically (PWUs) for emergency
competent contracting services, and cannot be reinstatement and work in areas
encouraged to do so; such work units will where no competitive private
operate as independent self-accounting cost contracting capacity
centres organised along commercial lines and PWUS to be self-accounting and
bidding for work from DOW HQ, so as not to commercially oriented
present unfair competition to the private
sector; Coordinate with provinces’
 Actively coordinate DOW provincial works
works agencies to make best
units with the works arms of the provincial
use of scarce technical skills and
governments so as to provide an integrated
engineering equipment
engineering capability in the provinces, making Maintain HQ and regional
best use of the combined capacity and skills of technical services and plant and
the DOW and provincial resources; works transport capability
undertaken by DOW for the provinces shall be
Establish protocols and
on an agreed fee-for-service basis;
safeguards, in consultation with
 Maintain a headquarters and, as necessary, DOT and others for the
regionally-based facilities to support operation of PWUs and their
engineering and related technical services engagement with provinces
such as quantity and land surveying,
geotechnical and materials testing, plant and Engage private sector
transport; at a level that is supportive of the consultants for road and bridges
industry but without restricting opportunities for design and works supervision
the private sector; contracts
 DOW will work with DOT and others, such as Maintain the RAMs and BAMs
ICCC in matters of competition pricing and system and make annual
policy, to establish protocols and safeguards constrained and unconstrained
for the establishment, operation and forward maintenance plans
monitoring of the PWUs and the headquarters
Lead role in developing
and regional facilities, so that they are
technical standards for road and
supportive of, rather than in competition with,
bridge engineering and
the private sector and in their engagement
engineering training
with the provinces;
 Such protocols will include but not be limited
to: (i) the types and scale of project that PWUs should undertake; (ii) where DOW should
124
become involved in plant and equipment hire, which should be on a commercial basis,
(iii) cost accounting and pricing of DOW services and plant hire to ensure that this fully
reflects costs and profit so as to not provide unfair competition (iv) plans to actively
assist private sector resources to develop in the provinces to reduce or remove the need
for DOW involvement over time; (v) terms of
service, including costs and funding basis,
120. Role of the DOW
where DOW engages with provincial Maintain safety management
governments and their works units; systems, safety audits of
 Be responsible for contracting the preparation projects and environmental
of road and bridge designs, contract codes of practice
documentation, tender evaluation and Engineering technical and cost
construction supervision services from private advice on project proposals and
sector engineering consultants; and maintain commissioning feasibility studies
sufficient in-house expertise in these areas for
technical audit and oversight purposes; Provide advice on engineering
costs and technical design and
 Maintain the RAMs and BAMs road and bridge
construction matters and
asset management systems, including the
participate with DOT in
timely collection of road inventory and
commissioning road and bridge
condition data and the annual preparation of
feasibility studies
multi-year forward maintenance plans,
advising Government on the forward funding
requirements and the implications of any funding constraints; DOW will also assist the
provinces in their development and maintenance of RAMs and BAMs on a fee-for-
service basis;
 DOW shall provide the NRA and the DOT with unrestricted access to the RAMS and
BAMS databases and associated GIS mapping data and will cooperate in the
maintenance, extension and utilisation of this data for transport planning purposes at
both national and provincial level;
 Implement safety management systems, undertake safety audits and maintain and apply
environmental management codes of practice in the design, construction and
maintenance of roads;
 Take the lead role in the development of road engineering technical standards and
practices and in road engineering technical training for nationwide application in
conjunction with the NRA, IPEPNG, Provincial Governments, the private sector and
others; also facilitate continuing career development for DOW staff at professional,
technical and trades levels;
 While final decisions on the planning and selection of national roads for major
rehabilitation, upgrading and new construction shall rest with the DOT, the DOW shall
advise the DOT on works costs and matters of an engineering technical nature that may
influence project selection decisions and the DOW’s viewpoint on priorities including the
commissioning of engineering feasibility and costing studies in conjunction with DOT.
DOW will seek to progressively restore the national road network to a good maintainable condition,
following the priorities established in the NTS and MTTP. Once restored, the more important roads
in terms of traffic carried and network function shall be progressively transferred to the NRA, as and
when NRA has the financial and managerial capacity to absorb the transfers. Once transferred, all
ongoing upkeep shall remain with the NRA.
125
10.4.3 National Roads Authority
The role and responsibilities of the NRA are set out in its
empowering act, the National Roads Authority Act 2003, 121. Role of the NRA
and in summary are, for those nationally declared roads Undertake roles and
that have been transferred to the responsibility of NRA by responsibilities as set out in the
order published in the national Gazette: NRA Act 2003 and as gazetted
 establish and operate a Road Fund from road Establish and operate a Road
user charges, budget and other sources to Fund for the upkeep of roads
fund the upkeep of its roads; under NRA control
 provide the RAMs and BAMs data inputs for Maintain RAMS and BAMs data
its roads and, by implication, to share the cost for NRA roads with shared
of operating and maintaining these data access and support in
systems with DOW on an equitable basis; conjunction with DOW
 formulate, prioritise and deliver annual road
Formulate and deliver annual
maintenance programmes for the NRA roads,
road maintenance programmes
using independent private sector contractors,
by private contract
including contract monitoring and supervision
through a transparent contract award and Implement safety and
management process; environmental practices
 implement safety management systems, consistent with DOW
undertake safety audits and maintain and Ensure consistent technical
apply environmental management codes of standards with DOW
practice in the design, construction and
maintenance of roads that are consistent with
Maintain records and report on
those of DOW;
operations and the source and
use of funds
 coordinate with DOW on technical standards
for road and bridge engineering to ensure
national consistency;
 keep detailed records and report publicly and transparently on collection of user
charges, revenues, and in detail on the use of the revenues on the road maintenance
programmes; and
 provide a continuing programme of professional staff development and required skills
training for non-professional staff.
The NRA role and responsibilities therefore parallel those of the DOW for the core road network that
has been brought up to a good maintainable condition and transferred to the NRA. The main
difference between the two organisations is that DOW has more of a development role in bringing
the lower traffic parts of the national road network up to
standard and in assisting the provinces in delivering basic 122. Role of the NRSC
road access to outlying areas, while the NRA assumes full
Coordination and promotion of
ongoing responsibility for maintaining and renewing the
all aspects of road safety
core network of higher traffic volume national roads.
Preparation of the national road
10.4.4 National Road Safety Council safety programme
The roles and responsibilities of the NRSC are those set Storage and analysis of road
out in the National Road Safety Council Act 1997 and are crash data collected by the
primarily to advise Government on all matters relating to Police
road safety, to coordinate road safety initiatives among NRSC to be become part of the
the sector agencies and the wider public, to promote road future Road Traffic Authority
safety research and to prepare a long term national road
126
safety programme. NRSC shall continue this role until such time as its functions are absorbed into
the proposed Road Traffic Authority and legislative changes are enacted.
In recent years NRSC has taken the initiative of updating the road crash database using data
collected by the Police, a function previously carried out within DOT Land Transport Division. It shall
continue to carry out this function as a support to the development of a road safety action plan.
10.4.5 National Land Transport Board
The NLTB has responsibilities defined under the Land

Transport Board Act 1968 which are the general 123. Role of the NLTB
supervision of licensed road passenger transport, that is Supervision of transport services
PMVs taxis and private hire cars, including licensing licensing for NCD urban PMVs.
procedures, transport safety, supply and demand for Inter-urban PMVs and inter-
services and conditions of operation. These powers are provincial goods vehicles
exercised within NCD, with responsibility for transport
licensed in the provinces delegated by DOT to provincial
Will be disestablished once RTA
LTBs.
is formed
The NLTB also has responsibility under the Licensing of Heavy Vehicles Act 1977 for inter-
provincial route licensing of hire-or-reward goods transport and maximum price setting, although
these powers have not been exercised in recent years. For goods transport within provinces,
responsibility has been delegated to the provincial LTBs.
The existing responsibilities and functions will continue in the short term but the NLTB and the
provincial LTBs will be disestablished under the legislation establishing the Road Traffic Authority,
and all of the transferred LTB powers and responsibilities will then be exercised by the RTA under
the governance of its board.
10.4.6 Motor Vehicle Insurance Ltd
MVIL has responsibilities defined under the Motor Vehicle

(Third Party Insurance) Act 1974 and Motor Vehicles 124. Role of MVIL
Insurance (PNG) Trust (Administrative Arrangements) Act Administration of 3rd party
1996 to administer the compulsory 3rd Party Insurance vehicle insurance
schemes for motor vehicles, a portion of which is used to
fund the NRSC. It has also been delegated the Agent of Government and
responsibility by DOT for motor vehicle and driver provinces for issue of vehicle
licensing in NCD from which it retains the revenue to fund and driver licences on a fee-for-
its operations. MVIL also provides vehicle and driver service basis
licensing services to several Provincial Governments
under separate arrangements.
MVIL will continue to perform services for the issue of vehicle and driver licences and collection of
fees. However, to ensure nationwide consistency, compliance and timely return of accurate
registration and licensing data, the existing administrative arrangements will be reformed and
placed under the responsibility of the new RTA and its establishing legislation.
127
10.4.7 PNG Ports Corporation Ltd
PNGPCL currently derives its powers from a

comprehensive delegation made by the Secretary for 125. Role of PNGPCL
Transport as provided for in the Harbours Act 1963 and Develop and maintain publicly
the Harbours Amendment Act 2002. provided port infrastructure
within the declared ports
These functions are primarily the responsibility for
provision and maintenance of the publicly provided port Operate main commercial ports
infrastructure within the boundaries of the declared ports, on a fully commercial basis and
and also to be the pilotage authority and responsible for non-commercial ports with
the maintenance of navigation aids within the declared Government funding support to
port boundaries. There are also various maritime a defined CSO policy
planning and operational responsibilities and powers Pilotage authority within
within and outside of the declared port boundaries which declared ports
have been included with the delegation.
Extent to which PNGCPL owns
In the future, the primary role of PNGPCL will be to and operates cargo handling
develop and maintain the publicly provided port plant versus contracting to the
infrastructure within the declared ports, operating on a private sector to be determined
fully commercial basis for the main commercial ports and
for non-commercial ports where Government agrees to
National standard setting for port
provide CSO funding support. The extent to which
operations and engineering
PNGPCL will also provide plant, equipment and cargo
practice
handling services rather than contract these functions to Assistance to provinces on a
the private sector is to be determined as part of ongoing fee-for-service basis as
port policy development. The legislation under which requested for marine
PNGPCL operates will be revised as appropriate to its engineering and asset
future role and in a manner so that its commercial management
operating objectives are not in conflict with any residual
Port master planning studies in
regulatory powers.
coordination with DOT and
PNGPCL will also be the primary agency for setting port consistent with NTS and MTTP
operational and engineering standards and practices and
will, on a fee-for-service basis provide port engineering, asset management and technical advisory
services to the provinces for the upkeep of port and navigation facilities under provincial, LLG and
local community ownership in accordance with Government’s CSO policy.
PNGPCL will coordinate with DOT in the preparation of master plans for each of the declared ports
and the port network as a whole, consistent with the NTS and MTTP.
10.4.8 National Maritime Safety Authority
The NMSA derives its powers and functions from the National Maritime Safety Authority Act 2003,
and those parts of the Merchant Shipping Act 1975 and associated regulations for which it is the
stated Authority. These functions are:
 all aspects of maritime safety, ship registration, ship safety surveys, ship inspection (flag
and port state control) and ships’ crew certification;
 marine pollution control;
 coordination of search and rescue operations;
 pilotage outside of the declared port boundaries and pilot boarding areas for
international passage; and
128
 responsibility for maritime navigation aids outside of the declared port boundaries.
The NMSA shall continue to exercise these functions and

will broaden and strengthen safety and environmental 126. Role of NMSA
compliance in PNG waters, extending to the navigable Responsible for regulating all
limits of inland waterways and to small craft safety. aspects of maritime safety,
including, ship safety surveys
NMSA will have primary responsibility for developing and
and crew certification
enforcing safety standards and for prosecuting breaches,
with the IMO providing oversight to ensure that the Marine pollution control
NMSA and the PNG Government observe the Provision and maintenance of
international maritime conventions and standards to navigation aids outside of
which the country is a signatory. declared port boundaries
In the future the NMSA will incorporate coastal and Coordination of SAR
international shipping regulatory activities currently
undertaken by Marine Transport Division and the
Pilotage outside declared ports
Maritime Security Unit of DOT and some of the port Develop into a NMA including
regulatory functions currently delegated to PNGPCL. In ISPS, shipping market regulation
recognition of this broadened responsibility, NMSA will and port regulatory functions
change its name to the National Maritime Authority
(NMA). This will require an extension to NMSA’s
legislative powers, adequate resourcing with suitably qualified and experienced staff, and ability to
fund its activities from revenues and, for some non-revenue earning services, by Government grant.
Now as NMSA, and in the future as NMA, the agency will need to coordinate closely with other
maritime industry participants, both public and private sector, and take opportunities to outsource
some service delivery functions where efficient and economical to do so, consistent with
maintaining the required standards of performance.
10.4.9 National Airports Corporation Ltd
The NAC is incorporated under the Companies Act 1997

127. Role of NAC
and established under the Civil Aviation Amendment Act
2010 as a state owned commercial enterprise for the Commercially own, manage,
purposes of owning, operating, managing and maintaining maintain and operate declared
airports and providing all related services in Papua New national airports using own
Guinea. The 21 airports under NAC ownership are revenues and provided CSO
specified in a schedule to the Civil Aviation Act 2000. funding for non-commercial
airports.
NAC will undertake airport master planning and feasibility
studies for airport development in coordination with DOT Undertake airport development
and consistent with the NTS and MTTP and will be studies and implementation
responsible for the implementation of the agreed works, consistent with NTS and MTTP
with capital funding provided from sources agreed with Assistance to provinces on a
the Government. fee-for-service basis as
requested for airport engineering
NAC will also be the primary agency for setting airport
and asset management
operational and engineering standards and practices and
will, on a fee-for-service basis provide airport engineering,
asset management and technical advisory services to the provinces for the upkeep of provincial
airports and rural airstrips under provincial, LLG and local community ownership, in accordance with
Government’s CSO policy.
No substantive change is envisaged to NAC’s institutional structure over the period of the NTS.
129
10.4.10 PNG Air Services Ltd
PNGASL is incorporated under the Companies Act 1997

and established under the Civil Aviation Amendment Act 128. Role of PNGASL
2010 as a state owned commercial enterprise for the Commercially own, manage,
purposes of providing air traffic, navigation, maintain and operate the air
communication and related services in PNG’s airspace traffic, navigation,
on a fee-for-service basis. communication and related
systems
No substantive change is envisaged to PNGASL’s
institutional structure over the period of the NTS.
10.4.11 Civil Aviation Safety Authority
CASA is established under the Civil Aviation Amendment

Act 2010 to promote safety and security in civil aviation 129. Role of CASA
through: Establish, promulgate and
monitor adherence to safety and
 establishing, promulgating and monitoring
security standards relating to the
adherence to safety and security standards
civil aviation system
relating to the civil aviation system;
 establishing and continuing the Aviation Primary responsibility for
Security Service; prosecution of safety breaches
 investigating and reviewing civil aviation Review air accidents and
accidents and incidents and notifying these to incidents and report these to the
the AIC AIC
 maintaining the Register of Aircraft, and Maintain aviation documentation
ensuring the provision of charts and including the register of aircraft
aeronautical information,
 promoting safety and security through information, advice and education programmes;
and
 consulting with all interested parties on aviation safety issues.
CASA will have the primary responsibility for developing and enforcing safety standards and for
prosecuting breaches, with ICAO providing oversight to ensure that the CASA and the PNG
Government observe the international civil aviation conventions and standards to which the country
is a signatory.
No substantive change is envisaged to CASA’s institutional structure over the period of the NTS.
10.4.12 Accident Investigation Commission
The Accident Investigation Commission (AIC) is

130. Role of AIC
established under the Civil Aviation Act 2000 to
investigate major air accidents and incidents on a “no “No blame” investigation of air
blame” basis with the purpose of raising industry accident causation
standards.
10.4.13 National Weather Service
The NWS is a unit within the DOT responsible for the collection and analysis of meteorological data
for the purposes of historic and current weather reporting, and near-term weather forecasting within
Papua New Guinea and the surrounding region. Weather reports and forecasts are provided for
general use and for specialist aviation and maritime purposes. NWS also advices on medium term
climatic variation and long term climate change.
130
In future, it is intended that the NWS be established as a

131. Role of NWS
commercially oriented Government owned enterprise,
supplying meteorological information tailored to user Collection analysis and reporting
needs with the aim of being largely self-funding. of meteorological data, current
weather reports and forecasts
10.4.14 Proposed National Rescue Coordination
Centre (NRCC)
Advice on medium term climatic
variation and long term climate
At present there is no Coastguard Service in Papua New change
Guinea. The NMSA will work with PNGASL, provincial Establish as self-funding
government and the private sector to establish local independent SOE
inshore SAR services, funded from donations with a
Government proportional contribution, and using
volunteer personnel. NMSA will assist in training local
SAR services, as an adjunct to its small boat safety 132. Role of NRCC
activities.
Combine maritime and air SAR
The two existing rescue coordination centres established into a National Rescue
within the NMSA for maritime SAR and within PNGASL Coordination Centre
for air SAR, will be combined into a single National
Establish local inshore SAR
Rescue Coordination Centre (NRCC). The NRCC will be
services
responsible for coordinating first response search and
rescue actions for maritime and aviation emergencies and, when appropriate, also for land transport
emergencies. Consideration will be given to attaching the NRCC to the National Disaster
Management Centre (NDMC).
10.5 Role of Oversight, Audit and Regulatory Institutions
10.5.1 Independent Consumer and Competition Commission
The ICCC is already the economic regulator in several

parts of the transport sector, or is consulted as part of the 133. ICC
process of price regulation. Although it periodically Will exercise an oversight and
reviews the state of competition, ICCC does not price monitoring role for competition
control air transport services and this is the preferred role and fair pricing in the maritime
for ICCC in the future monitoring of the port services, and aviation sectors
coastal shipping and land transport. By separating the
commercial and non-commercial functions of PNGPCL Will price control passenger
and moving to port-by-port pricing, the need for price transport (PMVs, taxis) in
control will be removed in this sector. consultation with the RTA,
NCDC and Provincial
ICCC will continue to control prices for urban and rural Governments
PMVs and taxi services, in consultation with the future
RTA once that organisation is established and with
134. IPBC
NCDC or provincial governments to ensure that there is
an appropriate balance between financial return to the Will oversee the transport SOEs
operators to allow them to invest in new vehicles, the under its ownership in particular
service quality provided, the affordability of fares and any for finance raising and financial
requirement on operators to run less profitable services. advice.
Infrastructure planning and
10.5.2 Independent Public Business Corporation
management will remain with the
IPBC has an oversight role for state-owned commercial SOEs themselves within the
enterprises currently including, in the transport sector, framework of the NTS
131
PNGPCL and Motor Vehicle Insurance Ltd (MVIL).
While its Act allows that IPBC may undertake the functions of planning, coordinating and managing
State assets, infrastructure and projects, this is not its intended function in the transport sector,
where its role will be limited to assisting SOEs with project financing, including mobilisation of
private finance and development of PPP proposals. Sector planning functions remain with DOT,
exercised primarily through this National Transport Strategy, while the SOEs themselves will
continue to undertake their own detailed project planning and programming within the framework of
the NTS.
10.5.3 Auditor General
The Auditor General has the responsibility for inspection

and audit of all Government departments, agencies and 135. Auditor General
Government-owned companies at national and provincial Will annually audit the transport
level. Annual audits will be required of all transport sector sector agencies and carry out in-
statutory authorities and SOEs. In addition, periodic in- depth audits every 5 years
depth audits under Section 3(4) of the Audit Act will be
carried out at intervals of no more than five years. Audits
will be carried out under the oversight of the Auditor General’s office, but may be outsourced to
registered public accountants, and will be budgeted for within the finances of the respective
transport sector agencies.
10.6 Role of Special Purpose Infrastructure Development Authorities
10.6.1 General provisions for All Special Purpose Authorities
There are a number of existing or proposed special

purpose authorities that include transport infrastructure 136. General Provisions for All
development within their remit. The creation of several Special Purpose Authorities
agencies working alongside the established Government These include IDA, BDA and
implementing agencies, such as DOW, PNG Ports and Economic Corridor
NAC, runs the risk of conflicting technical standards and Implementation Authorities
implementation priorities, a dilution of scarce technical
resources and reduced coordination in the sector. Projects implemented are to be
drawn from, or tested for
To avoid such risks and to ensure that all agencies work consistency with and priority
together harmoniously, it is proposed that all transport under, the MTTP and NTS
projects and operations sponsored by the special
Projects will be included in the
purpose agencies be drawn from the project priorities of
DoT Transport Development
the MTTP and wider transport development strategies
Budget coordination and review
established in the NTS. Where a special purpose
process and will be ratified by
authority wishes to pursue a project or program that is
TSCMIC
not within the MTTP/NTS, then it should submit its project
concept to the DoT for consideration under the transport Special purpose authorities will
infrastructure prioritisation processes developed for the use existing Government
NTS and subsequent referral to the TSCMIC. Where implementation agencies and
necessary any differences of view in strategic planning established processes for
and investment priorities would be resolved through project procurement.
agreement with DNPM.
Fast track procedures may be
All transport infrastructure programmes, budgets and developed for large projects with
funding proposals from the special purpose agencies will good technical and financial
be included in the Department of Transport’s annual management backing
transport budget coordination process and will pass
132
through the TSCMIC for ratification, noting that TSCMIC includes the key central planning and
budgeting agencies of DNPM and Treasury.
Unless there are compelling reasons otherwise, all transport infrastructure procurement and
implementation will be managed by the appropriate Government implementing agency on behalf of
the special purpose authority and using the existing Government systems and procedures, such as
processing of contracts through the Central or Provincial Supply and Tenders Boards.
Where large projects have been brought to an advance state of readiness, have received a high
level of technical and cost scrutiny in the process, and are backed by strong project management
and payment certification systems, then it may be appropriate that a fast-track procedure be
developed and implemented to avoid delays in approving contracts and in disbursing funds against
work performed.
The intent of these provisions is to strengthen the technical quality and cost-efficiency of the
transport projects initiated by the special purpose authorities and at the same time ensure that their
plans are fully integrated with the NTS, MTTP and wider Government planning and strengthen
rather than compete with or bypass established Government processes.
10.6.2 Infrastructure Development Authority
An Infrastructure Development Authority (IDA) is being established as a special purpose agency to

manage part of the funding stream generated by Government revenues from the major resource
projects through an Infrastructure Account. Another portion of this revenue stream is expected to be
disbursed through the State Owned Enterprises, which in the case of the transport sector could
include PNG Ports Corporation Ltd, National Airports Corporation and PNG Air Services Ltd.
The structure and mode of operation of the IDA is still under development but an establishment
group has been set up within the Department of Works. It is envisaged that the IDA will concentrate
on major strategic and high impact projects and will have a direct line of reporting responsibility to
the upper levels of Government. It is expected to employ various methods of infrastructure
procurement from conventional construction contract bids against a completed design and
specification, through to performance-based long term design-build-maintain contracts. The IDA
may also access project funding from multinational or bilateral agencies and private public
partnerships.
Because it potentially may have funding control over a substantial portion of the transport
infrastructure budget, it may be appropriate that the IDA have representation on the TSCMIC,
alongside Treasury and DNPM. However this will be dependent on what is finally determined as its
role, structure and governance.
Otherwise, it is expected that IDA will operate in a manner as described in 10.6.1 above.
10.6.3 Border Development Authority
The Border Development Authority (BDA) is established under its own legislation with
responsibilities for infrastructure to support economic and social development, immigration and
border security control within the designated border provinces. While its legislative remit is wide
ranging, in practice its role has been confined to date on a pilot border trade project and associated
infrastructure on the Sandaun Provincial border with Indonesia. Ways in which the transport
agencies should and do interact with the BDA are set out in other sections of the NTS (4.8.5, 8.1.5,
10.4.1, 12.9 and 13.9.3). The general provisions in 10.6.1 will also apply.
133
10.6.4 Proposed Economic Corridor Implementation Authorities
The DSP and MTDP envisage the establishment of a special purpose authority for each economic
corridor. The first such authority is expected to be for the PRAEC corridor. These special purpose
authorities are expected to be given similar functions and powers to the BDA in respect of the
boundaries established for each economic corridor. The general provisions in 10.6.1 will also apply.
10.7 Public – Private Sector Coordination

An important role is played by coordinating and
consultative committees and associations formed with
Public-Private Sector
representation from the public and private sector. Dialog
Coordination
between the public and private sector is needed to 137. Existing public-private
promote a mutual understanding of the issues, demands sector consultative bodies such
and constraints in the transport sector that act on the as the CIMC play an important
Government agencies on the one hand and private role and will continue to be
businesses on the other. Existing bodies, such as the supported by Government.
Consultative Implementation and Monitoring Council
(CIMC), supported by the Institute of National Affairs
(INA), play a valuable role in this regard.
To strengthen public-private sector coordination in freight

Public-Private Sector
transport across all modes, and following on an APEC
Coordination
initiative, it is intended to establish an advisory PNG
National Logistics Association (PNGNLA), facilitated in 138. A PNG National Logistics
the first instance by the Department of Transport. The Association will be established,
PNGNLA will provide a forum for freight interests, facilitated by DOT, with aims to
transport services operators and Government to consult improve the efficiency, security
and work together with the overall aim of improving the and reliability of freight transport
efficiency, security and reliability of the freight transport infrastructure and operations
infrastructure and freight operations.
10.8 The National Budget Process
The Budget Process has an important influence on how well any National Transport Strategy and
investment plan will work in practice. At present there are several features of the process that work
against good transport planning, rational selection and approval of projects and oversight of
implementation:
 part of the national budget for transport is administered by non-transport agencies –

DNPM, the Defence Force, the Border Development Authority and the Office of Rural
Development; these expenditures are not incorporated in DOT’s budget submission for
the sector and the TSCMIC does not have any opportunity to review them; there are
concerns that the spending is not always good quality;
 projects are added to the national budget after final submissions are made; the additions
are apparently made by direct intervention of ministers or by departmental heads to
Treasury and DNPM and are the result of poor forward planning or political pressure;
 projects in budget submissions are cut or reduced in funding – while this is the
prerogative of Treasury, cuts are made in an arbitrary way that can undermine the
priorities for funding classes of work – for example by underfunding maintenance and at
the same time providing budget for new construction;
 projects enter the national budget with little notice or prior consideration – any
substantial transport project should be signalled well ahead of the budget year in which it
is first to be funded;
134
 The program names often do not relate well to

the projects that are included, and projects are
Changes to the Transport
not always clearly identified and described in
Budget Process
the submissions by the transport agencies. 139. All national budget
transport expenditure to be
The NTS proposes the following changes: channelled through the budgets
 All national budget expenditure on transport of the agencies owning and
infrastructure should be included in the budget managing the assets
appropriation for the transport agency which Other than inter-governmental
will eventually be required to manage the funding grants, all Government
asset – DOW or NRA for roads depending on expenditure for provincial
asset ownership, PNG Ports for ports and transport infrastructure to be
jetties, NMSA for maritime navaids, NAC for channelled through the national
airports, PNGASL for air navaids; transport agencies rather than
 Apart from intergovernmental grants, such as other departmental budgets
TIMG, Government appropriations for All transport infrastructure
provincial, district or local level infrastructure expenditure to be reviewed by
should be included in the budget appropriation TSCMIC before inclusion in the
for DOW for roads, PNG Ports for small Budget
wharves and jetties, and NAC for provincial
airports and rural airstrips; these should be Budget program names and
clearly demarcated as provincial transport make up should be rationalised
infrastructure development programs; these Distinction between national
programs should be developed from the priority roads and non-priority
expenditure priorities set out in Provincial roads superseded by NTS
Transport Plans that have been reviewed and
endorsed at national level by DOT as No lump sum provisions
consistent with the NTS, the responsible unrelated to works quantities
national transport agencies and TSCMIC; and rates estimates to be
included
 Projects not put forward in budget submissions
by the agencies or by provincial government
and therefore not reviewed by TSCMIC should not be added to the national budget;
 Budget program names and make up should be rationalised. A suggested re-
classification of programs for the roads development budget is into (i) Rural roads and
bridges – GoPNG funded, (ii) Rural roads and bridges – including loan or grant
assistance, (i) Urban roads and bridges (iv) Other expenditure – for RAMS, BAMS, plant
and transport, works units etc. Program and project names and identification should not
vary year-to-year and be consistent between the Budget and PIP;
 Once the NTS and MTTP are adopted, it will no longer be necessary to identify “national
priority roads” and “non-priority roads” and these distinctions will be phased out in future
amendments to the NTS and MTTP;
 Lump sum budget appropriations that are not related to a scope of works, typically with
an accompanying technical description, quantities and cost estimate, should not be
approved – as this can lead to wasteful expenditure and lack of accountability.
135
11 Statement of Policy for Land Transport
11.1 Introduction
This section of the Strategy sets out the updated policy for land transport, comprising roads and
bridges, road traffic, vehicles, drivers, road passenger and freight transport services, based on the
general policy principles for the transport sector as a whole discussed in Section 8. It does not
contain investment strategy or priorities for road infrastructure which are considered in Section C.
This policy statement replaces the existing land transport policy as conveyed to Parliament by the
Minister in March 2009, contained in the National Transport Development Plan 2006-2010.
The policies for land transport are matched with key performance indicators (KPIs), targets and
monitoring in an action plan for implementation of policy and institutional reforms in the MTTP.
11.2 Development of the Land Transport Institutions
11.2.1 Road Traffic Authority

All land transport regulatory functions and associated
140. Road Traffic Authority
safety enforcement functions will in future be carried out
by a new Road Traffic Authority (RTA), formed from the A Road Traffic Authority (RTA)
NRSC and Land Transport Division of DOT, the Land will be created from the NRSC
Transport Board being disestablished in the process. and DOT Land Transport
Division; the National Land
The RTA will be established as a statutory regulatory Transport Board (NLTB)
authority under a Road Traffic Authority Act which will provincial LTBs will be abolished
also incorporate and supersede the existing Motor Traffic and their function rolled into the
Act. The RTA will be structured as a central headquarters new RTA;
office based in Port Moresby with provincial offices as
necessary. RTA will be responsible for: The RTA will be funded through
administration fees charged for
 administering all vehicle construction and use its services;
regulations;
The RTA will outsource
 administering registration and annual renewal operational activities to MVIL,
of registration for vehicles; Provinces and the private sector
 administering driver licensing including as proves most cost-effective
eyesight tests, driver competence tests, and consistent with maintaining
the issue and renewal of driver licences; quality control
 registering driving schools and certifying RTA will arrange for the
driving instructors; collection of statistical data on
 licensing, inspecting and auditing of vehicle motor vehicle, driver and
testing stations, vehicle testing inspectors and transport services licensing at
equipment; national provincial level, and
 administering the Motor Car Dealers Act pass this data to the DOT to
(although the requirement for this Act is to be support its sector policy,
reviewed); planning and monitoring role
 administering the licensing of public motor
vehicle (PMV) services, taxis and hire cars that are used in hire-or-reward services, and
for PMV driver licences for such services, based on quality standards (regulation of route
structures and route and service licensing to lie with NCD and urban councils);
 administering the licensing of heavy vehicles used for hire-or-reward freight transport,
based on quality standards;
136
 road safety functions as detailed further below; and

 on-road enforcement of all the above.
RTA will fund its activities from administration fees that reflect its costs of operation. The RTA will
not necessarily carry out all of the above functions within its own organisation but will outsource
certain of these to MVIL, to Provincial Governments and to the private sector as proves the more
cost-effective while maintaining service quality standards and integrity of the system.
11.2.2 Motor Vehicle Insurance Ltd and Provincial Governments

MVIL has well-established systems for issuing motor 141. MVIL and Provincial
vehicle registration, driver and transport services licences Governments
together with the various testing that accompanies them,
although some improvements are needed to the integrity MVIL will continues to provide
of certain of the testing procedures. vehicle, driver and transport
license issues and related
MVIL will be invited to continue to perform these services services under contract to RTA
on a contract basis alongside its primary function as a 3rd or to Provincial Governments
party insurer, but will be remunerated on a fee-for-service
MVIL will be compensated on a
basis rather than retaining all of the revenues. Part of the
fee-for-service basis and passes
revenues will be used for funding the RTA. The part
through the monies collected to
levied as road user charges will be passed through to the
the contracting authority;
NRA or any other agency entitled to a portion of the road
user charge revenue. In the provinces the remaining Provincial Governments will
revenues will be retained by the Provincial Governments. retain motor vehicle licensing
revenues as at present
11.2.3 National Road Safety Council and Safety
Functions Generally
142. NRSC and Road Safety
The NRSC has been operating without a governing
Functions
board, that is the Council as provided for in its legislation.
Prior to establishment of the RTA, a new NRSC Council Reconstitute the NRSC Council
will be agreed with the Minister and be approved by the in the interim
NEC. The new Chairman will then convene regular Consolidate all road safety
meetings of the NRSC Council as provided for in the functions of DOT and NRSC into
NRSC Act. the new RTA
On its formation the RTA will consolidate road safety NRSC Council continues with
functions within a single autonomous government revised membership as an inter-
statutory authority, combining the publicity and agency advisory body to the
promotional functions of the NRSC with the vehicle Board of the RTA.
roadworthiness and on-road vehicle inspection functions
of the LTD. The new RTA will work closely with the
RTA to actively monitor road
Traffic Police who will retain their current responsibility for
safety and develop and
on-road enforcement of traffic laws and for attending and
implement action plans for
reporting on road vehicle crashes.
safety improvement within an
overall National Road Safety
it is envisaged that the Council of the old NRSC will Plan (NRSP).
continue with a revised membership as an inter-agency Road controlling authorities will
advisory and coordinating body on road safety matters. advise on road design and
The committee, comprising officials from RTA, DOW, condition factors affecting road
NRA, DOT, Traffic Police, Departments of Education and safety and will contribute to the
Health and relevant private sector organisations will action plans and NRSP and will
provide technical support and policy advice to the Board include road safety in agency
of the RTA. budgets
137
The RTA, using information provided by the traffic accident database and Traffic Police scene
reports, will actively monitor the road safety performance of the public road network, and will
develop and implement actions plans for improvement, considering vehicle, driver/operator and
traffic factors. The road controlling authorities, namely DOW, NRA, NCDC, provincial governments
and town councils, will be required to assist the RTA in identifying road design and condition factors
contributing to crash risk and assist to develop and implement crash reduction measures and plans.
Agencies will also be required to: (i) identify individuals within their organisations with the prime
responsibility for road safety; (ii) to provide for roads safety in their budget requests and allocations;
(iii) to apply or provide for funding against proposed work programmes; and (iv) to report on
implementation.
11.3.1 Commercial Road Freight Transport

The requirement for commercial freight vehicles (hire or
reward services) to hold provincial or highway licences 143. Road Transport
that specify the routes that can be run or the types of Licensing
freight carried will be removed (quantity licensing). In Commercial goods transport
future road freight licensing will be on a quality basis, as subject only to quality licensing,
set out in Section 8.8, requiring only that the operator has quantity licensing abolished
the financial capacity, good character and sufficient
industry knowledge to operate a commercial freight
PMVs and taxis will continue to
business. Licences will be issued by the RTA and no
be quantity licensed under
longer issued by provincial governments. Companies and control of RTA by route or area
persons operating heavy vehicles to support their own
of operation
businesses (own account operation) will not be required Quality licensing will be by
to hold freight vehicle licenses. criteria of industry knowledge,
financial capacity and good
11.3.2 Commercial Passenger Transport Services character
Urban and rural PMVs and taxis are subject to route or
All licenses will be issued by
area licensing which will be retained for reasons of
RTA in consultation with the
providing a stable service based on planned routes or relevant urban council or
areas of operation and to facilitate the inclusion of social
provincial administration
services as described in Section 11.6. All licences will be
issued through the RTA in consultation with the relevant
urban council (NCDC, city or town council) or provincial administration in the case of rural licenses.
11.4 Road Network Development, Ownership and Management
11.4.1 Enlargement of the National Road Network

Progressively, as public roads are rehabilitated, upgraded or newly constructed, they will be
selectively transferred from provincial to national ownership under the management of DOW, except
where roads are transferred directly or at a later date to the NRA. The MTDP target is for 25,000
kms of public roads to be in national ownership by 2030 which will be the benchmark, along with the
five year target points for monitoring achievement. This is expected to result in approximately
17,000 kms of public roads under DOW management by 2030, and a residual 12,000 kms in
provincial ownership.
11.4.2 NRA Assumption of Responsibility for the Core National Road Network
Progressively, the core road network, comprising the most heavily trafficked rural roads, as they are
brought up to maintainable standard, will be transferred to the management of the NRA, which will
fund the ongoing maintenance from road user charges. NRA will also be responsible for later
138
upgrading and for rehabilitation/reconstruction of these roads at the end of their design life. The
core road network corresponds approximately to the NR roads and certain of the NM and ND roads
as presently numbered in the DOW inventory, although there will be a need to assess roads on a
case-by-case basis for suitability for inclusion within NRA’s responsibility with regard to the need to
meet upkeep costs from road user charges revenues. Some of the missing links, as and when
constructed, may become part of the NRA responsibility if of sufficient functional and traffic
importance. The MTDP expects this process to be completed within 20 years, and the MTDP
targets will from the baseline for monitoring achievement.
11.4.3 Provincial Road Network

Provinces will be responsible for the public road network
144. Road Network
not under national ownership, expected to reduce from
Development
approximately 20,000 kms in 2010 to 12,000 kms by 2030
and to be concentrated on lower hierarchy access roads New links and selected other
and local urban roads. This reduced responsibility is more public roads to become declared
in keeping with the funding provided through inter- roads as they are constructed,
governmental funding arrangements and the capacity of upgraded or rehabilitated
the provincial administrations. Length of the national network
will increase to 25,000 kms and
11.4.4 Transfer of Private Roads into Public
the provincial network will
Roads
decrease (~20,000 to ~12,000
There are individual roads and small road networks under km) in pursuit of MTDP targets
private ownership, generally as part of development
projects or providing access to private development. NRA to progressively assume
Private roads will remain the maintenance responsibility ownership of core roads,
of their owners. approximately 9,000 kms
Transfers of private roads or
In the case that (a) an owner of a private road wishes to
non-transport Government
transfer ownership responsibility to the Government, or
agency roads to public roads will
(b) a non-transport Government agency wishes to transfer
require prior agreement for
an agriculture, forestry or mineral development road to
ongoing maintenance funding
Government, with the intention that the road become a
public road then this will have to be agreed in advance DOT to lead development of
with the authority (DOW, NRA or provincial government) procedures for identifying,
which would become responsible for the road, to ensure agreeing, surveying and legally
that maintenance funds are available and that the roads transferring roads between
are of a design standard that is both suitable for public provincial and national
use and capable of being economically maintained. responsibility, between DOW
and NRA and between private
11.4.5 Procedure for Transfers of Road and public responsibility
Ownership
There will need to be agreed procedures for deciding which roads are to be transferred between
provincial and national responsibility (and vice versa), the responsible national agency (DOW or
NRA), transfers between DOW and NRA, and between private and public ownership. As this is a
long term process, taking place over 20 or more years, it can be approached incrementally and time
should be taken to ensure that the process is as robust as possible taking all relevant
considerations into account. Transfer procedures will be designed to operate in either direction (e.g.
national to provincial as well as provincial to national).
DOT will take the lead role in developing these procedures in consultation with DOW, NRA,
DPLLGA and provincial administrations, DNPM and other interested parties.
139
The procedures will cover:
 selection criteria when considering transfer of ownership, including the existing and
future planned role in the road hierarchy, sequencing and scheduling of transfers;
 provincial and regional equity – ensuring that road maintenance responsibilities are
allocated with due regard to provincial human and financial resources, and relative
development status using the KPIs established in the MTTP (Volume 2, Table 10);
 basis of the agreements to transfer between parties, documentation and approval
processes and sequencing and timetable of actions;
 accurate identification and centreline positioning, road layout and condition survey
requirements, legal and customary ownership/usage of the underlying land, any existing
agreements with landowners (in Memoranda of Agreement etc.);
 Legal instruments for transfer and procedures to be followed, including gazetting of
national roads under the Roads Maintenance Act and the NRA Act and implications
under the Protection of Infrastructure Act.
11.4.6 Cooperative Working between DOW and Provinces

Provinces will be encouraged to enter into management
arrangements with the provincial arm of DOW to manage 145. DOW-Provincial
provincial road assets on a selective or whole-of-network Cooperation
basis, in which case DOW will assume responsibility for Provinces to enter into
effective use of the funds available, reporting back to the management arrangements with
provinces. Conversely, where the Provincial Government DOW for road asset
has a strong road works capability and DOW is weak, management according to
DOW will be encouraged to outsource part of its network capacity and capability.
management tasks to the provincial administration. In
either case, the ultimate responsibility for asset
management and acquittal of funds will remain with the asset owners and such arrangements will
be governed by clear written agreements between the parties including for administrative costs.
11.4.7 Establishment of Provincially-Based Works Units

DOW will be encouraged to cooperate with Provincial
and, where necessary, district administrations, to 145. DOW-Provincial
establish commercially priced works units to act as a Cooperation
focus of skills and equipment in the more remote rural Establish joint provincial works
areas where there is a shortage of private sector capacity units combining DOW and
or interest. (See also the role of DOW, Section 10.4.2). Provincial resources
The purposes of the works units will be: Works units to provide for
emergency reinstatements, plant
 to attend to emergency reinstatements where
hire and for works on
no suitable arrangement can be made with the
competitive tender basis where
private sector;
little or uncompetitive private
 to undertake road works on a competitive sector capacity
tender basis where there is no private sector
interest or where there is evidence of market
dominance and uncompetitive pricing by the private sector;
 to provide a plant hire service to encourage SMEs in the private sector to become
involved in road works.
In establishing such works units, care will be taken not to unfairly compete with the private sector
and to this end the works units shall be self- and fully-accounting for their cost (that is using a
project-based commercial accounting framework rather than traditional public sector accounting).
140
11.5 Public Private Partnerships
In conjunction with the Government’s proposed PPP Unit,

146. PPPs
the DOW and/or NRA may explore the opportunities for
leveraging road construction for major projects using Envisaged to be very limited
private sector capital. However, the considerations noted opportunity for true PPP road
in Section 8.1.2 should govern either agency’s actions in concessions in Papua New
this area. PPPs will be subject to the prevailing National Guinea.
Public Private Partnership Policy and framework. Performance-based term
PPPs, where the private sector participates by arranging contracts offer opportunities for
private financing of all or part of a project in return for an leveraging private finance and
operating concession in which the private interest collects developing national construction
toll revenue, or receives revenue from Government capacity
through a shadow tolling arrangement, may be viable for Finance-and-build arrangements
new urban road links carrying a substantial volume of involving private sector loans are
traffic. It is envisaged that such facilities would be suited likely to be more costly than
to road links that provide a higher than average level of sovereign loans from
service to a particular group in the community, such as a multinational donors and also
limited access airport link road where such a facility create conflicts in combining
would not normally attract a high priority in the investment borrowing obligation with
programme. contract delivery.
Particular matters relating to PPPs for roads that should
be considered are:
 Most jurisdictions require that there be a free route in parallel to the tolled route, if the
PPP is to generate revenue from a physical toll concession, including where tolls are
collected electronically;
 The infrastructure for collecting physical tolls adds to the capital cost of the project and
has ongoing operational costs and security issues for the funds;
 PPPs are generally only used for roads carrying relatively high volumes of traffic; few if
any such conditions exist in PNG;
 The private consortium in a PPP arrangement will negotiate to reduce or remove the
traffic risk – that is the risk that repayments will be based on traffic volume and that the
traffic volumes may be less than expected;
 The responsibility for overload control needs to be considered, as this could become a
reason for the private party claiming a breach of the public party’s contractual
responsibility;
 If the future traffic and toll revenue is not to be the means of payment, and instead the
arrangement is just for the private consortium to provide the capital with a scheduled
debt repayment to the public party, or Government, then this amounts to no more than a
commercial loan which would be better separated from the delivery of the project – the
aim of a PPP is for both parties to assume some risk, if all the risk is with the public
sector, then there is no advantage;
 Performance-based term contracts for road rehabilitation and ongoing maintenance are
seen as a useful way of increasing private sector capacity, giving longer term assurance
of work for the private sector and moving risk away from the public sector, and can be
financially structured to bring projects on earlier than would be possible through the
conventional budget process;
 Alliance contracts between Government and private design and construction consortia
also offer a method of jointly achieving cost-effective results but their introduction would
require improved institutional capacity.
141
11.6 Cost Recovery, Road Fund and CSOs
11.6.1 Cost Recovery and User Charges

A cost recovery, user charges and funding policy for
147. Cost Recovery, Funding
roads is an urgent requirement to ensure a stable,
and CSOs
predictable and sufficient level of funding for road
maintenance. NRA will assume responsibility
for the more heavily used and
Roads funded from user charges - as for ports and functionally important rural
airports, the road network includes main roads carrying roads, with progressive transfer
relatively high levels of traffic from which user charges of roads being subject to
can be raised that are sufficient to finance ongoing assurance of long term financial
maintenance, once the main roads are restored to a good sustainability from the Road
maintainable condition and other roads. This part of the Fund
network will become the management responsibility of the
NRA and its funding will be provided for from the NRA Other economically viable roads
Road Fund with revenue to the fund being derived from will be funded through the DOW
charges on road users. and Provincial budgets subject
to funding availability
Other economically viable roads - the remainder of the
Non-economic roads providing
national network (other declared roads) fall under the
basic access to small remote
responsibility of DOW while undeclared roads are the
communities will be funded
responsibility of NCDC, provincial and local governments.
according to the CSO policy
For some of these roads, the economic benefits to road
from an agreed portion of the
users will outweigh the costs of road upkeep (including
road budget.
considerations such as indirect benefit from improved
health, education status and market opportunities), that is
a benefit/cost ratio>1. However, it will not be possible or practical to self-fund these economic parts
of the network solely from charges on road users. In these cases there will be ongoing reliance on
the existing sources of funding which are variously national Government appropriations to DOW,
inter-governmental development and maintenance grants, tax credit arrangements, and other
financial support to roads from other sources of revenue such as provincial motor vehicle
registration and licensing fees, provincial road user taxes, provincially distributed GST, sales tax,
liquor licensing taxes etc.
Non-economic roads to satisfy community services obligations (CSOs) – roads to some

remote areas serving small populations will in some cases be uneconomic to provide or maintain.
However Government wishes to be equitable in provision of basic access, and will assign a
proportion of road funding according to the policy on CSOs in Section 8.6
11.6.2 The NRA Road Fund

148. Operation of the NRA
A Road Fund has been legally established under the Road Fund
National Roads Authority Act. It is a special purpose off-
budget fund for financing maintenance and rehabilitation Will fund all works requirements
of those national roads for which full upkeep responsibility on NRA roads
has been transferred to the NRA from DOW by Gazette Road user charges to be
notice. Upkeep includes road and road corridor extended to a charge on both
maintenance, bridge and other structural maintenance petrol and diesel, an annual
and all road furniture, traffic facilities and road safety charge on registered vehicles
services. Eventual reconstruction and upgrading of roads and a charge for heavy vehicle
under NRA responsibility will also be funded from the axle loads
NRA Road Fund.
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The Road Fund will receive revenues from nationally

levied road user charges and other sources, and NRA will 148. Operation of the NRA
distribute these funds against programmes for road Road Fund
maintenance and rehabilitation based on road asset NRA to develop its financial and
management information. The NRA will work with technical management of the
Government to extend the present allocation by Treasury Road Fund and application to
of part of the excise duty on diesel fuel to the Road Fund the network
to a fully-fledged Road Fund obtaining revenue directly
from a charge on diesel and petrol, from an annual
NRA to publicly report on its
charge on motor vehicles and heavy vehicle charge at
affairs and to annually prepare
the time of relicensing, and from such other sources as
statements of intent and service
may be considered practical and appropriate.
performance
Oversight from Auditor General
NRA and DOW will manage the rate of transfer of roads and monitoring by DOT
to NRA responsibility such that the Road Fund revenues
are sufficient to fully fund the costs of sustaining the NRA
network in the long term.
NRA will continue to develop the necessary technical and financial expertise to assess needs of
their core road network, to ensure efficient and effective use of monies from the Road Fund, and to
evaluate the performance of completed work. The records of meetings, processes and decisions of
the NRA will be publicly disseminated. External oversight of the NRA will be maintained by the
Auditor General and by the responsible Minister with monitoring assistance from the DOT.
NRA will annually provide a Statement of Intent for the works that it intends to implement and a
Statement of Performance after the year end, reporting the achievement of targets and monitoring
the cost effectiveness of the services purchased.
11.6.3 Funding of NCD Roads
Several of the main urban arterial roads in Port Moresby

149. Funding of NCD Roads
and roads leading to national buildings and facilities are
declared national roads, so should be funded by NCDC to manage all works on
Government appropriation or, in cases where transferred roads within NCD boundary from
to the NRA, by the NRA from the Road Fund. However, in its own forces or by contract
practice NCDC has taken on the responsibility of funding
NCDC to receive road user-
road maintenance within the NCDC boundary and, for
based funding to supplement its
capital development of roads, has looked to Government
financing of road works
for a funding contribution which has not always been
forthcoming. Unlike the provincial governments, NCDC An investigation will be made of
does not receive revenue from motor vehicle and driver alternative funding sources
licensing, as the service is provided by MVIL which including a proportion of RUC,
retains the revenue. Consequently road funding is from vehicle registration and licensing
NCDC’s general revenue sources. Nor does NCDC fees and participation in inter-
routinely receive intergovernmental funding through DSIP governmental funding
or TIMG as is the case for provincial governments.
As the largest urban authority in Papua New Guinea, NCDC has considerable financial resources
compared with the provincial urban centres. However, it is in the position of committing about one
third of its total revenue to funding the road network. While it has a works capability suited to the
task, a more secure funding base related more closely to the costs imposed by road users is
needed.
Accordingly, an investigation will be made of alternative funding sources for Port Moresby roads,
including options, or a combination, of: (i) a proportion of the revenue raised through road user
143
charges, (ii) directing the funds raised by MVIL to NCDC with NCDC paying MVIL for the services it
provides on a cost plus basis or (iii) including NCDC within the inter-governmental funding
arrangements as for the provinces.
11.7 Regulation of Service Standards in the Land Transport Subsector

Regulation of customer service standards for licensed
150. Regulation of Service
passenger transport and commercial road freight
Standards
transport services will be controlled through conditions of
issue of the licences and enforced by the Road Traffic The RTA will regulate service
Authority. The ICCC also has a responsibility for standards for commercial
overseeing standards of service delivery to transport passenger and goods transport
service users, such as operation to agreed schedules, services
adherence to standards of passenger comfort and care
Consider the introduction of a
of cargo as advertised by the service providers, required
system of Land Transport Rules
by contracts of carriage or through the shipping service
franchise contracts. DOW to be the lead agency for
setting standards for road
The Government will give consideration to introducing a engineering works in conjunction
system of Land Transport Rules as an additional form of with industry stakeholders.
legal instrument so that matters of vehicle design and
use, traffic control devices, traffic management, fines and
penalties, can be more readily revised to keep pace with changing requirements.
Standards for the design, construction and maintenance of road infrastructure will be periodically
reviewed and monitored as set out in Section 8.8, with DOW initially being responsible for standards
for road design and the NRA and DOW jointly for standards of road maintenance.
11.8 Road Safety
11.8.1 Road Safety Strategy and Action Plan

The Papua New Guinea Road Safety Review (April 2011) 151. Road Safety
prepared by the NRSC has shown that a major effort is
The NRSC/RTA to prepare a 20
required to improve the safety of vehicles, drivers, roads
year National Road Safety
and transport services, including better coordination of
Strategy and 5 year Action Plan
the many public agencies contributing to road safety.
Reduce the number of vehicle
This review will be further developed into a 20 year testing stations and tighten
National Road Safety Strategy, and 5 year Road Safety criteria and enforcement;
Action Plan, to be prepared by the RTA (in the interim engage external auditing agency
NRSC) in consultation with DOT, DOW, NRA and other
stakeholders and monitored annually and reviewed every Review period between retesting
five years as part of the MTTP preparation and NTS for younger vehicles
review process. Centralise issue of number
plates and vehicle registration to
11.8.2 Vehicle Roadworthiness the RTA; review the delegation
The number of vehicle testing stations will be reduced of functions to Provincial
and the criteria for licensing as an Authorised Inspection Governments and MVIL
Station (AIS) will be tightened and more vigorously
enforced. Responsibility for approving vehicle testing stations will transfer to the RTA on its
formation. The RTA will review the options for outsourcing the licensing and compliance inspections
of AIS to a quality certification agency with the necessary credentials and independence.
144
Importation of motor vehicles will become subject to approval to ensure that transport equipment is
fit for use on PNG roads in regards to mass and dimensions, vehicle construction rules, age and
history of pre-use, and emission control equipment.
Consideration will be given to increasing the time period for retesting vehicles for roadworthiness
(issue of safety certificates) to one year for vehicles of up to three years of age.
11.8.3 Vehicle First Registration and Annual Renewal

The issue and surrender of vehicle registration plates and the issue and renewal of registrations will
be centralised through the Road Traffic Authority. The procedures for delegating vehicle annual
relicensing to provincial governments and MVIL will be reviewed to ensure integrity, consistency,
and accurate data recording and central reporting.
151. Road Safety
11.8.4 Driver Licensing and Testing Driver tuition and testing
The procedures and supporting legislation for driving requirements to be raised
schools, driver training, testing and licensing will be
RTA to increase enforcement
reviewed with the aims of requiring a minimum number of
effort to counter unroadworthy
hours of tuition from a qualified driving instructor, a
vehicles
tightening of the practical test and issue of competency
certificates, review of the term for renewal of licences, Safety management systems to
requirements for older drivers and the introduction of be introduced for identifying and
defensive driving courses. mitigating safety risks from road
layout and use; new road
11.8.5 PMV and Taxi Safety projects to be safety audited
The use of unroadworthy PMVs and taxis will be Road safety funding to be
countered through increased enforcement effort by the increased and self-funded from
new Road Traffic Authority in coordination with the Police RTA revenues
Traffic Division.
11.8.6 Safety Management Systems and Design Auditing

Road network managers (DOW, NRA, Provincial Government and NCDC) will be required to
establish Safety Management Systems for identifying and rating safety hazards related to road
design and traffic facilities, with a corresponding process for their mitigation. All road designs will
be required to pass an independent safety audit by persons trained and certified to do so. An
appropriation against road safety will be included in the Development Budgets for DOW and other
road authorities, to encourage an increased focus on road safety improvements.
11.8.7 Road Safety Funding

The basis for funding road safety will be reviewed, including the present allocation of 5% levy on
third party insurance to the NRSC. Consideration will be given to self-funding all road safety
activities including the activities of the NRSC and on-road safety enforcement and accident
reporting under the new RTA structure.
11.9 Environmental and Social Safeguards for Road Transport
11.9.1 Emissions from Road Transport

Road transport emits noise, harmful gases, unburnt hydrocarbons, particulates and carbon dioxide
from engines, brake linings and tyre wear which cause localised disturbance, air pollution, waterway
pollution and contribute to global warming. There is legislation against the emission of visible smoke
but no other controls on vehicle emissions or on vehicle fuel efficiency.
If PNG is to meet its commitments made at Copenhagen in December 2009, the vehicle fleet will
have to become cleaner and more efficient. This will benefit people living in urban areas as well as
145
the climate, as cleaner vehicles will help reduce

respiratory and coronary disease and create a more 152. Environment
pleasant living environment. Review import controls to
eliminate high emission vehicles
The Government will review the import controls on used
road vehicles, with the aim of eliminating vehicles with Increase on-road enforcement of
outdated and unserviceable emission control systems. smoky vehicles
The Government will also consider the inclusion of DOW to maintain and develop
pollution related charges as part of the road user charges environmental codes of practice
system. There will be an increased enforcement for road and bridge infrastructure
response to remove smoky vehicles from the road. construction and maintenance
including practice guidelines for
11.9.2 Environmental Safeguards for Road
climate change adaptation.
Construction and Maintenance
The construction and maintenance of transport DOT to develop proposals for
infrastructure and the operation of transport vehicles and limiting the carbon emissions
associated equipment will be subject to practice from the vehicle fleet and
guidelines and, where necessary, regulations aimed at introduction of biofuels in
safeguarding the natural and built environment and conjunction with the OCCD
minimising adverse environmental and social impacts on
people and communities, considering both direct and
indirect or consequential effects. DOW will take the lead in developing a strategy and practice
guidelines in consultation with other stakeholders. Road network managers will be required to
observe environmental laws and regulations enacted by national and provincial Government from
time to time and the legal requirements and procedures laid down by the Department of
Environment and Conservation.
11.9.3 Carbon Emissions

Carbon emissions from the road vehicle fleet can be reduced by encouraging fuel-efficient vehicles,
by good maintenance practice and by substitution of sustainable biofuels for conventional petrol and
diesel. DOT will develop proposals for each of these initiatives in conjunction with the RTA and the
OCCD.
11.9.4 Climate Change Adaptation

Road infrastructure is potentially threatened by the effects
153. Social Safeguards
of climate change, including increased rainfall intensities
affecting drainage flows for culvert and bridge design and, Construction contracts to include
at the coastal margins, the severity and area of effect of provisions for protecting local
tropical storms and sea level rise. These threats require communities from HIV/AIDs
a response both when designing new roads and bridges infection
and also in retrofitting existing roads to increase their
Transport operator targeted
climate change resilience. The DOW, NRA, DOT and the
education in HIV/AIDs
proposed Committee on Engineering Design Standards
prevention
will take the initial responsibility for considering a
response strategy to climate change that balances the Legitimate resettlement impacts
risks of infrastructure damage and closures against cost. to be avoided and/or
compensated in road
11.9.5 HIV/AIDS and other Communicable development
Diseases
Roads into inaccessible areas to
The potential spread of HIV/AIDS through construction take account of cultural and
camp personnel, and by freight and passenger vehicle ecological impact risks
drivers and crews will be countered through safeguard
146
conditions in construction contracts and through operator education programmes in cooperation

with the Department of Health.
11.9.6 Resettlement Impacts of Road Construction

The Government will compensate legitimate claims of those whose land, property and activities are
adversely affected by new road construction and road realignment whether the resettlement is
voluntary or involuntary, as required under the Protection of Infrastructure Act.
11.9.7 Impacts of Roads on Areas of Cultural and Ecological Sensitivity

The opening of previously inaccessible areas can provide access for undesirable exploitive and
disruptive human activity, such as hunting pressure on wildlife and illegal logging and mining, and
adverse effects on the traditional culture of isolated communities. Development of new transport
routes through pristine or thinly populated areas will therefore have regard for balancing
development advantages with environmental and social costs.
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12 Policy Statement on Maritime Transport
12.1 Introduction
This section of the Strategy sets out the policy direction for maritime transport, comprising ports and
port operations, river transport and river ports and landings, coastal maritime activities, marine
navigation infrastructure and operations, international and costal shipping, based on the general
policy principles for the transport sector as a whole discussed in Section 8.
This policy statement replaces the existing maritime policy as conveyed to Parliament by the
Minister in March 2009 and contained in the National Transport Development Plan 2006-2010. It
does not contain the investment strategy or priorities for ports and other maritime infrastructure
which are considered in Section C. It is recognised that in some areas maritime policy requires
further analysis and development, and that this policy statement will be updated, amended and
expanded as necessary in future reviews of the NTS
12.2 Development of Maritime Transport Institutions
Establishment of a Shipping Franchise Unit: A unit will

154. DOT
be established within DOT Rural Infrastructure
Development Division (RIDD) as an interim measure to Establish a Shipping Franchise
provide for the continued administration of the Shipping Unit within DOT RIDD to service
Franchise Scheme. Until the completion of the CTWP the CWTP
Stage 2, this unit will remain based in the CWTP project
DOT PCD and RIDD to
office. In the medium term the Shipping Franchise
coordinate the planning of minor
Scheme will be transferred to the broadened NMSA/NMA
wharves, jetties and landings in
(see below).
conjunction with provinces and
Rural Infrastructure Planning: the future coordinated DPLLGA
planning of rural maritime infrastructure, that is minor MTD including MSU to be
publicly owned/available wharves, jetties and landings absorbed into an enlarged
and their local road access, for the purposes of NMSA as the National Maritime
implementing and revising the NTS and MTTP, assisting Authority in the medium term
provincial administrations in development of their
transport plans and determining appropriate projects for CSO funding, will be carried out jointly by
PCD and RIDD of DOT, in close liaison with DPLLGA through the Provincial and Local Level
Services Monitoring Authority (PLLSMA).
Marine Transport Division (MTD) to be absorbed into 155. NMSA/NMA

NMSA/NMA: Non-economic regulatory functions carried NMSA to broaden to a National
out by the MTD, including the Maritime Security Unit and Maritime Administration (NMA)
the proposed Shipping Franchise Unit, will be reassigned in the medium term to include
in the medium term to a broadened NMSA/NMA (see the administration of maritime
below). regulatory policy performed by
DOT Marine Transport Division,
12.2.2 National Maritime Safety Authority the Maritime Security Unit, the
Shipping Franchise Scheme of
The role of the NMSA will be broadened over time to a
the CWTP and port regulatory
National Maritime Administration/Authority (NMA), to
functions presently delegated to
incorporate those regulatory functions currently
PNGPCL from the Secretary of
performed by PNG Ports Corporation under delegation
Transport.
from the Secretary for Transport, allowing PNGPCL to
148
concentrate on its commercial functions without the potential for conflicts of interest. The non-
economic regulatory functions of Marine Transport Division will also be transferred to the NMA,
including the Maritime Security Unit and the operational management of the CWTP Shipping
Franchise Scheme.
Functions will be transferred from DOT to NMSA/NMA only where financial provision for their
delivery is made by Government, through national budget allocation and/or user charges.
NMSA/NMA will retain powers to delegate or outsource the service delivery of its regulatory
functions to PNGPCL and others on a fee-for-service basis, under a clearly specified instrument of
delegation. In the following paragraphs, where NMSA is stated, the policies and actions will apply
similarly to the future NMA.
Endorsement of the SOE Model: The policy position of 156. PNG Ports Corp Ltd
this NTS is that a SOE model of a ports corporation is an PNG Ports to remain as an SOE
appropriate one for Papua New Guinea. A move back to
Main port assets to remain in
a statutory authority model, such as a harbour board,
majority public ownership
would be a retrograde step and should not be
contemplated. PNG Ports Corporation to
operate the three main
Private/Public Ownership of Port Assets: Because of commercial ports on a fully
the limited opportunities for competition in the delivery of commercial basis, as separable
port infrastructure, full privatisation of the publicly-owned business enterprises with price
main commercial ports carries risks of loss of sovereign monitoring but not price control
control over what are key strategic assets, and would be
very difficult to reverse. However, private sector PNGPCL be provided with CSO
investment in port assets that retains a majority funding support to operate the
shareholding by Government may be considered. non-commercial ports
PNG Ports Corporation to Operate on a Fully

Further consideration be given
Commercial Basis: PNG Ports Corporation should be
to development of PNGPCL as a
landlord or tool port operator.
encouraged, and given the institutional and regulatory
framework, to operate on a fully commercial basis in PNGPCL regulatory functions
regard to price-setting and service provision and be delegated from the Secretary of
required to provide a market return to Government on Transport be transferred to an
invested capital in the commercial ports (as opposed to expanded NMA.
ports requiring CSO support, see below). This in turn
A review will be undertaken of
requires that PNGPCL not be burdened with the
which ports should be declared
responsibility to internally cross-subsidise unprofitable
ports and their ownership and
ports, allowing the present regulation of port charges be
management arrangements
lifted and instead replaced with a monitoring regime.
PNGPCL to operate commercial
PNG Ports as a Landlord or Mixed (Tool) Port and non-commercial portfolios,
Operator: with the acquisition of mobile cranes and the non-commercial portfolio to
rubber tyred gantry (RTG) cranes, PNGPCL has moved receive supplementary funding
towards the mixed or “tool” port model of port operation, from Government or an industry
where the SOE owns and maintains the port infrastructure levy, to be determined
and also provides some of the ship loading and cargo
handling operations, particularly for containerised cargo. PNGPCL to provide an asset
An alternative “Landlord“ operator model would see these management service for other
operational functions undertaken by the private sector, undeclared ports on a fee-for-
with the possibility of leasing whole berths and wharf service basis on behalf of
areas to one or more transport/freight logistics operators. provincial or local government
This NTS does not take a fixed view on which model is
149
most appropriate for Papua New Guinea, but proposes that either PNGPCL or IPBC commission a
review of future strategic options, taking into account the desirability of retaining sovereign control
over key assets, the availability of capital to PNGPCL versus the private sector for port development
and port equipment, PPP opportunities to involve the private sector and leverage more investment,
and the benefits of introducing vertical integration along the transport chain by opening port
operation to logistics operators with interests in shipping and inland transport.
Regulatory Functions of PNG Ports to be Transferred to a NMA: The regulatory powers enjoyed
by PNGPCL over the establishment and operation of other ports not under its ownership is in
conflict with its commercial role and allows the possibility of it exerting regulatory powers for
competitive commercial reasons. Over time, as PNGPCL is put on a more commercial footing (see
above) and the NMSA’s role is expanded to include all administration of maritime transport
regulation through transition to a National Maritime Authority (NMA), these regulatory powers that
presently reside with PNGPCL will be transferred to the NMA.
Review of Declared Ports and Ownership: A few of the declared ports are so for historical
reasons and now carry little traffic as their function has been superseded by land transport or
change in importance of the urban centres that they serve. On the other hand, some undeclared
ports are assuming more importance. Apart from those ports that will clearly remain as declared
ports (Categories A and B in the ICCC regulatory contract), this NTS proposes that a review be
made of which of the existing declared ports and which other significant ports under public
ownership should in future be declared and within the management responsibility of PNGPCL. It
should be noted that the port declaration refers to a geographical boundary over which a port
authority has jurisdiction, certain ownership rights and certain development controls. Within this
boundary may lay a mixture of public and privately owned and operated port facilities. The relevant
legislation governing the establishment and operation of ports is in need of updating as discussed in
Section 16.3.
Commercial and Non-Commercial Portfolio: The ports of Lae, Port Moresby and Kimbe can
support their capital and operating costs from port revenues. The next tier of ports can largely
support their operating costs but not provide a return on capital and the lower tier cannot support
operating costs from revenue. It is proposed that PNG Ports split its operations for accounting
purposes into a commercial and non-commercial portfolio, with the commercial portfolio required to
generate a return on invested capital and operate profitably while the non-commercial portfolio is
supported with CSO funding from Government or through an industry levy. There should be an
inbuilt financial incentive in the CSO funding and a mission objective for PNGPCL to increase trade
and profitability of marginally un-commercial ports so that they can be brought within the fully
commercial portfolio with the aim of reducing the CSO requirement over time.
Asset Management of Other Ports: PNGPCL is technically the best equipped agency to
undertake the asset management of other publicly owned (provincial or LLG) minor ports, should
the owner of the facilities lack the technical and financial expertise to do so. Where these provincial
or LLG owners request, or where national government determines that this is in the best interests of
efficiency and effectiveness in the application of inter-governmental funding (through TIMG, DSIP
and suchlike funds), then PNGPCL should be prepared to take on this responsibility on a fee-for-
service basis. This would not preclude PNGPCL outsourcing specific tasks to the private sector or
others for best cost-efficiency.
12.2.4 Reform of the Coasting Trade Committee
In parallel with amendments to the regulation of the coasting trade, it is proposed to reform or
replace the Coasting Trade Committee (CTC) with a Marine Industry Advisory Group (MIAG) of
wider representation, expanding its area of advice to conduct appraisal, validation and
recommendations to the Minister on coastal shipping licence applications and associated maritime
industry matters. The proposed composition of the MIAG is:
150
 Four permanent core members:

- DoT maritime representative (Chairperson role and minute distribution),
- NMSA (Vice Chairperson role and to advise and coordinate on matters of safety,
seafarer interest and vessel registration)
- Manufacturers Council of PNG (representing the interests of PNG manufacturers),
- ICCC (primarily as an observer and with the role to investigate any complaint)
 Three invited members on rotation every 12 months:
- one invited shipping line (as a representative of the Coastal Shipowners
Association),
- one invited representative of the maritime industry (towage, port, dry-dock,
insurance etc.)
- one invited shipper (as a representative of the PNG Shippers Association if this
body is reformed)
12.2.5 Shippers Council
A PNG Shippers Council was formed at some point in the

past but has become inactive. A strong PNG Shippers 157. Coasting Trade
Council needs to be reformed and this may be best Committee
facilitated with Government assistance to legislate its The CTC will be reformed or
formation and provide an operating remit of collective replaced by a more widely
discussion and negotiation. The Shippers Council would representative Marine Industry
then provide an ongoing stimulus for the PNG Coastal Advisory Group (MIAG)
Ship Owners Association to become more active. The
Shippers Council would also interact with international
158. PNG Shippers Council
associations and become active in promoting PNG Government will support the
products in export markets; reactivation of a PNG Shippers
Council
12.2.6 Role of the ICCC
159. ICCC Role
As discussed in Section 7.2.5, the preferred model for The ICCC will monitor the state
funding the community services obligations (CSO) of competition and service
component of the maintenance of the non-commercial quality in the port and coastal
national ports is to remove CSO funding as a cross- shipping sector, once direct
subsidy obligation on PNG Ports Corporation, with this price control is removed
funding instead delivered from an external source,
allowing PNG Ports the freedom to set its port charges
competitively, port by port. This will remove from ICCC the requirement to enter into a regulatory
contract with PNG Ports that regulates the level of certain port charges. ICCC’s future role, similarly
to aviation, will be to maintain a watching brief on PNG Ports Corporation’s operation to ensure that
it is not engaging in monopolistic or market dominant pricing behaviour.
ICCC will exercise a similar role in monitoring the levels of prices in the coastal shipping industry, by
undertaking periodic sample studies and reviews of charges versus costs, assisted by the DOT in
data collection.
12.3.1 International Shipping

Papua New Guinea international ports of entry are currently served by nine liner services and
directly contracted services for particular large industries, with direct shipping links to Australia,
Europe and Southeast Asia and various transhipment arrangements in overseas ports to other
151
destinations. Papua New Guinea is comparatively well-served by comparison with other Pacific
ports, and there is no regulation of international shipping access to its ports of entry, other than that
required for safety and border security. Oversight of the state of market competition in international
shipping will be maintained by the Independent Consumer & Competition Commission.
In order to promote competition in the international freight rates offered by line and charter shipping,
it is proposed that a Shippers Council to represent shippers’ interests be formed, probably as an
adjunct to an existing interest group such as the PNG Chamber of Commerce, to act on behalf of
the consumer to provide an exchange of market data and to assist in freight rate negotiation.
12.3.2 Cabotage
Cabotage is the market protection regulation against
foreign entry to coastal shipping. The existing cabotage Market Entry and Competition
rules apply to vessels over 10m length and require PNG 160. Cabotage - There will be
registration or licensing of shipping companies, ships and stricter conditions and limits on
shipping operations and for seamen and port workers to permits for international shipping
be either Papua New Guinean or to have obtained a PNG to carry coastal cargo
work permit. The regulations are towards the lower end (cabotage) to avoid damage to
of market protection when compared against other the PNG flagged coasting trade
countries and there are a number of exemptions available and its associated onshore
which further reduce their effect. industries
The existing permit system allows international operators A fee-based system will be
to carry cargo on coastal routes. In the last few years the introduced for cabotage
number of permitted services has increased, in part to on- privileges to be applied to
carry specialised imported goods for the LNG and other developing the PNG domestic
resource projects and partly to allow international vessels shipping industry and potentially
wishing to directly compete in the domestic trade between to CSO services to small ports
ports that they visit to also transfer international cargo.
161. Price Control - Price
There are signs that this second category is increasing
control on coastal shipping
and that excessive use of permits could hollow out the
freight rates will be removed but
most profitable domestic routes causing damage to the
operators will be required to
domestic shipping industry and related maritime
structure their charges to
industries, constraining their growth with loss of
transparently reflect actual
employment and career opportunities for PNG citizens.
costs.
As a maritime nation, reliant on shipping connections, it is
in PNG’s interest that it foster market conditions for a ICCC will periodically monitor
healthy maritime industry to play the major role in freight rates through case
carriage of at least domestic cargo. studies
The Government’s policy on cabotage is therefore to 162. CSO Delivery - The CWTP
balance the possible short term price advantages to Shipping Franchise Scheme will
shippers of allowing cabotage by international vessels of be the preferred method of
purely domestic cargo with the longer term costs to delivering services on thin routes
industry and the nation. In the short term, the policy will that cannot bear a commercial
be to more strictly limit the granting of permits for service as part of the
international operators, and in the longer term to consider Government’s CSO policy
the introduction of a fee-based system for permitting
cabotage such as a flag state fee, a national seafarer’s manning levy, and/or freight tonnage levy to
give an appropriate balance between lowering costs to shippers and supporting the local industry.
The revenue from such cabotage fees would be applied in the maritime sector, such as contributing
to CSO payments through the CWTP or support to maritime industry training.
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12.3.3 Coastal Shipping Freight Rates
Although there is regulation of coastal freight rates in theory, in practice the industry has been free
to set its prices since 1991. A recent Shipping Freight Rates study, carried out for the DOT,
indicated that overall freight rates bear a reasonably close relationship to costs and that there was
no evidence of over-pricing. The perception that freight rates are high can be attributed to thin
services on some routes which makes them costly to service, and the backlog of maintenance and
expansion of port infrastructure which adds costs in the form of ship and cargo delay. However, the
structure of the freight rate composition is not transparent and individual elements may not bear a
close relationship to actual costs.
Maintaining regulatory control over shipping freight rates is cumbersome, costly and somewhat
doomed to failure as there are various ways that operators can disguise price rises in various
surcharges and service fees. The policy will be to allow the ICCC to monitor competition and prices
for domestic shipping on an as-required basis, probably through periodic case studies, and to
require the structure of charges to transparently reflect actual costs.
Where markets are thin and there are no regular commercial services then the CWTP shipping
franchise scheme is the preferred method of delivering financial support as a community service
obligation (see Section 8.6).
163. Coastal Shipping
12.3.4 Coasting Trade Licensing Licensing:
While there is a good level of competition on international MIAG will advise minister on
routes, there are relatively few operators in the coasting coasting trade licence and
trade (domestic shipping services) and the first tier permit applications
coastal services are shared geographically between a
Applications decided primarily
few operators, each dominant in their own area. For
on quality criteria but some
similar reasons as for cabotage, regulation of the
consideration of the effects of
coasting trade offers some market protection for
new entrants on the structure of
operators, making them more likely to offer service on
the coastal shipping market will
lower traffic routes which contain an element of internal
remain
cross-subsidy, and to provide a mix of passenger and
freight services. Use of PNG nationals for
crewing and commitment to
Entry to the domestic shipping market at present is industry training will be included
through a system of coasting trade licences for regular as criteria in deciding
services and permits for individual charters. Licence applications
applications pass before the Coasting Trade Committee,
a group with shipping industry representation, before PNG owned, flagged, operated
being approved by the Minister on the advice of the and crewed vessels will be
Department of Transport. preferred; requests for waiver
will need to prove unavailability
A review of the coasting trade licensing system carried
Bareboat and demise charters
out for the DOT has cautioned against full deregulation
will be considered will require
while recognising that there is a need for reform of the
NMSA safety approval of
licence application and approval process and
vessels either before importation
corresponding changes to the governing legislation, the
to PNG or before going into
Merchant Shipping Act. However, there is a perception in
service
the industry that the present system for issue of permits
is not transparent, that there is inconsistency and political The Merchant Shipping Act to
bias, with too many permits being awarded by direct be revised to incorporate these
ministerial intervention, and that the national interest changes.
grounds for such intervention are not well articulated.
The policy for issue of coasting trade licences and
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permits in future will be channelled through a reformation or replacement of the CTC, with a working
name of Maritime Industry Advisory Group (MIAG), as discussed in Section 12.2.4.
The policy principles to be observed by the MIAG and the Secretary for Transport when
recommending on the award of licences and permits will be:
 Regulation of domestic market entry on other than quality criteria will be kept to a minimum,
subject to ensuring that the advantages of deregulation to passengers and shippers of
cargo are not outweighed by loss of service on thin traffic routes, increases in the
Government CSO contribution, instability in the supply and regularity of services;
 Quality criteria will be a demonstrated record of: industry experience; compliance with
safety and security requirements, financial capacity, good character and long term intent;
where new entrants have little prior experience or track record of operations they shall
provide credible evidence of how they intend to acquire this knowledge through recruitment
of experienced personnel;
 Quality criteria will apply to the owner, operator (or charterer), master and crew of the
vessels and the vessels themselves; licences and permits will only be issued to PNG
registered vessels that are in-survey or to overseas flagged vessels (where a waiver has
been given) that have prior NMSA safety approval;
 New operators, as part of the licensing process, should demonstrate their degree of
commitment to train, certify and sustain through employment opportunities and career
development a PNG national maritime workforce, including sea- and shore-based positions
and through all levels from master to ordinary seaman; applications from operators who
demonstrate a high level of commitment reflected in actual performance, should be looked
on more favourably than those who demonstrate little commitment;
 Coasting trade licences and permits should, as a starting point, require PNG owned and
registered vessels and PNG crew; waivers to allow non-national vessel ownership,
registration or crewing should be given only where non-availability of PNG owned,
registered or crewed vessels can be demonstrated; (see also Section 12.3.2 on cabotage);
 Bareboat and demise chartering will be considered subject to quality and other criteria
noted above being satisfied.
The above principles will be incorporated into the planned revisions to the Merchant Shipping Act.
12.3.5 Maritime Transport Information for Competition Regulation and Monitoring
The review of competition in the domestic shipping

market is made more difficult by a lack of reliable 164. Coastal Trade Data
transport statistical information. The Department of DOT to resume collection of
Transport once operated a Freight Study Bureau (FSB) data on coastal freight and
which recorded all domestic cargo flows from shipping passenger movements and
manifests. This provided a useful source of data on the tariffs charged for planning and
origins and destination of cargo movements for planning monitoring purposes
purposes, although it did not capture feeder services and
was very resource intensive.
While it is not proposed to re-establish the FSB, periodic and targeted sample surveys of import and
export domestic freight and passenger origins and destination will be undertaken as part of the
transport planning functions of the DOT in support of the provincial transport plans of those
provinces with a high reliance on coastal and river transport. This information will also be useful to
the ongoing operation of the Community Water Transport Programme. Such studies will assist in
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identifying where cargo flows are relatively high or low in relation to the populations and economic
potential of the areas served, and where changes to domestic shipping service patterns may be
warranted. Studies will be coordinated with the requirements of the MIAG for assessing coasting
trade licenses and permits and ICCC for state-of-competition monitoring.
12.4 Maritime Infrastructure Ownership, Management and Regulation
12.4.1 Declared Ports

PNG Ports Corporation currently owns and manages the
port infrastructure assets at the declared ports on behalf 165. Port Ownership,
of the Government. It provides some port-related Management and Regulation
services, such as pilotage where it has been declared the DOT legal team to prepare and
pilotage authority, while other cargo-handling and port submit proposed legislation for
services are provided by private companies. the management and operation
of declared and undeclared
DOT will submit to NEC proposed legislation for the
ports.
management and safe operation of ports, both declared
and undeclared, providing for the appointment by the PNG Ports Corporation to be the
Secretary for Transport of port authorities and the port authority for all declared
appointment by port authorities of port managers and port ports
facility operators. The legislation will supersede the Port plans will be required for all
Harbours Act from which PNG Ports presently derives its declared ports
delegated authority from the Secretary of Transport. The
port authority for the declared ports will, in the first Where provinces or LLGs do not
instance, be PNG Ports Corporation. have the management capacity
or technical capability, PNGPCL
Port master plans, to be prepared by PNGPCL in will manage undeclared port
consultation with the DOT will be required for all declared assets on a fee-for-service basis
ports, compliant with the NTS and MTTP.
DOT PCD will lead an
12.4.2 Other Ports assessment of minor port
development needs and funding
There are a large number of existing smaller and minor
methods involving DPLLGA and
ports in various states of condition and use under
Provinces, with inputs from the
provincial, local level government and local community
CWTP/RIDD jetty programme
ownership, including small jetties and landings to be
and PNGPCL following the NTS
rehabilitated or constructed under the CWTP (to be
planning framework
transferred in the interim to DOT RIDD).
The same group will consider
There is limited capacity in the provinces to maintain additions to and removals from
these smaller facilities and many have fallen into disrepair the list of declared ports
as a result. Following the policy that the best technically
equipped agency should manage the upkeep of Procedures will be put in place
infrastructure assets, for those provinces and for transfer of private ports to
communities where managerial capacity and technical public ownerships
capability is limited, PNG Ports Corporation will be PPPs for development within the
engaged to asset manage the facilities on behalf of the main commercial ports will be
owners on a fee-for-service basis. encouraged under the prevailing
PPP framework and considering
PNGPCL will be paid a fee in recognition of the funding
the overall impact on the port
gap between port revenues and port costs, that is the
network
community services obligation (CSO), in addition to
retaining port charges, which will be at controlled levels
under the service contract. The NMSA will similarly be engaged to asset manage local navigational
infrastructure where this is not already under their control. Both agencies may outsource parts of
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the asset management to competent contractors, favouring locally based firms, where this is cost-
effective.
The Planning and Coordination Division of DOT, together with inputs from the CWTP/RIDD and
PNGPCL will work with the DPLLGA and provincial governments to identify and prioritise the minor
ports and landings for rehabilitation and ongoing asset management, consistent with the planning
framework provided in this NTS, that is by identifying each facility’s functional importance, trade
prospects, condition and cost to restore or construct.
An arrangement for adequately funding the asset management from revenues of the sub-national
owner will be required before the national level agency assumes the management task. It is
envisaged that the function grant allocated by national government for provincial wharf and jetty
maintenance would be used to fund asset maintenance, and that part of the funds currently
channelled through the DSIP would be used to fund repair, upgrading and replacement. A further
option is funding from the proposed cabotage levy described in 12.3.2.
12.4.3 Review and Changes to Declared Ports

As with the national road network, there may be benefit in transferring the ownership of some ports
at present under provincial ownership, to national ownership to better ensure continuing
maintenance of the assets. The same may apply to certain privately developed ports, such as for
resource exploitation where the original development purpose no longer applies. Such ports would
become declared ports and part of PNGPCL’s commercial or non-commercial portfolio. Such
transfers will require ongoing funding arrangements to be in place prior to PNGPCL taking on the
new responsibility.
Conversely, there are declared ports that have lost their importance over time due to modal shift to
road or to a reduction in administrative importance of the place served. Ports should in such cases
be removed from the list of declared ports and either closed or transferred to alternative ownership.
These transfers of ownership and management responsibility for ports will require prior review by
the transport agencies and Provinces as in 12.4.2.
12.4.4 Private Ports and PPPs

There are a number of special purpose privately owned port and landing facilities in the main
centres and along the coast such as for export of palm oil and logs. Private ownership and
investment in ports will be encouraged and facilitated but will be subject to regulation in regard to
their location, design and construction approval for the purposes of safe navigation, maritime
security and environmental safeguards. This regulation is currently delegated from DOT to
PNGPCL but will in future transfer to the NMSA/NMA.
Private public partnerships (PPPs) for the development of major new port facilities will be
encouraged where in the best economic interest of the nation, taking account of the financial and
operational impact on PNGPCL ports and the non-commercial ports and CSO costs. PPPs will be
subject to the prevailing National Public Private Partnership Policy and framework.
12.5 Maritime Infrastructure Protection

166. Maritime Infrastructure
The Government recognises the need to protect transport Protection
corridors for future development, to ensure that access to
land, water or underwater area required for transport The provisions of the Protection
infrastructure is not compromised by development, and to of Transport Infrastructure Act
give the owners and occupiers of land certainty regarding will be applied to public port
Government’s future intentions infrastructure, including that
developed under PPPs
To this end the Government has enacted the Protection
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of Transport Infrastructure Act which will ensure that area required for transport infrastructure (i) is
available to be used for national, provincial and local-level transport; (ii) is secure and protected;
and (iii) is free from encroachment, deliberate damage and excessive and unjustified land
compensation demands. The legislation applies to any port, harbour, haven, roadstead, channel,
navigable river or creek where transport infrastructure may be located. All publicly owned maritime
infrastructure and infrastructure created under a PPP arrangement that will later transfer to the
Government will fall under the provisions of this act.
12.6 Pricing, Cost Recovery and CSOs
12.6.1 Main Commercial Ports
PNGPCL port tariffs will be removed from direct price

control by ICCC but tariffs will remain under ICCC review 167. Pricing, Cost Recovery
and benchmarking against other comparable ports in the and CSOs
Pacific Region to guard against unjustifiable price The main commercial ports will
increases, with the potential for price control to be reform a commercial portfolio, be
imposed if necessary. priced to individually recover
costs, and be subject to tariff
Lae, Port Moresby, Kimbe and potentially Madang and
monitoring rather than control
Rabaul will form PNGPCL’s commercial portfolio. On
removal of ICCC price control, PNGPCL will operate each PNGPCL will competitively
port as an individual accounting enterprise, with port outsource services where cost-
charges set to cover operating costs, including efficient and while maintaining
maintenance, depreciation and provision for renewals quality standards
and expansion, HQ overheads, and to provide a return on PNGPCL will maintain the
assets acceptable to IPBC. This will then allow PNGPCL remaining declared ports under
to enter into PPP arrangements at each of the main management contracts with
commercial ports should the opportunity arise without Government which recognise
affecting the cost and pricing structure at the other main and compensate PNGPCL for
commercial ports. PNGPCL will no longer be required to the CSO component of cost
cross-subsidise the non-commercial ports from main port
revenues. The term management contracts
will be contestable by the private
PNGPCL will competitively outsource parts or the whole sector and by Provincial
of the management and operation of ports under its Governments
ownership where this can be done more efficiently by the
private sector, taking account of the need to maintain
SAR, security and environmental
service, safety and security standards.
control activities of the NMSA
will be funded through a
12.6.2 Other Declared Ports transparent system of levies on
shipping and port operators.
The Government will enter into term management
contracts with PNGPCL to maintain and operate the non- Where maritime navaids cannot
commercial declared ports. The costs of operation for be fully supported through user
each port in PNGPCL’s non-commercial portfolio will be charges, NMSA will receive
examined alongside the volume of trade offering at a tariff CSO funding.
level agreed between PNGPCL and ICCC to be fair and
affordable. The gap between operating costs and
revenue will be covered by CSO payments, but with an incentive structure to encourage PNGPCL
to reduce the size of the CSO over time by developing trade through the port and by improving cost-
efficiency. A benefit sharing arrangement will be considered, whereby any reduction in the CSO
payment per tonne of cargo across the port is shared between PNGCPL and Government.
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These term management contracts for the non-commercial ports will be contestable by the private
sector and by provincial governments and will be subject to a performance agreement which will be
monitored by the Department of Transport, Treasury and the ICCC. The contracts will be issued on
an individual basis or for a group of ports, and will be for a period initially of three years but for
longer periods once the new arrangement is bedded down. Responsibility for issuing the contracts
will lie with ICCC.
12.6.3 Maritime Safety, Security and Environmental Control

The safety, search and rescue (SAR), security and environmental control activities of the NMSA will
be funded through a transparent system of levies on shipping and port operators that reflect the
costs of the services provided. NMSA will competitively outsource its service delivery
responsibilities, such as for installation and maintenance of maritime navaids, where private sector
capability and capacity exists or can be stimulated. The ICCC, as economic regulator for the sector,
will maintain oversight of the tariffs and may intervene to control maximum prices if it deems
appropriate.
Where maritime navaids cannot be fully supported through user charges, a CSO will exist and
NMSA will apply for CSO funding under the policy principles established in Section 8.6.
12.7 Regulation of Service Standards in the Maritime Subsector

Regulation of customer service standards for domestic
168. Service Standards
shipping services supported with CSO funds, including
the shipping franchises under the Community Water For domestic shipping will be
Transport programme, will be through the conditions built regulated through coastal
into the shipping franchise contracts and other licence and permit conditions,
agreements relating to CSO supported services. The and through the CWTP shipping
ICCC has a responsibility for overseeing standards of franchise contracts
service delivery to transport service users, such as
Standards for port infrastructure
operation to agreed schedules, adherence to standards
will be established and
of passenger comfort and care of cargo as advertised by
monitored by PNGPCL and
the service providers, required by contracts of carriage or
NMSA for maritime navaids
through the shipping service franchise contracts.
Standards for the design, operation and maintenance of

marine transport infrastructure will be established and monitored as set out in Section 8.8, with PNG
Ports Corporation being responsible for standards for port infrastructure and the NMSA for maritime
navaids infrastructure.
12.8 Maritime Safety
12.8.1 Adherence to International Conventions

Papua New Guinea has been a member of the
International Maritime Organization (IMO) since 1976, 169. International Conventions
and is a signatory to the following international maritime Through NMSA/NMA, PNG will
safety conventions: endeavour to come into full
compliance with the IMO
 Load Lines Convention 1966
conventions to which it is
 Tonnage Convention 1969 signatory and will accede to
 Collisions Prevention (COLREG) 1972 future conventions as
 Safety of Life at Sea (SOLAS) 1974 appropriate
 Standards of Training, Certification and
Watchkeeping for Seafarers (STCWS), 1978
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 Search and Rescue (SAR) 1979
Ensuring PNG’s compliance with the above international safety conventions is primarily the
responsibility of the NMSA, with oversight from the IMO. PNG will accede to future conventions as
appropriate.
170. Ship Registration, Marine
Through these and other safety, security and
Survey and Crewing
environmental control measures set out below, the
Government will seek to raise PNG’s standing in the NMSA will work to ensure full
Asia/Pacific region and to come into full compliance with compliance with ship registration
the international conventions that it is signatory to. and survey requirements, and
extend coverage to include
12.8.2 Ship Registration and Marine Survey fishing vessels
All vessels of 10m length and above operating on the NMSA will ensure that safety
PNG coast are required to be registered. NMSA will requirements are met by
engage with port owners, provincial governments and resource exploration and
others on an ongoing basis to discover unregistered support vessels and offshore
vessels and require that they either be surveyed and platforms within PNG waters
registered or be withdrawn from service. This includes
fishing vessels which are licensed by the Fisheries Any public agency intending to
Authority but are frequently neither registered or acquire, lease or charter a
surveyed, which will be brought into compliance over a vessel will inform NMSA and
five year period. The NMSA is also responsible under its obtain prior approval of the
existing legislation for safety regulation of oil and gas fitness of the vessel for the
offshore platforms and support vessels operating from intended purpose before
PNG ports. importation or entry into service
NMSA will maintain a secure
All vessels that are required to be registered must first
data system for true and
undergo a survey of their seaworthiness carried out by a
accurate competency
marine surveyor who has been registered with NMSA as
certification for ships’ crew
a fit, proper and competent person to carry out such
work. Vessels must undergo survey periodically and after Coasting trade vessels will be
any alteration to the vessel. The NMSA is responsible for required to reserve up to two
vessel inspection and issuing Safety Certificates for berths for apprentice PNG
vessels that have passed survey and satisfied other national crew
requirements of the Merchant Shipping Act 1975.
It will be a requirement that any public agency intending to acquire lease or charter a vessel inform
NMSA of its intention prior to such action and satisfy NMSA of the suitability of the vessel for the
intended service, including the supply of construction drawings, specifications and survey
certification if requested. NMSA will be empowered to require any additional inspection that it
deems necessary. Where public agencies fail to comply, NMSA will not include these vessels on
the register and will be empowered to detain them until compliance is met.
12.8.3 Crew Registration
Crew on registered ships are required to hold certificates of competency, issued through the NMSA.
The NMSA will maintain and update records of seafarers using its secure data system, to help
ensure that qualified and competent persons are engaged as ships’ crew. NMSA will audit the crew
certification process to ensure that qualifications and experience are true and accurate.
To encourage PNG nationals into the industry, Government will require that vessels licensed to
trade on the PNG coast and all PNG flagged foreign going vessels be required to provide up to two
berths for apprentice or cadet seafarers, depending on the crew size for the vessel, and to provide a
career path for the advancement of capable people.
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12.8.4 Port State Control
PNG, in common with many other countries in the Asia

Pacific Region, is a full member to the Tokyo MOU on 171. Port State Control
Port State control (PSC). This has the objective of NMSA in conjunction with port
eliminating substandard international shipping visiting owners/operators will increase
PNG ports so as to promote maritime safety, to protect inspection of foreign flagged
the marine environment and to safeguard working and vessels to improve compliance
living conditions on board. with Tokyo MOU Port State
Control provisions and will apply
This requires the maritime authorities to detain foreign
legislation to bring PNG flagged
flagged vessels where these do not comply with the
vessels up to white list status
international maritime conventions covered within the
Tokyo MOU. Under this convention, ships under a 172. Small Craft Safety
particular country flag are inspected and rated, and the
NMSA will promote small craft
ranking classified into black, grey and white lists. The
safety by support to Provincial
compliance of PNG flagged ships visiting overseas ports
Government and the production
is similarly inspected and rated.
of safety guidelines, education
The NMSA, in conjunction with port owners/operators and and through the provisions of
others, will work to increase its inspection of foreign the Small Craft Bill which will be
flagged vessels entering PNG waters to improve its level passed through parliament.
of compliance with Tokyo MOU standards, and will apply Provincial registers of small craft
domestic legislation to bring PNG flagged vessels up to will be established, together with
white list status. an inspectorate with reserve
powers lying with the NMSA
12.8.5 Safety of Small Craft and Community
Education 173. Navaids, Coastguard and
SAR
Legislation governing the safety of small craft (under 10m
length), the Small Craft Act provides for the construction, NMSA will continue to restore
equipping, operation, registration and safe use of small and maintain navigational aids,
craft and related matters. provide hydrographic services,
coastguard and marine
Provincial Small Craft Registers will be established under surveillance systems to IALA,
the legislation, with provisions for the NMSA to appoint IHO and IMO standards
members to the Provincial Registration Boards and to
direct the registrar and inspectors established under the The proposed NRCC will be
boards in certain matters in the event of delay or inaction. available on a 24h basis and
maintain continuous
The NMSA will form partnerships with the Department of communication with the NDMC
Education and provincial governments to encourage and other first responders in
small craft safety through education programmes and PNG and the local region
sponsorships for safety equipment, building on the NMSA
designed “Small Water Craft Safety” courses which have been accredited by the Department of
Education from 2011.
12.8.6 Maritime Navigation and Safety in PNG Waters

PNG, through the NMSA, is a member of the International Association of Marine Aids to Navigation
and Lighthouse Authorities (IALA) and will continue to restore and maintain its marine navaids,
provide hydrographic services, coastguard and marine surveillance systems to meet the standards
established by the IALA, the International Hydrographic Organization (IHO) and the IMO.
160
This will include:

 Ensuring that marine navigation charts are complete, accurate and up-to-date, together with
other nautical publications;
 Applying best asset management practice for maritime navaids for PNG waters including
the navigable river systems, and including local community engagement programmes;
 Ensuring that new navaids are provided where required for safe navigation and that
missing or damage navaids are replaced or restored;
 Ensuring ongoing maintenance of navaids, that repairs and replacements are effected
promptly with a system for reporting and publicly notifying where marks and beacons are
damaged or otherwise unserviceable and maximum times for remedial action;
 Maintaining and operating the PNG Automatic Identification System (AIS) for vessel
tracking and monitoring and requiring that all vessels trading in PNG waters carry the
necessary equipment in operating condition;
 Establishing the Global Maritime Distress Safety System (GMDSS) for maritime radio
communications to support SAR activities and supplement existing radio telephone and
coastal radio services.
12.8.7 Maritime Search and Rescue

The Government has the objective of progressively building the capacity and extent of coverage of
its maritime search and rescue (SAR) capability.
A National Rescue Coordination Centre (NRCC) will be established, combining the rescue
coordination centres operated by NMSA and CASA respectively for maritime and civil aviation.
The NRCC will be available on a 24 hour basis to respond to information on emergency situations
where search and rescue may be required. A Search and Rescue Operations Manual will be
updated on a continuous basis as a controlled document with distribution lists and recorded
amendments.
The NRCC will maintain continuous communication links with the National Disaster Management
Centre (NDMC), Provincial Disaster Coordinators, and other emergency and first response
agencies and with Pacific regional SAR organisations. Memoranda of Agreement will be established
with relevant stakeholders and neighbouring regional organisations, such as Australian Maritime
Safety Authority (AMSA).
12.9 Maritime Security

The Government has increased its maritime security
surveillance and response capability in recent years and 174. Maritime Security
will continue to improve and extend its systems to provide The Maritime Security unit,
maximum possible coverage of its marine-land interface currently within DOT, will
and security for shipping and small craft travelling within coordinate maritime security
PNG waters and across its international maritime
boundaries. Resources will be made
available to achieve full
Security has several dimensions, including illegal compliance with the ISPS Code
trafficking across borders, declaration and payment of
Security standards will be set for
import duties, immigration control and biosecurity. In PNG
each port consistent with its
waters, while there is no existing threat, the global
international gateway function,
increase in piracy cannot be ignored, and the secure
volume of trade and security
passage of passenger and cargo vessels must be
risks
assured.
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PNG is signatory to the International Ships and Port Facility Security (ISPS) Code and has
introduced the Merchant Shipping (Maritime Security) Regulation 2005, which are the administrative
responsibility of the Maritime Security Unit (MSU) currently located within DOT.
This requires that all ports and PNG flagged ships be inspected, where necessary their security
systems be upgraded, and then verified as compliant with the ISPS Code under the IMO. This is a
large task which has previously been outsourced, in respect of shipping, to the recognised
international classification societies. Several new port facilities to be established in the next few
years will also require verification, and all ports and vessels require periodic re-inspection.
The Government will increase the resource available for ISPS compliance, at the same time
working to ensure that there is an appropriate level of security set for each port, based upon the
nature and volume of trade and the assessed security risks. Cost recovery for compliance activities
will be through industry levies, collected by the NMSA and/or the PNG Ports Corporation Ltd.
The MSU will act as the coordinating agency for maritime security, liaising with other Government
agencies such as the Police, PNG Defence Force, the Border Development Authority, Customs,
Immigration and Department of Agriculture to avoid duplication and gaps in security screening.
12.10 Environmental and Social Safeguards

Papua New Guinea’s seas, coastline and rivers are subject to a number of environmental threats
from transport sources including:
 pollution by shipping through oil and cargo spillages, discharge of liquid and solid wastes,
and anti-fouling coatings;
 spillages and discharges from wharves and port industrial sites; and
 modification to shorelines and beaches through reclamation, dredging and materials
extraction for construction and other purposes.
Environmental impacts of development projects are subject to environmental impact and protection
regulations administered by the Department of Environment and Conservation (DEC).
12.10.1 Marine Pollution from Ports and Shipping
PNG is signatory to the MARPOL convention on marine

175. Marine Pollution
pollution, so has responsibilities to ensure that ships
operating in PNG waters are properly equipped and NMSA will counter marine
operate to MARPOL standards. pollution threats through national
and international training
The NMSA is the responsible agency for the control of exercises, establishment of an
pollution from ships, assisted by port owners and Environmental Protection Unit,
operators in respect of pollution within port limits. The regular review and updating of
NMSA will take the following actions to counter marine legislation, establishing
pollution threats: protocols for engaging
 With support from the DOT, ensure that marine international assistance.
pollution legislation is regularly updated to best
176. Climate Change
practice and is in conformity with PNG’s
Adaptation
international convention requirements;
 Maintain a national plan for combating marine PNG Ports to coordinate
pollution, including designated personnel, training standards for environmental
exercises, a store of pollution fighting equipment assessment and control of
and materials, and a first response capability; coastal engineering works,
including for climate change
 Regularly convening the National Marine Spill
adaptation.
Committee and conducting training exercises with
162
national and international marine pollution response organisations, in particular the

Australian Maritime Safety Authority (AMSA);
 Establishing a protocol for engaging international assistance to respond to major pollution
incidents beyond the normal capacity of PNG, such as the sinking of a vessel containing
polluting cargo or an offshore oil and gas platform accident; and
 Establish and maintain an Environmental Protection Unit within its organisation to address
these requirements
12.10.2 Coastal Engineering Works and Climate Change Adaptation

Marine infrastructure is potentially threatened by the effects of climate change, including increased
severity and area of effect of tropical storms and sea level rise. These threats require a response
when designing new wharves and jetties, access roads and other coastal transport infrastructure, to
ensure that sufficient provision is made for future sea level rise and that the structures and seawalls
can withstand all but the most exceptional storm conditions.
PNG Ports Corporation will, within its brief for coordinating engineering standard setting for maritime
works, manage the preparation of guidelines for environmental impact assessment and control of
modifications to the shoreline for the purposes of establishing and maintaining port facilities. These
standards will ensure that climate change risks are taken into account in the relevant design and
construction codes in matters such as allowances for sea level rise and storm surge.
12.11 Regional Relationships in the Maritime Sector
The PNG maritime transport agencies will engage in

cooperative efforts with other countries in the region 177. Regional Relationships
working through regional organisations, to achieve PNGPCL and the NMSA/NMA
consistent and compatible standards and practices will actively engage with
appropriate to the region across the maritime sector. neighbouring countries to
promote consistent and
Regional cooperation will include:
compatible standards and
 Development of relationships with the practices across the region
neighbouring maritime countries of Indonesia,
Australia, the Philippines and Pacific island states;
 Regional involvement of the NMSA in the work of the IMO and ILO, in the area of marine
pollution working through South Pacific Regional Environment Programme (SPREP);
 Identification, designation and management of Marine Protected Areas; and
 Continuing involvement of PNG Ports Corporation in a leadership role in the Pacific
Countries Ports Association (PCPA) and in international port operator forums
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13 Policy Statement on Air Transport
13.1 Introduction
This section of the Strategy sets out the updated policy for air transport, comprising airports and
airport operations, rural airstrips, airways and air navigation, based on the general policy principles
for the transport sector as a whole discussed in Section 8. It does not contain investment strategy
or priorities for aviation infrastructure which are considered in Section C.
This policy statement replaces the existing aviation policy as conveyed to Parliament by the Minister
in March 2009, contained in the National Transport Development Plan 2006-2010 and in the earlier
Civil Aviation Policy 2000.
13.2 Development of the Air Transport Institutions
No further major structural changes are proposed for the

Government institutions in the civil aviation subsector. 178. Air Transport Institutions
Roles and responsibilities are set out in the Civil Aviation No further structural change is
Amendment Act 2010. anticipated for the institutions in
the air transport subsector
The Civil Aviation Safety Authority (CASA) is the safety
and security regulator for aviation within PNG airspace, CASA will be the safety and
including airports, air operators and air crew, for PNG- security regulator for civil
registered aircraft and for safety and suitability aviation
compliance of overseas registered aircraft operating
NAC and PNGASL are SOEs
within PNG.
responsible respectively for the
National Airports Corporation (NAC) has primary provision of airports and air
responsibility as the SOE owner and operator of the navigation and communication
scheduled national airports, although some extension of services
its role more generally for airports standards and The AIC will provide no-fault
management is proposed and, over time, the scheduled investigation of air accidents and
airports for which it is responsible may be extended. incidents
NAC is responsible for all runway, taxiway, apron and
airfield infrastructure, traffic control of aircraft on the The ATR Division of DOT will
ground, terminal buildings, landside facilities, control of advise on aviation policy,
leases and concessions and all airport land. administer international air
service agreements and market
PNG Air Services Ltd (PNGASL) is the SOE responsible entry
as the sole provider of air navigation and communication
DOT will retain an overall cross-
infrastructure and services.
modal policy and planning role
The Accident Investigation Commission (AIC) is that includes aviation
responsible for investigating and reporting on the causes irrespective if a Ministry of Civil
of air accidents on a no-fault basis with the objective of Aviation were to be formed in
improving air safety. future.
ICCC will maintain a monitoring
The Air Transport Regulation (ATR) Division of the DOT
role over competition in civil
provides policy analysis and advice and administers
aviation
international air service agreements and market
regulation of the aviation industry. It should be noted that
an overall cross-modal transport policy and planning function will continue to reside with DOT
irrespective of any future separate establishment of a Ministry of Civil Aviation.
164
The ICCC will maintain a general monitoring role over market competition and service standards
with the reserve powers to intervene as provided for under its legislation
13.3.1 International Air Transport

The existing policy for the regulation of market entry and
competition in international aviation will generally be 179. International Air
continued under the NTS. Transport Market Entry and
Competition
Existing policy is to gradually and selectively deregulate
There will be gradual and
international scheduled air services through new and
selective deregulation of
renegotiated bilateral air services agreements with
scheduled international air
emphasis on achieving fair and equitable competition and
transport placing limitations in air
opportunities for each country’s designated carriers.
service agreements including
A phased approach towards full liberalization of specifying routes, capacity
international scheduled services will be continued as allocation limits and exchange of
opposed to having an open skies regime allowing for free traffic rights limited to 3rd, 4th
competition. This will be done by placing limitations in air and 5th freedoms.
service agreements including specifying routes, capacity PNG will continue to support
allocation limits and exchange of traffic rights limited to APEC and Forum policies of
3rd, 4th and 5th freedoms. Granting of 5th freedom rights regional liberalisation of air
(right to carry revenue traffic between a second and third services
country as part of a service connecting the airline’s own
country) will be limited to the carrier’s own traffic. Non-scheduled international air
services will be considered on a
Entry of foreign owned airlines into the domestic market case-by-case basis with
will continue to be subject to a maximum of 49% foreign approval safeguards for the
equity and minimum of 51% PNG national ownership. PNG aviation industry and
airport
PNG participates in the Pacific Forum plan to deregulate
air services within the Forum countries and will continue
support for the Asia Pacific Economic Cooperation (APEC) and Forum policies for liberalising air
services. All PNG carriers will be treated fairly and equitably in seeking access to international
markets, with disputes being resolved by the Secretary of Transport.
When negotiating air services agreements with other countries, PNG will seek to incorporate the
following conditions:
 PNG airlines’ rights to fly services to more than one destination in the overseas country
where economically beneficial to PNG;
 PNG airlines’ rights to link to 3rd and 4th country destinations, with 5th freedom rights;
 Multiple PNG airlines’ rights to fly the agreed services;
 The airlines free to decide on service capacity and frequency; and
 Air fares set by the airlines in response to market forces and can be disallowed if both
governments agree (double disapproval pricing).
Existing policy for non-scheduled international air services is to consider applications for passenger,
freight and mail carriage on a case-by-case basis, having regard to the need to strike a balance
between the interests of the scheduled operators and their customers, while taking into account the
overall economic interests of PNG.
Regular or periodic non-scheduled services by a foreign operator will not be approved unless
required by law or permitted under an agreement between PNG and the air operator’s country of
165
origin. Suitability of the foreign operator’s aircraft to the PNG airport it intends to use will also be a
requirement of approval (such as aircraft weights, tyre pressures, dimensions and communications
equipment). Within these safeguards, there will be a liberal policy on air charter arrangements.
13.3.2 Domestic Air Transport

The National Government seeks to encourage the private
sector to provide a comprehensive range of affordable 180. Domestic Air Transport
aviation passenger and freight services throughout the Market Entry and Competition
country. Access to the domestic aviation system will Open competition permitted on
continue to be controlled through a licensing system domestic scheduled services
supported by a separate system of safety regulation. subject to majority PNG
ownership, aircraft suitability and
Domestic air services competition will be subject to the
safety compliance
following conditions:
 Full competition will continue to be permitted on Charter operations, such as by
all domestic aviation routes; business and industrial
companies allowed only in joint
 Airlines may use aircraft of their choice on all
venture with a PNG air operator
domestic aviation routes, subject to certification
through CASA in regard to safety and NAC and Temporary importation of aircraft
PNGASL in regard to compatibility with PNG’s for use in PNG limited to two
airport and airways infrastructure, present and three month periods in total and
future (such as aircraft dimensions, tyre pressures subject to prior aircraft suitability
etc.); approval by NAC and PNGASL
 All air operators in the domestic market, except
for those permitted on a temporary basis, must be majority (51%) PNG citizen owned;
 Charter services contracted by business and industrial companies, mining companies and
others operating within the country will be allowed only if such charter operators enter into a
joint venture agreement with a majority PNG owned air services operator. This requirement
will be written into all future mining and other major foreign investment agreements; and
 The temporary importation of aircraft for operation in PNG, renewable three monthly, will be
limited to a maximum of six (6) months in total and will be subject to the prior approval from
NAC and PNGASL regarding compatibility with PNG’s airport and air navigation
infrastructure and systems.
13.4 Government Ownership of Airports, Air Operators and Aircraft
13.4.1 Airports and Air Navigation Infrastructure

181. Government Ownership
All NAC airports will remain in Government ownership,
of Airports and Air Navigation
including the underlying land. NAC may lease facilities or
Infrastructure
land to the private sector and licence private sector
companies to develop facilities on airport land where this All scheduled national airports
contributes to, and does not interfere with, the primary air and underlying land to remain in
transport purpose and where this is in the long term public ownership
commercial interest of NAC as a Government owned
NAC may lease land and licence
enterprise under the Companies Act.
private facilities on airport land
PNGASL will be the sole provider of air navigation and where not to the detriment of the
aeronautical communications infrastructure. This forms air transport purpose
part of the primary air transport purpose, noted above, PNGASL will own and operate
where required to be located on NAC airport land. In such all air navigation and
cases, NAC shall arrange to accommodate this aeronautical communications
infrastructure on its land in a form and manner that is infrastructure
166
practical and efficient for the operations of both NAC and PNGASL without any lease charge for the
land occupied. DOT will facilitate the drafting of a form of agreement between NAC and PNGASL
for ratification by the NEC detailing this arrangement.
The schedule of airports that are national assets under

the ownership and management of NAC will be reviewed 181. Government Ownership
periodically with a view to removing those airports that no of Airports and Air Navigation
longer play an important function in the air transport Infrastructure
network and for the inclusion of other airports that NAC will freely accommodate
support, or could support, scheduled services, which are PNGASL air navigation and
currently under the ownership of Provincial Governments. communications infrastructure
The objective of bringing airports under NAC ownership on airport land
and management will be to ensure their continued safe
Provision will be made to add or
operability and appropriate development where the
remove airports from the
Provincial Government lacks the financial or technical
schedule of national airports
capability to do so, as part of NAC’s CSO portfolio. There
under NAC
will also be provision for NAC to manage provincial and
locally owned smaller airports and rural airstrips on a fee- The Protection of Transport
for-service basis, discussed further below. Infrastructure Act shall apply to
all publicly owned airports and
All publicly owned airport and air navigation infrastructure air navigation infrastructure
at national, provincial and local level will fall under the
Protection of Transport Infrastructure Act 2010.
13.4.2 Government Ownership of Air Operators

The national airline, Air Niugini will remain in Government
ownership with the maximum shareholding by a single 182. Government Ownership
foreign airline in the national carrier being 25% and the of Air Operators
maximum overall foreign holding 49%. Air Niugini will remain in majority
PNG national ownership with no
The Air Niugini board and executive will be responsible
foreign shareholding to exceed
for decisions in regard to purchase or lease of aircraft.
25% of the company.
Air Niugini will remain the only scheduled or charter The Government will not have a
operation in which the Government will hold an ownership shareholding in any other airline
stake. offering either scheduled or
charter services.
13.5 Cost Recovery and CSOs
Cost recovery from user charges in the aviation sector
Air Niugini will be responsible for
has been insufficient to meet the recurrent costs of
decisions in regard to its
maintaining and operating the airports and air navigation
purchase and lease of aircraft
infrastructure. Cost recovery across CASA, NAC and
PNGASL is recent years has been at about 50% of operating and maintenance costs. However,
this low cost recovery has been partly a result of Government’s expectation that loss-making
airports would be subsidised from the few profitable main airports, without a Government
contribution in recognition of the community service obligation (CSO) being provided.
13.5.1 National Airports Corporation

NAC will improve its efficiency through streamlining its operations, outsourcing and application of a
fair system of user charges that reflect the costs of the services provided. The Government expects
NAC to move to a position of full cost recovery for all operating and maintenance costs across the
21 airports that it currently owns on behalf of the Government by 2015. To do so, NAC will exploit
opportunities for non-aeronautical revenue, such as through landside parking, terminal concessions
167
and leases or licences on airport land. In the interim, the Government will cover NAC’s operating
cost shortfall from annual appropriations.
The capital development programme to rehabilitate and

upgrade the national airports under NAC over the 20 year 183. Cost Recovery and CSOs
period will be funded by Government, utilising aid - NAC
funding. By the end of the NTS in 2030, NAC is expected NAC to improve its efficiency
to have achieved a position where it is able to recover and increase its revenue
infrastructure replacement and renewal costs from user sources to full cost recovery of
charges across the airports under its ownership, due to maintenance and operating
the increase in air traffic. costs over the 21 airports
currently under its ownership in
In the event that a detailed analysis of airport revenue
the short term (2015) and
and costs shows that it is impractical for NAC to fully
inclusive of capital replacement
recover operating costs in the short term, or all costs in
and upgrading costs by 2030
the long term, then the less profitable airports will be
transferred to a CSO portfolio and operated with a If studies and experience show
transparent Government subsidy, the source of the CSO this to be impractical the less
funds to be determined. The less profitable airports are profitable airports will be
identified currently as Buka, Girua, Momote, Vanimo, transferred to a CSO portfolio
Tari, Kiunga, Mendi, Chimbu, Daru, Kerema and
NAC will enter into management
Wapenamanda.
contracts with Provincial and
Airports transferred from provincial government LLGs for the operation and
ownership to NAC ownership for reasons noted above, maintenance of minor airports
will also form part of NAC’s CSO portfolio. on a fee for service basis
NAC may also enter into management contracts with

Provincial, LLG and local community owners of small 184. Cost Recovery and CSOs
airports and rural airstrips to provide asset management - PNGASL
services for these facilities where the owners lack the PNGASL will aim to increase its
capacity and capability. NAC will be reimbursed on a fee- recovery of operating costs
for-service basis with funding provided from the provincial through user revenues and
TIMG, DSIP and similar inter-governmental funding and internal efficiencies, recognising
from the provinces own revenue sources. NAC will plan, limitations for cross-subsidising
programme and oversee the asset management, between upper and lower
outsourcing service delivery where it is cost-efficient to do airspace and the affordability of
so without compromising service quality. NAC may charges on low traffic routes and
employ roving airport maintenance works units for the to rural airstrips.
task or source this service from the private sector, where
heavy maintenance is required to restore remote rural Government will cover
airstrips. PNGASL’s operating cost
shortfall from through the annual
13.5.2 PNG Air Services Ltd Budget appropriation
PNG Air Services Ltd will similarly be expected to CSO funding arrangements will
improve its operating efficiency to achieve a higher level be put in place for air navigation
of recovery of the operating and maintenance costs of air and communications services to
navigation services over the upper airspace and air rural airstrips
navigation services provided at and between the national
Capital development of air
airports. However, it is recognised that international
navigation and communications
aviation agreements to which PNG is signatory may limit
will be met through the
PNGASL’s ability to raise charges to full cost recovery
Development Budget utilising
level and that there are limits on the extent to which
donor funding
overflight revenue can be used to support operating costs
168
of the lower airspace. There are similarly affordability limits to the air navigation levies and charges
that can be borne by operators flying into remote airstrips for which a degree of CSO funding is
likely to be required or contributions from the airport owners. In such cases, certain charges may
need to be waived or fully offset with CSO payments.
Government will therefore cover PNGASL’s operating cost shortfall from annual appropriations once
it is satisfied that PNGASL has made best efforts to provide a cost-efficient service and has
demonstrated that it has a well-designed tariff structure set at levels that maximise cost recovery
while not unduly suppressing air traffic on the thinner routes and charter destinations.
The capital development programme to rehabilitate and upgrade the air navigation systems under
PNGASL to 2030 will be funded by Government, utilising donor funding.
13.5.3 Civil Aviation Safety Authority

CASA will similarly be expected to move from being
funded entirely through Government budget appropriation 185. Cost Recovery and CSOs
to a position where part of its costs are funded from – CASA
revenue such as licensing fees, levies and ticket tax. The CASA will aim to achieve 50%
aim will be to achieve 50% cost recovery by year 2015. It cost recovery by 2015
is recognised that under international agreements to
which PNG is signatory, the ability of CASA as a safety A CSO funding procedure will be
regulator is limited in the levels of fees that it can impose. developed and implemented for
NAC’s less profitable airports,
There are similarly affordability limits to the CASA levies any additional airports
and charges that can be borne by operators flying into transferred to NAC and airports
remote airstrips for which a degree of CSO funding is remaining in provincial, LLG and
likely to be required or contributed by the airport owners. local community ownership
In such cases, certain CASA charges may need to be
waived or fully offset with CSO payments.
13.5.4 CSOs for Minor Airports and Air Navigation Services

It is recognised that a degree of CSO funding will be
required to maintain and operate (i) the less profitable 186. Cost Recovery and CSOs
NAC owned airports – its basic CSO portfolio (ii) – Minor Airports and Air
additional airports transferred from provincial to national Navigation Services
ownership as part of NAC’s CSO portfolio and (iii) CASA will aim to achieve 50%
airports remaining in provincial, LLG and community cost recovery by 2015
ownership either asset managed by NAC or by the
owners. Air navigation and aviation safety costs incurred A CSO funding procedure will be
by PNGASL and CASA in relation to these airports and developed and implemented for
the operators using them will also require CSO funding. NAC’s less profitable airports,
any additional airports
The general principles for prioritising capital works to transferred to NAC and airports
restore or upgrade these minor airports and airstrips and remaining in provincial, LLG and
to fund their ongoing maintenance have been set out in local community ownership
Section 8.6.6. Priority should be given to those airports
and airstrips requiring the least CSO funding to achieve an economic rate of return, with the facility
owners able to top up the cost from additional local financial contributions or “sweat equity” to
demonstrate local commitment.
169
13.6 Private Sector Role in Air Infrastructure Services
13.6.1 Private Airports

187. Private Sector Role
There are a few privately owned airports for special
purposes, such as mine sites, but no privately owned Private airports for resource
airports supporting regular passenger transport services. development purposes will be
Further private ownership and investment in airports will facilitated, subject to approval of
be facilitated but will be subject to regulation in regard to location, design, navigation and
their location, design and construction approval for the other compliance requirements
purposes of air safety, security and environmental PPPs will be encouraged for
safeguards as well as for compliance with urban and major new airport facilities where
provincial planning requirements, and land acquisition. in the overall economic interest
and subject to the Government’s
13.6.2 PPPs for Major Airport Facilities PPP framework
Private public partnerships (PPPs) for the development of
NAC and PNGASL will
major new airport facilities, such as at PMIA, will be
competitively outsource parts of
encouraged where in the best economic interest of the
their operations where more
nation, taking account of the financial and operational
cost-efficient to do so, subject to
impact on NAC and the non-commercial airports and
service, safety and security
CSO costs. PPPs will be subject to the prevailing
standards being maintained
National Public Private Partnership Policy and
framework.
13.6.3 Outsourcing of Air Infrastructure Services

NAC and PNGASL will competitively outsource parts of the development, asset management and
operation of airports and air navigation systems where this can be done more efficiently by the
private sector, taking account of the need to maintain
service, safety and security standards. 188. Airport Service Standards
13.7 Service Standards in Air Transport NAC will be responsible for

developing and administering
13.7.1 Airports and Air Navigation Infrastructure standards for airports
infrastructure, and PNGASL for
Standards for the design, operation and maintenance of aviation navaid and
air transport infrastructure will be established and communications infrastructure.
monitored as set out in Section 8.8, with NAC being
NAC will develop technical and
responsible for standards for airport infrastructure and
economic feasibility and
PNGASL for aviation navaid and communications
business cases for airport
infrastructure.
upgrading taking account of air
The design parameters for upgrading NAC airports will be transport demand forecasts.
responsive to air transport demand forecasts when NAC will discuss any
deciding on the design aircraft, apron and terminal sizing conclusions on upgrading
etc., so that upgrading is based on economic efficiency standards and timing and
and a supportable business case. differences between these and
NAC will take account of the expectations in the NTS and those in the DSP/MTDP and will
DSP/MTDP as amended from time to time. NAC will carry report its resolution through
out feasibility and business case studies in consultation TSCMIC and if necessary
with the DOT to ensure alignment with the NTS. referred to the NEC for a
decision
Where there is a difference between the DSP/MTDP and
CSO management contracts to
NAC’s conclusions on the design and timing of airport
specify standards to be met
improvements and the location and design of new airport
170
facilities, these will be discussed with DNPM and reported back through the TSCMIC and if
necessary referred to the NEC for a decision.
13.7.2 Standards for Domestic Air Services

The size and frequency of aircraft used on main services
to and between the NAC airports will be at the discretion
189. Aircraft Service
of the operators. The aircraft used must be compliant with
Standards
design limits of the infrastructure and aviation safety Aircraft used at PNG airports to
standards, for example in regard to maximum tyre be compliant with design limits
pressures, runway length requirements, runway and of the infrastructure and aviation
taxiway surface, width and apron stand size, and also safety standards.
with PNGASL air navigation standards.
Where air operators wish to
Where air operators wish to introduce aircraft that require introduce aircraft that require
upgrading of PNG airports, NAC’s feasibility studies upgrading at one of more
should include the costs and benefits to air transport airports, NAC will conduct
services as part of the decision on an upgrading path or feasibility studies that include
policy to enable informed decision-making. costs and benefits to air
transport to enable informed
13.7.3 Standards Oversight decision-making
The ICCC has a responsibility for overseeing standards of 190. ICCC Role
service delivery to transport service users, such as
operation to agreed schedules, adherence to standards of
ICCC to oversee compliance
passenger comfort and care of cargo as advertised by the
with service standards
service providers and required by contracts of carriage.
Regulation of customer service standards for airports and air services supported with CSO funds
will be through the conditions built into the management contracts and other agreements relating to
CSO supported services.
13.8 Aviation Safety
13.8.1 Safety Paramount

Safety is, and will continue to be regarded, as the
191. Aviation Safety
paramount requirement in the Government’s regulation,
provision and facilitation of air transport. Safety standards Safety to be the first and highest
and safety compliance will not be traded off against other priority in civil aviation
aspects of Government spending in the air transport CASA to complete the
subsector. Through this policy statement, the Government implementation of compliance
requires CASA, NAC and PNGASL to make passenger actions required by ICAO safety
safety its first priority. audits
13.8.2 Adherence to International Conventions
Papua New Guinea is a signatory to the Convention on International Civil Aviation (Chicago
Convention) 1947, which established principles and arrangements for safe and secure international
civil aviation. The International Civil Aviation Organisation (ICAO), which administers the Chicago
Convention, undertakes safety and security audits of signatory states to measure compliance with,
and application of, standards and recommended practices. A safety audit was undertaken for PNG
in 2009, and as a result the Government, through CASA, is pursuing a compliance action plan
accepted by ICAO to address safety and security issues.
171
13.8.3 Harmonization with Neighbouring States

Government will continue to harmonize its civil aviation
laws, rules, standards and practices with international
191. Aviation Safety
best practice and, in particular, with those states in the PNG will harmonize civil aviation
Asia Pacific Region with which it shares air traffic routes. laws, rules, standards and
practices with international best
CASA signed a MOU with Australia in 2009 to provide a practice and with other regional
further avenue for PNG to gain assistance in meeting its countries with which it shares air
International aviation obligations in the form of training traffic routes
and regulatory cooperation where required.
NAC airports to be brought up to
13.8.4 Aviation Infrastructure Safety safety certification standard by
Aviation infrastructure providers, that is providers of 2015
airport, air navigation and meteorological facilities, Other publicly owned airports to
equipment and services, will be required to meet PNG’s be brought up to a certifiable
international obligations and the legitimate requirements safe standard by 2020
of civil aviation users in regard to aviation safety.
Air operators to set up and
In 2010, there were several NAC airports that did not maintain Safety Management
meet the safety certification requirements under the Civil Systems to ensure compliance
Aviation Rules part 139. Government will fund the with civil aviation rules, overseen
rehabilitation and upgrading of non-compliant airports to by CASA
meet certification standards by 2020. Director of Civil Aviation and
NAC and PNGASL will introduce, maintain and CASA to rigorously implement
progressively improve Safety Management Systems with and monitor legal safety
open reporting for their service delivery functions requirements
including outsourced services.
Government will provide CSO funding as necessary to fund the rehabilitation and improvement of
all other airports in public ownership so that these are brought up to certifiable standard and
maintained at or above that standard by 2030. In cases where funding is not available for this
purpose, these airports will be closed to traffic until such time as their restoration can be afforded.
13.8.5 Air Operator Safety

All air operators shall be required to set up and maintain Safety Management Systems to ensure
that rules and standards are complied with. Compliance will be overseen by CASA.
13.8.6 Adherence to the Civil Aviation Act, Regulation and Rules

The Civil Aviation Act, and subsidiary regulations and rules provide the legal framework for ensuring
that safety principles and practices are followed. These provide certification requirements for
aircraft, air crew and other defined occupations in the civil aviation industry. The Director of Civil
Aviation and CASA are the controlling authorities in respect of the legislation. Government will
require that the legislation is rigorously implemented, monitored, and reported.
13.9 Aviation Security
13.9.1 National Aviation Security Programme

Security has several dimensions, including illegal trafficking across borders, declaration and
payment of import duties, immigration control and biosecurity. There have been security incidents
in the PNG aviation system such as armed hold-ups at airports and carrying of firearms aboard
aircraft.
172
The Government has increased its aviation security

surveillance and response capability in recent years and 192. Aviation Security
will continue to improve and extend its systems to provide NASP to guide improvements in
comprehensive coverage of its air-land interface and aviation security, including
security for PNG registered aircraft and for all aircraft airport and air operator security
travelling within PNG airspace commensurate with the
Government to agree a security
assessed level of risk.
compliance action plan with
The National Aviation Security Programme (NASP), ICAO
developed among the industry stakeholders, will form the CASA to be the coordinating
guideline document for future improvements in aviation agency for aviation security,
security, together with any compliance actions required by liaising with other authorities
ICAO (below). The NASP includes an air operator
security programme as legally required under Civil Government will harmonize its
Aviation Rule 108 as part of operator certification. aviation security practices with
neighbouring states
13.9.2 International Conventions
Aviation security is governed by Annex 17 to the Chicago Convention and the security related
aspects of Annex 9 (Facilitation). These Annexes set out a range of standards and recommended
practices designed to safeguard against an act of unlawful interference with international civil
aviation.
While the requirements of the Chicago Convention relate to international operations, the
Government will apply similar measures to domestic civil aviation, as far as practicable and
commensurate with the assessed level of risk.
Following an ICAO security audit in 2010, Government will agree and implement a compliance
action plan with ICAO to redress any identified security issues.
13.9.3 Security Coordination

CASA will act as the coordinating agency for aviation security, liaising with other Government
agencies such as the Police, PNG Defence Force, the Border Development Authority, Customs,
Immigration and Department of Agriculture to avoid duplication and gaps in security screening. The
Government will also coordinate and harmonize its security practices and systems in both its
domestic and international air services with those of its neighbours in the Asia Pacific Region and
with international good practice.
13.10 Environmental Safeguards
13.10.1 Airport Noise and Development Control

NAC, as part of its airport master planning, will assess
193. Environment
present and future airport noise footprints for its airports
and, in conjunction with the responsible authorities for NAC to include airport noise
land use and development planning, will agree on control in airport master plans
development controls for the purposes of maintaining and to liaise with urban planning
aircraft noise impacts on residents and activities to an agencies to mutually ensure that
acceptable level in the surrounding areas. This will airport expansion is not limited
include engine testing and like activities as well as flight by urban development
operations. Noise abatement procedures are in force at
Port Moresby to limit the noise exposure from aircraft take-off and landing and will be periodically
reviewed.
NAC, using the provisions of the Protection of Transport Infrastructure Act where necessary, will
similarly agree with the planning authorities on the protection of land, flight paths and obstacle
173
clearance surfaces required for future airport development, and for airport ground access, so that
future expansion of the main airports is not compromised by urban development.
13.10.2 Aviation Carbon Emissions

PNG has a target rate of improvement in its transport
193. Environment
sector carbon emission intensity of 3% per annum. As air
traffic increases and new larger capacity jets with more DOT will monitor air traffic and
fuel efficient turbofan engines are introduced, the carbon estimate changes in carbon
emission intensity of the aviation subsector will reduce in emissions and intensity from
relation to seat kilometres performed. As part of its aviation.
improved sector data collection and monitoring, the DOT
NAC to coordinate with other
will monitor domestic and international air traffic and
agencies to ensure climate
estimate changes in carbon emissions and intensity,
change adaptation is included in
obtaining data from operators using its powers under the
airport upgrading
Transport (Collection of Information) Act.
13.10.3 Climate Change Adaptation

Airport infrastructure in low lying coastal locations, such as Madang and Vanimo, is potentially at
risk from the effects of climate change, such as sea level rise and increased storm intensity and
frequency. These threats require a response when designing new airports and access roads or
considering retrofit measures to existing airports, to ensure that sufficient provision is made for
future sea level rise and that the structures and seawalls can withstand all but the most exceptional
storm conditions.
The Government, through NAC and the proposed Committee on Engineering Design Standards will
ensure that climate change risks are taken into account in the relevant design and construction
codes.
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14 Policy Statement on Modal Integration
14.1 Principles
The principles of integration of the three main modes of transport are:
(i) Where people or freight must complete a journey

194. Modal Integration
using more than one mode of transport, the
Principles
transition between one mode and another should
be as seamless as can be provided, taking due Efficient modal transition on
account of cost, capacity and border constraints journeys requiring more than
and the specific requirements of different one mode and/or cross-border
travellers and forms of freight. The main points at travel
which inter-modal transitions occur are at the
Planning to ensure basic access
country’s ports and airports.
to transport by at least one most
(ii) In planning the national transport infrastructure all cost-effective mode
significant concentrations of population should
have basic transport access, either by road, Balanced investment across
water or air, and the provision of infrastructure at modes to achieve similar
local level should be integrated between the economic return and compliance
transport modes to ensure that this occurs. with other policy priorities
(iii) Investment made in the main transport Multi-modal transport studies to
infrastructure should be consistent and balanced form basis for decisions on
across the three transport modes, so that in missing link construction
general project investments in port, airports and Provide direct links between
roads should achieve similar economic rates of main provincial centres, main
return. Unbalanced development where, say, one tourism destinations, areas of
mode of transport is significantly underfunded in economic production and
comparison with another, is to be avoided. international port and airport
(iv) The planning of new transport infrastructure gateways consistent with
development in the defined economic corridors economic feasibility and
will in some cases complete new linkages international transport
between hitherto isolated road networks. In turn connections
this will provide a different pattern of access to
the country’s main international seaport and airport gateways. Infrastructure planning will be
integrated through multi-modal transport studies to take account of such effects on the
demand pattern for transport.
(v) It is the aim of transport planning to provide as
direct links as possible between the main 195. Modal Transition -
provincial centres in PNG, the main destinations Passengers
for tourism, main areas of economic production,
and the international gateways, and so avoid NAC to work with airlines and
lengthy domestic connecting services. However, border control agencies to
it is recognised that the preferred points of entry smooth modal transfers for air
to Papua New Guinea for international shipping passengers.
and, potentially, for aviation will to a large extent PNGPCL, the domestic
be dictated by the international shipping passenger ferry operators and
companies and airlines. the tourism industry will work
together to improve passenger
14.2 Modal Transitions for Passenger Traffic reception facilities at domestic
ports for local travel and cruise
The modal transitions for passenger traffic are the
tourists.
interfaces between international and domestic air
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transport and land transport. The requirements for efficient modal transition are adequate capacity
at airport terminals and adequately staffed and equipped passenger processing stages,
incorporating immigration, customs, health and security screening.
Well-designed secure and passenger-friendly ground access between the air terminal landside
concourse, car parking and public transport services will be incorporated into airport master plans.
NAC will work with the airlines and the border control agencies to reduce passenger terminal
congestion and delays, to improve the passenger experience and streamline processing, including
consideration of the allocation/sharing of airline check-in facilities and domestic/international
passenger transfers.
Passenger terminal facilities at the main and secondary ports for accommodating passengers
boarding and alighting from domestic shipping services are poor. PNGPCL will work with the
domestic passenger ferry operators and the Tourism Promotion Authority to improve passenger
reception facilities at domestic seaports and cruise ship tourism destinations.
14.3 Modal Transitions for Freight Traffic
Efficient cargo handling at the main general cargo ports

and at the international air gateways is of critical 196. Modal Transition - Freight
importance to Papua New Guinea’s import and export Port master planning to include
trade. Inefficient handling causes delays, potentially cargo provisions for improving
damage and deterioration, and reduces the efficiency of use of port land and
competitiveness of the country. Papua New Guinea is in a rate of processing of cargo
region where international seaports operate at relatively through the water/land interface.
high levels of efficiency and for it to achieve aspirations
Inland terminals, port relocations
such as to be a significant transhipment port in its region
and improved road links will be
of the Pacific, efficient cargo handling is a pre-requisite.
considered for the major ports
Cargo transfer efficiency requires uncongested berthage, as part of master planning to
efficient quayside cranes, efficient yard handling reduce urban congestion
equipment, well arranged and uncluttered container Use of logistics companies who
stacks and break bulk cargo sheds, and efficient landside can integrate sea, port and land
access and load-out areas. The master plans for the main transport operations to manage
gateway ports of Lae and Port Moresby will be developed the main port terminals will be
with these principles in mind. Where waterfront space is considered.
at a premium and where it is cost-effective to do so,
opportunities for developing inland container terminals (dry .
ports) will be considered linked to the
waterfront port by road or rail shuttle services.
Opportunities will be taken for expediting the movement of cargo through the ports by electronic
cargo tracking and document processing through border control. Consideration will be given to
engaging logistics companies who are positioned to integrate sea, port handling and inland
transportation for main port terminal operations.
Priority will be given in urban road development to improving freight vehicle access to port terminals
and, where possible, creating heavy vehicle roads links that are not compromised by urban
commuter traffic.
14.4 Basic Access Provision to Rural Areas
Transport planning at provincial and local level will seek to integrate the provision of local roads,
small jetties including those constructed under the Community Water Transport Project, and the
restoration of small rural airstrips with the objective of providing a basic level of transport access to
all significant concentrations of population.
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This policy recognises that there are parts of the country

where transport access can only be made available at 197. Integration – Rural Areas
reasonable cost by a single mode of transport, either Priorities for providing basic
small aircraft in certain upland areas, or by small boat access to remote rural
around parts of the New Guinea islands and up the larger communities will take account of
systems of the Sepik, Ramu, Fly and Gulf rivers. Opening modal availability as well as
or reopening airstrips and providing small jetties and boat population and economic
services will be the priority in those areas that are not development potential
economically accessible by road. In order to prioritise
which airstrips and jetties should be funded, the size of
DOT, DPLLGA/PLSSMA will
population and potential for agricultural production will be
coordinate with provinces to
taken into account, as well as providing access to primary
prioritise basic rural access to
health care and education services.
integrate with the national
network
This planning will be carried out jointly between the Functional classification
provinces and districts using transport planning recognises modal availability
assistance from the DOT Planning and Coordination
Division, DOT Rural Infrastructure Development Division and. coordination from DPLGA/PLSSMA.
It is noted that the functional classification of the network (see Section 20) takes availability of
modes into account.
14.5 Other Transport Modes
Transport modes other than road, sea and air transport

that have been either used or proposed for use in Papua 198. Other Transport Modes
New Guinea include rail, pipeline, conveyor and aerial Pipelines, conveyors and aerial
ropeway. Pipelines, conveyors and ropeways are used ropeways have application to
mainly in association with minerals, oil and gas either as bulk materials handling in
part of the local extraction and processing plant or in minerals, oil and gas and only
some cases for long distance movement of bulk impact on the publicly owned
materials, through oil, gas and slurry pipeline. These transport infrastructure where
forms of transport are private to the industry concerned these materials transfer to roads
and tailored to the projects, although there is scope for waterways or seaports.
some sharing of oil and gas pipeline infrastructure. Apart
from matters such as land and environmental control, the Rail, either for long distance
role of Government is limited in these modes of transport. freight or passenger or as urban
However, national infrastructure planning must include light passenger rail is very
places and routes where these bulk materials are unlikely to be economically
transferred to river or coastal barge or to road cartage. feasible, would present technical
As with forest production, these industrial movements of challenges in construction, be
bulk material can be very large but transient over the life less resilient than road and
of the development and operation of a project. would be difficult to sustain over
the long term
Rail was used in limited form in Papua New Guinea up to
.
early part of the 20th century, in the form of low speed narrow gauge railways for produce movement
associated with island and coastal plantations. However, there has never been a rail system in
Papua New Guinea used for long distance freight or for passenger transport. Rail has been
suggested occasionally for long distance freight and passenger services and for urban public
transport; however in no case have these been supported by convincing technical and economic
feasibility studies.
Rail competes best for long haul low value bulk freight movement, particularly in large volumes over
long distances on flat terrain. For long distance traffic in PNG the freight flows are relatively small,
and the rail construction and operating costs would be relatively high due to the severe terrain.
177
Construction of rail links would not substitute for existing roads, leaving the country with dual
transport infrastructure to be maintained. In urban areas light passenger rail is found to be a very
expensive transport mode to construct and maintain, particularly where it has to be retrofitted into
the existing urban fabric. Rail systems depend on a high standard of control and communication
system and are not as resilient as road to disruption.
A possible role for rail is as an alternative to road for very specific freight links such as connections
from an inland to waterside port (Lae is possibly an example). However a business case would
need to be made against the road alternative and there are fewer options for the upkeep of a rail
connection and rolling stock than there are for road. In summary, while superficially attractive, rail is
seen as a very unlikely alternative to road transport in the Papua New Guinea context.
14.6 Balance of Investment between Modes
There has been concern that investment in the three

transport modes has been overly concentrated in roads 199 Investment across Modes
while airports and seaports have been starved of Using the TIPS methodology
investment. To assist balanced investment between the together with other policy
three modes of transport, the prioritisation of criteria, the NTS aims to arrive
infrastructure maintenance and development in the NTS at a better allocation of
will consider road, port and airport investment within a investment between the three
common evaluation framework, based initially upon modes of transport, recognising
economic indicators such as internal rate of return, net that ports and airports have
present value and benefit/cost ratio, but also incorporating been relatively underfunded in
other decision factors as set out in the section on the past.
investment prioritisation.
.
14.7 Economic Corridors
The DSP identifies the priority economic corridors, a

number of which involve the construction of new trunk 200. Integrated Development
road connections between hitherto isolated road in Economic Corridors
networks. The economic corridor concept involves the DOT to liaise with DNPM to
integrated development of agriculture, forestry, mining, undertake feasibility studies of
industry, power generation along major interprovincial missing link and corridor roads
highways, linking ports, airports and the lower level feeder taking account of the benefits of
road network. The combined economic impact of this associated development in other
integrated development is expected to be greater than its sectors.
parts.
The NTS includes the inter-provincial missing links as potential projects and these have been
subject to preliminary evaluation using the TIPS methodology. More detailed feasibility studies will
include the reinforcing effects of coordinated development where this can be clearly defined. DOT
will liaise with DNPM to test the incremental cost benefit analysis of adding missing links and
associated development sequentially to the network, making due account for induced demand and
producer surplus benefits.
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15 Policy Statement on Sector Capacity Building
15.1 Introduction
The transport sector is capacity-limited on several fronts, both in the Government and private
sector. The most important capacity constraint is the limited numbers of educated, trained and
experienced PNG nationals available to take up posts at managerial, professional, technical and
artisan levels through the transport sector. Financial constraint on secondary and higher education
has been a contributing factor.
Within the Government agencies, there is the need for a stable and attractive career path for
prospective employees under a well-designed management structure with knowledgeable and
experienced leadership. There is a need for structured in-service training and personal development
both in-house and through external courses that are appropriate to the level, background and
responsibilities of staff. Conditions and remuneration that compete with those of the private sector
are also needed so that good candidates are attracted and retained and to foster the integrity and
morale of the agencies.
15.2 The Existing Situation
15.2.1 Public Sector Human Resource
In the Government transport agencies there are insufficient national staff with professional,
technical or managerial qualifications to fill the established positions. As a result many positions are
being left vacant or filled with staff with lesser qualifications and experience.
There is an aging of the workforce, particularly among higher grades and in areas that require
specialist technical training and experience. Many of these started their career at or shortly after
Independence in 1975. As older workers retire, gaps are opening up that may take several years to
fill because of the long lead time required for training and work experience.
New graduates are attracted by higher wages in the private sector, with the mining and petroleum
industry competing strongly for workers and offering incentives such as in-service training. Also,
the numbers of well qualified technical graduates from the PNG high school and university system
are very limited. Those with internationally marketable qualifications also have opportunities beyond
Papua New Guinea.
The employment package conditions in the public sector are governed by the Public Services
Commission and the general orders regarding pay and other entitlements which can limit the ability
of Government Departments to offer competitive market salaries. Conditions for executive staff of
public authorities and SOEs are also similarly bound by the Salaries and Conditions Monitoring
Committee Act 1988. Also, matters such as housing availability and affordability in relation to
allowances, particularly in Port Moresby, are a constraining factor.
The outcomes of an inability to attract or retain suitably qualified staff in the Government agencies
are:
 the remaining experienced staff becoming over-extended, and processing of work through
the government agencies slows down;
 a loss of technical knowledge and competence, leading to a reduction in the quality of
decision-making and an inability to discriminate between good and poor advice;
 staff are promoted to positions for which they lack training and experience, leading to weak
management and loss of confidence in the agencies;
 a loss in institutional memory.
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15.2.2 Private Sector Human Resource
The private sector has flexibility to offer attractive staff packages and parts of the transport sector
are open to owner-operators and SMEs, such as PMV, taxi and freight operators. There is a solid
and increasing demand for passenger and freight transport and for the trades that sustain it,
although price control does exert a constraining influence. In domestic shipping there is an aging
workforce of PNG national masters and mates, and insufficient enticements for new recruits to the
industry with uncertain career path and opportunities on shore once retired from the sea. The lead
time to train up replacements for those retiring is quite long, and involves years of sea-time. In
aviation, which is technically the most demanding of the three modes, there is also a shortage of
PNG national qualified flight crew and air traffic control and other technical occupations, leading to
pressures to import foreign workers.
In the construction industry the resource projects provide strong competition for engineering and
technical trades to those companies who undertake civil construction for road, airport and port
development. Also, as work on public infrastructure projects is largely funded through the national
budget, unless there is a continuous and predictable flow of projects from the government agencies,
companies are discouraged from investing for the long term, which includes investing in staff
training.
15.2.3 Role of Technical Assistance
Technical assistance has been provided to the sector through programs such as the Australian
funded TSSP, “Strongim Gavman” and through grant TA for specific advisory and project
preparation activities under multinational development bank, UN and bilateral funding.
Where there are extreme staff shortages and a low level of existing education or training, then
technical assistance will be less effective than it should be. TA ends up being used as a way to
shore up departmental resources rather than as an additional resource to help raise the standards
within a well-staffed department.
Also, there is often an inherent conflict of objectives when TA is provided with a dual
training/technology transfer role and a project achievement role – one objective will often get in the
way of the other. Delivering and evaluating training is a skill and profession in its own right and not
one that is necessarily easily combined with other TA advisory functions of a technical nature.
15.2.4 Courses and Study Tours
Another form of assistance is to offer courses and study tours to Government staff, often overseas.
However, when there is already a shortage of staff in Government positions, participation in such
courses can be disruptive. Also the nature of courses provided are not always well geared to the
capabilities or roles of those who take them up and there is a danger that they can be treated as
perks of a Government job rather than as well-designed training opportunities for a future career
step.
Nevertheless, where training needs are properly identified, are well-matched to staff roles and the
training resource is focused and professional, good outcomes can be achieved. Providing this
training in PNG also makes it more generally accessible and less disruptive than sending staff
overseas, although in some cases overseas travel is the only option.
15.2.5 Position of the SOEs and Statutory Bodies
The human resource shortage in the transport SOEs and statutory bodies is not as severe as in the
Government Departments. The SOEs are more focused on service delivery and have a commercial
imperative which makes for a more business-like and dynamic environment and this is inherently
more attractive than the traditional Government department. However, the ability of each agency to
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support capacity building is influenced by its financial self-sufficiency and reliance on Government
budget to fund activities. Where SOEs are more financially secure, then they are able to invest in
their own in-house training which is often the best way to build capacity within such an organisation.
15.2.6 The Education and Training Institutions
At tertiary level, the PNG University of Technology at Lae (Unitech) is the only technological
university in PNG. The ability of Unitech to attract well-prepared school leavers and train capable
graduates in engineering and allied technical disciplines is critical to the replenishment of the
professional and technical workforce with PNG nationals to build capacity and compensate for
retirements.
Unfortunately, the strength of PNG universities has gradually weakened through financial
constraints, insufficient quality control and weak governance, as reported in the PNG Universities
Review (Garnaut and Namiliu, 2010), at the same time as the demand for skills is expanding with
the resources boom. Graduate numbers are small and the educational standards are reported to
have declined. Other factors, such as student and staff security and declining standards in the
national high schools have also worked against the quality and quantity of graduates. There is also
a problem of small scale compared to universities internationally. All of these factors have led to a
loss of high quality staff to overseas posts, leaving a small pool of dedicated educators with a large
workload.
At vocational and technical level, the PNG Maritime College offers training for crew, officers and
shore-based maritime occupations. However, as with the universities, the College has very limited
funding and is constrained in the courses that it can offer.
The National Training Council is the Government-Industry sponsored agency responsible for
implementing national policy for vocational training, including trade skills commonly required in
construction and transport operations. It provides an umbrella within which the National
Qualification Framework is administered and public and private sector agencies can become
accredited as training providers.
15.2.7 Training within the Government Agencies and Private Sector
Historically, Government transport infrastructure agencies, in particular DOW and PNG Ports
Corporation, have played a role in in-service education and training, particularly for works
overseers, plant and equipment operators and technical trades. Training is typically hands-on
backed up with classroom training and geared to the specific requirements of the agency.
The larger private sector organisations, such as the resource development companies, train in-
house and sponsor training courses at institutions in order to raise and expand skills among the
PNG workforce to serve the demands of industry.
Bilateral assistance, international twinning arrangements and participation in international

conferences also provide training and capacity building opportunities to the transport SOEs.
15.2.8 Professional and Technical Grades of Engineers
Civil, structural and mechanical engineering and allied disciplines such as quantity and land
surveying, geology and materials science, are required to support the development and asset
management of transport infrastructure.
The Institute of Professional Engineers PNG (IPEPNG) is a Government recognised professional

body structured along similar lines to professional bodies in the larger countries in the region.
Membership is attained by demonstrating professional competence and experience. Members of
IPEPNG are often also members of similar bodies in Australia, New Zealand or the UK. However,
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the number of members is relatively small, aging, and this makes it difficult to maintain the critical
mass for a flourishing institution.
15.2.9 Workforce Planning
The last Government assessment of workforce demand and supply dates back to 1982. DNPM and
OHE are carrying out a new review to inform the implementation of Vision 2050. The MTDP
similarly provides for a “National Manpower Study” and human resource training plan.
The results of this in the workforce grades and qualifications supporting transport will be important
to developing a capacity building strategy for the transport sector.
15.3 Development of a Sector-Wide Education and Training Strategy
15.3.1 Introduction
The severe capacity constraints within the Government

transport sector and, to a lesser extent, in the
201. Sector-Wide Education
construction industry and transport operations industry,
and Training Strategy
demand a thoroughgoing assessment and development Establish a “Capacity Building
of a training strategy and plan for the transport sector. Taskforce” under TSCMIC
auspices to build capacity
It will need to be recognised that this strategy will only focussing on human resource
mature over the medium to long term, that there are development
probably no short term fixes, except by importing staff to
maintain capability in the existing organisations, which Carry out a status review of
has been the pattern over the past 20 or more years. technical education, training and
professional qualifications and
A capacity building strategy for the transport sector will supply/demand outlook
need to be coordinated with the Government’s general
Coordinate with wider
programmes for the education sector, those of the
development partners, NGOs and the private sector, so
Government development
as to avoid overlap and to concentrate effort on the
initiatives for the education and
training sector
specific needs of transport infrastructure and services
development, operation, maintenance and management Develop an education and
together with transport sector administration, policy training strategy and plan
formulation and planning. focused on the skills,
qualifications and experience
It is proposed that a “Transport Sector Capacity Building required by the sector
Taskforce” be formed under the auspices of the TSCMIC
to oversee the development and implementation of a Propose interim ways of filling
sector-wide education and training strategy. It is likely gaps in the staff establishment
that external assistance will be required for the strategy of the Government transport
development, combining experience from within and agencies to cover shortages of
external to PNG in the education/training and transport qualified PNG nationals
sectors and with development partner support for specific Propose changes and
tasks. development of secondary
education and tertiary
15.3.2 Status Review institutions to support the sector
As a first step a comprehensive review should be
undertaken to establish the demand and supply situation for the transport sector workforce, in both
public and private sectors, and the present performance and outlook for the secondary, tertiary and
vocational education systems to deliver the replenishment workforce. The review should also
identify issues and constraints that are hindering the recruitment, retention and in-service
182
development of staff capacity and their relative importance. It should include an assessment of the
present staffing of the Government transport agencies, the qualifications and experience of staff
and suitability to their present positions. An age profile of the staff establishment should be
developed so that a cohort analysis can be made of the outlook for retirements and where critical
gaps are likely to occur.
The outcome of the review will guide subsequent actions. However, this will include an assessment
of the numbers of positions that need to be filled and the education and training pipeline that needs
to be in place to do so. Where it is clear that positions cannot be filled by PNG nationals,
recommendations should be made on the most appropriate form of interim support to the transport
agencies that allows them to perform their function but without becoming indefinitely dependent on
external support. This interim support could take the form of (i) twinning and support arrangements
with counterpart agencies overseas (ii) programmes such as TSSP that provide either line or
advisory support to specific public service positions (iii) local recruitment of overseas personnel to
fill positions on a contract basis.
Gathering the data for this assessment will probably require specific industry surveys, as the
information generally available is unlikely to be sufficiently detailed or focused on the issues at
hand.
15.3.3 Development of Education and Training within PNG
At a tertiary level, the MTDP outlines the future direction for higher education including a major
investment in the universities, technical colleges and vocational institutions. Realisation of the 2015
goals for the higher education sector would go a long way to restoring the ability of the education
system to produce good quality graduates. However the MTDP is unspecific about technical
disciplines and it is unclear whether the funding required for recapitalisation of the higher learning
institutions will occur as targeted. Implementation within the MTDP also lies within the OHE, DOE,
DPM and DNPM. A targeted strategy for transport also needs to involve the sector agencies and
industry.
The proposed taskforce should take the initiative to focus on the educational skills that are required
to support the technical disciplines in the transport sector, starting with secondary education
through to technical trade and vocational training for each transport mode, university degree and
post-graduate education, and professional society membership. Specific quality and quantity
weaknesses in the existing structure should be identified and a prescription, resource plan and
timetable developed for its strengthening. The existing courses, qualifications of the educators and
international standing of the qualifications given at each institution should be reviewed, with a focus
on those institutions supporting the transport sector, that is Unitech Lae and the Madang National
Maritime College.
In conjunction with wider education sector reviews the taskforce will make recommendations on
strengthening of the existing institutions and where privately financed institutions and PPP
arrangements can be usefully pursued.
At professional level, the taskforce will engage with the professional institutions to determine how
they can be supported and their active membership increased, including twinning arrangements
with overseas counterpart institutions.
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16 Supporting Legislative Programme
16.1 Introduction
The DOT legal section will take the lead role in drafting
new and amended legislation to support institutional
Legislative Programme
reforms, to introduce changes to economic and safety 202. Responsibility
regulation of the transport sector and to consolidate and
The DOT Legal Section will be
update existing legislation.
responsible for drafting new and
Where necessary, external consulting advice on legal and amended transport legislation,
technical matters will be obtained. All legislative reviews taking specialist external advice
will involve consultation with interested parties. Draft where needed.
legislation will be submitted to the TSCMIC, higher level 203. Land Transport
committees as necessary and the State Solicitor prior to
approval through the NEC and introduction to parliament. A Road Traffic Act will replace
the existing Motor Traffic Act
16.2 Land Transport and related legislation to
establish a Road Traffic
A new Road Traffic Act will be prepared to replace the Authority, combining the NRSC
Motor Traffic Act 1950, Licensing of Heavy Vehicles Act and LTD of DOT and introducing
1977, Land Transport Board Act 1968, National Road quality-based transport
Safety Council Act 1977 and associated Regulations. The licensing.
Act will provide for establishment of the Road Traffic
Authority replacing the Land Transport Board, Land
Road Classification and
Transport Division of DOT, and NRSC.
Standards Regulations to be
drafted under the NRA’s Act.
It will amend the provisions for driver licensing, and The need for the Motor Vehicle
vehicle registration, and will include quality-based Dealers Act will be reviewed with
licensing of goods transport, PMVs and taxis. A Road a view to repeal.
Traffic Bill and accompanying Road Traffic Regulations
will be completed in 2013 for NEC approval and 204. Maritime Transport
introduction to Parliament. The Merchant Shipping Act will
be amended to remove price
Road Classification and Standards Regulations will be control on shipping freight rates
drafted as provided for under the National Roads and to reform the coastal
Authority Act. shipping licensing and permitting
regime.
The need for the Motor Vehicle Dealers Act will be
reviewed and possibly repealed. The NMSA Act will be reviewed
to remove ambiguity and
16.3 Maritime Transport transfer regulatory powers
currently exercised by the
The Merchant Shipping Act will be reviewed to provide Secretary for Transport.
the legislative amendments necessary for:
Legislation will be introduced in
 The proposed changes to control of shipping the medium term to widen the
freight rates, basically moving from a (nominally) remit of the NMSA to a National
controlled systems of prescribed maximum rates Maritime Authority.
to oversight of fair pricing under the supervision of
ICCC; and
 To reform the licensing and permitting of coastal shipping as described in the maritime
policy section of the NTS, including reformation or replacement of the CTC.
184
The National Maritime Safety Authority Act will be

reviewed to correct areas of ambiguity, and to make
Legislative Programme
changes consequential on the changes to the Merchant 204. Maritime Legislation
Shipping Act.
A new Ports Bill will be drafted
In the medium term legislation will be drafted to widen by DOT in conjunction with
the remit of the NMSA to a National Maritime Authority PNGPCL to more clearly
and, as part of this, transfer some regulatory powers delineate the powers, functions
currently vested in the Secretary for Transport under the and responsibilities of PNGPCL
Harbours Act to the NMSA The Small Craft Act has been
A new Ports Bill will be prepared jointly by PNG Ports
passed to regulate small boat
Corporation Ltd and the DOT to more clearly delineated
safety
the powers, functions and responsibilities of the PNG 205. Air Transport Legislation
Ports Corporation and matters pertaining to the
The following air transport
declaration and identification of ports.
legislation will be enacted once
A new Small Craft Act has been passed which will outstanding matters of
regulate small boat safety. governance responsibility and
function are agreed:
16.4 Air Transport • Civil Aviation Act, Rules and
The following items of aviation legislation are awaiting Regulation
resolution of certain governance matters within the air • Air Services Act and
transport agencies of CASA, NAC, PNGASL and the Regulation
TAIC. Once resolved, these will be amended and
submitted for higher approvals and enactment:
• Airports Act, Regulation and
Bylaws
 Civil Aviation Act, Rules and Regulation • Accident Investigation
 Air Services Act and Regulation Commission Act
 Airports Act, Regulation and Bylaws
 Accident Investigation Commission Act
185
Part C – Transport Funding and Investment Strategy
17 Introduction to Part C
Part C of the National Transport Strategy focuses on investment priorities and the infrastructure
investment strategy and programme. It contains the following sections:
 Section 18, Transport Infrastructure Investment Policy – outlines the matters to be

taken into account in developing a policy for transport infrastructure investment including:
investment policy elements, the investment planning cycle, framework for prioritisation,
transport investment benefits and how they are treated, and order of funding priority for
classes of expenditure under budget constraint;
 Section 19, Present Structure of Transport Infrastructure Funding – sets out the
sources and extent of funding of transport infrastructure maintenance and development
over recent years and trends;
 Section 20, Functional Hierarchy and Standards of Provision – develops a five level
hierarchy of transport routes and terminals in terms of strategic importance and connecting
function, and desirable standards for design and condition applying to each level in the
hierarchy;
 Section 21, Transport Infrastructure Deficiencies - is a general review of the deficiencies
in the transport network as at the end of 2010 compared with the desirable standards for
provision;
 Section 22, Development Cost of the MTDP - the new construction, upgrading and
rehabilitation envisaged in the MTDP is identified, preliminary cost estimates are made, and
these capital works are assigned to each five year period, using the MTDP targets for 2015,
2020, 2025 and 2030. Using the TIPS 2010 model, preliminary benefit cost ratios are
assigned to projects and priority rankings given;
 Section 23, Maintenance Cost of the MTDP - the same process is applied to maintenance
of the infrastructure. As items of infrastructure are upgraded, the ongoing costs to maintain
them in good condition are estimated, with the objective by 2030 of all of the national
transport infrastructure and the key provincial infrastructure being in good serviceable
condition as envisaged by the MTDP;
 Section 24, Funding Projections and Funding Gap – this is estimated for both a
continuation of historic trends (a “business as usual” or BAU approach) and for increased
national budget appropriation enabled by the strong GDP growth envisaged in the MTDP. In
each case, new funding sources, such as road user charges, are included and some
infrastructure is expected to be self-funding. As well as funding limitations, there are other
resource constraints, such as the capacity of the construction industry to gear up for a
higher level of output and the capacity of the Government administration to process and
manage a much larger construction programme. A comparison between the cost estimates
for each five year period of the MTDP against the resource constrained funding projections
indicates a wide gap, even if the economic growth forecasts of the MTDP are achieved;
 Section 25, Ongoing and Committed Projects – the work that will be funded under the
first five years of the MTTP is strongly influenced by projects that are ongoing or are
committed under the forward programmes of the transport sector agencies and
development partner contributions; these are analysed in this section;
 Section 26, Priorities for Project Selection – the final section in this part lists the priorities
for projects by mode and class of expenditure using analysis from the TIPS model together
with other feasibility study and transport agency data.
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18 Transport Infrastructure Investment Policy
18.1 Investment Policy Elements
In concert with the policy on private and public sector roles in transport infrastructure investment,
Government will invest in the provision and maintenance of transport infrastructure where the
services are provided primarily for the public benefit, and where there is no competitive market for
private provision of infrastructure services and no reasonable prospect of such a market being
developed.
The road system, air and sea ways and navigation systems are natural monopolies. Some privately
owned access roads, airports and wharves connect with this public infrastructure and serve mainly
the transport needs of their owners, which in most cases are mineral, agricultural and forestry
interests. Some small airstrips and jetties are owned by small business enterprises, by church
groups and village incorporations. There are also examples of the private sector supplying facilities
within the publicly owned transport terminals such as private wharves, jetties and marine industry
within main ports, and similar private facilities and operations at public airports. There are potential
areas for private sector capital investment in PPP arrangements, where Government sees
advantage in mobilising additional capital resources not available to it from general taxation or
concessional donor assistance.
Given the importance of transport networks in facilitating the economic and social development of
the nation, it is important that Government sets out its policy for allowing and promoting
infrastructure investment and maintenance.
There are several elements to such a policy:
 Levels of planning - strategic, wide area, long term planning down to focused short term
action plans;
 The planning, programming, implementation and review process that is followed;
 Standard of provision in relation to use and network importance;
 Acceptance criteria for including new and upgraded infrastructure in forward programmes;
 Prioritisation of new and upgraded infrastructure that meet the acceptance criteria;
 Establishing the funding envelope and continuity for future spending, including
maintenance, rehabilitation, renewals, upgrading and new infrastructure;
 Prioritising the call on funds between maintenance and upgrading/new construction; and
 Assigning the responsibilities for administering each stage of the policy to particular
government agencies and providing procedures for the investment process.
These elements are set out in more detail below.
18.2 Strategic and Tactical Planning
The Government has set out its long term strategic planning objectives through Vision 2050, the
DSP and MTDP, including the development along economic corridors, other main linking roads, and
strategic development of main ports and airports. Medium term (5 year) and short term (annual and
rolling programmes) will be required to be consistent with, and contribute to, the long term strategic
plan.
Government has also signalled that it wishes to give increased control to the provinces, districts and
local level governments to determine the planning priorities within their own jurisdictions and,
consistent with their technical and administrative capabilities which will be built up over time, to take
a greater role in managing transport infrastructure maintenance and development, particularly at a
local level. From a planning perspective, this involves alignment of the provincial and national level
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plans for transport, ensuring that both are in turn consistent with the sector plans for resource
development and social service delivery.
This National Transport Strategy recognises the priorities

expressed by the provinces through their individual 206. Strategic Planning
development plans, transport plans where these exist The NTS recognises the MTDP
and the how the Government sees these plans being and DSP five year targets for
implemented through the new Integrated Service Delivery transport system growth and
Model (ISDM) and Service Delivery Mechanism (SDM) development to 2030
prepared by the Vision 2050 Development Centre. The
Department of Transport has assisted, and will continue Provincial transport plans will be
to assist, the provinces in developing their transport plans integrated with national level
working within the framework of the Provincial transport infrastructure planning
Coordination and Monitoring Committee (PCMC) under DOT will assist provinces and
the DPLGA and PLSSMA. work within the ISDM and
framework of DPLGA, PLSSMA
When developing a long term strategic investment plan it
and PCMC
is important not to get caught in the trap of justifying
every incremental tactical decision on funding in a short Longer term strategic planning,
period time frame, particularly when there are strong where proven economically
funding constraints. feasible, socially desirable and
financially affordable, will set the
A typical example is road relocation onto a route that will framework within which shorter
be shorter, faster, more reliable and easier to maintain range tactical planning and
over the long term, compared with carrying out incremental development takes
incremental upgrading of an existing less well-aligned, place.
less reliable and longer route (an example might be the
unstable section of the Highlands Highway through
Simbu). The small incremental improvement will almost always give a higher rate of return than the
larger longer term solution and through incremental development may undermine the chance of the
longer term strategic solution ever being taken up.
A similar case occurs when trying to develop a new port or airport – it is almost always more
expedient in the short term to squeeze a little more capacity out of the existing facility, but the
advantage of the more radical strategic project is never grasped and in the end as much investment
might be made in the second best solution.
This tendency for short term expediency can be countered by taking the long term and large scale
strategic decisions first, and then requiring that incremental development always build towards the
agreed long term goal.
This does not mean that every large scale aspirational project will be a good strategic development
option. All it means is that a long term strategic view should be evaluated first before looking at
tactical options. This will require thorough technical and economic feasibility and evaluation that
takes proper account of all policy objectives and social and environmental safeguards. This applies
in particular to the proposed economic corridor developments and missing link roads, most of which
are large scale potentially transformational projects, but require the investment of large capital
resources and construction industry capacity and require careful analysis and prioritisation before
final decisions on implementation.
18.3 Planning Investment in Transport Infrastructure
The sequence of activities that the Department of Transport will follow in its continuous cycle of
planning, prioritising, facilitating implementation, monitoring and review of transport infrastructure
development is illustrated in Figure 30 – The Investment Planning Cycle.
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The elements of this process are:
 Transport Demand - the existing demand for transport is established from surveys and
statistical data on underlying passenger and freight demand factors such as population,
economic growth and sector outputs and the relationships between these factors and the
road, sea and air traffic generated.
This process considers Government’s spatial development planning to accommodate
population growth and for economic activities that rely on transport infrastructure and
services. In part this may be organic growth based on an existing pattern of resource
exploitation and human settlement but it may also involve deliberate planning by
Government for urban growth, new settlements, new agricultural and forestry projects,
export processing zones etc., where transport infrastructure is used as a lead investment to
help stimulate activity.
Forward projections of transport demand are then made based on growth trends and
relationships. For personal travel this involves population projections, forecasts of personal
and household incomes, and growth in private and public transport demand related to travel
costs. For freight transport, growth in transport demand is closely linked to growth in GDP
for general freight, and for specific export commodities to market prices and industry
capacity.
Transport Demand Plans & Projections
Transport System Standards of

Capacity Provision
Existing and Future

Deficiencies
Periodic Review Projects to Provide MTDP/DSP, Sectors,

(Annual, 5 years) Capacity Provinces, DOT
Evaluate and Rank TIPS economic /

Projects social analysis, BCR
Other Policy
Revised Ranking
Considerations
Gov’t Expenditure
Apply Funding
Projections, User
Constraints
Revenues
Project Sequencing,
Development
Industry Capacity,
Programme
Project Readiness
Figure 30 – The Investment Planning Cycle
189
 Standards of Provision – there are various

design and service standards governing the 207. Transport Planning and
transport system, both for infrastructure and for Investment Cycle
vehicles. These can be mandatory requirements Demand assessment
or desirable guideline practice, sometimes with
minimum permissible standards. Standards are Transport network capacity
required for consistency across the network and Present and emerging gaps
to harmonize Papua New Guinea’s transport between demand and provisions
system with international norms.
Project identification
Establishing standards in part involves identifying
a functional hierarchy of the transport network
Socio-economic evaluation and
that is the tiers of main transport nodes and
ranking of projects
arterials, the secondary distributors, and the local Apply other policy objectives
feeder and access routes. Functional hierarchy is and filters
considered in Section 20.
Revised ranking
The leading dimensions, alignment and structural
Apply funding and capacity
capacity of transport infrastructure are closely
constraints
related to the costs of provision as well as the
fitness for purpose to serve road vehicles, Investment programme and
shipping and aircraft. Other important standards scheduling
relate to safe operation, including air and marine
navigation systems.
Some standards are a matter of balance between transport efficiency and cost, such as
road design speeds, structural load limits, runway lengths and shipping berth length and
depth.
 Transport System Capacity and Deficiency Analysis – the Department of Transport and
the transport sector agencies collect and analyse data on the inventory, condition and use
of the transport system. Together with the standards of provision established for each road,
wharf or airport according to their position in the functional hierarchy, this allows a
comparison to be made against the actual provision and so shows where there are
deficiencies that need to be remedied.
These deficiencies can be in the maintenance condition and where the existing design falls
short of the standard appropriate to the function of the road, wharf or airport and the amount
and type of traffic that it supports. As well as an analysis of existing deficiencies, traffic
growth projections can be used to predict where deficiencies may emerge in the future.
 Project Identification – projects are investments in the transport infrastructure and include
maintenance of the existing facilities and upgrading to reduce or remove present and future
emerging deficiencies in the transport network. Projects can form part of a wider sector or
area development plan, or may be undertaken in a lead role as a stimulator of activity.
Projects must pass a number of acceptance filters before being considered for the NTS so
that projects contrary to accepted strategic plans or clearly infeasible projects are not
pursued.
Potential projects are identified from various sources: (i) previous planning studies that have
suggested projects which have not yet been implemented; (ii) projects arising from the
government’s strategic planning, such as the MTDP, and from economic and social sector
plans; and (iii) projects indicated from deficiency analysis and planning studies undertaken
by the transport agencies.
 Evaluate and Rank Projects – the initial evaluation and ranking of projects is based on the
principles of economic benefit cost analysis. The TIPS model may be used as an
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evaluation tool for the initial project economic screening or a stand-alone cost benefit
analysis may be undertaken. For large investments that pass the initial screening, a more
thorough feasibility study may be needed to more accurately evaluate the project, prior to
inclusion within the investment strategy and programme.
 Apply other Policy Criteria and Revise the Ranking – the economic benefit cost analysis
cannot incorporate all of the policy criteria that the Government must consider when
preparing its programme. These non-economic criteria are added using a multi-criteria
framework and a modified priority ranking of projects is obtained. This framework is to
reflect the Government’s social and economic objectives at national and provincial level and
will also take account of social and environmental safeguard policies;
 Apply Funding Constraints – the NTS process includes a projection of the future funding
envelope for public expenditure on transport infrastructure derived from the economic
development and expenditure forecasts of government, through Treasury and DNPM, and
from funding generated within the sector from user charges.
The funding envelope provides a constraint on the costs of projects that can be funded in
any one year or over a period of five years corresponding to the MTDP and MTTP. The
funding constraints must also take account of different sources of funding, some of which
will be tied to groups of projects depending on the transport mode (road, port, airport), the
ownership of the facilities (SOEs, government and provincial government agencies) and in
some cases aid donor constraints.
Funding of emergency reinstatement, essential compliance projects and maintenance will
take precedence over upgrading and network expansion where funding is a constraint.
 Preparing the Transport Investment Programme – the final step to develop an
investment programme for implementation in an annual or rolling three or five year
programme.
This involves considerations of project readiness (land acquisition, environmental mitigation
plans, planning and design studies), industry capacity, and project sequencing and
packaging. These practical factors may require some priorities to be shifted forward or
back, but not to a loss in integrity of the overall network strategy.
18.4 The Framework for Prioritising Asset Investment
18.4.1 Economic Benefit Cost Analysis Framework
The framework for prioritising projects is economic benefit cost analysis taking a national economic
viewpoint with the objective of maximising social welfare per kina of public investment. This
framework is well-recognised internationally, is the principal method used by PNG’s development
partners for evaluating projects in the transport sector, and is the method adopted in TIPS, so has
the advantages of harmonization and general acceptability.
Resource cost basis - In the analysis all benefits and costs are expressed in resource cost terms,
that is exclusive of transfer payments these being primarily import duties and indirect taxes such as
VAT, but also making corrections for market rigidities, such as shadow pricing labour and foreign
exchange if necessary. Costs are expressed in constant kina values as of the base date for the
analysis, normally the year in which the project is put forward for consideration.
Benefit/cost ratio indicator - as the Government’s financial resources are constrained, the primary
economic indicator is the benefit/cost ratio, which is the ratio of the economic benefits of the project
option compared with a base option divided by the economic costs similarly compared to a base, all
discounted over a specified time horizon and rate of public sector discount.
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Discount rate and time horizon - for comparability

across projects, a standard discount rate of 12% and time 208. Evaluation Framework -
horizon of 20 years is used, although the effects of a Social Cost Benefit Analysis
lower discount rate (suggested 8%) can be included as a For comparing between
sensitivity test. Where project investments are long lived, independent projects and
then a terminal value can be included at the end of the 20 between mutually exclusive
year time horizon to represent the ongoing present value project options
of discounted benefits net of discounted costs for a
further future period.
Use resource costs, net of
transfer payment, at constant
Ranking of projects - projects are accepted in present day values
descending order of BCR until the available funding is Costs are investment costs to
exhausted. The BCR for the last accepted project is the the public agency
acceptance value.
Benefits accrue to existing
Selection of project options using the incremental transport system users and new
BCR - where projects are mutually exclusive (doing one users
project stops the other from being done) then they should
be treated as project options and evaluated using the
Decide time horizon to suit
incremental BCR method.
project lifetime and an
appropriate rate of discount for
Project options are ordered by increasing cost and the future benefits and costs
BCR calculated for the lowest cost option, called the base Selection criteria – Benefit/Cost
option. The incremental cost and incremental benefit of Ratio (BCR) preferred where
the next higher cost option is next calculated. If the ratio there are funding constraints –
of incremental benefit/incremental cost (the incremental as applied in TIPS
BCR) is greater than the acceptance value then this
option is selected and the process repeated with the next Use incremental BCR to
higher cost option until no higher cost option with an distinguish between mutually
incremental BCR above the acceptance value is found. If exclusive investments
the incremental BCR is less than the acceptance value Other effects on non-users and
then the next higher cost option is compared with the the environment can be
base option and so on. incorporated into SCBA
18.4.2 Modifications to Recognise Unquantified For links into inaccessible areas,
Benefits and Other Policy Objectives benefits in stimulated production
through reduced input and
Modifications to the quantified economic benefits have marketing costs should be
been included to recognise benefits and policy criteria included (producer surplus)
that cannot be readily incorporated into a quantified
benefit cost analysis:
Some less easily assessed
benefits, such as education and
 connecting isolated population – recognising health access to remote or poor
that a new transport connection (normally but not communities can be
necessarily a road) into an area with either no incorporated by benefit
existing access or only seasonal four wheel drive weightings – as in TIPS
access has the potential to induce producer Project options that do not
surplus benefits that are not included within the conform to minimum standards
basic evaluation framework which relies on of safety and environmental
transport user surplus. protection should not be
 social benefits – recognising the desire of included
Government to provide a basic level of transport
access to remote and isolated groups of the rural population and that this access provides a
necessary condition for the delivery of primary health and education services as well as
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market access which will ultimately lead to a higher health and educational status and
economic engagement. These hard to quantify benefits are incorporated in TIPS as “social
uplift factors” on quantified benefits and can be adapted to vary by provinces or district
based upon MDG or similar indicators.
 safety and security benefits – where these are not included as quantified economic costs
using recognised methodology. This combined benefit recognises the potential of a project
to reduce transport accidents and the role of projects in assisting in border and internal
security.
 environmental effects – that are not already mitigated with mitigation costs included in the
analysis and where such effects are not sufficient to breach environmental protection
standards and invalidate project selection.
 consistency and support to national planning – to recognise the role of a project in

providing support to the development of an economic corridor or missing link as identified in
the DSP and MTDP and proven through feasibility assessment to be a transport
infrastructure development priority, and/or to recognise the supporting role of the project to
a national agricultural development plan.
 consistency and support to provincial planning – for transport infrastructure supporting

intra-provincial transport movements, to recognise the role in supporting a Provincial
Government’s provincial development plan and/or provincial transport plan or other
recognised transport infrastructure priority process.
The modifying effects are incorporated as factors that amplify or depress the project benefits to a
level that is a best estimate of the benefit increase or decrease that would be obtained if complete
data were available that would allow a more comprehensive economic appraisal including inter-
sector benefit multiplier and accelerator effects. These are discussed further in the following
sections.
18.4.3 Transport User Benefits
Beneficiaries - the direct benefits of maintenance and upgrading existing transport infrastructure
that already has an established level of traffic accrues first to the transport users. These are the
owners and operators of transport vehicles using the system and the people and goods carried.
So for roads, the direct benefits lie with lower operating costs for private vehicle owners, taxi
operators, PMV operators and freight transport operators and travel time savings for travellers and
for those consigning and receiving cargo.
For water transport, the costs typically lie with the port or wharf owner and the benefits are
experienced by the ship operators through more efficient port operations such as reduced waiting
time for berths and faster turnaround time, by ships’ passengers and by those sending and
receiving air cargo.
For air transport, the costs typically lie with the airport owner and the benefits are experienced by air
service operators through more efficient airport operations, less time waiting to land or take-off and
faster turnaround time, by air passengers through time savings and by those sending and receiving
air cargo.
Transfers through fares and charges - in each case, the extent to which the direct benefits are
retained by the transport operator, passenger or cargo interest or are passed on to the passenger
or purchaser of the goods depends on whether there are any changes in the charges made
between the various parties. So, for example, the port or airport operator may raise charges to help
recover costs of the investments made which reduces the amount of benefit to the air operator and,
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in turn, increases may be passed on to the end customer, the air passenger or freight consignee.
These transfers do not affect the economic evaluation directly, although the benefit flowing through
to the end user of the transport service will influence whether transport demand increases as a
result of the project – in the worst case if a project “gold plates” a transport infrastructure investment
and fares rise more than passenger benefit, the effect might be to reduce demand. Estimating the
extent of the demand response is the responsibility of the project analyst.
Reliability benefits - as well as savings in operating costs and time to transport users, there may
also be improvements in the reliability of the transport service, experienced as lower risk of weather
closures and more predictable travel times in normal operation. Improved reliability has been found
in some situations to be as important as savings in travel time. For goods transport, benefits to
cargo owners come from more reliable delivery times and smoothness of goods handling to avoid
damage and loss in value, as well as from lower freight charges.
Factors influencing reliability benefits are the risk of weather delay or closure on the project route,
the availability of a practical alternative route and the importance of the route in the transport
network. International research has shown that the value of reducing the variability in journey time
by one standard deviation is roughly equal to the value of travel time. This allows a set of modifying
factors to be applied to the travel time benefits to recognise the influence of a project in improving
the reliability of a transport link.
Connecting isolated populations, producer surplus benefits - the benefits to transport users
are pass through into increases in the value of land and property and reduction in the prices of
goods and services imported and exported from the area served. So land becomes more valuable
for development when there is transport access, the price of store goods in remote areas may fall,
and the costs to supply inputs to agriculture and to transport produce to market both reduce.
Where new transport infrastructure or services are being provided, and where the most basic and
unreliable access is being improved to all-weather condition, then these flow-on effects can
increase the overall benefits of the project, the lower costs stimulating new production and allowing
people to purchase more goods with the added income. These benefits to producers in the places
given better access should be added to the transport user benefits to give a fuller estimate of
transport benefits of the project. Also the added production and consumption generates new
induced traffic, which also benefits from the lower travel costs and which are included in the base
analysis.
Again, a set of modifying factors can be developed to recognise the value of producer surplus
benefits relative to transport user surplus benefits.
Social benefits – as well as stimulating economic activity and providing market access
opportunities, particularly to those communities remote from the main urban centres and main ports,
transport access provides a necessary means for delivering social programmes such as primary
health care and education, supplying schools and aid posts and facilitating outreach programmes
such as vaccination, maternity services and neo-natal health and health education to prevent the
spread of infectious diseases including AIDS.
Apart from these social programmes, providing transport access to all populated areas of the
country, including isolated remote populations, is a specific objective of Government policy and, in
evaluating transport investment, Government may choose to give special weight to serving
particular areas based on their remoteness and income, as a means of alleviating relative
disadvantage.
In the TIPS model, this has been included as a “social uplift factor” on quantified transport user
benefits. Giving a special weighting for social benefits recognises that improved health and
education status and improved social cohesion by removal of isolation all feed back into economic
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prosperity and wellbeing, but are hard to measure in monetary terms. It also needs to be recognised
that not all effects of transport accessibility are positive, and that some positive aspects of village
life and cultural values may be weakened and accessibility to outsiders may be regarded as
undesirable in some cases. It is important therefore that local community views through Local
Government Councils and District Councils are taken into account when providing new or upgraded
transport links as not all projects will necessarily be welcomed at local level.
Safety and security benefits - an important factor in personal transport is safety, and project
investment may be directed specifically towards improving the safety of the transport system or may
have safety benefits as part of the overall value of the project. It is now well accepted in
international practice that safety benefits can be quantified and included with other transport user
benefits in economic evaluation. Safety benefits include avoidance of damage to vehicles and other
property, reduced costs of medical treatment and emergency services, avoidance of lost output
from injured workers and their families and the social value placed on reducing the risk of fatal,
serious and minor injuries. Valuing safety benefits does not limit the role of safety in setting
minimum standards, particularly for safety-sensitive modes such as aviation.
Environmental effects – in most cases, transport projects are undertaken with environmental
effects treated as negative externalities that have to be either accepted, mitigated or avoided. In
the worst case a project may have to be abandoned or substantially revised if the environmental
consequences are regarded as unacceptable. For example, Government may at some time choose
to create reserved conservation land or marine reserves where new infrastructure development is
prohibited.
The environmental impacts of transport include local pollution from construction, ongoing
infrastructure maintenance and traffic such as air emissions, pollution and sedimentation of natural
water, noise and vibration, impacts on wildlife and ecosystems and global climate change impacts.
There are also environmental effects on people and activities close by transport routes, including
noise disturbance, dust, severance of communities, loss of privacy and security and safety
concerns.
Where land is to be occupied or acquired for the project then there are voluntary or involuntary
resettlement issues as well as compensation, now legislated under the Protection of Transport
Infrastructure Act, and processes to be followed. Apart from compliance with minimum standards
and planning controls, and inclusion of mitigation and resettlement costs as part of the economic
evaluation of a project, environmental effects are treated as consequences of a project.
While some environmental effects can be ascribed with a monetary cost using non-market valuation
techniques, this is difficult, contentious and probably impractical for the time being in Papua New
Guinea. So the approach recommended is to identify and quantify the adverse (or in some cases
positive) impacts according to the numbers affected and the degree of effect or qualitative
description so that environmental factors can be viewed alongside the main quantitative economic
analysis.
Conformity with Vision 2050, DSP and MTDP – the selection of projects should not be contrary
to, or inconsistent with, the long range development plans in these national planning documents.
Assuming that detailed feasibility has shown an economic development corridor or missing link to
be economically viable, then it can be assumed that proceeding with development of the transport
component will be backed up with the required complementary investments in other infrastructure
required to support the population and economic growth projected in the area of influence.
In this respect the economic development corridors will have a greater benefit increment than the
missing links where no specific complementary investment is planned and the benefits derive solely
from shorter transport connections. Until such time as stand-alone feasibility study and economic
analysis is carried out for each corridor and missing link, a modifying factor is applied to the
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transport user benefits calculation to recognise the economic surplus attributable to the transport
infrastructure share of the total corridor investment that has not been quantified in transport user
savings, in a similar way to the producer surplus benefits from connecting isolated areas.
Conformity with provincial development plans – a similar process can be applied for conformity
with national level planning, but in this case to recognise where transport projects form part of an
integrated provincial development plan. If the project is a transport connection with no other evident
development support, then the modifying factor is sufficient to recognise some latent traffic demand
and provincial commitment to maintaining the project in the future. If the project is part of a more
considered integrated development, such as to support agricultural production, then a factor to
reflect producer surplus benefit is included.
18.4.4 Priority for Classes of Transport Expenditure
The priority order for call on funds should be:
 urgent and emergency maintenance to reinstate

209. Priority order for
infrastructure that has been closed or seriously
expenditure
degraded, usually by weather events;
urgent and emergency
 investment required to meet legal operating maintenance to reinstate
requirements to avoid facilities being closed for infrastructure that has been
safety reasons (such as for airports); closed or seriously degraded,
 routine and periodic maintenance applied to
usually by weather events;
standards and frequencies that minimise road investment required to meet
maintenance plus road user costs; legal operating requirements to
avoid facilities being closed for
 rehabilitation or reconstruction of degraded safety reasons (such as for
infrastructure to its original standard; airports);
 upgrading of existing infrastructure to a higher routine and periodic
standard by expanding capacity or improving the maintenance applied to
user performance of the facilities; standards and frequencies that
minimise road maintenance plus
 new infrastructure – new road links, new ports,
road user costs
airports.
rehabilitation or reconstruction of
There is an understandable tendency to underfund degraded infrastructure to its
routine and periodic maintenance in favour of adding original standard;
higher profile new infrastructure. This leads to the
damaging cycle of infrastructure deterioration, high costs upgrading of existing
to users, followed by premature failure and expensive infrastructure to a higher
rehabilitation or reconstruction. A higher economic return standard by expanding capacity
is almost always obtained from timely and sufficient or improving the user
maintenance than from building new projects. performance of the facilities;
new infrastructure – new road
So a primary goal of the NTS and MTTP is that
links, new ports, airports.
infrastructure maintenance be fully funded at national,
provincial and local level. If the transport network cannot
be properly maintained through lack of funding, then there is a case for abandoning lower use
sections and concentrating funding on a smaller core network. This is undesirable and should not
be necessary as PNG has the economic base to properly maintain its existing infrastructure.
However, it does argue for caution in constructing new transport links over long and thin traffic
routes, particularly where there is already existing access and new links are providing additional
cross-connections.
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At all times, forward planning of road investment should take account of the funding envelope. New
projects should go through a systematic process of desktop feasibility, field investigation and
detailed feasibility, then design and tendering, with the opportunity at each stage for the project to
be moved up or down the priority list, or rejected if not good value or if it goes against the
investment strategy. Under this systematic process, new projects should not be introduced directly
into a national budget request without being signalled at least one or more years ahead, so they can
be properly assessed.
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19 Present Structure of Transport Infrastructure Funding
19.1 Sources of Funds
Transport infrastructure is funded from a mix of sources:
 parliamentary appropriations through the national budget process to the Government

transport agencies, primarily the Department of Works, but also the NRA, PNG Ports
Corporation and National Airports Corporation; mainly through the development budget
although from 2010 some road maintenance funding is through the recurrent budget;
 multinational (ADB, World Bank) and bilateral (Australia, Japan, China etc.) donor funds
either grant-in-aid or loans, made to Government or passed through to transport SOEs, with
loans being repaid to terms and conditions specified in the loan instruments; loans and
grants are normally shown in the Government appropriations and monies held in
Government trust accounts;
 parliamentary appropriations to non-transport sector agencies for expenditure on transport
infrastructure, such as the Department of National Planning and Monitoring (DNPM) which
in the recent past has directly administered a number of national, provincial and district level
development programmes and projects which include or are exclusively for transport
infrastructure development, mainly roads;
 national government funds transferred directly to provincial and district administrations
under the reformed intergovernmental financing arrangements; these include funding for
transport infrastructure maintenance under the Service Delivery Function (SDF) Grants;
 members of parliament (district open seats) are also provided with funds for discretionary
expenditures in their districts, some of which are used to fund local transport infrastructure;
 charges made by PNG Ports Corporation Ltd, National Airports Corporation, PNG Air
Services Ltd and the National Maritime Safety Authority which go towards the maintenance
and upkeep of ports, airport, marine and air navigation infrastructure;
 a portion of the excise duty on diesel fuel is transferred from Treasury to the National Roads
Authority for road maintenance purposes and NRA administration;
 provincial governments, exercising their powers under the Organic Law, are legally
authorised to levy a provincial road users tax, although there is no provision that revenues
be expended on road upkeep;
 the tax credit scheme, whereby companies involved in development activities, such as
mining, directly fund and administer infrastructure provision, mainly roads, in return for a
corresponding tax credit; the use of these funds is administered by DNPM;
 as part of memoranda of agreement with landowners and/or for public good motives, some
developers fund public infrastructure provision in development areas, for example the
activities of the PNG Sustainable Development Program in Western Province;
 charitable and church-based institutions which support the maintenance of local level
transport infrastructure, such as rural airstrips, small wharves and local roads, often as
support to their social services (health, education) activities;
 private financing is used to fund private transport infrastructure which may at some point be
transferred to public ownership, examples being logging and agriculture development
roads, mine access roads, airstrips and port facilities, and commercial transport operators
who develop infrastructure to support their operations. In some cases common user access
is provided, either free or for a charge, alongside the private owner’s operations, and in
some cases the infrastructure is restricted to private use; and
 village self-help in-kind inputs to transport infrastructure, so-called “sweat equity”, is now
less prevalent than was once the case; however it still has a place in future consideration of
the overall funding envelope, even if not rewarded through cash payment.
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19.2 Recent Funding and Expenditure Trends
Actual expenditure on transport infrastructure has generally been lower than the original budget
appropriation. This has been for a variety of reasons, including the need for Government to limit
expenditure part way through the year, projects not going forward as quickly as programmed, and
approvals being received close to the year end leaving insufficient time for funds to be applied.
Also, some funds that are not expended immediately are credited to trust accounts, a recent
example being the accumulation of funds in trust for the National Road Authority while that agency
was acquiring its legal mandate and building its organisation. Another area of under-expenditure
has been the tax credit scheme where forecast credits have not been taken up to extent expected.
Expenditure trends for the period 2004 to 2010 are illustrated below. These show expenditure that
is traceable to transport infrastructure maintenance and development although there are some
programmes where the application of funds is not readily identifiable or the proportion applied to
transport compared with other infrastructure. For the statutory authorities and SOEs, the
expenditures are partly from the national budget and partly from internally generated revenue.
19.2.1 Roads Funding and Expenditure
Total spending traceable to road maintenance and construction over the last five years has
averaged a little over K300 million annually, 80% of which has been channelled through DOW, 14%
through DNPM (including DSIP), and 6% via the Transport Infrastructure Maintenance Grant
(TIMG) directly to provinces. About 76% of expenditure has been on national roads and 24% on
sub-national (provincial, district and local) roads. However, the expenditure on sub-national roads
assumes that all of TIMFG, DRIP and DTIP and an assumed 30% of the DSIP funds were spent on
road works. As there is no central reporting of the uses of the funds the actual delivery in
completed works is not known.
K500,000
K450,000
K400,000
K350,000
K300,000
Provinces
K250,000 DNPM
K200,000 NRA
DOW
K150,000
K100,000
K50,000
K0
2004 2005 2006 2007 2008 2009 2010
Figure 31 – Recent Trends in Road Construction and Maintenance Expenditure
Up to 2009, the NRA accumulated its revenues from diesel excise and only in 2009 commenced
active expenditure on road maintenance. However, this is expected to increase rapidly as NRA
takes over maintenance responsibility for an increasing length of national road and by 2015 NRA is
199
expected to fund between K150 and K200 millions of

201. Levels of Funding, last 5
road maintenance, assuming that its revenue stream
years
from road user charges is secured.
Roads:
The great majority of road expenditure has been on
remedial and deferred maintenance and reconstruction K200 rising to K400 M pa,
rather than on upgrading. Where upgrading has occurred average K 300 M from all
it has generally taken the form of pavement sealing of sources; ¾ on national roads
gravel roads with drainage and minor alignment Mainly through from
improvements rather than construction of new road links. Development Budget including
The annual allocation to national road maintenance loans and grants, NRA diesel
outside of remedial, mainly donor supported, projects excise, DSIP and TIMG
averaged about K40 million or under 20% of total road
expenditure. This was transferred from the development Substantial proportion through
to the recurrent budget in 2009. DNPM
actual expenditure only 68% of
Actual expenditure has been only about 68% of budget
budget appropriation
appropriations over the five year period, although this
substantially improved in 2008 and 2009 to around 85%. Maritime:
Also the total appropriation and expenditure on roads has
Main Ports – K45 M pa average,
been increasing, expenditure approximately doubling
85% development and 15%
from K200 to K400 million between 2005 and 2010.
maintenance
Part of the higher spending has come from a substantial Ports development expenditure
increase in Transport Infrastructure Function Grants to mainly through the Development
the provincial governments, together with the start up in Budget to PNGPCL or IPBC
maintenance expenditure by NRA.
Maritime Navaids restoration
19.2.2 Ports and Maritime Infrastructure Funding K16 M pa average
and Expenditure Small jetties programme
expenditure programmed but not
Historically, the larger capital projects at declared ports
executed; little to no expenditure
have been funded from the development budget either
below national level
directly to PNG Ports Corporation or through IPBC as the
holding company for SOEs. The larger projects have had Air:
donor loan support. Maintenance support has not been
Main airports – K10 M pa
made available by Government and has been funded
development through CAA with
from port revenues, although at a lower level than that
maintenance from airport
required to maintain the assets in good condition due to
revenue
the limited revenues obtained from many of the smaller
non-commercial ports which has required maintenance to Donor supported CADIP to
be cross-subsidised from the operating surpluses from improve expenditure on national
Port Moresby, Lae and Kimbe. airports in future
Over the five year period annual capital expenditure has Little to no provision for
averaged about K38 million and maintenance K7 million, provincial airports and rural
a total of K45 million. Projects have included Lae and airstrips
Wewak port extensions, reconstruction at Kupiano and
development at Kimbe. There are some very large expenditures over the 2011-2014 for Lae Tidal
Basin and port expansion and for purchase of mobile harbour cranes, with a number of other port
rehabilitation and expansion projects in prospect.
Maritime navigation aids have been replaced under the donor funded program that established the
NMSA which involved an average of K16 million expenditure over the 2005-09 period. NMSA has
now taken over the ongoing funding of navaids for which about K12 million was budgeted in 2009
200
on an annual basis to fund preventive maintenance, replacements, land leases and community-
based security arrangements. All costs are met from NMSA revenues.
Restoration and replacement of small jetties under the Community Water Transport Project are
being funded through the DOT development budget with donor loan support. However, none had
been completed to the end of 2010, although 40 jetties are planned for construction with a further
160 in the longer term.
While a small part of the TIMFG has been assessed for jetty maintenance at provincial and local
level, the extent to which these funds are actually applied for this purpose is uncertain.
19.2.3 Airports and Air Navigation Services Funding and Expenditure
The Civil Aviation Authority was funded by an average of K10 million per annum over the five year
period to 2009 from the Development Budget to undertake airport and airstrip upgrading. From
2011 responsibility for national airport maintenance and development transferred to the National
Airports Corporation (NAC) with an annual appropriation of K30 million increasing to over K70
million annually on average in future years against the loan funded Civil Aviation Development
Investment Programme (CADIP).
National airport maintenance is funded from NAC revenue. Ongoing maintenance requirements for
the 21 national airports certified to existing usage (F100/Q400 and Dash-8) are estimated at around
K20 million annually to cover periodic resealing, airfield, terminal and fencing maintenance.
However, maintenance costs will rise substantially in future in real terms as some airports are
upgraded to larger jet aircraft (B737-800) or if an alternate B747 capable airport for Port Moresby is
developed at Lae or elsewhere. Even at present standards, the NAC’s ability to adequately fund
maintenance of all 21 national airports is in some doubt.
Below national level, 23 previously national airports have been transferred out of NAC responsibility
mainly to provincial government, but without an accompanying means of funding (Amanab,
Ambunti, Balimo, Bewani, Cape Rodney, Finschhafen, Green River, Hayfields, Imonda, Kandrian,
Karkar, Kikori, Kiriwina, Marawaka, Misima, Morehead, Namatanai, Ningerum, Ruti, Safia, Tadji,
Tapini, Telefomin). The annual maintenance requirement for these airports is estimated to be a
further K6.5 million in 2011 values. These airports currently support scheduled services by Airlines
PNG and charter operations but are already restricted or at risk of closure. There are approximately
72 other active provincial government owned rural airstrips and a further 26 inactive, with an annual
maintenance requirement of K14 million.
At local level there are some 300 rural airstrips classed as active by NEFC out of a recorded total of
about 600. These are under a variety of ownership and management arrangements, with an
estimated maintenance requirement of K75,000, or K22 million in total if all were to be maintained to
a safe and sustainable standard. In practice relatively few of these airstrips remain open and those
that are by the efforts of the users and at the own risk of those using them. While a small part of the
TIMFG has been assessed for airstrip maintenance at provincial and local level, the extent to which
these funds are actually applied for this purpose is uncertain.
Responsibility for the upkeep and upgrading of the air navigation infrastructure transferred to PNG
Air Services Ltd from 2008 which is required to be self-funding commercial entity. Capital
investment requirements also have to be met out of revenue and borrowings, with the upgrading of
Port Moresby’s instrument landing system included within the first CADIP project.
201
20 Functional Hierarchy and Standards of Provision
20.1 Traffic and Access Functions
Transport networks are composed of nodes (road junctions, ports and airports) and links (roads, air
and sea routes). The start and end points for passenger trips are centres of population, from large
urban areas to small remote villages accessed by walking. For freight trips, the start and end points
are areas of production, manufacturing and sale and include plantations, smallholdings, production
forestry, mines, and industrial areas.
The traffic and access functions of transport links and nodes are their function in carrying traffic
through an area and collecting or delivering trips to or from that local area. The hierarchy of
functions classifies transport links and nodes from those that serve primarily a traffic function, with
little or no local access at the top of the hierarchy, and those links and nodes that serve only local
access with no traffic function at the bottom of the hierarchy.
 Highest level – mainly a through traffic function, little to no access function

 Intermediate levels – a mix of through traffic and access functions
 Lowest level – mainly access function, little or no through traffic function
There can be any number of levels in a hierarchy and five levels have been defined for the
purposes of the NTS.
20.2 Primary Transport Infrastructure
Overseas trade and travel are critical to the Papua New Guinea economy, so the main international
traffic gateways and their connecting routes are of primary importance in the transport network. As
the port carrying the bulk of PNG’s exports, the port of Lae, in conjunction with the Highlands
Highway are probably the two most important pieces of transport infrastructure in the country.
When grading the transport infrastructure, the first importance is to provide the population with at
least one connection to the main urban centres and the international sea and air gateways.
Many of Papua New Guinea’s provincial capitals are on the coast or on islands and have limited
land connections. For these provinces the sea ports are particularly important for inter-provincial as
well as international travel. For provincial centres that lie inland, the land connection from a main
port are the most important transport links. This applies to the Highlands provinces and to the large
inland catchments of the Sepik and Fly rivers.
Where provincial centres lying on the coast have a good road connection to Port Moresby or Lae,
then the role of the provincial port becomes less critical, particularly if it is used primarily for coastal
cargo and passenger travel. This is why the port of Kerema is less important now than formerly,
since it has been connected to NCD via the Hiritano Highway. In future, the importance of some
other coastal ports may be reduced as main road connections are developed, such as along the
northern coast.
The general trend internationally is towards fewer but larger capacity ports in each country, with
inland freight distribution as the land transport connections are improved. However, the balance
between providing main port facilities and providing better road connections is an economic
decision and depends on the relative size of the provincial populations, the export production from
the port hinterland and the road distances, standards and costs.
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For the Highland provinces, the Highlands Highway provides the backbone transport link to Lae
and, provided there is at least one reliable and good standard road link from the Highway to each
province, any other inter-provincial connections become a second order priority. Having additional
inter-provincial connections is justified where these provide new access to populated areas and
areas of production, where they genuinely provide an alternative route and better network security if
the main connection to Lae should be closed and where they can be justified from an economic
benefit cost analysis. However, some additional inter-provincial links, because they pass through
low population areas and are costly to construct, have a lower importance in the network than new
or improved provincial roads that help open up isolated pockets of population.
Similarly, within provinces, the first priority is to ensure a reliable transport connection to all
significant areas of population, either by road, sea or river, or air. This will generally mean ensuring
one reliable connection from the provincial centre to each district centres and into all significant
populated areas, particularly where these have untapped agricultural production potential. Providing
additional cross-connections between districts may help with network security, but will generally be
of secondary importance and should be justified by economic benefit cost analysis.
These priorities result in a tree structured road network emanating from the main ports, with some
areas isolated from road access served by secondary ports or airports, which is the form of the
network in Papua New Guinea today. The highest priority will be to develop new branches from the
tree to serve significant areas of population, rather than to create additional cross connections.
Once the road, sea and air networks have each been extended to serve the population and centres
of production as far as it is economically feasible to do so, then the construction of other cross-
connecting links between provinces and districts can be considered as a second stage of network
development.
20.3 Critical Lifelines and Network Redundancy
Another way of looking at the importance of transport links in a network is the impact of removing a
link on the operation of the network. Removing a local access road to a small village has serious
consequences for that village, but very little for the remainder of the network. However if a link were
to be removed from the Highlands Highway, say at Kassam Pass, then the whole of road
communications between the Highlands Provinces and the Port of Lae would be affected, as there
is no alternative route. So importance of links in the network should also include their importance
as critical lifelines.
The lifeline role of a transport link will determine the extent to which the link is engineered to be
proof against closure from natural hazards such as seismic or flood induced damage and route
closure. In some cases, where the natural hazard risks are high, there will be value in providing an
alternative route. A particular case is an alternative to the Highlands Highway route through Simbu
Province which is on unstable geology. There are other locations where roads are at risk from
shifting flood prone watercourses and alternative routes may be economically viable on a risk-based
analysis.
Providing network redundancy through route alternatives helps reduce the impacts of closure of the
main route, but there will often be a choice between reducing the risks on the existing route versus
the cost of a route alternative. In some cases, all that may be needed is a local diversion that is
capable of carrying traffic while the main route is repaired. In other situations there may be a case
for a wide diversion. However, if the alternative delivers traffic to a different destination (for
example, to Madang or Port Moresby instead of Lae), this is not a full substitute and may be of less
value. The reason for the trip may require it to end at Lae or, for export shipping, there may not be
the facilities or overseas shipping service at another port.
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20.4 The Functional Hierarchy
The functional hierarchy that has been developed for the NTS is shown in the table below. The
levels are shown from I to V and include the size and importance of the areas served together with
whether the connection is the primary link for an area or provides a secondary connection. Where
connections are secondary, in that they provide an additional transport link conferring some network
redundancy but with no other primary function, they are rated one level lower.
Areas of economic production include agriculture, forest resources, minerals, oil and gas,
concentrations of manufacturing industry and any special export processing zones that may be
established in future. Forestry, minerals and oil and gas will generally support the development of
transport infrastructure as part of projects, as will some large scale agriculture, so tend to lead
development of the transport infrastructure where none already exists. In some cases, Government
is then able to “piggy-back” on this resource development to improve the transport access to areas
that might otherwise have been uneconomic to provide.
In the case of airports, there is currently only one international gateway of any size, which is Port
Moresby International Airport (PMIA). However, Nadzab and Mount Hagen are important hub
airports and Tokua a gateway for the Island provinces. For ports, Lae, Port Moresby and Kimbe are
the most important in terms of cargo throughput and all are international gateways.
Table 15 – Functional Hierarchy for Transport Infrastructure

Level in Ports and Airports Roads
Hierarchy
 Main international gateway and PNG  Primary connections from Level I ports
regional ports and the main and airports to national and provincial
I international gateway and hub centres and to major areas of economic
airports. production;
 Primary connections between provinces.
 Other ports handling significant  Primary connections from Level II ports
volumes of overseas cargo, serving and airports to their provincial capitals
other provincial centres and/or other  Primary connections from provincial
significant areas of economic centres to district centres and to other
production significant areas of economic production
II  Other airports handling significant  Secondary connections between
volumes of overseas traffic, serving provinces
other provincial centres and/or other  Connections to international land border
significant areas of economic crossings
production
 Other ports and airports generally  Primary connections from Level III ports
serving district centres or and airports to the district centre or other
catchments of over 10,000 areas generally of over 10,000 population
population, or over 5,000 population in the hinterland served
without a road or (for airports) a  Primary connections from provincial
III water connection to the provincial centres to other areas generally of over
capital 10,000 population
 These ports and airports generally  Primary connections to high schools,
support, or could potentially support, hospitals and health centres
regular services on a scheduled or  Secondary connections between district
inducement basis centres
 River and coastal landings and rural  Road connections from Level IV ports and
airstrips serving other areas airports
IV  Occasional charter, private and local  Road connections to other areas
use
 Subsidised services via CWTP
 coastal and river landings suitable  Minor roads and tracks providing only dry
only for small craft weather access for four wheel drive
V  minor landing areas suitable only for vehicles
rotary wing operations
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20.5 Relationship to Other Classifications
This functional hierarchy applies principally to the rural

transport network rather than to urban roads, although 211. Functional Hierarchy
the road connections in this hierarchy penetrate the Need for a classification of
urban areas (they do not stop at the urban boundary). transport routes and terminals
Within the larger urban areas, there is similar hierarchy of based on function in connecting
arterial roads, collector/distributor roads and local access provinces, districts, towns, ports
roads. However urban road networks are better treated and airports that is separate
separately. from national/provincial
ownership or funding
Roads managed centrally by DOW are denoted in the
arrangement
RAMS system as:
A five level classification has
 NR - national routes, reserved for the recognised been developed
main rural highways;
Each link is rated according to
 NM - national main roads, which are a second
its function in connecting
level to NR roads and also include some urban
provinces, districts, other
sections;
concentrations of population,
 ND - national district roads, a level further down ports, airports and social
again; and infrastructure (schools and
 NI - national institutional roads. The NI roads are health facilities)
generally relatively short access roads linking
This classification is
government facilities to the main network (police
independent of the ownership or
stations, barracks, training colleges, institutes
administrative responsibility
etc.) but also include oil palm estate and access
(DOW, NRA, PNGPCL, NAC,
roads in New Britain.
Province etc.) and funding
The numbering system is four digit, the first two digits a arrangements;
provincial identifier (except for NR roads which are Standards of provision are
denoted 00) and the third and fourth digit a road identifier. related to volume of traffic
The roads are further broken down into RAM segments. carried and functional
Provincial roads are given a P number in RAMS, again classification
with a provincial two digit identifier and a four digit road
identifier. The provinces have in some cases adopted the Standards of route security
RAMS numbering but others use their own systems. should also take account of
critical lifelines and network
The classification of a road under RAMS provides a redundancy
general indication as to its importance and place in the
Routes that are critical lifelines
functional hierarchy, but there is not an exact one-to-one
and have no alternatives should
correlation.
be constructed and maintained
For ports, the declared and other (undeclared) ports to a standard that gives them
again give a general picture of relative importance but added security against
there are declared ports that are now not operational and unplanned closure
have become less important while there are also ports The Highlands Highway retains
not under PNG Ports Corporation ownership that have its importance as “backbone
been developed as part of resource projects and have an infrastructure” connecting the
importance in the network. inland highland provinces with
the main coastal ports, in
For airports, the functional hierarchy will to some extent
particular Lae
be associated with the design aircraft for sizing runways
and the required approach surface controls and
navigation standards. The levels of design aircraft are (a) wide bodied jets (B7370-800 and larger
205
in the case of PMIA) (b) large turboprop aircraft (F100, Q400) (c) small turbo-prop (DHC-6) and (d)
light aircraft (Cessna 206).
20.6 Identification of Transport Assets by Functional Hierarchy
The maps in Figure 13 to Figure 20 show the functional hierarchy for each transport mode as the
network presently exists. As missing links and other new road links are constructed, some outlying
road sections that presently serve only rural access will be reclassified to a higher level appropriate
to their new functional status. The DOT will develop a full database of the functional classification
and mapping of all national and provincial transport infrastructure as it now exists and in its ultimate
future development.
20.7 Standards of Provision for Infrastructure
20.7.1 General Considerations and Responsibilities
The standards of provision for transport infrastructure will 212. Standards of Provision
be based on the following considerations:
 position in the functional hierarchy;
General Considerations
 the level of use; position in hierarchy
 the economics of provision; and level of use – traffic carried
 harmonization with recognised international and economics of provision
national codes and practice
harmonization with recognised
Standards may include minimum required levels of international and national codes
provision (mandated standards), and desirable levels of and practice
provision (guideline standards) in relation to the above
Parameters
considerations.
availability – limits on outages
Parameters that will be taken into account in setting
standards of provision include: user performance – technical
criteria
 network availability – acceptable limits on the
frequency and duration of closures; safe design and operation
 user operability – technical characteristics of the security
facilities provided;
environmental compliance
 safe design and operation;
 security – in particular for cross-border transport Responsibility
operations; and DOT, responsible transport
 environmental compliance agencies, external agencies with
cross-cutting responsibilities
In general, a higher position in the functional hierarchy
will be accompanied by higher standards of provision.
The responsibility for setting standards will involve the Department of Transport in respect of overall
policy and planning considerations, the transport agencies responsible for management and safe
operation of the infrastructure assets (DOW, NRA, PNG Ports, NMSA, NAC, PNGASL, CASA) , and
external agencies with cross-cutting responsibilities such as the Department of Environment and
Conservation.
20.7.2 Standards for Rural Roads
The guideline standards for rural roads will be based on a combination of: (i) network function; (ii)
total traffic volume (iii) use by heavy traffic (iv) costs of construction versus terrain; (v) natural
206
hazard risk management; and (vi) user operability. The following standards are proposed but will be
subject to ratification and amendment by the proposed Standards Working Group (see Section 8.8)
Network Function: Irrespective of traffic volume, roads with a high network classification justify a
good standard of surface, alignment and reliability (low risk of closure). For example, the traffic level
along the Highlands Highway is greatest near the larger towns and populated valleys and is least
over mountain passes. However, the Highlands Highway has the same important network function
over all of its length and this requires that some of the design standards be to a consistent high
level along the length of the highway.
Traffic Volume: Roads carrying higher volumes of traffic can justify higher standards of design than
low volume roads. In particular this affects carriageway width, horizontal alignment and gradients.
Also, where rural roads carry volumes of traffic in excess of 2,000 vehicles/day and are limited in
sight distance, auxiliary passing lanes may be justified. Where traffic volumes and network function
are both low, then it will be sufficient for the road to be single lane per direction.
Heavy Traffic: Roads carrying high volumes of heavy traffic warrant some particular design
standards, such as lower maximum road gradient, wider road shoulders for heavy vehicles to pull
over, and extra widening on curves. Some roads may be required to carry extra-heavy or extra-
large loads, and this may justify increased loading capability for bridges and other road structures,
and greater horizontal and vertical clearances. At present most bridges are rated as T33 or T44
standard. T33 was a pre-1976 Australian standard approximately equivalent a 33 tonne semi-trailer,
and T44 from 1976 to 2004 approximately equivalent to a 47 tonne semi-trailer. Post-2004,
Australia has adopted the SM1600 standard, which caters for heavier loads again and may be
appropriate for heavy traffic routes, such as the Highlands Highway from Lae to the Southern
Highlands.
Unit Costs and Terrain: While it is desirable to maintain consistent design standards along a road
route, the costs of construction are heavily influenced by topography and geology. Roads can be
classified by the nature of the terrain, with more difficult mountainous terrain requiring some
compromises in road alignment compared with flat terrain. Mountainous terrain is more likely to
involve more hard rock cut, whereas at the other extreme swampy terrain may require the use of
geotextiles, deep removal of organic material and raising and preloading of road embankments. So
guideline standards also vary with terrain.
Natural Hazard Risk Management: natural hazards, particularly earthquakes and storms can give
rise to slips and flood damage that can close roads for protracted periods. The network
classification allows for important roads to have a lower risk of closure which can be provided by
higher standards of engineering or by providing route alternatives. Standards for the acceptable
length of route closure are included in the guideline standards.
User Costs: the costs of using the road as experienced by the road user are a combination of the
vehicle operating cost (or fare or freight charge), the time taken (or average travel speed), the ride
comfort and the perceived safety of the route. Vehicle operating costs are largely a function of road
geometry and road surface roughness, rougher surfaces being more damaging to vehicles and
cargo and also less comfortable for passengers. The RAMS data base includes road roughness
and a composite road condition index that rate road surfaces a good, fair or poor. Roughness and
condition index can serve as proxies for user costs.
Guideline technical standards for road design and management features that vary with functional
classification are proposed in Table 16 below. The standards are for the network function or the
annual average daily traffic (AADT) in vehicles per day, whichever is greater. These guideline
standards will be considered by DOW in conjunction with NRA, DOT and the IPEPNG, amended
and extended as necessary and then adopted for general use.
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Table 16 – Guideline Minimum Performance Standards for Rural Roads

Item I II III IV V
Traffic, more than vehicles/day 1,000 500 200 50 0
Road Passability (other than
during closures)
% of time passable in dry not not
weather by two wheel drive 100% 100% 75% required
required
vehicles
% of time passable in wet not not
weather by two wheel drive 100% 95% 50% required
required
vehicles
% of time passable in wet not
weather by four wheel drive 100% 100% 95% 90% required
vehicles
Road Closures
maximum number of minor not
5 10 15 25 required
closures (< 4 hours) per year
maximum percent of time closed not
for more than 4 hours with 1% 5% 10% 20% required
diversion alternative
maximum percent time closed for not
more than 4 hours without nil 1% 5% 10% required
diversion alternative
Vehicle leading dimension limits
maximum overall length, trailer 20.0
combinations, m
maximum width, m 2.5
maximum height, m 4.3

Vehicle mass limits (bridges)
designated heavy vehicle routes ≥ T44 (SM1600) *n/a n/a n/a
other routes T44 T44 ≥T33 ≥T33 n/a
Bridge lanes, minimum
short bridges (≤ 20m length) 2 2 1 1 1
long bridges (> 20m) 2 1 1 1 1
Road standards
number of traffic lanes, min 2 2 2 1 1
gravel/ earth
surface type sealed sealed gravel
earth
surface, short steep grades sealed gravel earth
surface condition rating (RAMS)
% good 95% 90% 80% 70% n/a
% fair 5% 10% 20% 30%
% poor 0% 0% 0% 0%
no more than 5% of surface
roughness measurements 5.5 7.5 10.0 n/a n/a
exceed IRI (International
Roughness Index)
maximum short gradient % 10% 12% 14% 16% 25%
max sustained gradient % 8% 9% 10% 12% 20%
design speed, km/h:
flat to rolling terrain 100 80 60 50 20
hilly terrain 80 60 40 30 10
mountainous terrain 60 40 20 15 5
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Item I II III IV V
sealed pavement width, m
flat to rolling terrain 7.5 7.0
hilly terrain 7.0 6.5 n/a n/a n/a
mountainous terrain 6.5 6.0
pavement + shoulder width, m
flat to rolling terrain 9.5 8.5 7.5 5.0 4.0
hilly terrain 8.5 7.5 7.0 4.5 3.5
mountainous terrain 7.5 6.5 6.0 4.0 3.5
Notes: * n/a – not applicable
For road safety, the crash exposure increases with increasing traffic volume and measures to
mitigate traffic hazards are more economically viable as traffic levels increase. At present there is
no road safety or roadside hazard rating system in place for Papua New Guinea roads and this is
one of the future objectives of transport policy. When such a rating system becomes available, then
then higher standards will be required for roads carrying higher volumes of traffic and for higher
levels in the functional hierarchy.
General environmental protection and mitigation standards apply to road construction and
maintenance techniques and these are not directly related to road function. Similarly, for new
construction, the desirable or required degree of environmental mitigation is related more to the
surrounding natural and built environment than to road characteristics. The Department of Works
“Environmental Impact Guidelines for Roads and Bridges” provides information for the preparation
of Environmental Management Plans, including environmental treatments for issues commonly
arising during road and bridge construction. However, these Guidelines need to be reviewed and
formalised to ensure that they comply with international best practice, are well attuned to the
environmental issues encountered in Papua New Guinea, that there is clarity in how and when they
are to be applied and how they inter-relate to the wider environmental legislation and procedures of
the Department of Environment and Conservation.
20.7.3 Standards of Provision for Ports
Type and Size of Vessel

The leading dimensions and layout of port facilities are largely guided by the size and types of
vessel using the port. The main design characteristics are the vessel length, draft at the berth, form
of cargo loading and quantity of cargo transferred. Liquid and dry bulk carriers may require
dedicated berths or ports, particularly if associated with a single industry and cargo interest (oil and
gas, palm oil, bulk cement, grain, ore slurries). The extent to which these bulk facilities can be
shared with general cargo may be limited. Rough cargo, such as logs, also use dedicated berths
and around the PNG coast export logs are mainly loaded from small coastal landings associated
with logging projects where the landing and forest roads are temporary in nature.
For general cargo, a large proportion is unitised in some form, mainly in ISO 20ft and 40ft
containers, including refrigerated (reefer) units. Container cargo is currently handled by geared
vessels, that is self-supporting vessels equipped with deck mounted cranes for ship-shore transfer
alongside. PNG Ports has recently acquired mobile shore-based cranes for Lae and Port Moresby
which will provide additional cargo transfer capacity. Break bulk (non-unitised) cargo is transferred
by ships’ derricks or port mobile cranes.
Another form of cargo transfer is roll-on roll-off vessels (RoRo) equipped with stern or quarter ramp
access for cargo handling equipment and vehicles to the ship’s loading decks. Car carriers are
another form of RoRo. Motorised landing barges are also used around the PNG coast, flat bottomed
209
open deck vessels equipped with bow ramps that can be lowered onto shelving barge landings
which are provided at several ports.
The size of vessels that can be accommodated at each port can also be length and draft
constrained by navigation at the port approaches, and the depth of channel available. The ability of
ships to dock can be affected by the state of tide, wind and sea conditions depending on the
configuration of the harbour.
The international shipping lines serving Papua New Guinea trade on routes to Australasian, Pacific
and Southeast and East Asian Ports. They are regional in nature and for shipping to onward
destinations such as the Americas, Europe and other parts of Asia. Cargo is transferred onto larger
vessels at regional hubs in Australia, Indonesia, Singapore, China, Korea and Japan.
Typically these vessels are medium size geared cellular container and mixed container/break bulk
carriers of capacity from 500 to 1700 TEU capacity, up to 180m in length and 11m draft.
The main coastal shipping services are provided by a combination of second tier operators using
general cargo vessels and landing craft of 50 to 100m length and 750 to 5000 tonnes load capacity
and operators who cross over from international services using their larger vessels and serve the
larger ports.
Below this is a third tier of smaller cargo/passenger landing craft typically 30 to 50m equipped with
bow ramps to allow the versatility of alongside or RoRo operation where there is a landing pad or
suitable shoreline conditions. The Border Development Authority has a number of such vessels in
service or in prospect to serve the designated border province coastal communities. However,
these vessels are rather large for the volumes of cargo moving on feeder routes. Two companies
also provide passenger ferry services in vessels of 30 to 50m length.
Smaller again are workboats, mainly of wooden construction from local yards, of 10 to 25m length
with both passenger and cargo capability providing unscheduled feeder services to small jetties and
landings. At the lowest level are small “banana” boats, outboard equipped open fibreglass
workboats of about 10m length. Although relatively expensive to operate, banana boats are popular
for being able to provide a fast responsive service for small amounts of cargo and passengers;
however they are also frequently overloaded posing safety risks.
Berth Occupancy and Cargo handling

The standards of provision for ports should attempt to minimise the overall costs of providing port
facilities and the costs to the users in ship and cargo delays. Service criteria that can be used as
indicators of the standard of provision are the probability of not finding an unoccupied berth (that is
the probability of having to queue), the average time spent queuing and the rate of cargo transfer.
Investment in upgrading and maintenance that increase the berthage length and number of berths
available or increases the cargo handling rate will bring down the probability of queuing, and such
investments should be analysed individually to determine their financial and economic feasibility.
However, as a general guideline, the standards can be applied as shown in Table 17. The more
berths of a type that are available, the higher the overall occupancy rate can be for a similar degree
of ship queuing.
Standards for Minor Jetties and River Landings

Standards designs for minor jetties have been developed by the Community Water Transport
Project. The typical layout for jetties is a small T-head with trestle and/or causeway to land,
sufficiently large for mooring and loading vessels of up to 10 to 15m length alongside and also to
cater for banana boats and traditional craft. All goods are loaded and discharged by hand.
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For some sheltered river landings where jetties are unsuitable, a floating pontoon landing design
has been developed.
Table 17 – Guideline Standards for Ports
Guideline maximum monthly

berth occupancy
International container berths
1 berth 50%
2 berths 60%
3 berths 65%
Coastal general cargo berths
1 berth 50%
2 berths 60%
Cargo handling rate, containers
shore based crane, TEU/h 15
ships crane, TEU/h 10
RoRo, TEU/h 8
barge 6
Cargo handling rate, break bulk
ships crane, t/h 150
RoRo, t/h 75
barge, t/h 75
Port Security
All international ports of entry will be required to comply with International Shipping and Port
Security (ISPS) standards for land access to the port facilities, to ensure that risks of illegal and
unsafe movements of people and goods across the border are minimised.
ISPS provisions will also apply to situations where there may be direct ship to shore transfers of
passengers and goods from overseas shipping outside of the ISPS certified ports.
20.7.4 Standards of Provision for Airports

Airport and air navigation standards are more rigorous and more highly codified than either port or
road, mainly because of the much more stringent safety regime that surrounds air transport.
For the aerodrome, the leading characteristics determining physical standards are the categories of
aircraft using the airport, whether international or only domestic air traffic is handled, whether the
airport supports both day and night operations with the consequent airfield lighting requirements,
and the air navigation systems in use. For the smaller airports, there is a distinction between visual
and instrument flight operations.
The categories of aircraft using the airport and the sector lengths flown determine the runway take-
off length requirement. The aircraft types and take-off weight also determine the loads applied to the
aircraft pavement and the design strength requirements. The aircraft wingspan and length
determine taxiway and stand separation distances and positioning of terminal services.
The leading physical features are the approach and take off lengths of the main runway, in each
direction, the facilities required for taxiing and aircraft stands so that ground movements are
facilitated, the passenger boarding method and gate numbers, the air cargo and baggage handling
systems and the sizing of the passenger holding areas within the terminal. Finally, the landside road
access and parking arrangements affect the efficiency of the airport.
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Airport design is codified in publications by the International Air Transport Association (IATA), the
International Civil Aviation Organisation (ICAO) and the Federal Aviation Administration (FAA). In
addition Papua New Guinea must also harmonise its air transport standards and practices with its
Pacific neighbours, particularly in regard to international operations, aviation security, upper
airspace control and overflying arrangements.
Table 18 – Typical Standards for Airports by Network Functional Classification

Functional Classification I II III IV V
B747-400ER B737-800 F100/Q400 Dash-8 DHC-6
Design aircraft range
A330-300 F100/Q400 Dash-8 DHC-6 C206
3,500 2,300 1,700 1,100 700

Runway length range, m
2,500 1,700 1,100 700 300
45 30 23 18 -
Runway width range, m
30 23 18 - -
300 150 80 60 45
Strip width range, m
150 80 60 45 30
Note: actual lengths and widths to comply with IATA, ICAO and NAC/CASA standards; runway length requirement will
depend on elevation, temperature and take-off weight.
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21 Transport Infrastructure Deficiencies
21.1 General
Over the last 25 years there has been persistent under-investment in the transport infrastructure at
national, provincial and local level. Under-investment in maintenance of existing infrastructure has
led to unnecessarily high rates of deterioration which have then required substantial rehabilitation or
reconstruction, often funded through development assistance. Also, financial resources have not
always been well directed and best practice construction and maintenance methods have not
always been applied.
Expansion of the capacity and extent of the network over the last quarter century has been limited
to essential investment to address traffic congestion in the main urban centres, particularly Port
Moresby, and some new links mainly for access to mining and oil & gas development. Investment
in rehabilitation of the main rural roads, main ports and airports has been sufficient to keep facilities
operational, although often at a sub-optimal standard and not without some periods of disruption.
However the second tier of district roads and provincial ports and airports have overall deteriorated
while the lower level rural infrastructure has in places suffered badly, many rural airstrips having
closed, many coastal jetties and landings now unserviceable and rural access roads impassable.
Overall, there is a large deficit between the existing state of the physical transport infrastructure and
the desirable levels of service indicated by the functional hierarchy and in national and provincial
development planning.
21.2 The Road Network
Table 19 shows the shortfall in surface type and condition for the main national highways compared
with the standards proposed for the corresponding functional class as of 2010. Most NR roads are
Class I in function once they are fully developed, apart from the Wabag to Mendi Road and the
Sepik Highway which are Class II. However, until some of the missing links and economic corridor
connections are made, the outlying parts of some highways have a lower functional classification in
practice and an unsealed surface standard is appropriate until that time.
Table 19 – National Highways condition versus standards

Per cent of length
Per cent of length not to
Road below (good) surface
(sealed) surface standard
condition standard
Existing Future Existing Future
Function Function Function Function
NR001 - Hiritano 29% 29% 43% 43%
NR002 - Magi 39% 73% 39% 44%
NR003 – Northern 15% 44% 44% 49%
NR004 – Wau (Trans-Island) 20% 20% 64% 68%
NR005 – Wabag to Mendi 91% 91% 81% 81%
NR006 – Enga 0% 0% 67% 67%
NR007 – Highlands 6% 6% 19% 19%
NR008 – Ramu 42% 42% 51% 51%
NR009 - Coastal 56% 67% 16% 63%
NR010 – New Britain 44% 54% 56% 57%
NR011 – Bundi 0% 100% 57% 95%
NR012 – Sepik 28% 28% 57% 78%
All NR Roads 33% 44% 50% 52%
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This table will be extended to national main roads, national district roads and other roads
progressively in future development of the NTS and updated to maintain currency.
The percentage of road length that was not to sealed standard at the end of 2010, and should
desirably be so for the existing road function was one third of the length of the NR network, a little
over 1,000 kms. When the NR roads perform their future
Existing and Emerging Gaps
function this rises to 44% or about 1,400 km. Note that
between Transport Demand
this does not include the missing sections of these main
and Infrastructure Provision
national routes.
213. Roads
Similarly the percentage of length that was below the
proposed standards for good condition (95% for Class 1, National routes (NR) – 33% that
90% for Class II, 80% for Class III and 70% for Class IV), should be sealed to serve their
was about 50% for the present function of the NR present function remained
network and 52% for the future condition once all unsealed as at 2010 and this
connections are made. rises to 44% when the future
function of these routes is
Highways that stood out as being below the desirable considered
standards for their functional class were the Wabag to
50% of the national routes were
Mendi Road, which was almost entirely unsealed at the
below a good surface condition
time and largely in poor surface condition, the Bundi
Highway if it is to be re-established to perform an inter- Notable deficiencies were:
provincial linking role and alternative to the Highlands
- Wabag-Mendi Road
Highway, the western part of the Sepik Highway and the
- Bundi Highway
Highlands Highway to Wau Road, particularly if it is
- Sepik Highway
extended in future as part of a Trans-Island link or to
- Lae-Wau Road
connect through to Popondetta as one of the economic
corridor roads.
This deficiency analysis will be extended to all of the performance indicators in future development
of the NTS, once baseline data are collected and analysed.
21.3 Ports, Coastal and Marine Navigation
PNG Ports Corporation has had limited revenues and development budget with which to maintain
the declared ports, many of which are loss making in terms of port revenues versus operating and
maintenance costs. Consequently there are unmet deferred maintenance and repair needs at all of
the ports to varying degree, with the ports carrying lower levels of traffic attracting relatively less
expenditure. In particular, maintenance dredging at the berths and approaches of the smaller ports
has been carried out to the minimum necessary to allow the ports to remain open. There has also
been deterioration of wharf structures, pavements and buildings.
Lae is the largest port in Papua New Guinea and gateway to the Highlands Region. The port
suffered earthquake damage in year 2000 and there has been general deterioration through low
levels of maintenance. Existing deficiencies stem from the inability to make use of all the berthage
length, insufficient depth alongside and limited well-configured cargo storage area in the face of
increasing size of vessels, cargo volume growth and a predominance of container cargo for a port
that was originally designed to handle smaller ships and break-bulk cargo. Delays of up to 3 to 5
days are regularly experienced, with berth occupancy well above that for an efficient operation.
Additionally there is insufficient berthage for passenger vessels. However, the port is now at the
start of a donor assisted programme of port rehabilitation, upgrading and expansion.
Port Moresby is also experiencing congestion, particularly berthing and storage. Also the port is
constrained in its development by its location on the foreshore of Port Moresby town, with road
traffic having to negotiate congested urban roads for access. As well as expansion of the existing
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container berth and storage area, this has given rise to a call for consideration of a new location for
publicly owned port facilities at Port Moresby. However, the development of privately owned port
infrastructure at Motukea Island to support the LNG project has with potential capacity for more
general use.
Kimbe, while not experiencing the same degree of congestion as Port Moresby and Lae, has
general rehabilitation needs for the main overseas and small ships wharf and improved mooring
and pipeline connections for larger liquid bulk vessels for palm oil exports.
Madang overseas wharf is in need of rehabilitation and

pavement resurfacing. The role of Madang port in relation Existing and Emerging Gaps
to the expansion of Lae and whether the new port between Transport Demand
development at Basamuk Bay to support the Ramu nickel and Infrastructure Provision
project could have potential as an alternative main port 214. Maritime
development, or a new port at another location, is a
Lae – the main Highlands
strategic decision to be considered in future planning.
gateway for freight; repairs and
Rabaul port has suffered from accelerated siltation of the expansion needed to increase
harbour and berthage from volcanic ash run-off following capacity and efficiency
the eruption of 1994, which poses an ongoing Port Moresby – existing port
maintenance cost. The existing natural harbour has many expansion and master planning
advantages and is well located in relation to sea routes to determine role in relation to
but East New Britain Provincial Government has plans to privately owned Motukea and
explore alternative port sites for future strategic need or otherwise for port
development. relocation
Wewak overseas and small ships wharves require Madang – rehabilitation needs
rehabilitation and the overseas berth requires extension and longer term decision on
to better cater for the size and number of vessels. possible relocation
On Bougainville, there has been development of Buka Rabaul – frequent dredging
port in recent years although Kieta has historically been requirement due to volcanic ash
the main port for the island. With the relocation of the and future development
centre of administration back to Kieta/Arawa, there is a planning required
demand to rehabilitate Kieta overseas wharf. Kieta/Buka – reopening of Kieta
Other PNG Ports Corporation ports generally require wharf and development with
dredging and general maintenance but without expansion respect to Buka as
needs. administration shifts back to
Arawa/Kieta
At a provincial level, as with airstrips, there are a large
Extensive rehabilitation/
number of small ports of call around the PNG coast and
replacement needs at several
inland waterways. Many have become derelict, while
hundred minor ports, jetties,
many others remain open with minimal maintenance
river landings
intervention or are maintained by users. There are 500 to
600 hundred recorded as historical or existing ports of Some outstanding restoration of
call, although not all will have had wharf or jetty small navigation aids along the
structures. The Community Water Transport Project has coast and main river systems
so far identified over 100 to be included in franchise (Fly, Sepik, Ramu etc.)
routes and a similar number feature in Provincial
development and transport plans.
Coastal maritime navaids have been substantially restored and rehabilitated over the period of the
NTDP. Further development is required to rehabilitate day markers and beacons for some coastal
routes and inland water ways. While this will largely result in a maintainable coastal and inland
215
waterway navigation system, there remain improvements to be made for vessels transiting through
PNG waters, in particular pilot and improved navigational aids and vessel tracking services in
Torres Strait, Jomard Passage, China Strait and other environmentally sensitive areas.
21.4 Airports and Air Navigation
In a recent review by the ADB, the state of the nation’s national airports was characterised as
having: low compliance with safety and security standards, creating risks of accidents and illegal
movements of people and goods; air-side pavements, terminal buildings, equipment, and utilities in
poor condition; swiftly deteriorating pavements; and inadequate maintenance. The air navigation
systems were described as unreliable and deteriorating
because of old and obsolete equipment, lack of spare Existing and Emerging Gaps
parts, theft and vandalism, unreliable power and between Transport Demand
communications, and logistics problems. This was and Infrastructure Provision
leading to operational problems, including unplanned 215. Air
airport closures, diversions and constraints on air
operators in their investment in new more efficient aircraft
Port Moresby International
types.
(Jacksons) Airport –
experiencing apron and terminal
Port Moresby International Airport (PMIA) was last congestion; increased runway
expanded in 1995-2000, when the new international length, expanded/ renewed
passenger terminal was opened. Also, the second terminal facilities and larger
parallel runway has been decommissioned opening up apron as set out in recently
some options for rearrangement of taxiways and apron. completed master plan.
A recent master planning study for PMIA has identified Lae – development as alternate
that the airfield and runway capacity is sufficient to cater international airport to PMIA
for the forecast growth in aircraft movements but that
plans to operate longer range international services Other NAC airports – upgrading
would require an extension to the main runway. to comply with ICAO certification
standards for security and
The passenger terminal apron is congested, with runway length and strength for
insufficient aircraft stands and the taxiway system needs F100 operation.
rearranging for efficient ground movement of aircraft. The
cargo and other aircraft maintenance and general
Provincial airports – ongoing
aviation aprons need rationalisation. The international
recurrent and remedial
passenger terminal is lacking in passenger processing
maintenance needs to avoid
capacity through check-in, immigration and security
closure.
giving rise to departure delays. Also the passenger Rural airstrips – heavy
concourse and departure areas are lacking space and maintenance and rehabilitation
associated commercial franchise facilities are limited. On of approximately 400 remote
the landside, the airport access roads and parking airstrips to maintain operability.
facilities are inefficient and routes into Port Moresby are
affected by traffic congestion.
PMIA is the only airport with capability for large wide bodied jets, and there is no diversion alternate
airport with similar capacity within PNG, which is recognised as desirable by Government to reduce
reliance on neighbouring Australian airports. The second airport at Nadzab, serving Lae, has been
identified as a possible alternate to PMIA, or a new or smaller airport could be expanded to provide
this facility.
The most pressing deficiencies at the other NAC airports is the non-compliance of several under
ICAO certification standards for Fokker F-100 operations even though these aircraft are already in
service in replacement of the F80. The airports requiring upgrading are Madang, Goroka, Gurney,
Buka, Momote, Vanimo and Hoskins, with the deficiencies being variously runway length, pavement
strength and surface condition, runway shoulder width, standby power supply and airport boundary
216
security fencing. The upgrading of these airports to certification standard is therefore an important
priority.
At provincial level, 23 airports previously maintained by CAA have been devolved to provincial
governments in addition to those already under provincial government management. These airports
typically support DHC-6 Twin Otter scheduled services by Airlines PNG and third level scheduled
and charter services. The ability of the provinces to adequately provide for the upkeep of these
smaller provincial airports is extremely limited and the number that remain operable is gradually
reducing.
Below this level are small rural airstrips of which there around 400 in number although many are
unserviceable, maintained by Local Government Councils, village groups, missions and private
persons and companies. Many of these airstrips have heavy maintenance needs beyond the
capacity of local resources which is forcing closure to fixed wing operations and reliance on more
expensive servicing by helicopter for access. Government policy is to rehabilitate and re-open
selected airstrips based upon need.
PNG Air Services Ltd faces a significant challenge in the rehabilitation and upgrading requirements
for the air navigation infrastructure in both the lower and upper airspace. In the lower airspace, air
airport-related ground-based navigation systems are in poor condition and face problems with
vandalism and are being replaced with satellite-based navigation. In the upper airspace, PNGASL
must continually upgrade the services it provides for overflying aircraft which are an important
revenue source, to maintain competitiveness and compatibility with adjacent air navigation regions.
21.5 Modal Integration and Overall Coverage
Historically there has been a lack of overall integration in

the development of the transport modes and between Existing and Emerging Gaps
national and provincial level. Port, airport and road between Transport Demand
system development have been pursued independently. and Infrastructure Provision
For example the port of Lae and Highlands Highway are 216. Modal Integration
both essential to the movement of PNG’s main exports
and unbalanced development of one and not the other
Development of the main
will not give the best outcome for investment. It has been
highway network, main ports
generally recognised that transport sector investment has
and airports has proceeded
been concentrated on roads and the results of the recent
independently and with little
TIPS 2010/11 study has supported the view that more
coordination.
investment in the main commercial ports will yield good Insufficient attention has been
economic returns. This also involves an efficient land/sea paid to land/sea and land/air
interface, including attention to road links from the interfaces.
strategic network to the ports of Lae and Port Moresby
There has been an imbalance of
with relocation of port facilities and creation of inland
investment concentrating on
terminals where justified.
roads with relatively less
At the local rural level, there are coastal and river investment in main ports and
communities that rely on access by water where road is airports.
not an option in the foreseeable future and other There has been insufficient
communities in inland valleys who rely on air. Attention is coordinated planning of land, air
required from the level of national planning in conjunction and water transport connections
with the provincial governments to better integrate the to remote communities with
development of the rural network so that all significant provincial disparities.
concentrations of population have at least one reliable
transport link to their district centre and that all district centres are reliably connected to their
provincial capital and to the primary transport network.
217
22 Development Cost of the MTDP
22.1 Cost Escalation
In developing cost estimates for new construction, upgrading, rehabilitation and maintenance of
infrastructure, all future costs are shown in 2010/11 kina values. When preparing budget
submissions for future years, allowance must be made for general currency inflation and differential
inflation for civil engineering works.
The cost estimates presented make the assumption that there is no differential inflation between the
costs of civil construction and general costs in the economy. Over the past decade the global prices
of inputs to construction such as cement, steel and fuel have increased at a higher rate than
general inflation. High costs can also arise where there is limited market competition in the
construction sector, and when there is high demand for construction resources, both of which have
been the case in parts of Papua New Guinea. However, past experience is not necessarily a
predictor of future trends, so a neutral position has been taken in preparing the NTS. Nevertheless,
future updating of the NTS should include monitoring of cost trends and where differential inflation is
apparent, adjustment of unit costs and project cost estimates.
22.2 Road Network
22.2.1 National Roads – New Links
The economic corridor roads and missing links identified

in the DSP and MTDP, together with some existing roads Development Cost of the
where connections need to be re-established and MTDP
potential national roads identified in provincial plans, form 217. New National Road Links
the long list of new road links for consideration. Other new
links include potential re-routing of the Highlands Highway The total cost of constructing the
and urban arterial roads in NCD, such as the proposed missing links and economic
airport link. corridor roads in the MTDP is
estimated at K 27 billion
An economic analysis for several of the economic corridor
New links with an indicative BCR
roads and missing links has been carried out as part of
greater than 1.0 (that is
the TIPS 2010/11 study although the results should be
economically feasible) are:
regarded only as an initial screening stage to establish
possible priorities for further detailed feasibility due to the - New Britain Highway (Bialla-
approximate nature of the costs and technical feasibility of Kerevat)
the routes and uncertainty regarding traffic demand. The - Gulf to S Highlands
MTDP envisages that full feasibility studies for these new (Samberigi – Erave)
links will be carried out over the first five year period 2011- - Bundi Highway restoration
2015 and this is endorsed by the NTS. Such feasibility - Lae-Wau road extension to
studies should be broadly based and consider the Popondetta via Garaina
development potential and benefits in the new corridors - Southern Corridor, New
and development of the links on an incremental staged Britain
basis. - Trans-Fly (Morehead-
Oriomo)
The prioritised new link projects are shown in Table 20.
Few, if any, of the missing links are found to achieve the minimum BCR of 1.0 (EIRR of 12%) in this
analysis. The most promising projects are described below:
Highlands – Lae/Madang alternative route: to improve network reliability an alternative route

linking the Highlands Region with the Morobe/Madang coast that avoids the unstable area of
geology in Simbu Province is desirable.
218
Table 20 – Initial Screening Prioritisation of New and Restored Road Links

Road Connection Indicative Road Missing Economic New Estim- Capital BCR Overall
Construct- No. Link Corridor Length ated Cost K from Ranking
ion Period kms Traffic million TIPS
veh/day Model
Bialla – Kerevat (part of New Britain Highway – log track upgrade) 2016-2020 NR-10 ML - 50 (of ) 500 500 3.41 14
Towei - Kopi – Samberigi – Erave Road (part of Gulf to S Highlands) 2016-2020 NR-01 EC PRAEC 160 (of 265) 400 420 1.60 41
Kundiawa – Ramu (Bundi Highway – restore/upgrade link) 2016-2020 NR-11 existing - 12 (of 98) 250 290 1.81 47
Garaina – Ioma – Popondetta (Northern Highway extn) 2016-2020 NR-03 CR Central 120 200 990 1.38 54
Cross-Island Road - Gasmata – Kandrian – Gloucester (ENB-WNB) 2021-2025 ML South Coast 56 (of 432) 150 980 1.08 57
Rabaul – Tol – Pomio – Cross island Road 2021-2025 ML South Coast 147 (of 436) 150 1,700 1.09 70
Morehead – Malam – Daru (Western) 2021-2025 CR Border(Trans-Fly) 25 (of 79) 150 1,000 1.11 77
Kimbe – Gloucester (part of New Britain Highway) 2021-2025 NR-10 - 150 0.94 91
Baiyer River - Aiome - Amele (WHP to Madang, alternate to Bundi H/way) 2026-2030 ML MBKG (1) 160 200 1,200 0.79 93
Kerema - Towei (part of Gulf to Southern Highlands, Hiritano extn) 2026-2030 NR-01 ML / PR PRAEC 75 250 2,600 0.57 101
Wau – Garaina – Morobe Patrol Post (Northern Highway extn) 2026-2030 NR-03 ML Central 136 100 1,300 0.53 101
Aitape – Vanimo (Coastal Highway) 2026-2030 NR-09 CR - 80 40 290 0.30 105
Bariji – Safia – Moreguina (Oro to Central P, Northern Highway extn) 2026-2030 NR-03 EC Central 96 100 860 0.32 116
Bogia – Angoram (Madang to ESP) 2026-2030 NR-09 EC / ML Momase 76 70 250 0.29 116
Malalaua – Wau (Trans-Island Road, Eloa Valley route 2026-2030 NR-04 CR - 176 250 1,300 0.68 119
Kiunga - Mendi (Western P - SHP) 2026-2030 EC - 180 150 1,600 0.58 119
Kiunga – Aiambak –Obo – Morehead (Western) post-2030 CR Border 200 40 3,300 0.31 124
Saidor – Wasu – Sialum (N Coast Huon) post-2030 ML Morobe-Madang 97 40 500 0.30 124
Bewani – Imonda – Amanab – Green River – Telefomin (Sandaun to WP) post-2030 ML Border 305 30 2,900 0.09 131
Siara Junction – Soraken – Kunua – Koripobi – Torokina – Boku (W Bvlle) post-2030 ML Solomons 167 30 1,500 0.15 141
Pagwi – Ambunti – Kuvenmas – Laiagam (ESP to Enga) post-2030 ML Enga-Sepik 193 90 980 0.24 142
Kopiago – Oksapmin –Telefomin –Tabubil (SHP to Western P) post-2030 ML - 153 80 1,600 0.22 142
Bubuletta-Motau-Lavora-Raba Raba-Agaun Road post-2030 ML - 159 30 1,330 0.07 142
Notes: ML and EC – missing links and economic corridor roads as in Table 4.2 of DSP; CR and PR – corridor road, proposed road as in DSP map.
219
Options are (i) to restore the Bundi Highway link from Kundiawa to the Ramu Highway, which would
provide a slightly less direct route to Lae or would connect with Madang, requiring reconstruction of
about 12 kms and upgrading of the adjacent sections; (ii) the longer (160 km) new proposed Baiyer
River to Madang road, from Western Highlands, which would draw on a smaller catchment of
population and would require the port of Madang to be viable in the role of an alternative port to
Lae; (iii) an intermediate route from Banz through the Jimi Gap to connect to Usino and (iv) a more
localised re-routing of the Highlands Highway in Simbu Province across more stable terrain.
Gulf – Southern Highlands link: This is the PRAEC corridor, a top priority for Government. The
link from Kopi via Gobe to Samberigi and Erave requires only a relatively short (40 km) connection
to complete, for which construction is expected in 2013/14, and could be served by sea to Kikori or
a new Gulf port nearby. To make the road connection to Port Moresby requires either (i) an almost
300 km connection from Kopi to Kerema skirting the base of higher ground north of the several river
deltas in Gulf province; this route has advantages of providing access to isolated Gulf population
and is more likely to be technically feasible than the alternative of (ii) a shorter but extremely
mountainous route to Ialibu through a less populated area. A feasibility study is required that
considers options of the Southern Highlands being served by sea and road or via one of the two
road alternative.
Trans-Island Road: this route has long been considered for a road link between Port Moresby and
Lae and various feasibility studies have been carried out. The link is from Malalaua in Gulf Province
near the end of the existing section of the Hiritano Highway to the Lae-Wau road. It is shown on the
DSP map of missing links (reproduced in Figure 1). An alternative is via a link from Malalaua via
Kaintiba to link with the Aseki Road. There are route alignment and technical feasibility issues but
no more so than many of the other missing links and the latent traffic demand should at least match
that on other long distance missing links.
Northern Highway, Lae to Popondetta: this lies in the Central Corridor which is a priority under
the MTDP. The missing section is from Wau to Garaina and then to Popondetta via Ioma. There
are options of a direct inland route or a connection along the coast via Morobe patrol post. The
inland route appears the most likely but a feasibility study is required for this together with any
possible extension across the island to Moreguina on the Magi Highway in Central Province, which
appears less likely to be feasible.
Magi Highway link to Milne Bay – this involves connecting the missing section from east of
Kupiano at Babaguina to the Sagarai River near Gadaisu on the Milne Bay border. The terrain is
relatively easy and the corridor is moderately populated with plantations, forestry and economic
potential. An exploratory feasibility study was carried out some years ago but no work is currently
programmed.
New Britain Highway – the MTDP priority is for a route along the south coast connecting Rabaul,
Pomio, Kandrian and Cape Gloucester. However, the New Britain Highway along the north coast
already mainly exists between Rabaul and Kimbe apart from around 50 km of linking sections, on
which work is proceeding under GoPNG funding. This area also has economic importance for oil
palm and has a moderate population density. The south coast route appears technically more
difficult and is longer and higher cost so may be a longer term project. In the meantime, most of the
towns along the south coast are linked by sea and the area is one of the proposed routes for the
Community Water Transport Project.
Lae – Finschhafen – is a relatively short link of about 50 kms which would connect the south and
east Huon coastal settlements to Lae. It can be seen as a much more ambitious and long term
project to complete a route around the Huon peninsular and through to Madang. Some construction
work has been commenced under MP’s funding.
220
Bogia – Angoram - this is part of the Coastal Highway connection along the north east coast,
linking Madang, East Sepik and West Sepik if the Aitape-Vanimo link is also completed. Resources
have already been committed to commencing work on the Bogia to Angoram section but there are
costly engineering challenges in crossing both the Sepik and Ramu Rivers close to their estuaries
which most likely would be by ferry, and the surrounding swampy terrain.
Other proposed missing links and corridors are considered to be technically very challenging and
high cost, while their traffic function is relatively low and the areas that they pass through of low
population density. These less obviously feasible proposals include:
 East Sepik to Enga – from Pagwi on the Sepik River west to Ambunti, a ferry crossing of
the Sepik, then across the flood plain to the south and over the dividing range through the
remote mountain settlement of Maramuni to join the Wabag to Laiagam road in Enga
Province.
 Kopiago to Tabubil – an east-west connecting link between Southern Highlands and
Western Province, via Oksapmin and linking Telefomin. This connects a number of small
mountain settlements but across mountainous terrain and with low traffic demand. There is
no clear economic purpose for the link.
 West Border route – this ambitious route from Bewani to Telefomin and then from Kiunga
to Daru is proposed as a border economic corridor connecting from Sandaun to Western
province. Parts of the route, in particular the Trans-Fly section, may be individually feasible
and useful as intra-provincial roads but connecting the full route involves new roads over
long lengths of difficult and relatively uninhabited terrain. Due to its remoteness there would
probably be important natural environment issues connected with this route. Its role in
assisting (or otherwise) border security is unclear and there are no obvious economic
benefits.
 West Coast Bougainville – from Siara junction at the north of the island down the west
coast to Koripobi where there is an old road, then connecting Torokina and to the cross-
island road near Boku. The west side of Bougainville is relatively low population compared
with the east, south and north and traffic demand is expected to be similarly low.
22.2.2 Construction of Additional National and Provincial Roads
The MTDP has established targets for additional roads to the missing links and economic corridor
roads. In some cases these additional roads will be feeders to the missing link and corridor roads
and in other cases will be priorities established by provinces. The aim is for the full length of the
national road network in PNG to attain 25,000 kms by 2030.
The total length of public roads in Papua New Guinea, based upon the national RAMS database
and data from the extension of RAMS to the provinces comprises the approximately 8,400 km of
national roads and 20,000 kms of other provincial, district and local roads. If all of the missing links
and economic corridor roads are constructed, this would add approximately a further 3,400 kms.
The MTDP also envisages that 4,000 kms of provincial roads would be either upgraded or be new
construction, also by 2030. The length of secondary and feeder roads required to provide access
within the economic corridors from the main connectors has yet to be determined. However, as
many of the missing links pass through sparsely populated areas, for the purposes of the NTS,
1,000 kms are assumed to be new roads associated with the corridors, a further 1,000 other new
provincial roads, and the remaining 2,000 kms upgrading of existing roads.
The MTDP anticipates that all national roads will be managed and/or owned by the Department of
Works as they are progressively upgraded under the targets set out in the MTDP. The higher traffic
sections comprising the core road network for which maintenance can be financially supported from
road user charges will be brought under the management of the National Roads Authority. The
residual local roads will remain the responsibility of provincial and local government councils. On
221
this basis, the projected development of the road network and its ownership is shown in Figure 32
below.
40,000
35,000
30,000
25,000 Under NRA ownership
kms 20,000 Under DOW ownership
15,000 Under Provincial/Local

ownership
10,000
5,000
0
2010 2015 2020 2025 2030
Figure 32 – Projected National Road Length and Ownership/Management
22.2.3 National Roads – Upgrading
Upgrading of national roads will generally involve

replacing gravel surfaces with bitumen seal where roads Development Cost of the
are not already to sealed standard and where the function MTDP
and traffic volumes warrant, with associated alignment 218. Upgrading of National
and side and cross-drainage improvements. In most Roads
cases, bituminous sealed surfaces will be double surface
treatments of stone chip and bitumen over a crushed Targets have been established
aggregate or stabilised road base but, for high traffic at 5 year intervals for sealing all
volume roads carrying substantial numbers of heavy national roads by 2020, with
trucks, asphaltic concrete construction may provide a 1,800kms of the 16 Priority
more economical solution. Roads at K 2.1 billion having
precedence, followed by4,800
The functional classification has indicated that Class I andkms of other national roads.
II national roads will normally be sealed and the MTDP
There is no need for multi-lane
has also provided targets for sealing the national road
roads outside of the main urban
network, which requires that some lower classification
centres; however passing and
roads, including all of the institutional access roads, also
climbing lanes may be
be sealed within the 20 year period. The MTDP interim
considered on some higher
targets for sealed length have been converted to
traffic sections of rural highway
percentages of each road class and sub-targets
developed for each level of priority for the 16 priority roads .
and for each of the NR/NM/ND/NI classifications for the remainder of the national network (Table
21).
222
The remaining unsealed sections of the 16 priority roads,

with costs and BCR from TIPS 2011 are shown in Table 218. Upgrading of National
21. Where the roads are not continuous, the BCRs for Roads
upgrading the adjacent unsealed sections do not allow for National roads need to be
the connection of missing links and the consequent assessed for reliability against
increase in traffic. closure, a monitoring system for
closures established, and road
The total unsealed length of existing priority road sections
drainage upgraded to cope with
is around 1,800 kms, with an estimated cost of upgrading
increasing rainfall intensities and
to seal exclusive of bridge costs of about K2.1 billion in
duration in the future.
2011 values. Relatively few of these sections justify
upgrading on economic criteria alone at existing levels of The total cost of new road links,
traffic. upgrading to seal and
rehabilitation of national and
In general, the traffic volumes on rural sections of Papua provincial roads to satisfy the
New Guinea’s road network do not yet require more than MTDP is estimated at K46
two traffic lanes. However, on some higher traffic volume billion, of which K11 billion is for
sections (typically exceeding 2,000 vehicles/day) provincial roads and K35 billion
overtaking lanes may be desirable, particularly where for national roads.
sight distances are limited and on uphill sections to
provide opportunities to pass slow vehicles.
Table 21 – Road Sealing Targets in MTDP and proposed NTS

National Roads Actual 2011 Target % sealed
kms sealed % 2015 2020 2025 2030
16 Priority Roads
Very High Priority 1,588 63% 75% 90% 100% 100%
High Priority 1,113 60% 65% 80% 95% 100%
Medium Priority 895 43% 50% 65% 85% 100%
Total 3,597 57% 65% 80% 95% 100%
Other National Roads
Routes (NR) 482 2% 50% 100% 100% 100%
Main (NM) 1,239 26% 30% 50% 80% 100%
District (ND) 2,161 14% 20% 35% 60% 100%
Institutional (NI) 937 10% 20% 35% 60% 100%
Total 4,819 15% 25% 45% 70% 100%
Notes: MTDP targets in bold italics, NTS detailed targets remainder
Upgrading works may also be undertaken to improve the reliability of a route against unplanned
closures such as areas of flooding and those prone to slips. Works may require local realignment,
widening and cutting back of embankments, raising the road level and raising the road at bridge
crossings. In future, climate change is likely to increase rainfall intensities and duration and worsen
these problems. All national roads should be assessed for closure risk and a system established to
monitor and record periods of closure so that performance against the norms set out in Table 16
can be measured.
Bridges may be upgraded as part of the upgrading of road sections or may be undertaken as
separate works and are discussed below.
223
Table 22 – Remaining Priority Road Sections for Upgrading to Sealed Standard

Unsealed Cost K TIPS
Road Section kms mill. model
BCR
Very High Priority
Boluminski Highway (NIP) Matakam Br to near Manga 79 118 0.1
Koroba-Mendi Road (SHP) Mendi to Nipa 58 71 0.3
Koroba-Mendi Road (SHP) Nipa to Tari 97 119 0.6
Koroba-Mendi Road (SHP) Tari to Koroba 41 50 0.3
New Britain Highway (WNB) Nuau Br to Obatubu Br 105 129 0.05
New Britain Highway (WNB) Galoku Br to Buvussi Jnc 30 37 0.04
Sub-total 410 524
High Priority
Sepik Highway (Sandaun) Mai to Lumi 61 74 0.2
Coastal Highway (Sandaun) Aitape to Sandaun Border 92 113 0.6
Coastal Highway (Sandaun) Sandaun Bdr to Vanimo 109 71 0.2
Coastal Highway (Sandaun) Vanimo to Bewani Jnc 70 75 0.1
Coastal Highway (Sandaun) Bewani Jnc to Wutung 44 32 0.2
Hiritano Highway (Gulf) Malalaua to Kerema 52 38 0.7
Coastal Highway (Madang) Korak Br to Deigum Br 43 47 0.2
Coastal Highway (ESP) Angoram to km 31 31 35 0.2
Sub-total 502 485
Medium Priority
Kokoda Road Euru Br to Mamba Br 47 58 0.5
Wau Road Bulolo to Wau 26 32 0.3
Magi Highway Kupiano to Gadaisu 61 74 0.1
Magi Highway CP Border to Sagarai R 78 96 0.1
Magi Highway Sagarai R to Gumine Br 12 15 1.7
Ramu Highway Saussi Br to Wasigo Br 57 71 0.2
Ramu Highway Tapo Crossing to Umin Br 19 23 0.2
Northern Highway Oro Bay to Bareji Jnc 35 18 0.1
Sub-total 335 387
Total 1,247 1,396
Note: costs are 2010/11 base and derived from TIPS estimated; some part sections have been estimated pro rata.
22.2.4 National Roads – Rehabilitation
For national roads that are already constructed to sealed standard, the MTDP target is that these all
be rehabilitated to good condition by 2030. Priority for rehabilitation will be given according to road
functional classification, traffic volume, existing condition and cost. However, indicative targets for
the four classes of national road are shown in Table 23 below.
Table 23 – Targets for Rehabilitating Sealed National Roads
National Roads Actual 2011 Target % good condition

kms % fair or 2015 2020 2025 2030
poor
Routes (NR) 1,730 38% 70% 80% 90% 100%
Main (NM) 604 34% 70% 80% 90% 100%
District (ND) 306 66% 50% 65% 85% 100%
Institutional (NI) 97 85% 30% 55% 80% 100%
Total 2,738 42% 66% 77% 89% 100%
Estimated Cost, K mill 1,284 252 340 357 335
224
These require about 60 km of road to be rehabilitated to good condition annually from 2012. The
total cost over the period of the NTS is estimated at K1.3 billion in 2011 values, based on TIPS
2011.
22.2.5 National Roads – Bridges

Bridges are an integral part of road links and all bridges
along a route should be built and maintained to a Development Cost of the
standard consistent with that of the road, including MTDP
reliability against closures from flooding and other 219. Rehabilitation of National
incidents. The standards in Table 16 propose a minimum Roads
of two lanes for bridges on Class I links and also for
Class II links for shorter bridges. Bridge loading
Targets are set at 5 year
standards are generally T44 loading in Papua New
intervals for rehabilitating sealed
Guinea, although increased capacity to accept
national roads to good condition
overweight and over-dimension loads on strategic routes
by 2020 at a cost of K 1.2 billion.
carrying heavy traffic such as the Highlands Highway
At present 42% are in fair or
should be considered where economically justifiable.
poor condition.
220. Bridge Upgrading or
The structural form for bridges will be a technical decision Replacement
based upon site conditions, accessibility, industry
capability and construction costs. However, the practice Bridges on national road
of using rapid deployment steel component “Bailey” type sections that are upgraded or
bridges for permanent construction, while expedient in rehabilitated should also be
some circumstances, does not normally give the most repaired, upgraded or replaced
economic design solution and does not assist the as necessary to T44 or higher
development of the local civil engineering design and standard
construction industry. Upgrading or replacement of
A systematic bridge replacement programme on national
over 50 bridges on national road
roads will form part of the NTS. ADB assistance has been
sections at a cost of K63 million
secured for one component of such a programme which
have been identified as being
seeks to replace single lane Bailey bridges on national
economically feasible in their
roads where upgrading to two lane permanent
own right
construction is justified on grounds of traffic delay, road 534 bridges require upgrading or
safety and route security, with usable components of the replacement on the 16 Priority
replaced structures being re-used at priority locations on Roads at a cost of K735 million
non-national rural roads. although few of these are
economically justifiable
The TIPS study has developed an initial prioritisation for
bridge replacement which can form a starting point for
development of the on-going bridge programme. The following road sections are listed by priority of
BCR for bridge upgrading or replacement to T44 standard, for projects achieving a 12% EIRR.
Further projects achieving under 12% EIRR or that are not quantifiable on available data are set out
in the TIPS reports.
The bridge prioritisation has made a number of broad assumptions regarding loading capacity,
residual life and the economic impact of closure. Also road safety and congestion are excluded.
Consequently a more detailed appraisal is required prior to including TIPS bridge priorities into the
programme of works.
225
Table 24 – TIPS Bridge Upgrading or Replacement

Section
No. of Cost
Road Section length BCR
bridges K mill
kms
NR0007 Highlands Highway Waterais to Goroka 124 8 17 5.0
NM3701 Koroba Road Mendi to Nipa 58 9 7 2.8
NR0006 Enga Highway part 1 90 18 18 2.8
NR0005 Wabag to Mendi Road Wabag to Sirunki 28 1 2 2.6
NR0008 Ramu Highway whole length 11 1 1 2.6
NM3101 Tabubil Road Tapko to Tabubil 51 1 5 2.0
NM4801 Warongoi Road whole length 56 1 2 1.8
NM3701 Koroba Road Nipa to Tari 97 14 11 1.2
Total 515 53 63
In addition to the bridges prioritised by BCR, bridges on the 16 priority roads identified by TIPS
2010 for upgrading or replacement to T44 standard are shown in Table 25 below. There are 534
bridges in all at an estimated order of cost of K 0.74 bn.
Table 25 – Bridges for Upgrading or Replacement on the Priority Roads

No. of Cost BCR
Road Section
Bridges K mill
Very High Priority
Highlands Highway Lae to Nadzab 25 43.7 0.2
Nadzab to Waterais 64 123.7 0.1
Waterais to Goroka 8 16.7 5.0
Goroka to Kundiawa 0 0.0 -
Kundiawa to Mt Hagen 0 0.0 -
Mt Hagen to Mendi 0 0.0 -
Boluminski Highway Kavieng to Fangalawa 0 0.0 -
Fangalawa to Karu 7 3.7 0.9
Karu to near Manga 17 10.4 0.8
Koroba-Mendi Road Tari to Koroba 16 10.2 0.8
Nipa to Tari 5 19.0 <0.1
Mendi to Nipa 14 10.9 1.2
Porgera-Togoba Road whole length 9 7.4 2.8
Wabag-Mendi Road Wabag to Sirunki 0 0.0 -
Sirunki to Mendi 1 1.9 2.6
New Britain Highway Rabaul to Gaulim 0 0.0
Mt Uluwan to Hoskins 8 7.9 0.2
Hoskins to Kimbe 6 14.2 <0.1
Sub-total 180 269.7 0.6
High Priority
Sepik Highway Passam to nr Hayfield 18 29.0 0.1
nr Hayfield to Karaitem 0 0.0 -
Coastal Highway (west) Angoram to Wewak 22 13.1 0.2
Coastal Highway (west) Wewak to ESP border 38 27.5 0.5
ESP bdr to Wutung 36 22.8 0.1
Baiyer Road Baiyer - Part 1 0 0.0 -
Hiritano Highway P Moresby to Veimauri 11 35.1 0.1

Veimauri to Bereina 9 15.6 0.1
226
No. of Cost BCR

Road Section
Bridges K mill
Bereina to Kerema 4 8.5 0.2
Coastal Highway (east) Madang to Surumarang Br 22 29.3 0.1
Surumarang Br to Awar 63 68.1 0.1
Sub-total 223 249.0 0.1
Medium Priority
Kokoda Road first section 17 19.5 0.2
Wau Road H/Hwy to Mumeng 13 40.0 0.1
Mumeng to Wau 12 23.9 0.1
Buka Road Tunuru Jnc to Wakunai 0 0.0 -
Wakunai to Kokopau 0 0.0 -
Magi Highway P Moresby to Launakalana 8 12.8 0.4
Launakalana to Kupiano 4 8.6 0.2
Kupiano to Ganai 5 8.8 0.1
Magi Highway CP Border to Sagarai 16 22.6 0.2
Sagarai to Alotau 0 0.0 -
Ramu Highway H/Hwy turnoff to Bundi 28 34.4 0.1
Bundi to nr Madang 16 27.7 0.1
Madang 1 0.7 2.1
Northern Highway Popondetta to Kokoda 10 16.7 0.1
Sub-total 130 215.7 0.1
Total 534 735 0.3
Note: as indicated by TIPS 2010
In total, the estimated cost to upgrade the 16 priority national roads to sealed standard, together
with bridge upgrading and replacement is K2.9 bn.
22.2.6 Summary of Road and Bridge Construction, Upgrading and Rehabilitation

The costs of upgrading the remaining unsealed national roads to good sealed standard are
estimated in Table 26 below, which summarises the overall costs by five year period of the NTS
required to achieve the targets in the MTDP for new construction and upgrading.
Table 26 – Summary Indicative Costs for Road Construction, Upgrading and Rehabilitation
National Roads Estimated Cost in K millions (2011 values)
Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
New Construction
Economic corridor & missing links 26,850 3,000 5,400 6,700 11,750
(2)
New provincial & district roads 5,000 0 2,500 1,250 1,250
Sub-total, new construction 31,850 3,000 7,900 7,950 13,000
16 Priority Roads – upgrade to seal
Very High Priority 750 250 300 200 -
High Priority 500 50 200 200 50
Medium Priority 750 100 200 250 200
Sub-total, 16 priority roads 2,000 400 700 650 250
Other National Roads – U/G to seal
Routes (NR) 650 300 350 - -
Main (NM) 1,100 50 300 450 300
District (ND) 2,350 150 400 700 1,100
227
National Roads Estimated Cost in K millions (2011 values)

Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
Institutional (NI) 1,050 100 200 300 450
Sub-total, other national roads 5,150 600 1,250 1,450 1,850
Sealed National Roads – rehab.
Routes (NR) 675 150 175 175 175
Main (NM) 175 25 50 50 50
District (ND) 200 50 50 50 50
Institutional (NI) 100 25 25 25 25
Sub-total, sealed roads rehab. 1,150 250 300 300 300
Provincial and Other Roads
Provincial – upgrade to seal (2) 2,500 0 1,250 625 625
Gravel and earth rehabilitation 3,000 750 750 750 750
Sub-total, provincial & other roads 5,500 750 2,000 1,375 1,375
Total new, upgrading & rehabilitation 45,650 5,000 12,150 11,725 16,775
Notes: (1) Costs include new, upgrading and replacement of bridges (2) these are new and upgraded provincial and district
roads as anticipated in the MTDP some of which support the economic corridors; they will become part of the national
network under DOW/NRA ownership/management
22.3 Ports, Coastal and Marine Navigation
22.3.1 National Ports under PNGPCL
A number of port development and rehabilitation projects currently in prospect by PNG Ports
Corporation Ltd have been evaluated by economic benefit cost ratio in TIPS 2010/11 as shown in
Table 27 below. All projects were evaluated against an appropriate level of maintenance of the
existing infrastructure. In many cases this is a higher level of maintenance than can be afforded
under existing budgetary arrangements. A number of other projects not included within TIPS, such
as the Lae tidal basin and associated container terminal and berth 1 reconstruction, and those other
projects included in the 2011 development budget submission, are also shown.
Not included in the table are funding requirements for the port master planning exercises, for which
a total of K30 million were requested, but not funded, in the 2011 development budget submission.
Table 27 – Short to Medium Term National Port Project Proposals

Port and Project Cost K mill BCR Commitment / Timing
Lae
Berth 1 and tidal basin project 770 not inc (2) in progress, ADB loan
Wharf extension and hardstand 300 1.5
Liquid bulk (tanker) berth extension 275 0.9
Berth No. 3 extension 78 3.9
Wharf mobile cranes 36 10.0 funded 2011-2012
Pavement repairs 4.5 49.7
Port Moresby
Berth 4a extension 190 2.7
Wharf mobile cranes 36 13.2 funded 2011-2012
Barge crane 10 0.0
Dumb barge 3.5 38.2
Incinerator 5 not inc (2)
Kimbe
Pipeline and offshore mooring 80 0.01 2011 budget submission(1)
228
Port and Project Cost K mill BCR Commitment / Timing

Main wharf rehabilitation 35 0.04
Small ship wharf rehabilitation 13 0.04
Mooring dolphins 10 0.3 2011 budget submission(1)
Dredging 2 4.3
Madang
Overseas wharf rehabilitation 41 0.02
Pavement resurfacing 1.5 0.9
Rabaul
Dredging 4 7.0
Wewak
Overseas wharf extension 104 0.02 2011 budget submission(1)
Coastal berth extension 52 0.03
Small ships wharf rehabilitation 3 0.05
Buka
Kokopau wharf 200 0.004
Pavement rehabilitation 3 0.1
Oro Bay
Dangerous goods facility 15 not inc (2) 2011 budget submission (1)
Dredging 2 4.4
Kieta
Kavieng
Dredging 2 0.1
Lorengau
Port rehabilitation 40 0.01
Alotau
40 not inc (2) part funding PIP 2012-
Overseas wharf extension
2015
Coastal wharf rehabilitation 17.5 0.1
Daru
Approach trestle 18 0.001 2011 budget submission(1)
Dredging 2 0.2
Aitape
Wharf rehabilitation 10 not inc (2) 2011 budget submission(1)
Vanimo
Dredging 2 3.7
PNG Ports passenger terminals project 15 not inc (2) 2011 budget submission(1)
Total cost for works with BCR > 1 1,513
Total cost of all works 2,479
Notes: (1) included in development budget submission for 2011 but not funded or included in the PIP for outyears to 2014;
(2) projects not included in TIPS 2010 evaluation
In general, capital projects at the two largest commercial ports of Lae and Port Moresby show the
greatest economic benefits for invested capital. For the smaller ports which support less cargo
volume, the first priority is to maintain the facilities in operable condition, which generally show a
positive net economic return, but upgrading is harder to justify.
For a few of the national ports, Daru being one example, even the cost of maintaining port facilities
at their present level falls short of producing a positive economic return, and much less a financial
return. This is particularly the case if the port has been allowed to fall into disuse; for example
Aitape is not recorded as carrying any traffic, a considerable capital expenditure is required to
229
rehabilitate the wharf and any future road extensions along the north coast may undermine its future
viability.
The MTDP target for the 16 national ports is that all be progressively rehabilitated and upgraded
over the 20 year period, four ports every four years. Rehabilitating ports where there is ongoing
expectation that investment costs will be matched by port revenues is an appropriate objective,
although upgrading should take place as cargo demand increases and not necessarily be
concentrated into one time period. So it is likely that there will be justification and cargo demand for
ongoing investment in the upgrading of Lae, Port Moresby and possibly Kimbe throughout the
period of the NTS.
Strategic development at the ports of Port Moresby, Lae,

Madang and Rabaul will require further study. In the case Development Cost of the
of Port Moresby this should take account of the roles of MTDP
the public and private sector, including possible PPP 221. Ports
arrangements, possible relocation of the port facilities in
downtown Port Moresby and the future role of the port
The total cost of development
facilities that have been developed at Motukea Island.
projects for the national ports in
the short to medium term is
In the case of Lae, there will be ongoing demand for port estimated at K2.5 billion, of
expansion and there will be a need to investigate how this which K1.5 billion is for
can be accommodated at the present location, through economically justifiable projects.
port expansion and the possible development of an inland This does not include longer
port terminal with connecting transport link. Again, the term development at Port
potential for private sector involvement in port financing Moresby, Lae, Madang, and
and operation should be considered. Rabaul for which master plans
An increased role for Madang in relation to Lae for must first be prepared.
international and domestic trade lies behind the MTDP A further K0.5 billion is required
suggestion of port relocation, together with consideration for the 200 minor jetties and
of the Basamuk Bay port developed for Ramu Nickel as a landings envisaged under the
potential site. Such an investigation should be carried out CWTP and small jetties projects
jointly with the feasibility studies for either the Bundi
Highway or the proposed Baiyer to Madang link as an
Relatively small additional
alternative access to the Highlands. For international
capital investment is required in
trade, fewer rather than more international ports is the
small maritime navaids
most likely scenario and an expansion at Lae and the
upgrading and restoration of the Bundi Highway or development of an alternative route to Lae port
from the Highlands, seems a more attractive option.
The port of Rabaul is a well-located and a good natural harbour apart from the problem of volcanic
ash siltation. Retention of the present site, accepting an ongoing need for dredging seems the most
likely option, but a feasibility study of development options is warranted.
For the other national ports, individual feasibility studies of each port, the connecting road network
and cargo demand from developments in the port hinterland will be carried out to determine an
appropriate development path. In some cases ports may be either closed or devolved to provincial
or private ownership where they no longer have a sustainable role in the transport system, for
example where land connections have diverted trade away from coastal shipping or where the
location served has less importance (such as Samarai). In other cases, the ongoing maintenance of
the ports, where these are not commercially viable, will be dependent on suitable arrangements for
funding the community services obligation in maintaining them. There may also be cases where
ports that are not currently declared ports should be raised in status.
For the purposes of forward projections of capital funding requirement, shown in Table 28, it has
been assumed that all economically feasible projects as assessed by TIPS, will be undertaken
230
within the first 10 years of the NTS, together with those expenditures already in progress or recently
approved. These will be funded from a combination of concessionary loans, Government
development budget allocation and from PNGPCL revenue. Other capital works that have not been
shown to be economically viable at present are included in the second 10 year period 2021-2030.
Some of these may become economically viable as port traffic increases, or may be funded as a
community service obligation. The total capital funding over the period of the NTS on PNGPCL
facilities at main ports is estimated at K3.9 billion in 2010/11 values, of which an estimated K1.4
billion has been shown or expected to provide a net economic return.
It is recognised that not all main port development requirements for the period of the NTS will have
been anticipated, and a clearer picture will emerge once PNGPCL has completed its detailed
master planning studies. Future reviews of the NTS will take such studies and their
recommendations into account.
22.3.2 Privately Owned/Operated Ports
The NTS does not include estimates of investment in privately owned and operated ports. As well
as Motukea in Port Moresby and other private wharf facilities in the main ports, there are declared
ports that have been transferred to private ownership and/or operation such as Kiunga, Misima and
Bialla, and a number of undeclared privately operated ports either developed to serve specific
industries, such as the Basamuk Bay for Ramu Nickel, or partly maintained by shipping operators.
Investment in privately owned ports is not directly included in the NTS but where private interests
are willing to invest in port facilities that are available for common use, this has the potential to
reduce the need for public sector investment.
22.3.3 Minor Wharves and Jetties
The MTDP anticipates the restoration or new construction of 200 minor wharves and jetties, with 10
by 2015, 50 over 2016 to 2020, 60 over 2021 to 2025 and 80 over 2026 to 2030. The Community
Water Transport Programme is seen as the agent for delivering this commitment. At present the
CWTP has identified about 100 ports that could be included in the franchise routes and there are a
similar number of other ports under provincial and local government ownership in need of
rehabilitation that feature in Provincial development plans.
In determining the priorities and need for jetties in remote rural locations, a similar general approach
will be taken as for rural airstrips. Preference will be given to jetties or other types of small craft
landing that serve isolated catchments of rural population that do not have land or air access and on
the basis of size of the population served. Where the districts have relatively low social indicators
(as measured by the MDG), these will be given relative priority over similar size areas of population
where the level of development is higher.
In all cases, creation of new jetty and similar facilities will be contingent on certainty regarding
ownership, access rights, continuity of maintenance funding and maintenance responsibility with a
competent agency. Some assurance that there will be use of the facilities will also be a prior
condition of development. All development under this programme will need to be consistent with
provincial development and transport plans, which in turn will be integrated with national level
planning.
The development costs for restoring, reconstructing and building new jetties and river landings,
using the experience from the Community Water Transport Project have been estimated based on
the available tender information, as no jetties have so far been constructed. An average capital
cost of K 2.5 million per facility has been allowed for, or K 500 million for 200 jetties and landings,
assumed to be evenly distributed over the 20 year period.
231
22.3.4 Maritime Navaids Infrastructure
Progress under the NTDP 2006-10 has seen the rehabilitation and reconstruction of maritime
navigation aids around the Papua New Guinea coast under donor-supported programmes. The
NMSA has also been established to oversee the operation and ongoing development and
maintenance of this infrastructure. The capital replacement requirements are included in
maintenance funding projections discussed in Section 23.2.4.
22.3.5 Summary Maritime Infrastructure Capital Funding Requirement
A summary of the maritime sector capital funding requirements over the period of the NTS in
2010/11 values, for new, upgraded and rehabilitated infrastructure is shown in Table 28.
Table 28 – Maritime Sector Projected Capital Funding Requirement

Port and Maritime Infrastructure Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
Main ports - PNGPCL facilities
Commercial/economic development 1,428 842 586 - -
Other development 1,051 146 146 380 380
Sub-total, PNGPCL 2,479 988 732 380 380
Minor Wharves and jetties 500 125 125 125 125
Maritime Navaids (inc under maintenance)
Total 2,979 1,113 957 505 505
22.4 Airports and Air Navigation
22.4.1 National Airports
The CAA Infrastructure Investment Plan, Long Term

(2010-2030) (LTIP), (CAA, 2009), endorsed by the NEC, Development Cost of the
is the most recent definition of a long term strategy for MTDP
upgrading the national airports, now under the 222. Airports
management of NAC. The plan gives effect to NEC
Decision 215/2005 to upgrade regional airports to wide- The CADIP project covers the
bodied jet for Air Niugini’s likely re-fleeting programme for development costs of the
future domestic and international operations. national airports and air
Subsequent to the LTIP, the Civil Aviation Development navigation system, apart from
Investment Program (CADIP) has slightly modified the PMIA at a total investment cost
selection and likely timing of improvements. The of K 1.4 billion
upgrading and new development work envisaged under Development of PMIA to the
this strategic plan involves: master plan is estimated at K 1.0
billion
Long Range International (2 airports):
 Upgrading of Port Moresby International Airport Further development of the
(PMIA) to a larger wide-bodied jet standard, such national airports to complete the
as B787 Dreamliner, together with enlargement national airport development as
of the apron and terminal facilities, possibly with envisaged in the MTDP is
private sector financing as a PPP project estimated at K 0.3 billion
 Develop an alternate diversion airport for PMIA in
Papua New Guinea, currently anticipated to be Nadzab in the LTIP/CADIP, but other
candidates have been suggested
232
Medium Range Regional (5+4 airports):

 Upgrading of five national airports to B737-800 or
similar standard (Mt Hagen, Wewak, Madang, Development Cost of the
Gurney and Hoskins are proposed in CADIP as a MTDP
two stage process, the first stage being to bring 222. Airports
the airports up to F100 standard; The Long Term
Investment Plan (LTIP) proposed Mt Hagen, While security and certification
Wewak, Tokua and Kavieng) upgrading are economically
feasible, further upgrading of
 The MTDP proposes that 10 airports including
airports to B737-800 standard
Nadzab be upgraded to medium range regional
should be subject to further
standard by 2030; assuming that those proposed
studies of demand and
in CADIP are upgraded by 2020, then in the 2021
economic and financial feasibility
to 2030 period other domestic jet airports that
could be considered for upgrading subject to A further K 100 million is
feasibility study are Tokua, Kavieng, Goroka and required for rehabilitation of
Aropa (assuming that the administrative capital of provincial airports and rural
Bougainville returns to Arawa/Kieta). Aropa is airstrips
currently not a national airport and is the An estimated K76 million is
responsibility of the Autonomous Bougainville required for upgrading
Government. CNS/ATM systems
Domestic Jet Services (3 airports):
 Upgrading of a further four airports to F-100 or similar standard (Vanimo, Buka and
Momote). Goroka and Aropa might be added to this list if not included as part of the second
stage medium range regional upgrade.
Domestic Turbo-prop Services (8 + 1 airports):
 Repair and maintenance works at the remaining 8 national airports supporting turboprop
aircraft (Chimbu, Daru, Girua, Kerema, Kiunga, Mendi and Wapenamanda). Tari is also
included in the LTIP future works programme but is now the responsibility of Southern
Highlands Provincial Government.
The investment programme for the national airports will be 85% funded from ADB loan assistance
under CADIP. Project 1 will finance the emergency upgrades to bring Hoskins, Wewak, Gurney,
Goroka and Kavieng airports up to F-100 certification standard, involving pavement strengthening,
security fencing and airport fire and rescue services, together with an extension of the domestic
apron at Port Moresby and installation of an instrument landing system (ILS). The design of
upgrades for the other national airport to form subsequent projects under CADIP will also be
undertaken as part of this initial work.
This NTS endorses the NAC’s investment plan for the airports under its control, subject to the
upgrading of each domestic airport to B737-800 standard being justified by a feasibility study that
considers the traffic demand potential at each airport in relation to air service capacity and
frequency and the combined economic costs and benefits to air operators, NAC and users to
ensure that upgrading in each case is the best use of available funding, is appropriately timed and
achieves an acceptable rate of return on investment. Such studies should take account of the
planned developments and feasible timing for the main road network, in particular where new road
links may alter the regional catchments for air passenger and freight demand.
233
Figure 33 – National Airports Projected Funding Requirement
Assuming that projects anticipated in the LTIP, CADIP and MTDP are found to be economically and
technically feasible then, subject to availability of funding, a forward programme of development and
funding requirement is shown in Figure 33 and Table 29 below (2010/11 kina values).
Table 29 – National Airport Projected Funding Requirement

TIPS Cost K 2011- 2016- 2021- 2026-
TIPS
Airport and upgrade Priority million 2015 2020 2025 2030
BCR
2010
CADIP – PPP and other funding
Upgrade to PMIA (Master Plan) 3.9 975 165 621 210 16
CADIP Project 1 – 85% ADB, 15% Government Funding
Security fencing (5 airports) high high 28 28 - - -
PMIA domestic apron, ILS, Fire high high 36 36 - - -
Upgrade to F-100 operations
Wewak 2 2.9 35 35 - - -
Mt Hagen 3 1.9 101 101 - - -
Hoskins (Kimbe) 4 1.7 52 52 - - -
Gurney - - 21 21 - - -
Security fencing (2 airports) high high 13 13 - - -
Upgrade to alternate for PMIA
Lae 1.1 139 - 139 - -
Madang 5 1.3 79 79 - - -
Kavieng 1 3.7 57 57 - - -
Goroka - - 46 46 - - -
Tokua - - 70 35 35 - -
Non-Jet Airport Rehabilitation
Simbu - high 25 25 - - -
Kiunga - high 25 25 - - -
Vanimo - high 25 25 - - -
Upgrade to B737-800 operations
234
TIPS Cost K 2011- 2016- 2021- 2026-

TIPS
Airport and upgrade Priority million 2015 2020 2025 2030
BCR
2010
Mt Hagen - - 104 - 104 - -
Wewak 2 2.0 93 - 93 - -
Hoskins (Kimbe) - - 97 - 97 - -
Non-Jet Airport Rehabilitation
Girua (Popondetta) - high 25 25 - - -
Mendi - high 25 25 - - -
Wapenamanda - high 25 25 - - -
Kerema - high 25 25 - - -
Daru - - 25 25 - - -
Buka - - 62 - 62 - -
Madang 4 1.0 93 - 93 - -
Gurney (Alotau) 3 1.0 60 - 60 - -
CADIP Ongoing – no funding identified
Momote (Manus) - - 38 - 38 -
Tokua (Kokopo/Rabaul) 1 8.4 75 - 75 - -
Kavieng - - 63 - - 63 -
Goroka - - 80 - - 80 -
Buka or Aropa - - 63 - - 63 -
Note: TIPS benefit cost ratios adjusted for changes in CADIP cost estimates; priority numbers are order of BCRs within
groups of upgrading (to F100, to B737-800 etc.); BCRs for certification work and for non-jet airport pavement rehabilitation
are generally greater than 10.
The table includes the priorities and benefit/cost ratios from the TIPS 2010-11 study with some
modification to reflect updated CADIP cost estimates. This showed Tokua, Wewak and possibly
Gurney to be economically feasible for upgrading to B737-800 but Kavieng slightly sub-economic if
the upgrading were to take place in the immediate future. All of the upgrades to F-100 operations
were shown to be economically viable apart from Goroka and Gurney. The order of development is
that currently shown in the CADIP programme, but ongoing reviews of priorities and timing should
take account of the TIPS cost benefit analysis and more detailed feasibility studies.
22.4.2 Privately Owned/Operated Airports
The NTS does not include estimates of capital investment in privately owned and operated airports.
These include the airports of Kunaye (Lihir Island), Tabubil and Moro (Kutubu), as well as many
smaller rural airstrips under company or individual private ownership. Where private interests are
willing to invest in airport facilities that are available for common use, this has the potential to
reduce the need for public sector investment. Each of these larger airports could be considered for
upgrading to F100 operations. However, there is also the potential in the future for companies to
close airports no longer needed to support their business operations, in which case any ongoing
upkeep would revert to either NAC or provincial government.
22.4.3 Provincial Secondary Airports and Rural Airstrips
Proposals for maintaining, upgrading and opening non-national airports derive from the available
plans and priorities expressed by provincial governments and districts together with the DSP
objective of re-opening 50 unserviceable rural airstrips.
235
In the process of forming the NAC, twenty four (24) formerly national airports operated and
maintained by CAA were divested without any clear future ownership and maintenance
responsibility and, by default, they have become the responsibility of provincial governments. These
include licensed airports of Kikori, Kiriwina, Misima and Tari that might be considered for upgrading
in future.
The general conditions for considering secondary and smaller airports/airstrips in developing a
priority list for public funding are:
 airports or airstrips that currently support regular scheduled or charter services, or have
done so in the recent past (where closed for maintenance reasons rather than where they
have been made obsolete by other transport connections)
 classification in the functional hierarchy (I to V as in Table 15), the higher classified having
precedence
 airports or airstrips should not duplicate services to an area, apart from privately operated
facilities that do not allow common use
These should be used as general screening criteria. However, the costs of rehabilitation or new
construction, the expected usage of each facility, the discounted cost per expected revenue
passenger and provision for sustainable maintenance funding should be taken into account when
prioritising investment in rehabilitation and/or upgrading.
The cost of opening currently unserviceable airstrips will vary with size of facility and the extent of
deterioration. The CAA LTIP estimates for rehabilitation vary from K50,000 to K250,000 for small
rural airstrips to secondary provincial airports, which are probably lower end estimates. For larger
airports, an example being the closed Kieta (Aropa) airport, the cost of restoration has been
estimated to be around K25 million, once security fencing, new terminal building and runway
resurfacing are included. The LTIP estimate for rehabilitation of the 23 secondary provincial
airports, 128 other provincial airports and 307 rural airstrips was K 40 million.
The total number of secondary and other airport and rural airstrips that are currently active or could
be returned to useful activity with restoration work, excluding those that are privately or company
owned, is somewhere in the range of 360 to 520, with the LTIP provision a reasonable mid-
estimate. It is unlikely that restoring all of these will be economically feasible or financially
affordable. However, the overall provision that needs to be made is still probably an under-estimate.
The NTS has included a working allowance of K80 million (2010/11 values), to allow for price
increases and expected greater works requirements, spread over the 20 year period at K20 million
per 5 year period. The notional distribution of these funds is shown in Table 30.
Table 30 – Estimated Funding Requirement for Other Airport Rehabilitation

Airports for Rehabilitation Notional Unit Cost K Total Cost
Number (2010/11) K mill
(2010/11)
Secondary provincial airports 25 2,000,000 50
Other provincial airports 40 500,000 20
Selected rural airstrips 50 200,000 10
Total 100 80
22.4.4 Air Navigation Infrastructure
Proposed development projects for the air navigation infrastructure under PNGASL are targeted for
completion in the first five year period of the NTS:
 Communication, Navigation and Surveillance (CNS) services improvement
236
o installation of Global Satellite Navigation Systems (GNSS) at all national airports

apart from PMIA;
o installation of Automatic Dependent Surveillance (ADS) & Controller-Pilot Data
Link Communications (CPDLC) at Wewak, Tokua, Momote, Alotau and Nadzab
o upgrade radio navigation aids in Port Moresby, Madang, Gurney, Buka, Momote,
Girua and Finschhafen
 Air Traffic Management (ATM) Services centralisation and modernisation – centre the
delivery of ATM services in Port Moresby including progressive modernisation of
equipment, communications and surveillance systems;
The Instrument Landing System (ILS) for Port Moresby International Airport is part of the airport
infrastructure and responsibility of NAC, and so is included in Table 27. The CADIP programme
estimates of investment cost for CNS/ATM service improvements are K61.5 million, to which an
ongoing addition of K10 million has been made, the period estimates shown in Table 31.
22.4.5 Airport and Air Navigation Infrastructure Summary
A summary of the capital funding requirement for airports and air navigation infrastructure over the
period of the NTS is shown in Table 31 below. The total capital development requirement in 2010
kina values over the period of the NTS is approaching K 3 billion.
Table 31 – Airports and Air Navigation Projected Funding Requirement, K millions (2010/11)
Airports and Air Navigation Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
National Airports CADIP program
Project 1 273 273.4 0 0 0
Project 2 410 197.0 212.9 0 0
Project 3 377 83.1 293.7 0 0
Project 4 361 0 360.6 0 0
Ongoing 318 0 75.0 242.5 0
PMIA master plan developments 975 128.5 620.6 210.0 16.3
Secondary provincial airport restoration 50 12.5 12.5 12.5 12.5
Other provincial airport restoration 40 10 10 10 10
Rural airstrip restoration 10 2.5 2.5 2.5 2.5
Air navigation infrastructure (CNS/ATM) 72 49.3 12.2 10.0 0
Total, Airports and Air Navigation 2,886 756 1600 488 41
237
22.5 Sector Capital Infrastructure Funding Requirement Summary
A summary of the funding requirements for new, upgraded and restored infrastructure across the
three subsectors is shown in Table 32. The total capital requirement is estimated at over K50 billion
over a 20 year period.
Table 32 – Transport Infrastructure Sector Capital Funding Projection, K millions (2010/11)

Subsector Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
Roads sub-sector
New road links 31,850 3,000 7,900 7,950 13,000
16 Priority roads - upgrade to seal 2,000 400 700 650 250
Other national roads - upgrade to seal 5,150 600 1,250 1,450 1,850
Sealed national road rehabilitation 1,150 250 300 300 300
Provincial and other roads 5,500 750 2,000 1,375 1,375
Roads sub-total 45,650 5,000 12,150 11,725 16,775
Ports and maritime navigation sub-sector
Main ports - PNGPCL, commercial 1,508 842 666 - -
Main ports - PNGPCL, CSO 1,022 170 284 284 284
Secondary and minor ports 500 125 125 125 125
Maritime sub-total 3,030 1,137 1075 409 409
Airports and air navigation sub-sector
National airports (NAC) 2,714 682 1,563 453 16
Provincial airports 90 23 23 23 23
Rural airstrips 10 3 3 3 3
Air navigation (PNGASL) 72 49 12 10 -
Air sub-total 2,886 756 1,600 488 41
Total 51,566 6,893 14,825 12,622 17,225
Road % 89% 73% 83% 92% 97%
Maritime % 6% 16% 6% 4% 3%
Air % 6% 11% 11% 4% 0%
238
23 Maintenance Cost of the MTDP
23.1 Roads
23.1.1 Maintenance Needs
Maintenance is required both to repair the wear caused

by road traffic and deterioration from age and weather
224. Maintenance Costs of the
influences. The ongoing maintenance requirements of
Road Infrastructure to meet
roads that have been brought up to a good maintainable
MTDP Targets
condition involve: The ongoing maintenance costs
(i) routine pavement, drainage, traffic facility and of roads in their present state
corridor maintenance activities required at and after development
intervals ranging from a few weeks to annually; expenditure to restore roads to
good condition to meet the
(ii) less frequent periodic resealing and regravelling targets of the MTDP are:
at intervals of several years; and
- K390 M rising to K860 M p.a.
(iii) more extensive strengthening, reshaping and by 2020 for national roads as
restoration treatment at longer intervals involving roads are upgraded and
variously reconstruction of base layers, overlays transferred into national
and resurfacing. ownership
Bridges also require routine maintenance of the - K230 M reducing to K70 M
waterway, foundations, superstructure, decking and p.a. by 2020 for provincial
fittings. and local roads
The main influences of the level of road maintenance on - The NRA share of costs as it
costs to users are from surface roughness, caused by takes over responsibility for
potholes, rutting and other surface unevenness, and the core national network
unplanned closures. Surface roughness affects vehicle rises from K30 M to K 280 M
repair and maintenance costs as well as running speeds p.a.
while closures cause lost time to road users and make A further K25 M rising to K 40 M
the road connection less reliable. For best overall annually should be set aside in a
economy, roads carrying higher volumes of traffic should sinking fund for urgent and
achieve a higher standard of surface smoothness than emergency maintenance needs
lower volume roads, and so will require greater
maintenance input.
23.1.2 Routine and Periodic Maintenance Estimated Future Funding Requirement
Assuming that the length of the national road network is expanded and upgraded as envisaged in
the MTDP and illustrated in Figure 32, with some roads transferring from provincial to national
ownership to achieve the MTDP target of 25,000 kms under national ownership by 2030, then the
estimated forward estimates for road maintenance are shown in Table 33 and Figure 34 to Figure
36. The total maintenance funding requirement to maintain roads brought up to good condition
under the MTDP targets is K15 billion over the 20 year period and rising from K600 million to K1
billion per annum over the period.
These estimates are in real 2010/11 values and have been made based on RAMS unit rates, with
some extensions and assumptions for provincial roads. Where roads are to be upgraded within five
years, then the estimates assume that only routine maintenance is applied in the interim. Once
roads are upgraded to good condition, then annual maintenance needs include an annualised
provision for periodic resurfacing and other specific maintenance activities. These estimates are
not resource constrained, that is they assume that funding and construction capacity are available,
and are well above historic levels of maintenance spending on both national and provincial/local
239
roads, where both funding and construction limitations have been constraining factors on achieving
a well-maintained road network.
Table 33 – Routine and Periodic Road Maintenance Funding Requirements, K millions

Road Type and Owner/Manager Total 2011- 2016- 2021- 2026-
20 years 2015 2020 2025 2030
National Roads
Sealed 7,515 741 1,234 2,143 3,397
Unsealed 4,365 1,183 1,140 1,143 900
Total 11,880 1,923 2,374 3,286 4,297
Provincial and Other Roads
Sealed 82 82 - - -
Gravel 2,173 908 689 391 186
Earth 683 171 171 171 171
Total 2,938 1,160 859 561 357
Total Roads
Sealed 7,597 823 1,234 2,143 3,397
Gravel 4,447 1,265 1,140 1,143 900
Earth 683 171 171 171 171
Total 12,727 2,258 2,544 3,457 4,467
By Owner/Manager
Department of Works 8,484 1,755 1,691 2,154 2,884
National Roads Authority 3,396 169 682 1,133 1,413
Provincial & Other 2,938 1,160 859 561 357
Total 14,818 3,083 3,233 3,848 4,654
Annual average 617 646 769 931
Figure 34 – Estimated Maintenance Funding Needs, National Roads, 2011-2030
The transfer of roads from provincial to national ownership, in some cases accompanied by
upgrading from gravel to seal, has the effect of placing almost all of the sealed network under
national management and reducing the size of the feeder and access road network, comprised of
mainly gravel and earth roads, that remain to be supported by services delivery function grants and
240
other local funding sources. Under NRA’s business plan, NRA will assume responsibility over time
for around 40% of the national road length, with the period through to 2020 seeing the bulk of the
transfer. Beyond 2020, the national network would continue to expand to meet the targets of the
MTDP with the ownership responsibility of new added length being taken primarily by DOW. Annual
routine maintenance accounts for about one third of the total maintenance requirement for gravel
roads and about half of the requirement for sealed roads.
Figure 35 – Estimated Maintenance Funding Needs, Provincial & Other Roads, 2011-2030
Figure 36 – Estimated Maintenance Funding Needs, by Ownership, 2011-2030
23.1.3 Urgent and Emergency Maintenance

Provision is also required for urgent and emergency maintenance to repair rain and flood damage
involving minor clearance of slips through to reinstatement of washed out bridges and culverts and
major land instability. Wilful damage and other events that close roads to traffic are also included.
DOW distinguishes between urgent works which are smaller natural events, with damage limited to
the roadway, where the costs are absorbed into the allocated budget (although at the expense of
other planned maintenance activity), and emergency maintenance such as cyclone where external
funding is provided through other government agencies.
241
Urgent and emergency maintenance is more likely to be needed where roads have not received
sufficient routine maintenance attention, for example blocked drainage increase the risk of larger
scale washouts. So, as maintenance funds are constrained below levels that address routine
maintenance needs, the expenditure on extraordinary events increases. This is destabilising to the
proper planning of preventive maintenance and encourages a reactive, rather than proactive, mode
of operation within the road maintenance authority.
In future, it would be desirable for one or more sinking funds to be established, one within NRA and
another accessible by DOW to spread the funding risk for genuine urgent and emergency
maintenance needs. As a starting point, this fund should aim to collect the equivalent of about 10%
of the routine maintenance requirement. On this basis the overall provision for urgent and
emergency maintenance should be about K25 million annually in 2011 rising to over K40 million
annually by 2030 (in real 2010/11 kina values).
23.2 Ports and Maritime Infrastructure
23.2.1 Maintenance Needs
Port infrastructure maintenance includes repairs and

periodic resurfacing of concrete, bitumen and unsealed
Maritime Infrastructure to
working surfaces, repairs to wharf structures,
replacements of fittings such as fendering and bollards,
meet MTDP Targets
maintenance of wharf buildings and port utility services. The annual maintenance
Where the port owns handling equipment such as cranes requirement, excluding major
or forklifts, these also form part of the maintenance task. rehabilitation and replacement
Another significant maintenance requirement is the for main ports managed by
dredging of approach channels, basins and berths to PNGPCL is estimated at K37 M
counter siltation, the extent of which varies with location. p.a. rising to K60 M p.a. by 2020
Rabaul, for example, has particular siltation problems
Of this, about 60% is attributable
from eruption ash.
to the commercially profitable
The tropical marine environment is particularly ports and 40% to the remainder
aggressive and any incursion of seawater into fine cracks A further K1.2 M p.a. rising to K
in concrete structures can rapidly lead to corrosion of 10.8 M p.a. is required to
reinforcement, spalling of concrete cover and structural maintain minor wharves and
deterioration. Similarly, steel piled wharves depend on jetties as these are rehabilitated,
cathodic protection against corrosion that must be replaced and new facilities
periodically renewed. Buildings and equipment subject to opened under the small jetties
sea spray drift will similarly be at risk of accelerated programme
deterioration.
Maritime navaids require an
As with all transport infrastructure, timely attention to annual maintenance expenditure
preventive routine maintenance can help avoid more of about K13 M p.a.
expensive heavy maintenance, rehabilitation or
- p.a.
replacement and increase operating life. However, compared with roads, maintenance of port
infrastructure is somewhat less use-dependent and is more time-dependent, port handling
equipment excepted. A whole of life cycle approach to optimising maintenance costs to the port
company is desirable but is easily compromised where there is a shortage of funding.
23.2.2 Main Port Maintenance
PNGPCL revenues are recognised to be insufficient to sustainably maintain all the main ports. A
detailed assessment of the work and costs to rehabilitate the main ports to their original working
condition is required. As these assessments are made, rational decisions can be taken on the
future of some of the smaller main ports.
242
The history of expenditure on maintenance by PNGPCL is therefore not a good guide to the
underlying funding need once ports are restored to a good condition. An approximate projection of
maintenance funding requirement has been made for the purposes of this NTS based on a
percentage of the estimated capital replacement cost of port fixed infrastructure assets. Assuming
the infrastructure has been rehabilitated then ongoing routine maintenance costs are estimated at
0.5% annually of this replacement cost. Taking account of future rehabilitation and replacement
needs, the annualised maintenance cost is expected to be about 1.5% of the capital replacement
cost. The capital replacement cost of the PNGPCL fixed port infrastructure is estimated to be about
K2 billion, based upon a rough order of cost for construction of berth length, open and covered
storage and with an allowance for other items such as services, security fencing and access roads.
This is in marked contrast to the book asset valuation at transfer of the port assets in 2007 at the
establishment of PNGPCL of K8 million.
As the invested capital in port infrastructure increases with planned extensions to the main ports,
particularly in Lae, then the maintenance requirement will also increase. The maintenance funding
projections show (i) maintenance of the commercial ports (Lae, Port Moresby and Kimbe) including
short to medium term upgrading, all of which have been shown by TIPS to be economic in terms of
benefit/cost ratio (except Lae Tidal Basin which has not been evaluated in TIPS) (ii) maintenance of
the non-commercial ports, for which the majority of rehabilitation and upgrading work has been
shown not too be economic by TIPS (the exceptions being dredging to restore berth and channel
depth at the more active ports). Under the MTDP, all of the main ports are to be rehabilitated, so the
upper maintenance cost estimate applies. It has been assumed that the short to medium term
upgrading work will be undertaken over the first 10 years of the NTS. Beyond 2020 there may be
additional port expansion to cater for growth, and the maintenance funding requirement to support
this potential future expansion is shown as a trend continuation through to 2030. Future reviews of
the NTS will reassess these requirements.
The future maintenance funding demand profile for fixed port infrastructure is as shown in Figure
37, separated into maintenance of port infrastructure that provides a commercial or economic
return.
Figure 37 - Required Funding Projection for Main Port Fixed Infrastructure
23.2.3 Small Wharves and Jetty Maintenance
An asset management plan has been prepared for the Community Water Transport Project which
estimates the operational costs of inspection and costs of routine maintenance, repairs and
renewals of the infrastructure. The assumptions in this plan have been applied to the average
capital cost per facility and the construction programme to give a forward maintenance funding
243
requirement shown in Table 34. This assumes that the 200 jetties and river pontoons cover all of
the smaller port capital requirements and that at present the minor ports are essentially receiving no
maintenance input.
23.2.4 Maritime Navaids Maintenance
Progress under the NTDP 2006-10 has seen the rehabilitation and reconstruction of maritime
navigation aids around the Papua New Guinea coast under donor-supported programmes. The
NMSA has also been established to oversee the operation and ongoing development and
maintenance of this infrastructure. An ongoing cost of K12.5 million (2010) values is included in the
NTS for navaids maintenance, replacements, lease and security payments for the navaids
infrastructure, based on NMSA information. The cost of maintenance is expected to be fully
recovered from NMSA levies.
23.2.5 Summary of Maritime Infrastructure Maintenance Funding Requirement
The estimated maintenance funding requirement for port and maritime navaid infrastructure over
the period of the NTS is shown in Table 34. A total of K1.4 billion (2010 values) is estimated to be
required over the 20 year period
Table 34 – Projected Maritime Infrastructure Maintenance Requirement, K millions 2010

Port and Maritime Infrastructure Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
PNGPCL ports
Commercial ports 624 107 158 177 181
Non-commercial ports 365 76 76 93 120
Sub-total, PNGPCL 989 184 235 270 300
Minor Wharves and jetties 121 6 22 38 54
Maritime Navaids 250 63 63 63 63
Total 1,360 253 319 371 417
23.3 Airports and Air Transport Infrastructure
23.3.1 National Airports Maintenance
The CADIP investment programme includes airfield upgrades and restorative maintenance to the
national airports. Where this occurs in staged upgrading to F100 and later to B737-800, the
upgrading costs include airfield pavement resealing and overlays. So this has the effect of reducing
the pavement periodic maintenance requirements in the years immediately following the upgrades.
In some cases, where the restoration or upgrading is later in the CADIP programme, some interim
pavement maintenance will be required to hold the condition at an acceptable level in the
meantime. Other building, airfield and landside facilities maintenance such as access roads, car
parks and security fencing will not be affected, and an annual provision is required. After
comparison with other sources, The NTS has adopted the TIPS maintenance model projections,
adjusted to agree with the CADIP investment programme, as a reasonable representation of
ongoing maintenance funding needs, which shows a forward funding requirement as shown in
Figure 38 and Table 35.
The maintenance requirements have been categorised by class of airport, so changes in

classification can be seen where Lae is upgraded to a Long Range International diversion airport
and where a number of domestic jet airports are upgraded to medium range regional capability. It
should be noted that if the CADIP programme were not to carry out the upgrades envisaged, the
ongoing maintenance funding requirement would probably remain the same or even rise, as
additional periodic resurfacing would be required in place of runway upgrading.
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Figure 38 – National Airports Projected Maintenance Funding Requirement
23.3.2 Provincial Airports and Rural Airstrip Maintenance
At present, it is believed that minimal maintenance

expenditure is being applied on a regular basis to airports
Air Transport Infrastructure to
below national level, although there is a small notional
meet MTDP Targets
allocation via the facilities maintenance grants under the
intergovernmental funding arrangements (new RIGFA). Annual maintenance
expenditure needs for the
Section 22.4.3 identified an investment programme for national airports operated by
selective restoration of provincial airports and rural NAC is estimated at K15 M p.a.
airstrips aimed at the most heavily dependent isolated
populations and avoiding overlapping provision. Once A further K10 M p.a. is required
restored and/or upgraded, these facilities will require an to maintain provincial secondary
ongoing routine maintenance provision and, after a and other airports in good
period of time, funding for periodic maintenance works operable condition once
such as resealing, regravelling, and building and services rehabilitated; there is minimal
repairs. For the rural airstrips, some of the routine work maintenance at present
such as grass cutting, other vegetation removal and A further K8 M p.a. is required to
minor airstrip drainage and field maintenance may be maintain rural airstrips in good
provided by local villagers under mutual agreement. operable condition once
Where local people are willing to input resources to rehabilitated; there is minimal
maintain facilities, this should be recognised by maintenance at present
Government when deciding on which rural airstrips to re-
open, as part of a community services obligation policy,
K10 M p.a. is required to
discussed elsewhere.
maintain the air communications
and navigation infrastructure
23.3.3 Air Navigation Infrastructure Maintenance
There is an existing investment in the air navigation infrastructure under the responsibility of
PNGASL incorporating the main ATM centre in Port Moresby, seven control towers at regional
airports, ground-based air navigation systems, and communications links both ground and satellite
245
based. Under the CADIP investment programme, much of the ground based infrastructure will be
gradually replaced with satellite based systems. An approximate annual maintenance estimate has
been made based upon the estimated replacement cost of existing systems and the replacement
investment, allowing for an annual maintenance cost of 10% of the current replacement value. This
indicates an infrastructure maintenance provision between K50 and K60 million annually.
23.3.4 Summary of Air Transport Infrastructure Maintenance Requirements
Table 35 shows the estimated maintenance funding requirements over the period of the NTS. In
total K0.9 billion is estimated to be required to maintain the upgraded and expanded air transport
infrastructure.
Table 35 – Projected Air Transport Infrastructure Maintenance Requirement, K mill. 2010/11

Airports and Air Navigation Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
National Airports
Long Range International 47 8 9 15 15
Medium Range Regional 90 - 6 38 46
Domestic Jet 146 56 53 21 16
Domestic Turboprop 45 10 11 12 12
Total NAC Airports 327 74 80 86 87
Provincial Government Airports
Secondary Airports 63 18 17 15 14
Other Airports 121 33 31 29 27
Total Provincial 184 51 48 44 41
Total Airports and Airstrips 674 165 169 171 169
Air Navigation Infrastructure (CNS/ATM) 229 50 60 61 58
Total, Airports and Air Navigation 903 215 229 231 228
23.4 Summary of Transport Infrastructure Maintenance Funding Requirements
A summary of the funding requirements for fixed public infrastructure maintenance in the transport
sector is shown in Table 36. The total maintenance requirement is estimated at K20 billion over the
20 year period, or an average of K800 million per year in the first five years rising to K1.1
billion/year, all in 2010 kina values. The majority is for funding road maintenance, which is
consistent with the extent of investment in the road subsector.
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Table 36 – Transport Infrastructure Sector Maintenance Funding Projection, K mill. (2010/11)

Subsector Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
Roads sub-sector
National Roads – Dept of Works 8,484 1,755 1,691 2,154 2,884
National Roads - NRA 3,396 169 682 1,133 1,413
National Roads, total 11,880 1,923 2,374 3,286 4,297
Provincial and other roads 2,938 1,160 859 561 357
Routine and Periodic Maintenance 14,818 3,083 3,233 3,848 4,654
Emergency and Urgent Maintenance 1,482 308 323 385 465
Roads sub-total 16,300 3,392 3,557 4,232 5,119
Ports and maritime navigation sub-sector
Main ports - PNGPCL, commercial 1,508 842 666 - -
Main ports - PNGPCL, CSO 1,022 170 284 284 284
Secondary and minor ports 100 25 25 25 25
Maritime Navaids 250 63 63 63 63
Maritime sub-total 2,880 1,100 1,038 372 372
Airports and air navigation sub-sector
National airports (NAC) 2,714 682 1,563 453 16
Provincial airports 90 23 23 23 23
Air navigation (PNGASL) 72 49 12 10 -
Air sub-total 2,886 756 1,600 488 41
Total 22,066 5,248 6,195 5,092 5,552
Road % 88% 88% 87% 88% 89%
Maritime % 7% 7% 8% 8% 7%
Air % 5% 6% 6% 5% 4%
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24 Funding Projections and Funding Gap
24.1 Introduction
The National Transport Strategy must have regard for the likely future availability of funds for
transport infrastructure maintenance and capital works. Funding for policy and operational
programmes must similarly be considered.
Inevitably, the call on funds for supporting desired transport infrastructure investment will be greater
than the financial resources available and prioritisation of expenditure will be required to keep within
funding constraints.
Sources of funding can be separated into funding from operational revenues, from Government’s
budget allocation and from grant assistance, which are “pay as you go” (PAYGO) methods of
funding, and various forms of debt financing such as concessionary loans from development
partners (ADB, World Bank etc.), commercial loans and public private partnerships (PPPs) in which
the private partner provides capital funding in return for a revenue stream from the project. While
debt financing is a way of enabling capital projects to be implemented at an earlier date that with
PAYGO financing, there are limits to the debt servicing capability of the Government and transport
sector agencies. Also debt commitments in other sectors may influence Government’s ability to take
on new borrowing in the transport sector. The project sponsors, whether Government or the private
sector must be confident that projects that are debt financed will achieve a net beneficial economic
return or a sufficient financial return if commercially funded. In turn this generally requires that the
projects will receive adequate maintenance funding so that their value is not reduced by premature
deterioration.
In this section of the NTS, the history of funding for the transport sector is examined so that
projections can be made of the likely future funding envelope. This is not to assume that past trends
will necessarily be continued in future. For example, the DSP and MTDP envisage transformational
change in PNG’s economic growth path and, if realised, this will increase Government revenues
and enable real increases for public spending on transport. There will also be some scope for the
introduction of new forms of charging for services provided within the transport sector, although
there will be limits on levels of user fees that can be borne by the market and levels that are
politically acceptable and will not be self-defeating through avoidance and evasion.
24.2 MTDP Infrastructure Funding Requirement
The total estimated transport infrastructure investment requirement to implement the Medium Term
Development Plan, including new infrastructure, reconstruction and rehabilitation, upgrading and
maintenance of assets, is summarised in Table 37. An estimated K70 billion (2010/11 values) is
required to bring the transport network up to a generally good state of condition, construct the
missing links and economic corridor roads and some supporting lower level transport infrastructure,
and provide better transport access to rural communities.
This provides an appreciation of the scale of funding required, against which the adequacy of
present and anticipated future sources of funding can be compared. The estimated K70 billion
compares with the DSP estimate of slightly over K100 billion for the transport sector, although it is
not clear whether the DSP estimate is in nominal or real kina values or whether it includes the
operating and administration costs of transport sector agencies.
The DSP anticipates that the Plan will be self-funding, through additional taxation revenue
generated by the expected increase in economic activity, although it also anticipates some
additional debt funding in the early years while new revenues build.
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Table 37 – Summary of Transport Infrastructure Investment to Support the MTDP, K mill 2010
Subsector Total 2011- 2016- 2021- 2026-
2015 2020 2025 2030
Capital investment - new infrastructure, upgrading, reconstruction/replacement and rehabilitation
Roads 45,650 5,000 12,150 11,725 16,775
Ports and Maritime 2,579 1,013 757 405 405
Airports and Air Navigation 2,885 756 1,600 488 41
Sub-total - capital investment 51,114 6,769 14,507 12,617 17,221
Maintenance - routine annual, periodic, urgent and emergency
Roads 16,300 3,392 3,557 4,232 5,119
Ports and Maritime 1,360 253 319 371 417
Airports and Air Navigation 903 215 229 231 228
Sub-total - maintenance 18,562 3,859 4,105 4,835 5,764
Total - Capital and Maintenance
Roads 61,950 8,392 15,707 15,957 21,894
Ports and Maritime 3,939 1,266 1,076 775 822
Airports and Air Navigation 3,788 971 1,829 719 269
Total 69,676 10,629 18,612 17,452 22,984
24.3 Government Appropriations through the National Budget
24.3.1 Department of Works
By far the largest appropriation of Government funding to transport infrastructure is to the

Department of Works. The average annual expenditure on roads and bridges for both development
and maintenance through DOW has been about K230 million, of which K112 million has been from
government appropriation and the remainder from development assistance grants and loans. A
small proportion of this expenditure has been for provincial road and bridge projects, both under
GoPNG and development partner programmes, such as the World Bank Road Maintenance Project
and the ADB Highlands Road Upgrading and Maintenance both of which have spanned national
and provincial roads. The provincial roads concerned will most likely be brought under national
ownership under the management of DOW in the future.
The DOT is primarily a policy and planning department, with some operational responsibilities, but
does not control a large capital works budget. It administers the Community Water Transport
Project which has expended about K3 millions of Government funding annually over the last five
years, but primarily on shipping services development. Prior to the establishment of the NMSA,
DOT also had responsibility for maritime navigation aid rehabilitation which drew Government
funding of about K5 million/year over five years.
24.3.3 Department of National Planning and Monitoring/ORD
In recent years, the DNPM has administered an increasing value of transport infrastructure
development expenditure through the national budget, at an average of about K40 million/year over
2004-2009. This has primarily been on provincial and district roads, including funding through
DRIP/DSIP. From 2010 the development budget appropriation for roads increased to over K 200
million, including one-off planned expenditure on two of the missing link roads (Bogia-Angoram and
Baiyer-Madang) with construction being executed by PNGDF. However DNPM’s forward provision
under the PIP is around K50 million/year, mainly for provincial road programmes. DNPM has also
funded transport equipment, such as coastal vessels, which are not included here. The Office Of
Rural Development (ORD) has been responsible for DSIP since 2007.
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24.3.4 Support to Statutory Authorities and SOEs
Government provides financial support to PNG Ports Corporation on a project by project basis
through the Development Budget varying from nil in some years up to K30 million for 2011.
Development assistance funding for ports has also been directed through the budget appropriation
for IPBC, for the Lae Port tidal basin project. Government has also provided funding support for the
establishment of the NRA and NMSA.
Up to 2010 when the CAA was split into NAC and CASA, Government funded selected airport
projects through the development budget, varying from nil in some years up to a maximum of K20
million in 2008. Government will channel funding for CADIP through the development budget
process in the future, utilising the proceeds of an ADB MFF Loan (85%) and Government
counterpart funding (15%).
24.3.5 Inter-Governmental Support to Provinces
Under the RIGFA, Government provides support to provincial governments for transport
infrastructure maintenance under the Transport Infrastructure Maintenance Grant (TIMG), the
majority of which is allocated to roads but which is also intended for maintenance of rural airstrips
and wharves under Provincial and Local Level Government ownership. This appropriation has
increased from K15 million/year up to 2007 to K62 million/year for 2011. The TIMG grants made
from 2006 to 2009 and appropriations for 2010 and 2011 are shown in Figure 39.
There is no breakdown of this expenditure on roads, airstrips and jetties although it is thought that
almost all the applied expenditure is on roads which has been assigned half each to routine
maintenance and rehabilitation.
The distribution of these grants in 2013 is shown in Figure 40. The grant allocations take account of
other sources of revenue available to provinces through other sources such as resource
development grants (Fly River/Western and New Ireland are examples) and have also been
purposely increased over recent years to better recognise the infrastructure maintenance needs, as
identified by the NEFC.
Figure 39 – Transport Infrastructure Maintenance Grants to Provinces, K’000s
250
Figure 40 – Transport Infrastructure Maintenance Grants by Province, 2013, K’000s
24.4 Development Partner Grant and Loan Assistance
24.4.1 Overall Sector Support
AusAID, ADB and the World Bank have been the main development partners contributing grant and
loan finance for transport infrastructure projects, together with mainly grant technical assistance for
project preparation and sector policy and implementation advisory services. Others active in the
sector are Japan (JICA) through bridge programmes and more recently China, through a specific
road project supporting road access to the Ramu Nickel Project and new port at Basamuk Bay.
All three of the main development partners and JICA have indicated their intention to continue to
support the development of the PNG transport sector. AusAID is currently reviewing the structure of
its future support under the TSSP, which includes both project grant financing and advisory
assistance. The form of technical assistance may change, but this review of the future funding
envelope anticipates that AusAID will continue to give project investment support at similar levels as
over the past five years and primarily in the roads subsector. AusAID’s financial assistance to road
construction, rehabilitation and maintenance has averaged between K50 and K60 million annually,
or 46% of the donor total support.
The ADB has been the second largest funder over the past decade but has increased its
commitment to PNG through long term financing under its Multi-tranche Financing Framework
(MFF) for main airport development (CADIP) and Highlands Region Road Improvement Programme
(HRRIP). ADB is also supporting the port sector through Lae Port development and community
shipping franchise services and small jetty construction through the CWTP. The Highlands Region
Road Maintenance and Upgrading Project is also continuing under supplementary funding for the
next few years covering second tier national roods and important provincial roads in the five
Highlands Provinces. ADB’s support to the roads sector has been between K30 and K40
million/year, or about 27% of the total donor assistance.
The World Bank’s recent activity has been through the Road Maintenance and Rehabilitation
Project (RMRP) in six provinces outside of the Highlands, where its contribution has been around
K23 million/year or about 18% of the donor assistance.
251
24.4.2 Roads and Bridges
Over the period 2005-2009, approximately half of project-related expenditure through DOW on
roads and bridges was from donors, at an average annual rate of K57 million in loans and K65
million in grants. AusAID provides exclusively grant assistance, with ADB and WB providing
concessionary loans.
A similar pattern of future commitment is anticipated over the NTS plan period, particularly over the
first five year MTTP.
24.4.3 Ports and Sea Transport
ADB has been the main development partner for the port sector, through a series of mainly project
loans directed at the main commercial ports. While PNG Ports Corporation is an SOE, it is not
financially independent and has relied on government backing for loans to fund capital projects.
ADB is currently providing K425 million equivalent loan financing for Lae Port Development over the
period 2010 to 2013. ADB has also financed the restoration of maritime navaids, and has provided
about K40 million equivalent funding for the Community Water Transport Project, part of which is to
finance small jetty infrastructure.
24.4.4 Airports and Air Transport
Over the past decade, development assistance for airports was primarily through the AusAID Balus
programme which ended in 2005. Since then there has been a gap in development partner support
for infrastructure works which has been filled by the ADB through CADIP which will support the
rehabilitation and upgrading of the main national airports to 2020. NAC has indicated in its longer
term planning a second phase of CADIP which is also reflected in the MTDP, and could be funded
by a second MFF loan, taking the main airport development programme support out to the end of
the NTS period. ADB funding commitment under CADIP is up to about K1.1 billion equivalent, as a
multi-tranche loan.
There has so far been no development partner support for restoration and maintenance of the
second tier airports now outside of NAC responsibility or for rural airstrips.
24.5 Funding from Transport User Charges
24.5.1 General
One of the policies of the NTS is to increase the recovery of infrastructure maintenance and
development costs from transport user charges, particularly for the main infrastructure carrying
substantial levels of passenger and freight traffic. This will improve the self-reliance of the sector
and lessen the dependence on government appropriation which can vary unpredictably from year to
year. The first target is for transport charges to recover the recurrent costs of maintenance and
operation of the transport infrastructure. Once this is achieved a longer term target is to recover the
costs of renewal and upgrading of the infrastructure, although it is recognised that this may not be
practical in all cases because of thin traffic routes and nation’s stage of development.
24.5.2 Road User Charges (RUC)
A reliable and sustainable source of funding for road maintenance is a longstanding goal of
transport policy. Reliance on annual budget allocations has led to severe under-funding of road
maintenance and progressive deterioration of the road network. Options for internalising
maintenance funding within the road sector include direct charging for road use through tolls, which
has many practical challenges and implementation costs, or indirect funding from road user
charges.
252
The National Roads Authority receives a small portion of the excise duty on diesel fuel to fund its
road maintenance activities. There are plans to extend the RUC to a three part levy covering diesel
and petrol, at higher rates than currently, an annual levy per vehicle scaled by vehicle size and a
levy based on the road damaging effect of heavy axles. The revenue from RUC will accrue to the
dedicated Road Fund, to which other financial contributions can also be made, including
development partner support.
The NTS funding envelope assumes that this development of RUC will take place, thus enabling the
NRA to extend its role as the asset manager of the core main road network, defined as those roads
carrying higher volumes of traffic and at the higher levels of the functional hierarchy. The lower
traffic sections of the network will remain under the management of DOW with some delegation to
provincial administrations where capability and capacity exists.
It is desirable that once roads are taken over by NRA, all road maintenance and rehabilitation
activities come under NRA’s financial and management responsibility. If this is not the case, there
will need to be on-going reliance on the uncertainty of Government appropriations for road
rehabilitation and/or reconstruction as pavements reach the end of their useful life. It also opens up
an opportunity for demarcation disputes between classes of maintenance and undermines the
incentive for NRA to effectively manage the road asset on a whole-of-life basis.
The revenue stream that could be raised from RUC has been estimated through various technical
assistance to GoPNG. The latest such estimate is for annual revenue from this source to be
increased progressively as charges are phased in reaching around K400 million p.a. in real terms
by 2020 and allows for a 3% annual increase in road traffic. This annual revenue has been
estimated to be sufficient for routine and periodic maintenance of the whole national network apart
from institutional roads (that is NR, NM and ND roads together with some important non-national
roads in the Highlands that are currently included within the ADB HRRIP). This amounts to an
estimated 8,780 kms of roads of which some 57% would be sealed (by 2020).
The Organic Law provides for Provincial Governments to levy provincial road user taxes. While this
provision is not widely exercised, and the need for these taxes has been superseded by the
Transport Infrastructure Maintenance Grants (TIMG), the intention of such taxes is that they be
applied to the upkeep of provincial and local roads. They are separate from road users charges
levied for maintaining roads under NRA control, notwithstanding that provincial administrations may
be engaged as collection agents for part of these national road user charges.
24.5.3 Vehicle Registration and Licensing Revenue
Vehicle registration and driver licensing revenue is retained by provincial government for
administering those services and with the residue intended to be used for road maintenance and
other transport related activities, although in most cases this revenue is used more generally as a
source of provincial government funding. In NCD, vehicle registration and driver licensing revenue
is collected by MVIL, which retains a fee for administration and pays the remainder to the central
Government. These arrangements are the subject of proposed policy reforms but meanwhile this
revenue forms part of the funding envelope for provincial roads.
The amounts declared by provinces for recent years, allowing for under-reporting by provinces in
some years, indicate annual revenue of around K20 million distributed as indicated in Figure 41.
Morobe receives by far the largest share (excluding NCD), due to its location at the end of the
Highlands Highway network and the preferred registration place for many of the vehicles using this
road. Central Province also receives a relatively large share as vehicles have the option of
registering at the provincial office or through the NCD office, both of which are in Port Moresby.
There has been a rising trend in revenues from 2006 to 2009 of about 5% per annum, which is
indicative of a slightly higher rate of increase in vehicle fleet growth than indicated from other
sources.
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Figure 41 – Motor Vehicle Registration and Licensing Revenue, 2009
24.5.4 Main Port Revenues and Infrastructure Expenditure
Actual expenditure on maintenance of port infrastructure over the last available five year period
2004-2008 averaged K5.8 million, which include one exceptional year when expenditure on
maintenance rose to K16.6 million. The exceptional year is a better reflection of the maintenance
expenditure needed to retain the ports in good condition (see 23.2.2).
The future projections for PNGPCL ship and cargo based revenues derive from the allowances for
increased charges made in the existing regulatory contract with ICCC together with shipping and
cargo growth. Beyond the end of the contract period, which expires in December 2014 it has been
assumed that port charges will increase at the rate of general inflation (that is no increase in real
terms).
The future capacity of PNGPCL to fund capital development and maintenance will depend largely
upon port traffic throughput and the tariffs for berthage, wharfage and cargo storage. At present the
existing revenue from these sources is approximately K70 million/year together with other revenue
of K25 million.
However, only a proportion of ship and cargo related revenue is available to fund port maintenance.
As a proportion of operating expenditure, maintenance currently accounts for only about 5 to 10%,
although the maintenance requirement is much greater. On a pro-rata basis only about K6 million is
currently available for maintenance work, although this will increase with higher tariffs and
increased cargo demand. PNGPCL’s contract with ICCC allows increases in port tariffs, subject to
PNGCPL completing certain capital development works to a prescribed schedule.
It is assumed that PNG Ports will be required to repay loans, taken out by itself directly or through
IPBC as the state owner of the asset, to fund port infrastructure development at the main
commercial ports, in particular Lae, but also Port Moresby and Kimbe and any ports which, in
future, develop trade to a level that enables port maintenance, operation and capital charges to be
recovered through port dues on an individual port basis. The same would apply to port
infrastructure funded through PPPs - revenues would be expected to recover all investment and
recurrent costs including interest on capital.
Those ports that require external financial support to remain financially viable but are to be retained
as a matter of public policy, include a CSO funding element.
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24.5.5 Maritime Navigation Revenues
The NMSA receives revenues of about K28 million p.a. from a system of levies for maritime
navigation services and for its other responsibilities in maritime safety and countering marine
pollution. NMSA’s revenues are expected to fully recover costs, including future capital
replacement and rehabilitation of navaids as discussed in Section 23.2.4 of K12.5 million/year (2010
values).
24.5.6 Main Airport Revenues
NAC has been established under the Companies Act as a commercial Government owned
enterprise with responsibility for national airports as set out in Schedule I to the Civil Aviation Act
2000. NAC derives revenues from landing, terminal navigation and services charges, subject to
payment of part of the terminal fees to CASA. The levels of charges are set out in the Civil Aviation
(Aircraft Charges) Regulation.
In 2009, a National Airports Strategic Management Plan (NASMP) was prepared on behalf of the
then CAA. One of the findings from the NASMP was a shortfall in funding for airport maintenance
and critical upgrading requirements. While the split into NAC, CASA and PNGASL had the effect of
removing some previously second level national airports from NAC’s responsibility, and the CADIP
programme has effectively shifted the critical rehabilitation and development expenditure to
Government, there is still ongoing uncertainty as to whether NAC’s revenue stream will be sufficient
to fund airport operations and ongoing maintenance commitments. NAC’s aeronautical revenue is
approximately K25 million which, together with other revenues of approximately K10 million, are
required to cover all staff, operating and administration costs of which facilities maintenance is only
a minor part. On a pro-rata basis, only about 15% of recurrent costs are attributable to
maintenance, and an equivalent share of revenue is K5 million.
The NASMP has recommended that a detailed review of airport services charges, and air services
charges generally, be made against forward operating and maintenance costs, so that either any
shortfall can be identified and recognised as an ongoing subsidy obligation on Government, or that
charges are raised to cover costs. It was also recommended that NAC explore other non-
aeronautical revenue streams, such as airport concessions, airport land leases, airport terminal car
parking fees and commercial development on NAC land to lessen the reliance on aircraft landing
fees and terminal charges. The NTS endorses this course of action and it is assumed that this
combination of measures will enable NAC to significantly increase its revenue stream and operate
profitably, assuming that capital development costs are born by Government.
24.5.7 Air Navigation Revenues
PNGASL is a SOE incorporated under the Companies Act, with an objective to operate profitably.
PNGASL is able, under the Civil Aviation Act, to charge for aeronautical services based on aircraft
type and sectors flown, including international overflights which accounts for a large proportion of
revenue, and other en route services provided.
However, as for the main airports, it is recognised that PNGASL will not be able to recover the costs
of capital reinvestment in modernising PNG’s air navigation infrastructure, including the transition
from ground to satellite based services. It is also uncertain whether PNGASL will be able to fund
ongoing maintenance of the new assets out of revenue.
24.6 CSO Funding
National policy for community services obligation (CSO) funding for non-commercial public services
is still in the process of formation and is discussed in more detail in the policy section of the NTS.
However, the de facto CSO policy has been for certain SOEs such as PNGPCL and NAC to use
revenues from commercial operations to fund, even if at a minimal level, the maintenance and
255
operation of non-commercial assets. This has allowed the unprofitable national airports and ports to
receive some limited funding.
24.6.1 Roads
This profitability definition of a CSO is inappropriate for roads which are not provided within a SOE
framework with direct charging. In this case the CSO is the difference between economically viable
provision and that required for other policy reasons such as a basic l level of access provision for
social and redistributive purposes. Even where roads are economically viable, the ability to support
a road user charge at a level that will recover costs and not be so high as to encourage evasion is
limited to the more heavily used sections of the network. Also, any practical road user charges
system is likely to be a second-best option, as direct charging for road use is not yet a technically or
financially feasible proposition.
The road network can therefore be divided into three levels:
 the core network for which a feasible road user charges system based on fuel and vehicle
charges can financially support the life-cycle maintenance costs – corresponding generally
to roads under the management of the NRA, which is the recipient of user charges via the
Road Fund;
 less functionally important and/or lower traffic roads which are nevertheless economically
viable based on social benefit cost analysis, but which cannot be supported from the road
user charges system so require Government budget funding;
 the CSO roads that are not economically viable but which the Government wishes to
provide as basic access as a part of its social policy and redistribution of income.
24.6.2 Ports and Maritime
In the case of PNGPCL, the ICCC has estimated the full cost of the CSO under the port tariff
structure prevailing in 2010 as K28 million per annum. This reflects the actual expenditures on the
non-profit making ports and will not cover the remedial maintenance needs to bring all ports up to
their original operating condition, so is most likely a low side estimate.
For lower level infrastructure, there are no revenue streams supporting small wharves and jetties
owned by provincial and local level government and these facilities would almost certainly be
heavily loss making even if landing charges were to be levied. The original design of the CWTP
envisaged that maintenance costs of jetties constructed under this programme would be absorbed
into the government agency charged with management of the scheme, then expected to be the
NMSA, but currently lying with the DOT.
24.6.3 Airports and Air Navigation
For NAC, the National Airports Strategic Management Plan has examined the cost recovery across
the national airports for high and low economic growth projections over a 10 year period. This
showed Port Moresby and the first tier of regional airports (Nadzab, Tokua, Mt Hagen and Madang)
to have sufficient revenue to meet ongoing operating and maintenance requirements. Other national
airports were projected to have an average annual shortfall of between K36 and K43 million. The
scope for operating surplus from Port Moresby International and other first tier airports to cover the
operating losses at the remaining airports depended on a high economic growth path being
achieved. Once capital development costs were included, only Port Moresby International was
found to be capable of recovering its capital development plan costs from revenue. If PMIA capital
development is funded as a PPP, this will remove all or part of the opportunity for it to continue to
be used to cross-subsidise the low profitability national airports.
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For provincial secondary and other airports, airport charges are the responsibility of the managing
authority, normally the provincial government. It is not known to what extent landing fees are
currently levied at provincial airports but it can be assumed that ratio of revenue to operating costs
will be well below that of the least profitable NAC operational airports which is Kerema at 15%. For
rural airstrips under District, LLG, village or mission ownership again it is not known to what extent
landing fees are charged, if at all and the costs of maintenance are likely to be well below any
supportable user charge revenue. To the extent these facilities are maintained at all, all of the
funding can be regarded as CSO in nature.
24.6.4 Provincial Transport Infrastructure Maintenance Grants
At provincial level, the TIMG to provinces can be regarded as an existing CSO funding channel from
National Government recognising that Provinces, Districts and Local Level Governments have
limited resources to maintain public transport infrastructure, much of which has no accompanying
revenue stream.
24.7 Other Funding Sources
24.7.1 Sovereign Wealth Fund
The Government has recently proposed a Sovereign Wealth Fund (SWF) for the purposes of (a)
providing a financial buffer to level fluctuations in public expenditure (b) funding long term high
impact programs and projects aimed at economic and social improvement and (c) investment of the
surpluses from resource development in foreign currency for the long term benefit of the nation. The
revenue of the SWF will come from deposited taxes and dividends from mineral and oil and gas
resources development.
It is envisaged that funding of large infrastructure projects will be made from the SWF, with
approximately 30% being channelled through SOEs and 70% through the Government’s
Infrastructure Development Authority. The IDA will manage the disposition of this funding to projects
that are consistent with the national strategies and plans, that is the DSP, MTDP and, in the case of
the transport sector, the NTS and the MTTP (also refer to Section 10.6.2 on the IDA).
The funding stream to the Infrastructure Account generated by the SWF is so far unknown but
estimates made from information on the mineral resources revenues indicate a possible K1,200
million annually in the medium term. Part of this revenue will flow to non-transport projects, so a
rough order of magnitude for this funding stream of K1,000 million is estimated. However, this will
not be all “new money”, rather a different way of channelling some of the financing for large
strategic projects.
24.7.2 Tax Credit Scheme (TCS)
The Tax Credit Scheme provides for certain types of private sector industry to offset up to 0.75%
per annum of their assessable tax by making a direct financial contribution to development projects,
normally in the vicinity of the industry. It originated in the mining sector but is now spread over
several industries. Development projects can include transport infrastructure, both capital and
maintenance expenditure, but has also been used for school buildings, clinics and other
infrastructure. In some cases the TCS has enabled private companies to reduce the risk of
disruption to road access to their project sites either from lack of maintenance by the responsible
public agency or road blocks by local landowners.
The budget expenditure on the TCS over the five years 2005-09 has averaged K25 million per
annum, although the original budget appropriations have been at three times this level. It is not
clear what proportion of this tax credit has been expended on roads or other transport infrastructure,
but probably the major part.
257
24.7.3 Resource Development Contributions
Certain districts and provinces benefit from financial contributions provided as part of resource
development agreements, either with Government or landowners or both. This mainly applies to
areas where there is mineral, oil and gas or forestry development. In some cases the developer
constructs and maintains the infrastructure as well as providing funding.
Western, Southern Highlands, Enga and New Ireland Provinces, in particular, benefit from mining
and petroleum royalties and dividends where these sources contribute between 50% and 90% of
provincial revenues (Western province is the highest). Overall these sources contribute about 40%
of total provincial revenue.
24.7.4 Self-Help and Voluntary Contributions

At a local level, the routine maintenance of access roads, airstrips and jetties can be largely
undertaken by unskilled labour with hand tools provided there is some incentive to do so and
enough local people with disposable time. This can be expanded to the next level of maintenance
work by community purchase or donation of basic mechanical equipment, provided there is
provision for housing and maintaining it.
This “self-help” or “sweat equity” contribution was once more common than it is today, as people
have become more accustomed to wage payment for work undertaken, and expectations have
been raised that public agencies are responsible for providing basic access and that people will
always be compensated for use of land. The idea of a social contract whereby villagers contribute
land and labour in return for assistance in materials and specialist construction skills to enable local
transport infrastructure, has been in decline. The policy framework for the NTS includes provision
for incentivising and rebuilding a self-help culture to improve basic transport access.
24.8 The Overall Funding Envelope and Funding Gap
24.8.1 Roads
The present overall funding envelope for capital works and maintenance, based on recent
experience and the future outlook are summarised below, disaggregated by funding source and
type of works. These are based on averages over 2005 to 2009 converted to real 2010/11 values
or, in some cases where new funding is expected in future, the expected value.
In round numbers about K580 million/year is currently available for roads, with approximately 70%
being applied to national roads and 30% to provincial and local roads, although it is difficult to track
actual expenditure at provincial and local level and some of the national road programmes include
provincial components.
Table 38 – The Present Funding Envelope for Roads, K millions 2010/11

GoPNG GoPNG Grants & User Other Total
Description
DOW DNPM Loans Charges
- NRA
National Roads
Recurrent Maintenance 42 - 9 91 - 141 36%
Rehabilitation 102 - 140 - - 242 61%
Upgrading & Construction 5 - 2 - - 7 2%
Bridges 7 - 1 - - 8 2%
Total, National Roads 156 - 151 91 - 398 69%
39% 0% 38% 23% 0% 100%
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Description GoPNG GoPNG Grants & TIMG Other Total

DOW DNPM Loans
Provincial & Other Roads
Recurrent Maintenance - - - 30 - 30 17%
Rehabilitation - 71 - 30 12 113 63%
Upgrading & Construction 17 8 11 - - 35 20%
Bridges (no separate data) - - - - - - -
Total, Provincial & Other 17 79 11 60 12 179 31%
9% 44% 6% 34% 7% 100%
All Roads 173 79 162 151 12 577
A relatively small amount had been applied to recurrent

maintenance until 2010 when NRA commenced funding Projected Funding Envelope
roads that have been transferred to its responsibility. The and the Funding Gap
majority of spending has been on rehabilitating roads that 228. Roads
have deteriorated due to a lack of preventive
maintenance. Annual funding for national
roads and bridges has averaged
For provincial and local roads, funding through the K400M in recent years, and
DNPM’s development budget is the largest component of K180M for provincial and local
funding and has been directed at specific projects. The roads
Transport Infrastructure Maintenance Grant is the second
main channel of funding and has risen rapidly over the This expenditure has not always
last five years as a result of the reviewed inter- been well targeted, particularly
governmental funding arrangements (RIGFA); although at provincial level where there is
exactly how much of this grant is effectively spent on doubt concerning the correct
roads and other transport infrastructure is unclear. Further application and effectiveness of
smaller contributions are channelled through the DOW the expenditure
development budget, from loans and grants from Maintenance has been
development partners, and the remainder from a variety underfunded and several of the
of sources such as the tax credit scheme and resource development projects have not
development grants, although these are also hard to track conformed to priorities
and are targeted on specific provinces and districts. developed under the last NTDP
In 2010 there was a relatively large allocation to two To meet the MTDP requires the
missing link roads, channelled through the DNPM Budget allocation to roads to
development budget, but this is no longer in the forward double as a percentage of GDP,
PIP, so has been disregarded in the current funding even assuming the high rate of
envelope. GDP growth expected in the
In comparison to the national budget, from which almost MTDP
all road expenditure is currently derived with the exception The rate of increase in
of diesel excise revenues hypothecated to the NRA, total expenditure required will also be
expenditure on roads and bridges has averaged 5.6% of constrained by construction
total national budget expenditure over the five years capacity
2005-2009. As a percentage of GDP, expenditure on
roads and bridges has varied between 0.8% and 1.6% , with an average of 1.1%, over the same
period. There are no particular time trends in either case.
In future, the Government’s forward projections of expenditure in the PIP do not show any
significant change in the intended pattern of spending on roads and bridges. Indeed, expenditure
tends to drop away in outyears but this is probably due to projects yet to be identified. The main
increase in funding for the roads subsector is expected to be from road user charges revenue
channelled through the NRA for road maintenance, which is expected to rise to K400 million by
2030, giving a total funding envelope of approximately K1 billion. This rests on the assumption that
259
Government will not offset any loss in hypothecated revenue to the NRA by reducing allocations to
DOW, DNPM or provinces. As DOW will be extending its road network responsibilities with several
MTDP upgrading targets to be met together with the funding required for the missing links and
economic corridor roads, the DOW budget should be grown rather than reduced.
The forward projections of the funding envelope for roads make the assumption that, apart from
NRA road user charges, other GoPNG and Donor expenditure on roads will maintain a constant
percentage of 5.6% of the Government budget which in turn will maintain a constant ratio against
GDP (the budget has consistently been 33% to 35% of GDP). In the case of road user charges, the
projections already incorporate some real growth in revenue due to an increasing population,
vehicle fleet and GDP increasing at a similar rate to historic trends. The MTDP projection of GDP is
for much higher growth and NRA road user charges revenues have been factored up to allow for
this higher rate of growth. This gives the two funding projections in Figure 42.
The actual funding to roads and bridges from GoPNG and donors in 2010 was 6.6% of the national
budget, which is why the funding dips in the early years. Although the appropriation for 2011 is very
high once carried over funds held in trust are incorporated, it is unclear how these funds will affect
future budget appropriations, so a conservative approach is taken. In the outyears to 2014, real
GDP and budget projections show only modest growth
Figure 42 – Road Funding Projections
Comparing the funding requirement from Table 32 with the above funding profile gives a large
funding gap as shown in Figure 43.
Figure 43 – Roads Expenditure Projections, Annual Funding Gap, K millions (2010/11)
260
The figure illustrates that a funding gap of K1 billion annually opens up almost immediately under
the expenditure profile required to fund the MTDP. To bridge the funding gap would require the
budget allocation for roads, including GoPNG and donor contributions, to approximately double
from 5.6% to 11% of the national budget and be sustained over the period of the NTS.
The rapid increases in funding required in the early years are in order to meet 2015 targets set in
the MTDP. Assuming that funds are available, the required increased in capacity of both the
Government and private sector to meet this expenditure profile are unrealistic.
24.8.2 Ports and Maritime
Funding for ports and maritime navigation comes from the national budget for some development
spending and otherwise from PNGPCL and NMSA revenues and retained earnings. The
Government contribution over the five years 2005-2009 has averaged K6.5 million, only 0.1% of the
national budget.
Under the tariff structure prevailing at in 2010 prior to the new regulatory contract, the capacity of
PNGPCL to fund capital development and maintenance from its own resources was limited by its
revenue stream. Almost all capital development in recent years has been financed through
development budget appropriation. Expenditure on maintenance has averaged K5 million/year
which is estimated to be only 15 to 20% of that needed to maintain all PNGPCL ports in good
condition.
Lae Port expansion is the largest capital development

currently in progress, although only one of several
Projected Funding Envelope
planned over the medium term. Assuming that the tariff
and the Funding Gap
increments in the regulatory contract with ICCC are fully 229. Maritime
implemented or, alternatively, the cross-subsidy
Government capital expenditure
arrangement for CSOs is replaced by direct funding
on the declared ports has
support allowing PNGPCL to be freed from price control,
averaged K6.5 M or 0.1% of the
then the capacity of PNGPCL to service the planned
Development budget
project loans and at the same time carry out maintenance
of national ports for which it is financially responsible will Maintenance expenditure has
be greatly enhanced. averaged K5 M p.a. only 15% to
20% of what is required to
From the available information, the outlook for the main maintain the assets in good
ports is that PNGPCL should be able to fund the capital condition.
costs of all port new construction and rehabilitation works
that show a positive economic rate of return as identified PNGPCL should have the
by TIPS together with the ongoing maintenance costs of capacity to fund capital costs of
the national ports, with the exception of those port construction and maintenance of
rehabilitation and maintenance costs that fall within the Lae, Port Moresby and Kimbe
community services obligation (CSO), as identified by from revenue and development
ICCC and subject to ongoing review. PNGPCL’s funding loans, but will require CSO
arrangements may include a variety of sources, including funding support for all other
concessional loans, grants, commercial borrowings and ports.
PPP arrangements. Maritime navaids are expected
to be fully funded from NMSA
Maritime navaids are expected to be fully funded from
revenue in future, once all are
NMSA revenues. The CSO component of national ports
restored to good operable
rehabilitation and maintenance, secondary and minor
condition.
ports and certain other maritime services costs are
discussed under CSO funding in Section 12.6.
261
24.8.3 Airports and Air Navigation
Funding for airports and air navigation comes from Government budget allocation and from
revenues of NAC and PNGASL. The Government’s annual budget contribution averaged for the five
years 2005 to 2009 has been about K8.4 million or 0.13% of the national budget. This will grow
substantially to around 3% of the national budget under CADIP, including Government’s direct
contribution and loan funds.
The National Airports Strategic Management Plan (NASMP) has modelled future scenarios for air
traffic growth, revenue streams and costs for NAC airports, based upon CAA’s LTIP capital works
programme with some suggested reductions in the proposed development of airport terminal
buildings. The NASMP has postulated low and high growth air traffic projections, based upon lower
(trend) or higher economic growth rates (corresponding to MTDP anticipated growth) over the
period to 2018.
The higher growth (MTDP) scenario leads to a small

overall operating surplus over the first 10 years for the
Projected Funding Envelope
NCA domestic airports subject to a number of
and the Funding Gap
management recommendations being followed; however 230. Air
the low growth (trend) scenario still leads to an operating
Capital funding of the national
deficit. Recurrent airport maintenance is included in the
airports with the exception of
operating costs, so a deficit implies inability to cover all
PMIA is met through CADIP
maintenance funding needs. None of the capital
Projects 1-4 development loan
development costs are covered.
to approximately 2017
The funding envelope for development of the main PMIA capital funding to carry out
airports under CADIP is committed only for Project 1, but the Master Plan is expected to
is covered by the Multi-tranche Financing Framework for be through a PPP arrangement
CADIP Projects 1 through 4, subject to overall limit of financed from the ongoing
ADB financing and Government providing its contribution. revenue stream; failing this
This funds the main airports development works through Government Development
the first half of the NTS, leaving the second half (2019- Budget funding would be
2030) with no firm commitment. However, it is expected required, probably with donor
that a second CADIP multi-tranche financing facility would lending support.
follow on, assuming successful completion of the first
programme. As less economically attractive projects are Beyond 2017, capital
likely to fall into this notional second programme, it should development envisaged under
be regarded as subject to confirmation at each main the MTDP will rely on a further
review period for the NTS. development loan of similar size
to CADIP
The NASMP proposes that the operating shortfall of the
Provincial airports and rural
less profitable airports which is all those except Port
airstrips are largely unfunded
Moresby and the regional airports of Nadzab, Tokua, Mt
and require a CSO arrangement
Hagen and Madang should be recognised as CSOs and
be subject to a contract between the Government and CNS/ATM upgrading is funded
NAC. To enable alternative funding arrangements, such from CADIP but ongoing
as the proposed PPP for Port Moresby International maintenance is unlikely to be
Airport, it is desirable that each airport be accounted as supportable from PNGASL
an individual cost centre or separable business revenue
enterprise, allowing flexibility to tailor landing and terminal charges to each airport, which would also
facilitate a CSO arrangement.
The secondary, other provincial airports and rural airstrips are essentially unfunded in regard to
their ongoing maintenance and capital expenditure needs. Figure 44 shows the projected funding
gap for airport development under the MTDP.
262
Figure 44 – Airports & Navaids Expenditure, Annual Funding and Funding Gap, K mill (2010)
The CADIP programme for the NAC airports and air navigation systems, together with PPP funding
for Port Moresby is assumed to provide the bulk of capital funding, leaving rehabilitation of
provincial airports, rural airstrips and maintenance of all facilities except for PMIA, Nadzab, Tokua
and Mt Hagen all unfunded. The overall financing agreement for CADIP will allow about 45% of the
national airports and navaids development programme as identified in the MTDP to be funded,
lasting through until mid-2017/18.
The funding gap for other provincial airport and rural airstrips construction and for all maintenance
not covered by airport charges is approximately K50 to K55 million/year in 2010 values over the
whole 20 year period.
263
25 Ongoing and Committed Projects
25.1 Introduction
In developing the Medium Term Transport Plan which has a one to five year focus, recognition must
be given to ongoing and committed projects. In general those projects that have been developed
with donor support and those which have been through the DOT coordination process of
prioritisation prior to budget submission are consistent with the NTS priorities in their categories of
expenditure. However, this does not necessarily mean that the best projects are being selected
and there is an imbalance between maintenance which is seriously underfunded and upgrading and
new construction.
25.2 Committed and Ongoing Road Projects
Road infrastructure maintenance and development is being delivered through the following
programs:
 DOT – feasibility studies for roads are included in DOT’s budget;

 DOW – mainly national roads, although some provincial and urban roads are also included,
and primarily through the Development Budget;
 Defence – two new roads being constructed by the Defence Force are now included in that
department’s budget, previously through DNPM;
 DNPM/ORD – funding of the District Services Improvement Program (DSIP), predominantly
roads, was delivered through DNPM’s budget to 2011 and through ORD budget from 2012;
 National Road Safety Council (NRSC) – is provided with development budget for safety
related programs;
 National Roads Authority – support to maintenance on NRA roads for capital works and in
lieu of an early start up of the full road user charges scheme ;
 Provincial Governments – through TIMG and individual project grants.
The DOT from time to time conducts feasibility studies for road projects, including engagement of
consultants. Apart from a budget allocation in 2011 for a study of the Gulf-S Highlands and Trans-
Island links, there are no committed projects in 2012 and beyond.
Most road works are delivered through the Development Budget, although there has been a move
to maintenance under the Recurrent Budget, to emphasise that it should be looked on as an
ongoing commitment. However, many of the donor assisted programs, which are in the
Development Budget, are mixes of routine, periodic and restorative maintenance. Also, some of the
donor funded projects include mixes of national and provincial roads and mixtures of roads and
bridges, despite the title of the program they have been classified under.
There is a lot of inconsistency in how projects are classified into programs (for example provincial
roads appearing under national road programs, asset management under “Construction and
Upgrading”, urban roads under “Rural Transport” etc.) and new project numbers are often opened
under a different program for what is a continuation of funding to a subsequent year. The PIP then
confuses matters further with a different set of Program names.
264
There is a trend towards life-cycle based funding through performance-based contracts that include
capital works and maintenance over a period of time. So projects that are a mixture of types of road
work are likely to be more common in future.
Rather than follow the somewhat confusing program names given to them in the Budget and PIP,
projects are described below under headings of:
 Road and bridge maintenance (GoPNG - Recurrent Budget)

 Donor supported road and bridge programs and projects
GoPNG funded:
 National road maintenance, rehabilitation and construction
 Provincial road maintenance, rehabilitation and construction
 Urban roads
 Bridge projects
 Other expenditure,.
Road and Bridge Maintenance (Recurrent Budget)
 Maintenance of National Priority Roads (Activity 11632): this is a budget to cover the entire
national road network, although maintenance is also included in the Development Budget.
The RAMS-generated road maintenance plan was transferred to the recurrent budget in
2009. In part this was to emphasise that road maintenance in an ongoing and largely
predictable annual activity that needs to be funded at an optimum level that will provide the
lowest combined cost to the road provider and road user (noting that costs to road users
from reductions in road maintenance are considerably greater than any savings to the road
provider).
Historically, road maintenance has been severely under-funded for many years, if not
decades, and the latest 2013 Budget is no exception. The DOW was so inured to receiving
only a fraction of the funding requirement that for several years the budget submissions
covered only routine light maintenance to roads that were in good or fair condition, the
remainder being left to deteriorate further and then become objects of largely donor funded
reconstruction and rehabilitation programmes. The budget submissions were probably not
helped by separately listing priority and non-priority roads, which could give the impression
that the non-priority items could be passed over for funding without too much concern. The
priority roads in this case were the 16 national priority highways and the non-priority was
the remaining national road network. Typically the budget submissions were for K100 - 200
million while the appropriation was between zero and K30 million.
Since 2010, DOW has submitted a budget based upon the maintenance actually required to
restore the existing network to good condition over time, which now requires an expenditure
of some K2 billion per year for a number of years. Meanwhile actual funding has continued
at a level of K60 to K70 million annually which, although an improvement over the K20 to
K30 million through the 2000 – 2010 period is still well short of what is required. The K2
billion is perhaps something of an exaggeration as some parts of the network are covered
under the Development Budget as part of the large donor funded projects, and a small but
increasing length of the network is being covered by the NRA funded from road user
charges. Nevertheless, this NTS has estimated that once restored to good condition, an
average annual expenditure of approximately K400 annually is required for annual road
maintenance, so the shortfall would still be some 85%, even if all rehabilitation and
reconstruction is catered for separately in the Development Budget.
 National Bridge Maintenance (Activity 11806) - a request for over K200 million/year for 2013
rising to K310 million in 2017 was made for maintenance and repair of cross drainage
265
structures (large culverts and bridges) nationwide with needs assessed using the BAMS.
The Budget appropriation in 2012 and 2013 was for about 15% of the assessed
requirement.
Donor Supported Road and Bridge Programs and Projects:
 Transport Sector Support Program (TSSP) (AusAID Grant, GoPNG) – routine, periodic,
specific and bridge maintenance of selected sections of the 16 identified national priority
roads in the NTDP in 12 provinces. The priority roads identified in NTDP remain important
and the nature of the work, being maintenance of the assets, is also of high priority. TSSP-1
concluded in mid-2012.
The TSSP-2 work programme currently projects forward to 2014 so there is no firm
commitment beyond that time, although a provision on some projects for expenditure in
2015+ In the Partnership Agreement document, the road assistance is indicated to be
K179.4 per year over the 2013 to 2015 period, although this is expected to be exceeded
based on the 2013 plan. TSSP as a whole is conceived as a 15 to 20 year commitment
from 2007, so has many more years to run and TSSP-2 has an approximate finishing date
in 2018. The K179/year funding has therefore been assumed to continue as an indicative
spend at least through to 2018.
Road sections included in the TSSP programme include: Central Province sections of the
Hiritano Highway; the Magi Highway in Central and Milne Bay Provinces; Milne Bay East
Coast Road; lower sections of the Lae-Wau Road; sections of the Highlands Highway in
Morobe and Eastern Highlands; sections of the New Britain Highway in both East and West
New Britain; New Ireland - sections of the Boluminski Highway and West Coast Road; The
Ramu and Coastal Highways through Morobe, Madang, East Sepik and Sandaun
Provinces.
 Highlands Road Maintenance and Upgrading Project (ADB, GoPNG Counterpart Funding)
– this project provided mainly for the upgrading to seal of sections of national road and
selected provincial roads in the five Highlands provinces from 2003 to 2007. The project
was extended with supplementary donor financing which was exhausted in 2012 but
continued using GoPNG funding and is now expected to complete by 2014. Roads
remaining to be completed are Raipinka to Okapa Stage 1 (gravel rehabilitation), Kamaliki
to Bekuvia (upgrade to seal), Ialibu to Seven Corners (rehabilitation), Kiapau to Pangu
(rehabilitation) and Chuave to Move Road (resealing).
 Highlands Region Road Improvement Investment Program (HRRIIP) (ADB, GoPNG
Counterpart Funding) – this is being implemented under the first tranche of a multi-tranche
financing facility (MFF); the facility itself runs through to 2018 and has an overall financing
provision of up to US$750 million (approx. K1,600 million) including $400 million ADB, $150
million possible co-financing and $200 million GoPNG. The MFF is expected to be
disbursed in four tranches.
The first tranche/project is for upgrading to seal of Mendi to Kandep (NR005, 50 km),
Laiagam to Pogera (NR0005, 65km) from mid-2012 to mid-2014. The project was originally
also to include three sections of the Koroba Road (NM3701) Nipa to Margarima (26 km),
Margarima to Nipa (41 km) and Hiwinda Junction to Koroba (29km) and upgrading of
selected feeder roads to improved gravel standard: Kandep to Margarima (34km), Nipa to
Munihu (23km), Kuare to Tindua (14.8km) and Mendi to Tambul (40 km). The two national
roads NR0005 and NM3701 are among the priority ranked road sections for upgrading from
NTS analysis (Table 43). Progress is nearly two years behind the original schedule and
risks exceeding the closing date of the Tranche 1 loan in 2014
Tranche 2 projects have been identified as upgrading to seal of Mendi to Tambul (ND3704,
SHP/Enga), Ialibu to Kagua (NM3703, SHP) and Kotna to Lampramp (or Lyaporambo) on
266
the Baiyer Road (P390303, WHP). Ialibu to Kagua is an important link, functional class II,
and will become more important when the Gulf-S Highlands connection is made. The case
for Mendi to Tambul is less clear. While Tambul is a district centre it is in Enga Province
and has a relatively short link to the Enga Highway. The Tambul to Mendi road traverses
relatively lowly populated terrain around the northern slopes of Mt Giluwe and has been
nominated as functional Class IV. TIPS analysis indicates “Maintenance Only”. The Kotna
to Lampramp Road similarly provides an additional cross-link rather than being a primary
connection and has also been nominated a Class IV. However, in this case the population
concentration and agricultural potential are probably higher.
The forward commitment by Government to Tranche 2 and subsequent tranches of this
program are not clear from the PIP. Table 40 shows the level of funding anticipated from
the MFF disbursement profile which is somewhat higher, particularly beyond 2014.
 Bridge Replacement for Rural Access (ADB loan, GoPNG Counterpart Funding) – this
project replaces temporary or damaged/aged single lane steel truss bridges on main
highways with permanent materials and deploys any usable system bridging components
for use on rural feeder and access roads. The project is programmed for 2012 to 2016 at a
value of US $82 million (K175 million). The bridges are to be selected based on BCR and
are expected to be on the Magi, Hiritano, Ramu, Sepik and New Britain Highways.
 Road Maintenance and Rehabilitation Project-2 (World Bank loan, GoPNG Counterpart
Funding) – this project provides $40 million (K82.4 million) for road rehabilitation and some
road upgrading from gravel to seal on both national and provincial roads. The project will
concentrate on the Hiritano Highway, including sealing of two unsealed sections between
Port Moresby and Kerema, rehabilitation of other sections and routine maintenance of all
sections prior to the rehabilitation/upgrading works. The Hiritano sections are consistent
with the NTS and with the Government’s priority to develop the PRAEC corridor. In future,
new sections should be selected based on NTS and MTTP priorities. The project runs
through to 2016. While the loan allows for expenditure in other provinces, present
indications are that the identified projects will absorb all of the loan funding.
 Usino Junction to Yamagi Road (Grant Funding China, Madang) – a new access road to the
Ramu nickel mine, about 95% funded by China and the remaining K2 million by GoPNG,
2011-2012.
Table 39 - Recent, Committed and Proposed Road Upgrading, Donor Programs

2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Donor, Road, Rd No, Prov-
Section kms
Treatment Sect ince
AusAID – Transport Sector Support Program (TSSP)

Hiritano Highway NR0001
Repair, Reseal 060-070 Cen Veimauri – Doa Plantation 26
U/G to Seal 090 Cen Agevairu - Akerama 16.4
U/G to Seal 100-110 Cen Akerama - Aropokina 18.3
Magi Highway NR0002
Repair, Reseal 110 Cen Kemp Welch – Matairuka 15.8
Reseal 130-140 Cen Lebugoro – Alepa Jnc 14.4
Repair, Reseal 170 Cen Upulima Br – Imila Br 7.4
U/G to Seal Cen unspecified
Regravelling Cen unspecified
Repair, Reseal 610 MBP Goilani - Kainako 9
Repair, Reseal 600 MBP Kainako - Hagita
267
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Section kms
Treatment Sect ince
Repair, Reseal 590 MBP Naura - Gumini 10

U/G to Seal MBP unspecified 10
Wau-Bulolo NR0004
Repair, Reseal 010 Mor HH to Markham River 4.0
U/G to Seal 140 Mor Bulolo – Pinetops Br 5.5
U/G to Seal 160 Mor Kuranga Br – Wau Ck Br 9.5
Enga Highway NR0006
PBMC 080-100 Enga Wapenamanda - Wabag 31.6
Highlands Highway NR0007
LTMC 010-200 Mor Lae Wharf – Yung Creek 168.8
LTMC 210-400 EHP Yung Ck – Magiro Creek 182.1
Ramu Highway NR0008
Repair, Reseal 010-040 Mor Waterais - Pompoquato 30.3
Repair, Reseal 040-110 Mad Pompoquato - Usino 75.2
Repair, Reseal 190 Mad Gogol Br – Baidal Modilon 12.8
Regravelling 140 Mad Mupu Br – Biribiri Mountain 7
U/G to Seal 140 Mad Mupu Br - Yabour 7
U/G to Seal 190-200 Mad Gogol Br – Tapo Ford 13
U/G to Seal Mad Remaining gravel sections
Coastal Highway NR0009
Repair, Reseal 010-060 Mad Ramu Hway – Sumerang Br 42
Repair, Reseal 130-170 Mad Kumul Br – Ulingan Jnc 34
U/G to Seal 190-210 Mad Nimuru Br – Deigum Br 20
Repair, Reseal 220-240 Mad Deigum Br – (Bogia) 32
Repair, Reseal 530 ESP Kreer Jnc – Nagam Br 18
U/G to Seal 540 ESP Minga Ck – Hawaian Riv 9.6
U/G to Seal 550 ESP Hawaian Riv - Parom 12.4
U/G to Seal 560 ESP Parom - Malamba 12.7
U/G to Seal 570 ESP Malamba - Hogi
U/G to Seal 570-580 ESP Hogi –
U/G to Seal 800-810 San Sawmill Jnc – Pasir Jnc 3.5
Regravelling 830-850 San Yalinge Riv - Romei 18
U/G Gravel 860- San Romei -
Regravelling 950 San Davi - Musu 6
New Britain H’way NR0010
Reseal 010 ENB Tunnel Hill Jnc _ Burma Hill 12.4
Rehab, Reseal 020 ENB Burma Hill – Vunadidir Jnc 6.8
Reseal 030 ENB Vunadidir J – Malabunga HS 8.4
U/G to Seal 040 ENB Malabunga HS - Gaulim 8.4
Rehab, Reseal 235 WNB Gigipuna Jnc – Koloi Br 5.0
Repair, Reseal 250-260 WNB Ruma Bx – Tiauru Riv 9.6
Reseal WNB unspecified
U/G to Seal WNB unspecified
Sepik Highway NR0012
Repairs 010 ESP Passam - Nagam 2.5
Rehab ESP Toanumbu - Warabung 31
268
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Section kms
Treatment Sect ince
Rehab ESP Drekikir – Warasikau Br

ESP unspecified
Regravelling WSP Asini Fd – Sipik Digicel 6.5
LTMC gravel WSP unspecified
WSP unspecified
Boluminski H’way NM4701
Reseal 060-080 NIP Paruai - Pananma 28
Reseal 090-130 NIP Pananma - Tandis 38
Reseal 250-260 NIP Pire - Namatanai 10
U/G to Seal NIP unspecified
U/G to Seal NIP unspecified
East Coast Road ND3501
U/G to Seal 030-040 MBP Daduwe - Lelehudi 15.7
Regravelling 050 MBP Gadudu – East Cape 14.7
West Coast Road ND4703
Sealed Repairs 020-060 NIP Marakalang - Kalili 54
Sealed Repairs 070-100 NIP Kalili - Labur 43
Sealed Repairs NIP unspecified
Sealed Repairs NIP unspecified
Mai - Nuku Road P450301
U/G gravel all WSP Mai - Nuku 28
Oro Bridges Oro Cyclone restoration 4 no.
ADB – Highlands Region Road Maintenance and Upgrading Project (HRRMUP)
U/G to Seal NM3901 WHP Mt Hagen - Baiyer R Stage 2 13.5
U/G to Seal NR0011 Simbu Kundiawa - Gewa 10.6
Rehab Gravel P410503 EHP Rypinka - Okapa 51.3
Sealing P410304 EHP Kamaliki - Bekuvia 17.3
U/G to Seal NM3703 SHP Ialibu - 7 Corners 19.7
U/G to Seal ND4003 EHP Chuave - Move 18
Wabag – Mendi Rd NR0005
U/G to Seal 100-110 Enga Kandep - Kaikau 21.5
Rehab 070-090 Enga Kaikau - Pangu 18.8
ADB – Highlands Region Road Investment Improvement Program (HRRIIP) – Project 1
Wabag – Mendi Rd NR0005
U/G to Seal 260-280 SHP Mendi - Peane 21
U/G to Seal 180-250 Enga Peane - Kandep 29
Porgera Rd NM3901
U/G to Seal 010-090 Enga Laiagam - Porgera 65
LTMC above NM3901, NR0005 115
LTMC SHP Tari – Koroba, NM3701 96
ADB – Highlands Region Road Investment Improvement Program (HRRIIP) – Project 2
U/G to Seal ND3704 SHP Mendi – Tambul 40
U/G to Seal NM3703 SHP Ialibu – Kagua 34
U/G to Seal P390303 WHP Kotna - Lampramp 23
ADB – Highlands Region Road Investment Improvement Program (HRRIIP) – Projects 3/4
unspecified
269
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Section kms
Treatment Sect ince
ADB – Bridge Replacement for Improved Rural Access Project (BRIRAP)

Replacement NR0001 3 bridges
World Bank – Road Maintenance and Rehabilitation Project (RMRP1 and 2)
Hiritano Highway NR0001
U/G to Seal 130 Cen Aropokina - Buioto 8.5
U/G to Seal 140 Cen Buioto - Inawabui 4.7
U/G to Seal 140 Cen 126.5-134 7.5
U/G to Seal 140-150 Cen Inawabui – Bereina Jnc 17.5
Recons Gravel 230 Gulf Malalaua – Kepemai Br 18.0
U/G to Seal 220-250 Gulf Malalaua - Epo 57
Reconstruct 230-250 Gulf Kepamai Br – Uamai Br 26.0
Reconstruct 250-280 Gulf Uamai Br - Kerema
Construction 280 Gulf Wara Kerema Bridge
Magi Highway NR0002
U/G to Seal Cen 9.5
U/G to Seal 150 Cen Matariuka-Bukuku (3 sects) 10.2
Northern Highway NR0003
Reseal 020-040 Oro Girua - Oro Bay 35.5
New Britain H’way NR0010
Reconstruct 300 WNB Bilomi - Koriri 13.8
Reconstruct WNB Koriri - Pisi 10.2
U/G to Seal WNB Koloi - Balaha 10.4
Torna Highway
U/G to Seal ENB Baliora - Tokorongan
Kokoda Highway NM3601
Reseal 010-020 Oro Popondetta – Inhambo 19.75
U/G to Seal 050 Oro Embara - Kumusi 9.5
E-W Highway NM4604 Man
Regravelling 030-050 Man Tingou - Mundrau 22.0
Reconstruct Worei Rd Man Tingau - Worei 9.0
Reconstruct Baliora ENB Baliora - Tokorongan 10.0
JICA
Strengthening NR0004 Mor Markham Bridge
Restoration NM5001 BVE Buka Road Bridges 15 no.
China
Rehabilitate Ramu Ni Mad Usino Jnc to Yamagi 16.0
Highlands Highway NR0007 (possible EXIM Bank Loan)
Repairs, Reseal 010 Mor Wharf – 2 mi Jnc 5.9
4 Laning 020 Mor 2mi Jnc – Wau Rd Jnc 6.9
Repairs, Reseal 030-060 Mor Wau Jnc - Nadzab 26.9
Reconstruction 620-630 SHP Kisenapoi - Ialibu 24.1
270
National Road Maintenance, Rehabilitation and Construction (GoPNG)
The following projects were funded in 2013:

 Alotau to Gurney (Magi Highway, NR0002) – sealing from Alotau to Gurney Airport turn-off,
a project with a very high BCR. A lump sum of K5 million was provided in 2012; this was
without any feasibility, design or cost estimate.
 Kumalu By-Pass (NR004 Morobe) – K14 million allocated 2012 to construct a local
deviation of the Wau Highway (NR004) to overcome a river erosion problem; originally the
submission was for a feasibility study but subsequently increased to fund the full project
 Wapenamanda to Wabag (NR006, Enga) – repair and reseal 28.9km of the Enga Highway
over two years at a cost of K24 million spread equally over 2012 and 2013; Rehabilitation of
this section has a preliminary BCR of 2.8 from TIPS using a cost estimate of K35 million for
a longer length of 32.5 km and is a high priority. The Togoba to Wabag section is part of
TSSP grant assistance but is contingent upon GoPNG part funding which this would
provide.
 Highlands Highway Maintenance (NR0007) – specific maintenance to parts of the
Highlands Highway, near term focus being on Simbu province and through Southern
Highlands Kisenapoi to Angura Bridge. K80 million was appropriated in each of 2012 and
2013, with K100 million in the PIP for each of 2014 and 2015.
 Vanimo Highway (future part of NR0009) – upgrading of the existing gravel road and
regravelling between Aitape and Vanimo. K10 million was appropriated in 2013.
 New Britain Highway, Ulamona to Open Bay (NR0010) – a lump sum of K10 million was
provided in 2011 to commence work on this missing link and completion of a pilot track
between Malasaet and Alakasam (14 km) is expected in early 2013. The completion of
missing sections between Rabaul and Kimbe has the highest BCR of all the missing link
and new economic corridor roads.
 Maintenance of Specific National Highways – one-off individual lump sum budget
allocations have been made for amounts of K5 or K10 million for maintaining: NR001
Hiritano, NR002 Magi, NR0003 Northern, NR0010 New Britain, NR0012 Sepik, NM3601
Kokoda, NM4701 Boluminski, and ND3701 Koroba-Kopiago (Oksapmin Road) Highways
overall K100 million in 2012 and K130 million in 2013 but with no continuity of funding in
outyears. None of these were in the budget submission.
 Malalaua to Kaintiba Road (NM3201) – a lump sum of K10 million was appropriated in 2012
towards the rehabilitation/construction of this link between the Hiritano Highway at Malalaua
and Kaintiba; only the section from Yandati to the mine is recorded in the inventory. The
project appears in the 2013 Budget under Malalaua to Kotidanga (see below)
 Tapini Road reconstruction (NM3304, Central) – K98 million over five years to reconstruct
98km of the Goilala road. The preliminary BCR from TIPS is 0.3 but did not consider the
benefits to the Tolukuma gold mine, which is a spur road off the Goilalai Road at Abele
River. This would restore an all-weather road connection to a significant area of population
and with high potential for supplying Port Moresby with market produce. The TIPS cost
estimate for this road is K98 million.
 Goilala access road (NM3304) - from the Hiritano Highway to Tapini District HQ and a spur
road to Tolukuma, both populated areas with poor access. No feasibility study has been
carried out. The 2012 Budget submission was for K68 million spread over five years of
which K10 million was allocated in 2012. The 2013 Budget submission was changed to K60
million spread evenly over six years, but no further funding was forthcoming.
 Wau Junction to Menyamya Junction (Aseki Road, NM4201, Morobe) – reinstatement of 85
km of road and bridges, at estimated cost of K10.5 million over three years. The project was
submitted in 2012 but not funded It was resubmitted in 2013 at K7 million over two years.
271
The TIPS preliminary evaluation is a BCR of 0.8 for upgrading to seal based on a cost of
K75 million excluding bridges. The first section will certainly justify sealing but the more
remote sections might justify only an upgraded gravel surface and a full feasibility study is
required. The road links a large population catchment area and has a functional
classification of III. If it became part of an alternative route for the Trans-Island missing link
via Kaintiba, this road would assume a higher functional status, potentially of Class I.
 Bundralis to Ndrehet (NM4604 Manus) – this is a 32 km extension westwards along the
north coast of the East-West road on Manus Island, an ongoing project from 2007. This
was a continuation of a 2012 project where K3.5 million has been appropriated as the total
budget requirement but a further K3.5 million was subsequently requested in 2013. Again,
this is a project ranked highly in the Provincial Development Plan although not nationally.
There is no supporting economic feasibility study. The route of the road does not appear to
agree with that in the Manus Sectoral Implementation Strategy which identifies the routes of
potential future national roads on the island It is not one of the missing links identified in the
DSP although Manus as a province is shown as an Economic Corridor
 Boregaina to Wiga Road (ND3308, Central) – rehabilitate and upgrade to seal a neglected
43km national road from the Magi Highway to inland Rigo District to provide access for
health, education and produce marketing. K43 million was requested over 5 years to 2016
in the 2012 and 2013 budget rounds, but was passed over for funding on both occasions.
TIPS evaluated this upgrade with a BCR of 0.3 based on the same capital cost.
 Hula Road (ND3314, Central) - rehabilitate and upgrade to seal a neglected 48km national
road from the Magi Highway to inland Hula District to provide access for health, education
and produce marketing. K48 million was requested over 5 years to 2016 in 2012 and again
in 2013 but was passed over on both occasions. Reconstructing this road had an estimated
BCR of 1.6 in TIPS based on a cost of K54 million, a relatively good ranking.
 Tomba to Piambi Road (Tambul Road, ND3704, WHP) – rehabilitation and maintenance of
32km was funded to K5.5 million in 2012 with no forward projection. A further K5.5 million
was requested in 2013 which was not funded. As far as Tambul which is a district centre the
road is functional Class II and beyond Tambul, Class III.
 Gumine to Karamui Road (ND4002, EHP) – this project was a late addition to the 2012
Budget and provided K10 million for the extension of this access road towards the isolated
inland district of the Karamui plateau, one of the Economic Corridor roads, but not a high
priority and without any supporting feasibility study. No submission was made in 2013. A
large expenditure is needed to reach Karamui and the best access is not clear and could be
through Eastern Highlands via an extension of the Lufa – Gono Road.
 Chuave to Move Road Sealing (ND4003, Siani Road, EHP) – this project was a late
addition to the 2012 Budget and was not part of the sector submission. K6 million was
allocated in 2012. A further K6 million was requested for 2013 but was not funded. The
TIPS preliminary assessment for sealing this road is a BCR of 0.8 based on a rough order
of cost estimate of K22 million.
 Bougainville, Kokopau to Arawa (Buka Road NM5001) - a lump sum of K20 million was
provided in 2011 to commence work on upgrading this main route down the east coast
connecting the present administrative centre of Buka with the pre-conflict capital of
Arawa/Kieta. This project has a high preliminary BCR.
Provincial Road Maintenance, Rehabilitation and Construction (GoPNG)
The District Services Improvement Program (DSIP) and the Transport Infrastructure Maintenance
Grants (TIMG) are the inter-governmental channels for providing the provinces for capital and
maintenance funding for provincial and local roads. However, a number of provincial roads are
nevertheless funded through the DOW Development Budget. It was notable in 2013 that the
Budget submissions for provincial roads (under Provincial Roads Transport Support and Rural
272
Transport Development) were almost all rejected for funding, and those that were partially funded
were described as new rather than continuing projects.
Funded projects in 2013 were:
 Wapenamanda to Baiyer Road (Enga) – pavement repair and reseal of 28km at a cost of K
30 million, over one year, was submitted in 2012 but not funded. The project was
resubmitted in 2013 as the Wapenamanda to Yalis Road covering the first section from
Wapenamanda towards Kompiam for K18 million over 2013-2014, of which K10 million was
appropriated in 2013 listed under a new project Kulupuga Road. The Wapenamanda to
Kompiam Road has been assigned a Functional Class II and the connection between this
road and the Baiyer River Road is assigned as a future Class III road. It is likely that the
Wapenamanda to Kompiam Road would be considered for national road status in future as
part of the Government’s policy to extend the national network.
 North Coast Highway (Milne Bay) Rehabilitation, Topura to Kwabunaki – this is an
incremental extension or possibly reinstatement of an old road from the existing end point at
Topura, west to Kwabunaki, currently a provincial road (P113547) but part of a long term
plan to create a continuous road along the north coast to Rabaraba so might eventually
become a national road. It is part of the Bubuletta - Motau - Lavora - Raba Raba - Agaun
Missing Link. A one-off K10 million lump sum allocation was requested in 2012 of which K7
million was appropriated K6 million expended. In 2013 a budget request for a further K6
million was made and K5 million was funded under a new project number and name
(Bubuleta to Agaun). Although part of Milne Bay Province’s plan, the economic feasibility of
this route has not been established and it is not one of the higher national priorities, so the
investment is questionable, particularly if nationally funded.
 Kulupuga Road (WHP, Enga) – this project was not part of the 2013 Budget submission but
was funded to K10 million and is apparently for the restoration of minor provincial road link
between Western Highlands (Lumusa area) and Enga Province (Pawari Area) although not
clearly defined
Projects submitted by DOW which were not funded in 2013 were:
 Tolukuma Mine Access Road (Central) – 12km new access road to the Petromin-owned
Tolukuma gold mine in the Goilala District of Central Province from Abele River on the
Goilala access road (NM3304) from the Hiritano Highway to Tapini District HQ and a spur
road to Tolukuma, both populated areas with poor access and with good market produce
potential for supplying Port Moresby. The 2012 Budget submission was for K68 million
spread over five years of which K10 million was allocated in 2012 and applied to the entire
road length from the Hiritano Highway (overlapping with the Tapini Road Reconstruction
Road project). The 2013 Budget submission was changed to K60 million spread evenly
over six years and applied to the access road construction only, but no further funding was
forthcoming.
 Obura to Wonenara Road (EHP) - this project was added to the 2012 Budget and was not
part of the sector submission, but appears in 2013. It provides a lump sum of K10 million
over two years for the repair of an outlying provincial road connecting between Lamari and
Yelia LLG areas. This is expenditure that should in theory be covered from the TIMG.
 Nuku to Arkusame Road (Sandaun) – this provides for maintenance to prevent closure of a
provincial road from Nuku Station to Arkusame Station in Mawase LLG which would deprive
the area of health, school and other Government services. K15 million was budgeted for a
two year project 2012-13, of which K8.4 million was been approved for 2012 and K5 million
for 2013. This is expenditure that should in theory be covered from the TIMG.
 Kusaun to Timbunke Road (Sandaun) - regravelling and drainage on this 45 km section of
provincial road from the Sepik Highway at Timbunke Station on the Sepik River, estimated
at K13.5 million/year over four years 2012-2015, a total of K54 million. An appropriation of
273
K10 million was made in 2012 but a reduced request for K10 million in the 2013 budget was
not funded, and no further costs in 2014 forward resulted in the submission not being
funded.
 Veifa’a Road (Aipeana Road) – rehabilitation of a 18km provincial feeder road from Hiritano
Highway to inland Mekeo in Kairuku District, Central Province; estimated K18 million over
2012-2013 of which K7 million was funded in 2012; a submission in 2013 for a further K7
million was not funded. This road appears on the District’s 5 year development plan as a
provincial project for the full 28 km but at only K0.5 million. The DOW estimate is more
realistic.
 Kikori to Komaiyo Road (Gulf) – the 2012 Budget submission was for K3 million for each of
2012 and 2013 for restorative maintenance; however only 2012 was funded. This local
road runs west from Kikori to Komaio, a ward administrative centre in West Kikori Rural
LLG area. There is an existing provincial road along part of the route. This is expenditure
that should in theory be covered from the DSIP.
 Boni to Tadji Road Upgrading (Sandaun) – this is a 52 km provincial road (P450204) link
across the Torricelli Mountains to (re)connect the inland Sepik Highway (Boni) with the
Coastal Highway (at Tadji). K10 million was requested in 2012 but not funded, although but
the project would appear to be larger than this, and no further submission was made in
2013. This would normally be expected to be funded through DSIP.
 Keibam to Fatima to Lumi Loop Road (Sandaun) – rehabilitate a 30km provincial feeder
road originally constructed in the 1980s, from the Sepik Highway to Fatima Station with loop
back to Lumi. K36 million over four years 2012-2015 was requested in the 2012 Budget
round but not repeated in 2013. This would normally be expected to be funded through
DSIP.
 Nubia to Giri Road Upgrade (Madang) – upgrading of 32 km of gravel road to seal, costed
at K50 million over three years 2012-2015 and submitted for the 2012 Budget but not
funded. This is a provincial feeder road (P43203/204) inland from Nubia on the Coastal
Highway. There is no supporting feasibility study. This would normally be expected to be
funded through DSIP.
 Yambi to Avatip Road (East Sepik) – regravelling and drainage to 40km of this provincial
road with funding requested at K30 million for 2012 in that Budget submission. The project
was resubmitted in 2013 split over two years at K15 million each but was not funded. This
is currently a pilot track running along the north bank of the Sepik River west of Pagwi to
Avatip. The economic basis for the road is unclear and there is no feasibility study. This
would normally be expected to be funded through DSIP.
 Replacement of Surumarang Bridge, Coastal Highway (NR009, Madang) – K15 million over
two years to replace existing damaged structure to prevent loss of the road connection.
 Bogia to Josephstaal Road (Madang) – in 2012 this was described as rehabilitate and seal
72km of provincial access road from the Coastal Highway at K15 million over 2012-2014.
The existing gravel road is currently impassable cutting off a substantial inland population.
In 2013 the project was resubmitted on a reduced scale as emergency restorative
maintenance and ongoing work on the gravel road for K11 million over a five year period. In
neither case was the project funded. While this would normally be expected to be funded
through DSIP, the route has a functional classification of III due to the population and
facilities connected and could be considered for change to national status following
upgrading. The cost estimate does not appear sufficient for the project and sealed
construction seems unlikely to be justified.
Again, the question must be asked why these maintenance and rehabilitation works have not been
funded using the TIMG and DSIP, for those roads that are not national roads. It implies that either
the DSIP/TIMG funds are insufficient or are not being properly applied.
274
Urban Roads
 National Capital District (Port Moresby) Roads – an urban project so is poorly classified, it
provided K65 million in 2012 for maintaining, rehabilitating and upgrading roads in NCD; in
2013 a separate project for Port Moresby City Roads was approved to K100 million under
 Metropolitan Roads – this is also ongoing to 2014, and split from “Provincial Roads
Transport Support” funded at K68.7 million in 2012 rising to K81,7 million in outyears. It
includes urban roads in: Lae K28.7 million; and lump sums for Mt Hagen K20 million;
Madang K 10 million; Kerema K10 million, Goroka K10 million. These roads will include
some national sections but will largely be provincial level responsibility and imply that the
Transport Infrastructure Maintenance Grant is either insufficient or not being used for urban
road maintenance.
Bridge Projects
 Replacement of Specific Bridges (GoPNG) – in addition to the ADB program, some

individual bridge replacements are funded directly by GoPNG, with three bridges (Yowar,
Minjung and Wasa) in the 2013 appropriation for K17 million
Comments on the Programme

Some general points can be made on the projects in the above program:
 The projects are not clearly described and information is often contradictory. In future, each
project should be accompanied by a clear identification of the road and section number
from the national or provincial inventory, a description of start and end places that
corresponds with the inventory, the present condition of the road and bridges and the
degree of passability in wet/dry conditions, an outline feasibility report (cost/benefit analysis)
generated from TIPS or other source, an estimate of the traffic using the road now and once
improved, and the population numbers and institutions (schools, health centres) dependent
on the road for access. Each project should be accompanied by a map and desirably, by
photographs along the road to illustrate the condition. This should be a reasonable
expectation for projects requiring millions of kina from the national budget.
 The nature of works is not always accurately described – in some cases the roads are in
fact new construction on an existing walking track and not rehabilitation of an existing road;
maintenance, rehabilitation or reconstruction are not clearly separated.
 Where sealing of a gravel road is proposed, particularly for provincial roads, it is not clear
why an improved gravel road has not been considered. Also, where provincial roads are
upgraded, their future status as continuing provincial road or change to a national asset
should be identified.
 The projects that have been submitted are a wide mixture from projects that appear to be
high priority (Aseki Road, Hula Road) to expenditures that appear to be attempting to
extend the network into remote areas with little clear justification and in a funding climate
where ongoing maintenance is not guaranteed.
 National and provincial road projects should be separated and clearly identified and some
explanation given why provincial roads are included in this program and not within, say, the
DSIP. Where provincial roads are to be improved using national funds and under DOW
management, these should then become part of the national road network as part of the
expansion to 25,000 kms (as discussed in the NTS).
 The rejection of some projects submitted by DOW/DOT while other projects that were not
part of the submission have been added is not conducive to good long term planning. Some
of the new projects added do not have obvious merit, while a number of those rejected do
have merit.
 The separation of bridges from road links for funding purposes carries risk that one will be
funded and not the other. Bridge and culvert maintenance should become part of an
275
integrated forward programme of road and bridge maintenance that uses multi-period
budgeting over at least a five year look ahead
25.2.3 Department of Defence
The Defence Force has been allocated budget from 2010 onwards for the construction of two
missing links, in 2010 through the DNPM budget and from 2011 through the Defence budget:
 Baiyer-Aiome-Madang – Annual appropriations of K20 million in years 2009-2011 (20101

through DNPM and not disbursed) and a further K10 million for each of 2012 and 2013 and
indicated K45 million in outyears 2014-2016. These costs appear to exclude an estimated
K125 million for new bridges at Jimi and Ramu rivers and delivery of the project seems
likely to be after 2107 at the earliest. This missing
link has an indicated BCR from TIPS of 0.8 and a Ongoing and Committed
rough order of cost of K830 million to construct to Projects
national highway standard. On paper it compares 231. Road
less favourably than a rehabilitation of the Bundi
Highway at a BCR of 1.8 and cost estimate of Approximately K1,100 M
K300 million, which would appear to be a better annually is expected to be
way of delivering the network reliability and available for roads and bridges
connectivity benefits between the Highlands and expenditure over the next five
Madang/Morobe. years
 Bogia-Angoram – The Defence Force was funded

This assumes funding at near
K20 million in 2010 through the DNPM budget.
2012 level and is a significant
This was continued in 2011 as a K20 million
increase on the average for the
conditional grant to East Sepik Provincial
last 5 years
Government but no further funding is indicated. On this basis, ongoing and
This missing link has an indicated BCR from TIPS programmed projects will utilise
of 0.3, making it one of the lower priorities, and all available funding through
an estimated rough order of cost of K550 million. 2013 and 2014.
These two projects, although major expenditure items There will be limited opportunity
and challenging in engineering terms, completely for expenditure on new projects
bypassed the transport sector agencies and have no from 2015
feasibility study or engineering and cost details. The
approach taken does not appear likely to complete these projects efficiently or in a reasonable time
frame. Described as “Civic Action Program”, the Defence Force might be better employed on
smaller and better defined community-based projects more suited to its capabilities.
25.2.4 Office of Rural Development
The DSIP was included in the ORD budget allocation to 2012; previously this was administered
through DNPM. The DSIP was budgeted at K178 million/year in 2011 and 2012. Up to that date
DSIP funds were spent almost entirely on sub-national roads and ORD had a monitoring role for
this expenditure. However the details of projects were held at District level and there is no national
statement of acquittal of the funds or of the works carried out.
In 2013 a greatly increased DSIP budget of K890 million was disbursed directly to Provincial
Governments (see below).
25.2.5 Department of National Planning and Monitoring
DNPM administered a number of road projects directly up to 2010 but these have now been
assigned to other agencies as described above. Remaining under DNPM are:
276
 Tax credit program – provisions under the tax credit programme have been: 2011 - K60
million, 2012 and 2013 - K130 million each year. The forward provision in the PIP for 2014-
2015 is - K80 million/year. Part of this spending is on roads constructed as tax offsets by,
or on behalf of, the private sector resource developers. However, the amount in each year
that can be allocated to roads and the division between national and sub-national roads is
also unclear;
 Economic Corridor Development – provision has been made in the budget and PIP for,
2012 – K10 million, 2013 no provision; 2014 and 2015 – K5 million/year. So far work has
proceeded on legislation to establish the PRAEC corridor implementation authority and the
future provisions are for feasibility studies.
25.2.6 National Road Safety Council
NRSC submitted a K4.1 million program for 2012 for support of its various awareness and
education functions, none of which were funded but K1.0 million/year was allocated to the National
Road Safety Program for 2012 and included in the PIP to 2015. In 2013 NRSC submitted a program
of five projects seeking funding comprising: (i) the road traffic accident database maintenance; (ii) a
national road safety programme; (ii) development of a road safety school curriculum; (iii) the social
costing of road accidents; and (v) a driver education programme and driving school, in total a
request for K4.2 million in 2013, K1.82 million in 2014, K1.65 million in 2015 and K0.3 million in
2017. No funding was forthcoming or any future funding signalled in the PIP.
The failure to fund the modest requests of NRSC from the development budget will be partly
reflective of Government’s view that NRSC has a dedicated funding source from the 3 rd Part
Insurance Levy, even though this is at an insufficient level and increases have been suggested.
25.2.7 National Roads Authority
The NRA has requested budget support in lieu of the establishment of the full system for road user
charges, so that it can fulfil maintenance commitments on those roads that have been transferred to
its care.
A budget request of K67.7 million for 2012 was only partially funded to the amount of K15 million
and K20 million in 2013. The request for outyears to 2016 was K25.3 million/year and the indicated
provisions in the PIP are K30 million/year for 2014 and K20 million/year for 2015-2016. Internally
sourced funds from user charges, together with donor financing brings the total funds available to
NRA to K133.7 million/year over the period 2012-2016.
The NRA has also been pursuing possible private sector, described as PPP, debt-financing of “high
impact” road projects. The model for delivery of these projects is still being formulated but appears
to be invite tenders for construction and ongoing maintenance under a performance-based contract
arrangement, with the contractor arranging finance and the NRA (or GoPNG) repaying the loan over
a period possibly as a repayment related to traffic use of the road or as a conventional loan. There
is discussion on PPPs in the NTS main Volume 2.
In addition, NRA has been given responsibility for the funding of Lae to Nadzab 4-laning project,
with budgets of K150 million in 2013, K100 million for 2014 and 2015 and K50 million for 2016. This
is the first road project to be given assistance from the SWF and the funding will be passed through
the Infrastructure Account and managed initially by the proposed new IDA. The project is for
improvements from Lae Wharf to the 2 mile roundabout, where the four lane section will commence
and finish at the Wau Road junction. From that point to Nadzab, the road will be improved two-lane
construction.
277
25.2.8 Provincial Governments
The forward allocation of Transport Infrastructure Maintenance Grants (TIMG), Special Support
Grants (SSG), District Services Improvement Program (DSIP), Provincial Services Improvement
Program (PSIP) and Project Grants to the provinces in the 2012 and 2103 budgets were:
 TIMG – the amounts for 2012 - K79.4 million and 2013 - K100.7 million continue the
planned increase in these grants according to the RIGFA. Amounts are allocated to each
province according to its circumstances. NCD and ABG are not included in this grant.
 DSIP – from 2013 these funds are channelled directly through the provinces rather than
administered by ORD on a district basis and there has been a large increase to K890
million. In the past the majority of this expenditure has been on roads, and it is assumed
that 75% of the 2013 and forward DSIP is available for roads expenditure. No indication of
forward funding intentions.
 PSIP – from 2013 these funds are channelled directly to the provinces at a value in 2013 of
K445 million; the PSIP is exactly half the DSIP in each province. Again, a large proportion
of this expenditure is expected to go on roads, 75% assumed No indication of forward
funding intentions.
 SSG – funded at K91 million in 2012 and K101 million in 2013 with no indication of forward
funding, applied to a variety of projects in the resource development areas with Western
Southern Highlands and Enga the main beneficiaries; part of this expenditure will be on
local roads.
 Provincial and District Support Grant (Members non-Discretionary Funding) – K27.3

million/year to 2016 is signalled in the PIP; part of this funding will go to road projects (25%
assumed)
 Grants for Provincial Road Projects – these vary from year to year with no indication of
funding continuity. In the 2013 budget K 41 million was allocated to town roads and a
further K20 million to specific road projects (see Table 40)
 Autonomous Bougainville Government (ABG) – the support to Bougainville includes DSIP

and PSIP funding plus K100 million to high impact projects, some of which will be roads.
25.2.9 Summary of Ongoing and Committed Road Projects
Table 40 overleaf summarises the on-going and committed projects and funding. For years 2012
and 2013 the amounts are either actual or budgeted while the years 2014 to 2017 are based on the
PIP, donor intentions and Government statements. Where there is capacity within donor programs
to accept additional projects, this has been shown.
The projects/programs have been grouped into: (i) routine maintenance; (ii) repairs, resurfacing and
rehabilitation; (iii) upgrading (which is mainly gravel to seal; and (iv) new construction. Because
some programs combine elements of more than one class of work it is not possible to be exact with
these classifications. Urban and rural, national and provincial, have been separated as far as
possible in a similar way. In this table, the funding for routine maintenance under DOW is assumed
to rise annually, although the amount shown falls well short of the requirement as discussed in
25.2.2 above.
278
Table 40 – Committed and Ongoing Road Infrastructure Projects, K million

Agency Source 2013 2014 - Medium Term Transport Plan
Program/Project
2018 2014 2015 2016 2017 2018
Routine Maintenance (mainly)
Maintenance of national roads and bridges (recurrent budget) DOW Recurrent Budget 64 450 70 80 90 100 110
NRA Dev Budget 20 70 30 20 20 0 0
(Assumes RUC now becomes operational 2014-15) NRA From Revenue 20 635 30 75 130 200 200
Maintenance of Provincial Roads Provinces TIMG 101 650 110 120 130 140 150
Routine maintenance, national and provincial 192 1805 240 295 370 440 460
Repair, Resurfacing, Rehabilitation (mainly)
Rural National & Provincial Roads – Donor Supported
RMRP-2 (World Bank/GoPNG) DOW Loan/D Budget 30 78 26 26 26 0 0
HRRMUP (GoPNG funded completion) DOW Loan/D Budget 75 75 75 0 0 0 0
HRRIIP MFF Loan(ADB/GoPNG)
Projects 1, 2 DOW Loan/D Budget 100 380 100 100 100 80 0
Projects 3, 4 (to be identified from list) DOW Loan/D Budget 0 120 0 0 0 20 100
TSSP – Roads in 9 Provinces
Committed/Identified Projects DOW Aus Grant 227 329 200 129 0 0 0
Future Projects (exact sections to be identified) DOW Aus Grant 3 656 69 50 179 179 179
Total DOW Aus Grant 230 985 269 179 179 179 179
Rural national & provincial roads – donor supported 435 1638 470 305 305 279 279
Rural National Roads - GoPNG
Highlands Highway Maintenance DOW D Budget 80 200 100 100 0 0 0
Individual National Roads Maintenance DOW D Budget 50 300 100 100 100 0 0
Koroba to Kopiago Road Rehabilitation DOW D Budget 10 91 25 40 26 0 0
Tax credit scheme (assume 50% to roads) DNPM TCS 40 200 40 40 40 40 40
Rural national roads - total 180 280 265 240 166 40 40
Rural Provincial Roads - GoPNG
Nuku to Arkusame rehabilitation (Sandaun) DOW D Budget 5 0 0 0 0 0 0
Kulupuga Road DOW D Budget 10 0 0 0 0 0 0
DSIP – assume 75% on roads PGs D Budget 670 3350 670 670 670 670 670
PSIP – assume 75% on roads PGs D Budget 335 1675 335 335 335 335 335
Special Support Grants (SSG, assume 25% to roads) PGs D Budget 25 125 25 25 25 25 25
Wabag – Kompiam Road (Enga) PG D Budget 3 0 0 0 0 0 0
279
Agency Source 2013 2014 - Medium Term Transport Plan

Program/Project
2018 2014 2015 2016 2017 2018
Yampu – Londol Road (Enga) PG D Budget 2 0 0 0 0 0 0
Kerowagi – Bogo Road (Simbu) PG D Budget 3 0 0 0 0 0 0
Nagum – Urimo Road (East Sepik) PG D Budget 5 0 0 0 0 0 0
Tari – Ambua Road (SHP) PG D Budget 5 0 0 0 0 0 0
Members’ PSG/DSG (assume 25% to roads) PG D Budget 7 35 7 7 7 7 7
Rural provincial roads - total 1055 5185 1037 1037 1037 1037 1037
Urban Roads
Port Moresby/NCD Roads DOW D Budget 100
Goroka Town Roads DOW D Budget 10
Kerema, Wabag, Hagen, Kundiawa, Madang, Telefomin PG D Budget 41
Urban Roads - total 110 0 0 0 0 0 0
New Construction – new links and extensions (mainly)
Malalaua - Kotidanga - Kaintiba DOW D Budget 10 0 0 0 0 0 0
Future stages of Highlands Highway Design DOW D Budget 30 0 0 0 0 0 0
Gulf to S Highlands Highway Design DOW D Budget 10 0 0 0 0 0 0
Kikori to Kerema Design DOW D Budget 10 0 0 0 0 0 0
Vanimo Highway upgrading (NR0009) DOW D Budget 10 0 0 0 0 0 0
Bubuleta - Agaun (M Bay N Coast Rd extension/upgrade) DOW D Budget 5 0 0 0 0 0 0
Baiyer-Aiome-Madang (Missing link) Defence D Budget 20.1 20.1 0 0 0 0 0
New construction - total 20.1 20.1 0 0 0 0 0
Bridges
ADB Bridge Replacement & Rural Access DOW Loan 72.5 208 72.5 67.5 67.5 0 0
Yowar, Minjung and Wasa Bridges DOW D Budget 17 0 0 0 0 0 0
Bridges - total 72.5 208 72.5 67.5 67.5 0 0
Total – Roads and Bridges 2,064.6 9,136 2,085 1,945 1,946 1,796 1,816
Through national budget (inc loans and grants) 908.6 3,116 978 793 739 519 539
Through internally-generated revenue 20 635 30 75 130 200 200
Through tax credit 40 200 40 40 40 40 40
Through inter-governmental funding to provinces 1096 5,185 1037 1037 1037 1037 1037
Note: items in italics are assumed continuation of funding for certain programs such as DSIP, PSIP and for future continuation of donor programs.
280
25.3 Committed and Ongoing Maritime Projects
There are two investment items in the DOT budget for

Ongoing and Committed
maritime:
Projects
 Coastal Vessels Program – K37 million was 232. Maritime
appropriated in 2011 under this program
assigned to DOT although not requested in the The largest committed project is
sector budget submission. Previously under Lae port at a projected cost of
DNPM budget this program was for the purchase K770 M between 2010 and 2014
of coastal work boats. A further K13 million was or later.
appropriated in 2013 under the ORD budget. Alotau Wharf rehabilitation has
The NTS does not support Government been funded to K15 M although
involvement in transport services except under not identified as a priority project
arrangements for CSO delivery discussed in the by TIPS
NTS. There is no ongoing commitment to
funding. The Community Water Transport
Project Stages 1 and 2 will
 Community Water Transport – this ADB- construct up to 250 small jetties
supported programme includes the shipping
NMSA will complete its
franchise scheme and the rural jetties program,
restoration of small navaids
which funds 40 jetties under CWTP, with a
further 210 jetties planned under GoPNG funding
with planning provided by the new Rural Infrastructure Division of DOT. Budget funding
under CWTP was 2011- K5.3 million; 2012 - K23.6 million appropriation of which GoPNG
contributed K10 million. A second programme CWTP-2 with ADB loan funded has been
approved but not initiated and there is no further GoPNG funding scheduled under the PIP.
DOW has not historically been involved in maritime infrastructure. However, in the 2012 Budget,
DOW was funded for K7 million for wharves and jetties repair, although not requested and this has
not been continued in the 2013 budget or PIP.
25.3.3 IPBC
IPBC, as the financial holding company for various SOEs, is the borrower for the ADB Lae Port
project, although engineering and operational matters and ongoing ownership lies with PNG Ports.
The Lae Port Project is funded through loans and grants: (i) the original loan for $100 million ADB,
$6 million OPEC and GoPNG counterpart of $45.75 million equivalent; (ii) additional financing in
2011 for ADB $189.1 million, OPEC $6 million and GoPNG counterpart $94.0 million equivalent.
The overall project cost of works is approximately K770 million with construction spread over the
period 2010 to 2016 or later.
25.3.4 NMSA
NMSA has been funded for K5 million/year for 2011 for small navaids and K1.0 million for tide
gauges. For 2012 K6.9 was requested for navaids, and K5.0 million approved. No budget funding
was appropriated for NMSA in 2013 and there is currently no provision in the PIP for future years.
However a Maritime and Waterways Safety Project Loan has recently been agreed between
GoPNG and ADB for replacement and new navigation aids over the period 2013 to 2018 at an
overall cost of K100 million including a GoPNG counterpart contribution of K14 million. NMSA
revenue is discussed in Section 24.5.5.
281
PNGPCL was been funded from the Development Budget for two projects in 2012 only one of which
involved ongoing funding. Eleven (11) projects were turned down for Budget funding for 2012.
 Alotau Wharf Rehabilitation – a budget request for K40 million was made and K15
million/year appropriated for 2012 with further K15 million shown in the PIP for each year
2013 to 2015. However, no further funding was made available in 2013. The TIPS
preliminary analysis did not give a high BCR for capital intensive rehabilitation and a more
detailed feasibility study of options for ongoing management of the wharf is indicated
 Rubber Tyred Gantry (RTG) Cranes for Lae – a request for K34 million was funded to K23
million in 2012. Lae port is the most commercially viable of all PNG ports and this puts in
question the requirement for national budget support rather than financing equipment from
revenue or borrowings through IPBC. There is also a strategic development issue of
whether PNGPCL should own and/or operate heavy port handling equipment rather than
outsource this to the private sector.
No appropriation was made for PNGPCL in the 2013 Development Budget although seven of the
previously submitted projects were again put up for funding. Projects that were not funded in
2012/2013 are shown in Table 27 above. Comments on individual ports and projects are discussed
in Section 26.3.
PNGPCL also has provision for funding maintenance of national ports from its own revenue as
discussed in Section 24.5.4.
25.4 Committed and Ongoing Air Transport Projects
25.4.1 Department of National Planning and Monitoring
An amount of K10 million was provided as air freight

subsidy in the 2012 budget, to help establish a new
Ongoing and Committed
operator Travel Air. While provision was made in the PIP
Projects
for ongoing expenditure this was not continued in 2013. 233. Air
Also refer to the discussion on subsidies in Section 8.6.10
The CADIP program provides
and 13.5.1.
committed funding through to
25.4.2 PNG Air Services Ltd
2017 for security works,
upgrading of airport runways to
PNGASL has applied for Budget support for the following F100 standard, and other priority
infrastructure projects: works at the national airports
 Replacement of ATM systems, new ATM building CADIP also provides committed
and services, Aeronautical Communications and funding for air communications,
Aeronautical Surveillance: these infrastructure navigation and air traffic
replacements are funded from CADIP Loan (ADB) management systems grading
with a GoPNG counterpart contribution; however, There is limited and
there is a funding shortfall for which PNGASL uncoordinated support for
applied to Government for budget support as provincial airports and rural
shown in Table 41 below. This support comprises airstrips that needs to be
80% of the project cost. K5 million was brought into a well-planned
appropriated in 2012 and K14.3 million in 2013. prioritised multi-year programme
led by DOT with implementation
 Radio Navaids Replacement at Port Moresby – a
carried out by agencies with an
one-off budget request for K 5 million in 2012 was
airports engineering capability
approved
282
25.4.3 National Airports Corporation
NAC’s forward infrastructure commitments are all within the CADIP program, of which Project 1 is
active. Project 1 includes:
 airport security fencing at Hoskins, Goroka, Gurney, Kavieng and Wewak;

 upgrades of the airport runways at Hoskins, Mt Hagen, Gurney and Wewak;
 apron extension at Port Moresby;
 terminal upgrade for Mt Hagen;
 fire tenders
The cost estimates and schedule are shown in . As with the air navigation under CADIP, the costs
are much higher than originally estimated, leaving a funding shortfall of just under 30%. The
Government has contributed K8 in the 2011 Development Budget and made appropriations for K15
million in 2012 and K16 million in 2013.
This provides the opportunity to reassess the projects using the TIPS 2010 model to decide the
priority ranking for the Project-1 components for inclusion in the MTDP. All of the security fencing
projects rank highest, while the upgrade to Gurney ranks lowest, with a negative BCR.
Table 41 – Committed and Ongoing Air Transport Infrastructure Projects

Agency Source 5 year 2011 2012 2013 2014 2015
Program/Project
Total
National Airports
CADIP Project 1
ADB Loan NAC Loan 224.9 1.8 34.8 153.4 34.9 -
GoPNG counterpart NAC GoPNG 59.4 8.0 15.0 16.0 20.4 -
Total NAC Total 284.3 9.8 49.8 169.4 52.3 -
Port Moresby Apron NAC
Provincial Airports
Telefomin Sandaun D. Budget 8.5 - 2.0 3.0 2.5 1.0
Kundiawa Simbu D. Budget 5.0 - - 5.0 - -
Wapenamanda Enga D. Budget 5.0 - - 5.0 - -
Rural Airstrips
Maintenance DOT D. Budget 6.0 - - 6.0 - -
Air Navigation
ATM/CNS Replacement
ADB Loan PNGASL Loan 40.5 - 12.3 20.1 8.1 -
GoPNG counterpart PNGASL GoPNG 7.1 - 2.1 3.7 1.3 -
Unfunded PNGASL none 201.2 - 75.6 77.0 48.6 -
Total PNGASL 248.8 - 90.0 100.8 58.0 -
Radio Navaids PNGASL D. Budget 5.0 - 5.0 - - -
Replacement
25.4.4 Provincial Airports
There are currently three projects within the national budget and PIP, included in the grants to
provincial government:
 Sandaun – Telefomin Airport Development: to develop and extend the airstrip to airport
status; K10 million over four years to 2015
 Kundiawa – K5 million in 2013 for pavement upgrading and drainage works
283
 Wapenamanda – K5 million in 2013 for security fencing of airport
25.4.5 Rural Airstrips
In theory the TIMG include an allowance for rural airstrip maintenance but use of the funds is not
reported nationally and it is believed that little of the grant is applied to rural airstrip maintenance.
The budget requirement to meet MTDP targets for rural airstrip restoration is shown in Table 31.
In the 2013 Development Budget K6.0 million was appropriated to the Department of Transport
budget for rural airstrip maintenance and the Department is currently developing processes for
assigning this funding to priority rural airstrip projects and engagement of implementation
resources. It is likely that DNPM will be requested to spread this budget commitment over a period
of several years to allow a well-planned approach, commencing with a status and condition review
of the airstrips, consultation with operators/users, identification of the airstrips’ current and future
role and the contributions required from local village/community groups to ongoing upkeep.
284
26 Priorities for Selecting Projects for the MTTP
26.1 Introduction
This section of the NTS assesses the priorities for adding additional projects to those already
committed for funding. The capacity for including additional projects will be constrained by the
amount of funding allocated to the sector and the capacity of the sector to internally generate
revenue sufficient to fund maintenance and capital works.
A preliminary assessment of priorities using the TIPS 2010 model (with data and modelling
enhancements) has been used to generate the priority lists that follow.
26.2 Priorities for Roads
26.2.1 Priorities for Rehabilitation of National Sealed Roads
The following existing national roads are provisionally identified from TIPS analysis as priorities for
light rehabilitation (fair condition roads) or heavy rehabilitation/reconstruction (poor condition roads).
DOW will commission field surveys to first visually inspect the road condition to confirm the extent of
deterioration and make a preliminary estimate of cost. Classified traffic counts will be carried out to
DOT specification.
If this confirms the general need to rehabilitate or reconstruct, then follow-up road pavement
investigations will be made to establish pavement layers, residual strength and any subgrade
weaknesses, carry out pavement deterioration and road user cost modelling using HDM-4 and
develop a treatment plan with cost estimates. At each stage the project list will be reviewed and re-
ranked according to the latest data.
Table 42 – Provisional Priorities for Rehabilitation of Sealed Sections, National Rural Roads
RAMS Vicinity Indicated Length Cost BCR
Road
Sections Treatment kms KM
2010
National Routes
NR07 – Highlands Highway 510 Kundiawa - Hagen Rehab 10.1 11 8.4
NR07 – Highlands Highway 590 Hagen-Mendi Reconstruct 9.8 13 8.3
NR08 – Ramu Highway 200 Madang Rehab 11.3 12 7.7
NR07 – Highlands Highway 020-060 Lae - Nadzab Rehab 33.8 37 6.4
NR07 – Highlands Highway 400 Goroka - Kundiawa Rehab 5.5 6 5.8
NR07 – Highlands Highway 270,330 Waterais - Goroka Rehab 21.9 24 4.6
NR09 – Coastal Highway 010 - 030 Madang to Plant. Rehab 20.7 20 3.7
NR06 – Enga Highway 030-100 Part 1 Rehab 64.4 71 2.8
NR01 – Hiritano Highway 020-030 POM - Veimauri Rehab 22.4 25 1.9
NR07 – Highlands Highway 150, 160 Nadzab - Waterais Rehab 20.2 22 1.4
NR04 – Wau Road 100-130 Mumeng- Wau Rehab 33.3 32 1.3
NR08 – Ramu Highway 020-040,090 NR07 - Bundi t.o. Rehab 36.2 40 1.0
NR04 – Wau Road 050-060, 080-090 NR07 - Mumeng Rehab 35.4 34 0.9
NR10 – N Britain Highway 290 Hoskins Reconstruct 14.1 19 -
NR12 – Sepik Highway 160 - 170 Hayfield-Karaitem Reconstruct 20.3 28 0.7
NR12 – Sepik Highway 110 - 150 Hayfield-Karaitem Rehab 46.6 44 0.7
NR12 – Sepik Highway 020 - 100 Passam - Hayfield Rehab 93.3 89 0.7
NR01 – Hiritano Highway 160-170 Bereina - Kerema Rehab 33.8 34 0.6
NR07 – Highlands Highway 600-610 Hagen - Mendi Rehab 20.8 23 0.6
NR08 – Ramu Highway 160 Bundi - Madang Rehab 5.2 6 -
285
RAMS Vicinity Indicated Length Cost BCR

Road
Sections Treatment kms KM
2010
National Main Roads
NM3901 – Baiyer Road 020 - 070 Part 1 Rehab 49 46 3.9
NM4601 – Momote Road 010 - 030 Part 1 Rehab 28.2 27 3.2
NM3903 – Ogelbeng - Dona 010 - 040 Part 1 Rehab 28.2 27 2.0
NM3903 – Ogelbeng - Dona 050 Part 1 Reconstruct 5.2 7 1.6
NM5002 – Aropa Rd 010 - 040 Arawa to Aropa Reconstruct 30.5 41 1.3
NM3901 – Baiyer Rd 080 Part 1 Reconstruct 5.2 8 1.0
National District Roads
ND4001 – Kerowagi Access 010 Part 1 Rehab 6.8 6 0.9
26.2.2 National Rural Road Sealing

The following existing national roads are provisionally identified as priorities for upgrading from
gravel to sealed standard. As part of policy under the MTDP all national roads are eventually to be
sealed. These selected roads show a BCR generally greater than 1 using the TIPS 2010 model.
However, these will require a staged process of field inspection and preliminary design to better
estimate engineering costs cost, classified traffic volume counts conducted to DOT specification,
followed by economic analysis using the HDM-4 economic evaluation model or similar to re-
estimate the BCR. This will allow the candidate roads to be more confidently ranked for
programming purposes.
Table 43 – Provisional Priorities for Upgrading to Seal, National Rural Roads

RAMS Vicinity Length Cost BCR
Road
Sections kms K million
2010
National Routes
NR0002 – Magi Highway 580 to 590 Sagarai to Gumine 46.8 25 12.1
NR0009 – Coastal Highway 530 to 600 Wewak to Sandaun bdr 84.4 95 4.8
NR0005 – Wabag to Mendi 050 to 280 Kandep to nr Mendi 50.0 56 1.4
NR0001 – Hiritano Highway 220 to 250 Malalaua to Epo 57.0 58 1.3
NR0009 – Coastal Highway 410 to 470 Angoram to near Wewak 56.4 68 1.1
NR0003 – Northern Highway 050 to 090 Oro Bay to Bareji Jnc 36.9 42 1.1
NR0008 – Ramu Highway 130 to 180 remaining unsealed sections 44.0 54 0.9
NR0012 – Sepik Highway 200 to 260 Mai to Karaitem 73.5 83 0.8
National Main Roads
NM3903 – Ogelbeng- Dona 060 to 080 Numga CS to Wara Mombl Br 27.1 33 3.6
NM3601 – Kokoda 060 to 090 remaining unsealed sections 30 53 3.5
NM4201 – Aseki Road 010 to 120 Wau Jnc to Aseki 85.9 130 3.3
NM3701 – Koroba Road 080 to 190 Nipa to Tari 96.9 109 3.0
NM3801 – Porgera Road 010 to 090 Kandep Jnc to Porgera 70.4 79 2.8
NM3701 – Koroba Road 010 to 070 Mendi to Nipa 57.6 65 2.6
NM3703 – Erave 030 to 090 Ialibu to Erave 73.2 82 2.0
NM3103 – Tabubil Road 110 to 140 Tapko to Tabubil 47.7 53 2.0
NM3103 – Tabubil Road 010 to 100 Kiunga to Tapko 76.3 86 1.8
NM4501 – Ainbai 010 to 060 Bewani Jnc to Ainbai Jnc 56.3 69 1.7
NM3305 – Kupiano 010 full length 8.9 11 1.6
NM3701 – Koroba Road 200 to 240 Tari to Koroba 40.6 47 1.0
NM3705 – Kagua 010 Kagua Jnc to Kagua 10.0 11 1.0
NM4604 – Manus East-West 010 to 050 Momote Jnc to Bundralis 52.8 59 1.0
286
RAMS Vicinity Length Cost BCR

Road
Sections kms K million
2010
NM4701 – Boluminski H’way 270 to 320 Matakam Br to Manga 70.5 88 0.8
National District Roads
ND3705 – Pangia Road 010 to 030 full length 23.1 26 3.9
ND4801 – Korere 040 Bai to Rapindik 5.0 6 2.8
ND3703 – Poro to Moro 010 to 100 Koroba Rd to Moro 112.6 126 2.6
ND4701 – Kaut 010 to 030 Boluminski Hway to Kaut CS 25.2 28 2.0
ND3314 – Hula Road 010 Gabagaba Jnc to E. Gabona 12.6 15 1.6
ND3313 – Kelewakra Road 010 to 050 full length 48.0 54 1.5
ND3307 – Launa Road 010 to 030 full length 30.0 34 1.4
ND4704 – Lihir Ring Road 020 to 030 Pali to Londolovit 43.2 52 1.4
ND3315 – Moreguina Rd 010 Magi H’way to Moreguina Stn 10.1 11 1.4
ND4102 – Dunantina Dumpu 010 to 040 HH’way to Hagulagabi 47.9 22 1.4
ND4103 – Okapa Road 020 to 030 Part 1 23.0 26 1.4
ND4305 – Mis to Kamba 020 Part 1 2.9 4 1.3
ND4703 – West Coast Rd 090 to 180 Kolube to Fagalawa t.o. 105.1 118 1.1
Note: Bougainville roads not included in this table
26.2.3 Construction of New and Restored Road Links
The MTDP identifies a number of proposed economic development corridors, several of which are
located around new inter-regional connecting roads. Outside of the defined economic corridors
there are several other “missing link” roads, most of which have appeared on earlier national
development plans. There are also a few cases where existing inter-regional or inter-district linking
roads have fallen into disuse through lack of maintenance and natural events, such as landslips.
The missing links and economic corridor roads are listed below in order of BCR from the preliminary
TIPS 2010 analysis. The priorities are sensitive to the estimated traffic volume using each route,
together with the cost estimates, and will need to be confirmed by more detailed feasibility studies
that take better account of induced demand effects.
Table 44 – Priority List of Missing Links and Economic Corridor Roads

ML, Route length for new Capital BCR
Section (Route/Highway)
EC or construction or upgrading, Cost
RC (1) kms K mill.
U/grade New Total 2010
Links with BCR >1.0
Bialla-Kerevat (part of New Britain Highway) ML 176 74 250 717 3.4
Kundiawa-Ramu (Bundi Highway) RC 98 12 110 300 1.8
Towei-Erave (part of Gulf to S Highlands) EC 105 70 175 897 1.6
Morobe-Ioma- Popondetta (N Highway Extn) EC 33 118 152 456 1.4
Morehead-Daru (part of Kiunga to Daru) EC 91 125 216 616 1.1
Rabaul-Cross Island Rd (NB S Corridor) EC 289 147 436 1304 1.1
Cross Island Rd-Gloucester (NB S Corridor) EC 376 56 432 1304 1.1
Links with BCR 0.5 < BCR <1.0
Kimbe-Gloucester (part of N Britain Highway) ML 122 148 270 949 0.9
Lae-Finschhafen (Huon South Coast) ML 83 39 121 409 0.9
Kupiano-Gadaisu (Magi Highway CP-MBP) ML 88 129 217 1030 0.9
Baiyer River-Madang (WHP to Madang) ML 94 66 160 832 0.8
Popo-Wau (Trans-Island Road) ML 22 154 176 1370 0.7
Kiunga-Mendi (Western – SHP) EC 168 136 304 1707 0.6
Kerema-Towei (part of Gulf-S Highlands) EC - 165 165 1538 0.6
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ML, Route length for new Capital BCR

Section (Route/Highway)
EC or construction or upgrading, Cost
RC (1) kms K mill.
U/grade New Total 2010
Wau-Garaina-Morobe EC 74 83 157 1258 0.5
Links with BCR < 0.5
Bariji-Safia-Moreguina (Oro to Central) EC 25 122 147 995 0.3
Aitape-Vanimo (part of Coastal Highway) ML 133 31 164 433 0.3
Saidor-Wasu-Sialum (Huon N Coast) ML - 100 100 400 0.3
Bogia-Angoram (Momase Corridor) EC 40 70 110 551 0.3
Pagwi-Ambunti-Laiagam Rd (ESP to Enga) ML 12 245 257 1906 0.2
Kopiago-Telefomin-Tabubil (SHP to Western) ML - 184 184 1627 0.2
Kiunga-Morehead (Kiunga to Daru) EC 42 330 372 1127 0.2
Siara Jnc-Soraken-Kunua (Bvlle W Coast) ML 117 86 203 793 0.1
Bewani-Amanab-Telefomin (Border Corridor) EC 122 294 416 2674 0.1
Bubuletta – Rabaraba-Agaun (MB Prov) ML 41 174 215 1330 0.1
Notes: (1) ML - Missing Link, EC – Economic Corridor Road, RC – Restored Connection (2) capital costs and BCR
calculation exclude land acquisition, pre-construction (feasibility studies and design) and construction supervision costs
For comparative purposes, all roads were evaluated assuming on the same basis using a nominal
three year construction period 2011-2013. If a project is constructed later in the 20 year period of
the NTS, intervening population, economic and traffic growth should lead to a higher BCR, provided
that construction costs have not risen in real terms.
The links have been grouped into:
 those with preliminary BCR greater than 1.0, which have good potential to be economically
viable, so should be given priority for feasibility study;
 those with BCR under 1.0 but above 0.5. This group may become economically viable over
time, and are worth more detailed feasibility in conjunction with complementary
development in the economic corridor which may raise their ranking;
 those with BCR less than 0.5 - this last group are much less likely to be economically
viable, mainly due to long distances, high cost due to terrain obstacles such as major river
crossings, mountain ranges and swamp, and relatively low catchment population.
As noted earlier, the future funding envelope and capacity constraints provide very little scope for
constructing new road links.
26.3 Priorities for Maritime Projects
26.3.1 Introduction
The content of the maritime sector infrastructure investment component of the MTTP for the 2011-
2015 period is heavily influenced by the Lae Port Development. Although assessed to be self-
financing, in that revenues can support the project loan, it forms a large capital commitment and will
limit the extent to which other port infrastructure can also be developed, other than committed and
ongoing projects.
In the port sector, there are a number of market and feasibility studies intended by PNG Ports, and
the pattern of port development later in the first five year period and beyond between 2016 and
2030 will be influenced by their findings.
As with other sectors, maintenance of the existing port infrastructure should take first priority for
funding, followed by upgrading and new development only where funds permit and where these can
be shown to be sustainable both financially and economically. The extent to which a CSO
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obligation is recognised by Government and is funded, will influence the extent of rehabilitation at
the non-commercial ports and for lower level port infrastructure.
26.3.2 Maintenance and Rehabilitation for Main Ports
The TIPS 2010 evaluation indicated high BCRs (greater than 10) for continuation of basic
maintenance of all the operational main ports with the exception of Daru (BCR of 0.2) and Aitape for
which no assessment was made.
Wharf rehabilitation projects evaluated by TIPS 2010 were ranked as shown in Table 27.
Dredging of the berths at several wharves is needed to remove accumulated siltation. Dredging at
Kimbe, Rabaul, Oro Bay and Vanimo improve wharf operability and showed good BCRs (range 4 to
7). Dredging at Daru and Kavieng gave low BCRs
In each case the BCRs are a comparison of rehabilitation compared with ongoing basic
maintenance. With the exception of Lae pavement repairs, the rehabilitation projects, all of which
involve substantial capital outlays, give BCRs well below 1.0. The assessments were made from
the viewpoint of increased efficiency of port and ship operation before and after the rehabilitation
work. They do not reflect the cost of the wharves becoming unserviceable over time if rehabilitation
work is not carried out. The analysis indicates that for most wharves a policy of continued basic
maintenance and spot repairs is preferred to major rehabilitation. For the non-commercial ports,
rehabilitation should be accompanied by CSO funding from Government, rather than require
internal cross subsidy from PNGPCL.
26.3.3 Main Port Upgrading and Extensions
Upgrading and expansion works will generally be justified on a financial basis at the three profitable
main ports of Lae, Port Moresby and Kimbe. At the next level of main ports, upgrading and
expansion may be justifiable on a national economic basis as traffic demand increases in the
second half of the planning period, even though the ports do not return a profit at the present time
(Rabaul, Wewak, Madang, Oro Bay and Alotau) provided that there is a clear expectation of
increased cargo and vessel throughput and little risk of trade being diverted to other port facilities,
including privately established ports. For all other PNGPCL ports there is unlikely to be any
justification for upgrading or expansion and for some closure or divestment are more likely futures
for certain PNGPCL ports (Kerema, Kupiano, Kinim, Lihir, Misima, Siassi, Samarai). Some of these
have been evaluated by TIPS 2010. However for port projects, the TIPS methodology should be
regarded as giving only an approximate indication of BCR and for investment of any size a more
detailed economic and financial feasibility assessment will be required. This is because the TIPS
2010 method is a “one size fits all” process while the characteristics of demand/supply relationships
and costs are sufficiently particular to each port to require specific analysis.
Committed and ongoing projects, such as the development of Berth 1 and tidal basin at Lae, were
not included. A brief description of the port upgrading and extension projects is given below.
Lae Port
Lae is the main export port for Papua New Guinea and experiencing the greatest capacity
constraints in both berthage and storage. With its large hinterland and as the internal road network
expands, Lae is likely to be become even more dominant as PNG’s primary port in the future. One
of only three ports that are currently profitable and with limited opportunities for the development of
private port facilities, Lae will be a main focus of port expansion in PNG over the time frame of the
NTS. Projects aim to contain occupancy for both international and coastal berths below the 65%
level needed for efficient operation through increased container transfer rates, and to increase
container terminal storage capacity. Upgrading is also required for larger size bulk tankers. A
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master plan for Lae port covering the next 20 years is due for completion at the end of 2011 and will
influence future revisions of the NTS.
 Berth 1 and Tidal Basin: dredging of a tidal basin 700m by 400m with entrance channel,
250m wharf, 200,000 teu container yard together with associated revetments, navigational
aids, port link road, buildings and utilities. Committed funding from ADB.
 Tanker Berth and Cement Wharf extension/reconfiguration: partial demolition and
reconstruction as general purpose berths primarily for tankers and bulk cement vessels but
otherwise available for container vessels. This project was proposed as an interim capacity
enhancement while the tidal basin project was under development. Continuing need for this
extension should therefore be reviewed as part of Lae Port Master Plan.
 Berth No. 3 extension: this is an extension of the coastal berth from 130m to 240m length to
accommodate up to three vessels. This project was proposed as an interim capacity
enhancement while the tidal basin project was under development. The project was
commenced in 2009. Continuing need for this extension as opposed to rehabilitation should
therefore be reviewed as part of Lae Port Master Plan.
 Mobile Harbour Cranes (MHCs): two mobile cranes for supplementing ship-mounted cranes
to increase the rate of cargo transfer and reduce ship berthing time.
 RTG cranes: seven rubber tyre mounted gantry cranes for container handling between
quayside, container stack and road transfer area; funded in 2012 budget appropriation.
 Inland port and transport link: to accommodate cargo growth and free portside space, an
inland port terminal is under construction at 2 mile; a dedicated transport link has been
proposed as a future development.
 Portion 508 project: development of an area owned by PNG Ports requiring reclamation and
development for storage and ancillary facilities, details to be determined by the Lae Port
Master Plan study.
Port Moresby
The future development of the downtown port in Fairfax Harbour is influenced by the future role of
private port facilities developed at Motukea to support the LNG development. The existing port is
also constrained by its physical location close to downtown Port Moresby, with difficult land
transport access that cannot be easily improved. While there will always be a need for main port
facilities to service NCD and Central Province, the port’s hinterland has relatively little scope for
expansion by new land transport connections. Future relocation of Port Moresby port to Tatana
Island is a possibility but development rests upon master planning yet to be undertaken. In the
meantime, projects are aimed at removing existing port constraints and improving productivity.
 Berth 4a Extension: 232m long x 25m wide overseas wharf, 57m long x 12m wide coastal
wharf, dredging, revetment works, earthworks and pavements, drainage, electrical and
water services. Existing pavement at Terminal 5 to be upgraded to a heavy duty concrete
block finish to cater for container loads and serve as container storage area for the Berth 4A
extension. The continuing need for this expansion project which was originally proposed as
a stopgap while the main wharf was undergoing repair needs to be considered as part of
Port Moresby ongoing master planning.
 Mobile Harbour Cranes: two 40t capacity mobile container cranes to supplement ship-
mounted cranes for improving container handling rates are proposed.
 RTG cranes: three rubber tyre mounted gantry cranes for container handling between
quayside, container stack and road transfer area were acquired in 2011.
 Incinerator: quarantine incinerator and waste treatment facility to meet national/international
biosecurity and safety requirements. This may be considered as a certification project
required for the continued operation of the port, so has priority in that respect and has not
been subject to economic analysis.
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Kimbe
Kimbe is the third profit making port and a major export port for palm oil. The port also handles
international and coastal general and container cargo experiences port congestion when schedules
coincide.
 Tanker berth: a separate tanker berth for palm oil is proposed to reduce ship queuing and
provide for long term expansion of the palm oil industry including developing Kimbe as a
hub port for palm oil from other parts of PNG and the Solomon islands. The berth will be
sized for new larger 200m tankers and is proposed in place of an earlier proposal to extend
the existing common user berth. The TIPS 2010 analysis did not show the former
extension project to be economically viable and this larger and higher cost project is
expected similarly to have a low BCR.
Wewak
Wewak port does not generate revenue sufficient to cover its operating and maintenance costs.
However, a major expansion of the wharf has been proposed.
 Wharf expansion: the design has been completed for this proposal to handle an increased
in ship calls and longer vessels resulting from anticipated traffic for fish processing and for
support of mining projects in the Sepik region. The project involves 100,000m³ of dredging,
creation of 2,400 m² storage area, a new 180m x 9m wide earth filled causeway, 2 no. 32m
x 5m wide approach trestles, two breasting and mooring dolphins and a 86m x 19m wide
reinforced concrete wharf head. The TIPS 2010 economic evaluation gave a very low BCR
for the project (0.02).
Oro Bay
There is no dedicated facility for handling dangerous goods at PNG ports. Oro Bay has been
proposed by PNG Ports as a suitable port due to its distance from any main urban area. The facility
would meet international code requirements and for this reason can be considered a certification
project, with high priority. No economic assessment has been made.
 Dangerous goods facility: To ensure all classes of dangerous goods imports are well
secured, safe and hazard free from the public, community and to protect the environment
and marine life from spills. Small consignments would be transhipped on demand to other
ports for immediate delivery.
Daru
Although it is the provincial capital, Daru port has historically carried very little traffic and serves only
Daru town. The approach trestle reconstruction is required to enable the port to remain open.
 Daru Approach Trestle: the project involves demolition, removal and replacement of existing
concrete deck and piles, and wharf service lines. The TIPS BCR for this project was very
low, and the work would need to be viewed in the context of CSO expenditure.
26.3.4 Port Master Planning and Feasibility Studies
PNGPCL has commenced a series of port masterplan studies to better assess the port
development needs over the next 20 years. The first of these for Lae is expected in early 2012 and
further studies are planned for Kimbe, Madang and Rabaul. In addition there is a stakeholder
working group for Port Moresby port possible relocation.
The NTS supports this initiative of PNG Ports and it is suggested that all master planning and
associated feasibility studies should include demand/supply analysis including port operational
modelling for the larger ports, preliminary site investigation and engineering order of cost analysis,
financial and economic valuation, funding source analysis, including potential private sector
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involvement, risk identification and mitigation, environmental and social impact, land ownership and
acquisition.
The NTS suggests that individual master plan and subsequent feasibility studies for main ports
should address the following:
 Lae: a master planning study currently in progress will be reviewed and extended as
necessary to a detailed development plan for the port of Lae over the next 20 years.
 Port Moresby: in conjunction with the port relocation stakeholder working group, a broad
ranging study of port development options is required, including scenarios for the
development of private port facilities and ownership/operational options, and covering all of
the port facilities within Fairfax Harbour.
 Rabaul: a master planning study of the future of the existing port of Rabaul, taking account
of its volcanic ash risk and susceptibility to siltation, alternative port locations and future port
hinterland and demand taking account of future road links along the north and south coasts
of New Britain.
 Kimbe: a master planning study of the future development of Kimbe port prior to
commitment to the proposed Kimbe tanker berth project. The study will review demand for
general cargo, palm oil and other specific cargoes; it should also consider the potential for
joint venture or PPP involvement of the palm oil company which stands to benefit most from
the project.
 Individual or collective engineering and demand studies for the smaller declared ports and
ports which might be considered to become declared national ports in future to better
estimate the rehabilitation needs, costs, utilisation and whether best operated by PNG
Ports, provinces or by private interests. This study would also supply improved information
to better determine the CSO component of funding needed at each port to supplement port
revenues and match ongoing upkeep costs.
The future of main ports on the Papua and Momase coasts and inland road connections to the
Highlands region deserves a major planning study before committing to projects such as a
relocation of Madang port or a new main port development at Towei in Gulf Province. The new
road link and new port proposals would involve very large capital investments and it is not clear that
the economic gains will warrant the construction costs in comparison over increased investment in
Lae port and the Highlands Highway to improve the capacity and reliability of this existing corridor.
Such a study should include consideration of future shipping patterns and the general industry trend
towards larger higher capacity vessels, freight consolidation and hobbling out of fewer international
ports. Ports that should be included in such a study are: Port Moresby, Towei, Lae and Madang.
Existing main highways links that should be included are: Highlands and Enga Highways, Ramu
Highway (upgraded), Bundi Highway (upgraded/restored), Hiritano Highway (upgraded) and Gulf to
Southern Highlands link (now a committed project but would need to be further upgraded). Missing
links that should be included are: Kerema-Towei; Trans-Island Road (Malalaua-Wau); and the
proposed Baiyer-Madang link. Different combinations and sequencing of development should be
explored in conjunction with development potential in the economic corridors to map out a long term
strategy for combined investment in main port and main road infrastructure that will deliver the
greatest economic and social benefit for investment cost and is deliverable within likely financial and
capacity constraints. Economic benefits that should be considered include transport user and
transport operator cost savings for shipping operators, port operators and road users. The study
should include considerations of risk, particularly for large investment components with uncertain
outcomes in terms of demand and development impact.
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26.4 Priorities for Air Transport Projects
26.4.1 Introduction
The MTTP for airports and air transport will be strongly influenced by the CADIP program, which
largely sets out the investment programme for the national airports in the near to mid-term and the
arrangements made to upgrade Port Moresby International Airport under possible PPP funding.
Beyond the initial CADIP Project 1, the feasibility of upgrading regional airports to jet status to be
able to support direct connections from Australia, Pacific and SE Asian destinations needs to be
addressed on an airport by airport basis as incremental network improvements. Initial indications
are that only a few airport upgrades to B737-800 standard will be viable.
For the provincial airports and rural airstrips, the rehabilitation and upgrading will require CSO
funding and airports and airstrips should be selected as set out in the NTS, taking account of their
functional status, provincial and community contributions, and the funding gap to economic viability
26.4.2 National Airport Maintenance

Section 24.8.3 noted a shortfall between operating revenue and funding requirement for NAC and
that the 16 airports other than Port Moresby, Nadzab, Tokua, Mt Hagen and Madang should be
regarded as having a CSO funding component, that should be supplied by Government through a
contractual agreement with NAC. The funding deficit varies year to year and should be subject to
detailed financial evaluation but is in the region of K50 to 60 million annually.
26.4.3 National Airport Capital Development

Airport capital development requirements are funded from CADIP. As indicated in Section 24.8.3,
the CADIP MTFF envelope should cater for development expenditure through to 2020, and this
expenditure is for work that can be justified on economic grounds.
TIPS 2010 economic evaluations for the planned upgrades to the main airports are summarised in
Table 45, together with their expected timing and tranche of funding from CADIP. Ongoing
maintenance at all of the airports evaluated showed high BCRs. Works required to certify the
airports to the standard required for the operations they currently support, mainly security fencing,
also show high BCRs.
With the exception of Goroka, all of the proposed upgrades to F100 standard were evaluated as
having BCRs greater than 1.0. Of the B737-800 further upgrades, Tokua (Rabaul) and possibly
Wewak give BCRs over 1.0, but upgrading of Goroka and Gurney (Alotau) are probably not justified
while Mt Hagen, Hoskins and Bougainville (Buka or more likely Aropa) have not been evaluated.
Table 45 – Airport Development Proposals and Economic Evaluation

Airport and Project Cost K mill BCR Commitment / Timing
Port Moresby International
Development to Master Plan 1,011 3.9 2014 to 2026 (1)
Nadzab (Lae)
Security works for certification 6 40 CADIP-Proj 1, 2011-15
Upgrade as alternate to PMIA 119 (139) 1.1 CADIP-Proj 2, 2016-20
Mount Hagen
Upgrade to F100 60 (101) 3.2 CADIP-Proj 1, 2011-15
further Upgrade to B737-800 (104) n/a CADIP-Proj 3, 2016-20
Tokua (Rabaul)
Upgrade to F100 (70) n/a CADIP-Proj 2, 2016-20
Upgrade to B737-800 58 8.7 CADIP-II, 2016-2020
Madang
further Upgrade to B737-800 104 (93) 0.0 CADIP-Proj 4, 2016-20
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Airport and Project Cost K mill BCR Commitment / Timing

Hoskins (Kimbe)
Security works for certification 31 4.6 CADIP-Proj 1, 2011-15
Goroka
Upgrade to F100 38 (46) negative CADIP-Proj 2, 2011-15
further upgrade to B737-800 (80) n/a CADIP-II, 2021-2025
Wewak
further Upgrade to B737-800 80 (93) 1.0 CADIP-Proj 3, 2016-20
Gurney (Alotau)
Upgrade to F100 15 (21) negative CADIP-Proj 1, 2011-15
Kavieng
Upgrade to F100 47 3.7 CADIP-Proj 2, 2011-15
further Upgrade to B737-800 (63) n/a CADIP-II, 2021-2025
Momote
Security works for certification 5 18 CADIP-Proj 2 , 2016-20
Upgrade to F100 (38) n/a CADIP-II, 2021-2025
Buka
Upgrade to F100 (62) n/a CADIP-Proj 4, 2016-20
Buka or Aropa
Upgrade to B737-800 (63) n/a CADIP-II, 2021-2025
Notes: (1) PMIA Master Plan development expected to be self-funded, possibly including PPP; (2) parenthesis indicates
project costs from CADIP, other figures and BCR from TIPS
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Part D – Resourcing, Monitoring and Review
27 Resourcing and Monitoring the NTS and MTTP
27.1 Resources Needed for Successful Implementation
The successful implementation of the National Transport

Strategy and Medium Term Transport Plan relies on the Resourcing and Monitoring
timely availability and efficient application of human, the NTS and MTTP
financial, material and information resources. 234. Responsibility - The DOT
Planning and Coordination
The financial resources required have been detailed in
Division will provide the
preceding sections, and will be supplied through a
resources for monitoring the
combination of direct and indirect user charges,
progress the policy, institutional
Government budget appropriation, Grant and Loan
and legislative reforms and the
financing from multinational and bilateral sources,
infrastructure development and
provincial revenues and contributions from communities
maintenance strategy and
and NGOs.
programme contained in the
Capacity constraints in the transport sector and the NTS and the MTTP.
general need to build staff numbers and capabilities in PCD will monitor the progress of
the public sector have also been noted in Section 15 on the MTTP against input, output
sector capacity building. and outcome indicators for
policy, institutional and
This section considers the particular resources needed to
legislative actions and for
carry out the administration, monitoring and updating of
infrastructure development.
the NTS and MTTP within the responsible government
agencies, with the Department of Transport taking the DOT Policy and Research
lead coordinating role. Division will annually report on
the extent and condition of the
27.2 Information Needs transport infrastructure, on traffic
and licensed transport users.
An up-to-date, accurate, comprehensive and readily
accessible database of information on the transport 235. Re-Establishing a
system, its development and utilisation is important for Transport Database - DOT will
monitoring the effects of policy initiatives and investments establish a project to rebuild its
made in the transport sector. database of the transport system
at national and provincial level,
The TIPS 2010 study experienced difficulty in collecting using a GIS mapping platform,
the minimum basic data required to carry out a rational so as to better equip itself to
analysis and prioritisation of transport investment. In carry out its transport planning
some cases this was due to an absence of data recording and policy analysis
and collection, in other cases to lack of data organisation responsibilities
making it difficult to efficiently collect and verify
DOT will request, collect and
information, and in other cases to a reluctance to share
analyse data from the transport
data among agencies. Some data collection and
agencies to further the re-
reporting that used to be done by government agencies
establishment of its transport
has stopped, again for various reasons, such as through
data system, where necessary
loss of key staff, budgetary restrictions or a loss of
making use of its powers under
recognition of the reasons for, and value of, regular data
the Transport (Collection of
series. Examples are the very limited data on the motor
Information) Act
vehicle fleet, road traffic surveys, and the lack of recent
inventory and condition data on the sub-national road
295
network.
The DOT is taking steps to rebuild its statistical database which covered most of the planning and
policy monitoring information required, but progress is slow and the management and staff
resources being applied are very limited. Physical transport planning is also very much reliant on
the geographic mapping of information, and most such data systems utilise one of the proprietary
geographic information system (GIS) software platforms so that information can be called up for
analysis and reporting. The DOW has a GIS database as part of its road and bridge asset
management system and the NEFC was instrumental in producing the Geobooks system of
provincial GIS mapping.
Accordingly, building a GIS enabled database that can interchange data sets with other
Government users for infrastructure planning, regulatory oversight of the transport industry and
policy analysis, is a recommended action for the Policy & Planning wing of the DOT. This will
require the establishment of a dedicated unit, recruitment of suitably qualified staff, and most likely
the recruitment of an external consultant to establish an operational system.
27.3 Monitoring Progress and Achievement
The NTS and MTTP will be monitored by Planning Coordination and Monitoring Division (PCD) of
the Department of Transport against the achievement milestones for specific policy, institutional and
legislative actions and on a project-by-project basis for transport infrastructure investment.
Monitoring will be at national level, but PCD, through its engagement with the provinces, will also
carry out a parallel monitoring process for each province, so that the linkage between national
agencies and provinces are strengthened and a better base of information on the provincial and
local level infrastructure is built up over time.
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28 Process for Periodic Review and Updating
28.1 Five Yearly and Annual Reviews
The National Transport Strategy will be subject to a main

review at five year intervals, corresponding with the 236. Periodic Review and
Government’s five year MTDPs, at the end of 2015, Updating
2020, 2025 and 2030. At each major review the outlook The NTS will be subject to a
for the strategy will be advanced a further five years, to main review in 2015 and at five
maintain a 20 year look ahead. year intervals thereafter.
At each five yearly review, DOT will consult with the At each five yearly review, DOT
transport and central agencies on changes to the policy, will consult with the transport
institutional and legislative content and direction of the and central agencies on
NTS and next MTTP. Any major change will be referred changes to the policy,
to the TSCMIC before incorporation. institutional and legislative
content and direction of the NTS
28.2 Annual Review of the Maintenance and next MTTP. Any major
Programme change will be referred to the
TSCMIC before incorporation.
Sufficient funding and effective implementation of
infrastructure maintenance has been the main failing of The annual review will report on
past development plans. The annual review will report maintenance expenditure, works
specifically on what maintenance effort has been applied and resulting changes in
to infrastructure in each mode and at each level, down to network condition, initially at
individual ports, airports and road links. national level but extending
down to provincial level over the
This comparison will compare (i) the maintenance first three year period to 2015
treatment for best economic efficiency (ii) the
Transport investment projects
maintenance actually programmed for that year (iii) the
will be developed progressively
maintenance delivered (iv) the costs and quantum of
from planning through to
work so that cost-effectiveness can be measured.
implementation and post-
Each of the line transport agencies and provinces will be evaluation, with particular effort
requested to supply information to the DOT to an agreed being applied to the larger more
template, where necessary using the provisions of the capital intensive projects.
Transport (Collection of Information) Amendment Act
2009.
28.3 Progressive Development and Review of Projects
Transport investment projects will be developed progressively from planning through to

implementation and post-evaluation, with particular effort being applied to the larger more capital
intensive projects.
Unlike previous five and ten year development plans, it is not anticipated that a fixed menu of
projects will be determined for each five year period and the success of the plan based on project
delivery. It is inevitable that some projects will rise in priority while others fall, according to the rate
of development in various parts of the country, the costs of projects as they are more clearly
defined, and the effects of funding and capacity constraints.
The processing of projects will follow stages of:
 Initial identification and listing for consideration; new projects may be suggested by the
transport agencies, other government departments, provinces or local communities
297
 Profiling, stakeholder consultation and

determining the consistency of each project with 237. Project Development
the NTS, the MTTP and MTDP; projects that are Cycle
clearly inconsistent or infeasible will be screened The processing of projects will
out; follow stages of:
 Preparation of an initial short Project Feasibility • Initial identification and listing
Report (PFR) from desktop analysis; as a result of for consideration;
the initial PFR, projects will be given an initial
ranking in the list of potential projects; • Profiling, stakeholder
 Rapid field inspection, development of preliminary
consultation and determining
cost estimates and pre-feasibility evaluation of
the consistency of each
BCR and project priority; initial identification of
project with the NTS, MTTP
funding sources
and MTDP;
 Detailed site investigation, environmental and • Preparation of an initial short
social analysis including land acquisition costs Project Feasibility Report
and development of an implementation timeline; from desktop analysis; as a
detailed feasibility report, economic and financial result of the initial PFR,
analysis, BCR, rate of return, risk analysis and projects will be given an initial
management plan, potential funding sources and ranking in
implementation mode; initial programming into the • Rapid field inspection,
forward budget (PIP) or investment plan (for development of preliminary
SOEs) cost estimates and pre-
 Detailed design and engineering cost estimates; feasibility evaluation of BCR
review of economic and financial analysis; review and project priority; initial
position in the PIP or investment plan identification of funding
 Programming into the forward budget process (or sources
investment plan for SOEs); tendering and • Detailed site investigation,
contract award; economic, environmental and
 Implementation; social analysis; initial
 Completion review of project outputs versus programming into the forward
design, including cost out-turn versus estimate budget (PIP) or investment
and reasons for variance, as-built design plan (for SOEs)
compared with engineer’s design; capturing this • Detailed design and
information for future planning and budgeting engineering cost estimates;
purposes; review of economic and
 Post-evaluation review of selected key or financial analysis; review
representative projects for impact and position in the PIP or
achievement of project outcomes and impacts at investment plan
three to five years following completion; including
• Programming into the forward
traffic demand versus forecast and review of
budget process (or
attributable benefits
investment plan for SOEs);
Projects may drop out of contention, be amended or put tendering and contract award;
on hold for later consideration at any of the first six of the • Implementation;
above stages. For large projects, a period of about two
years is expected to be required between initial • Completion review of project
identification and approval to proceed, so that projects outputs versus design and
can be given due consideration and those of a purely estimate;
political nature are not rushed through.
A comparison will be made between the expected project progress at the start of each financial year
and the achievement at year end, integrated with the Budget process. Except under specific
298
ministerial direction, projects that have not previously

been signalled through the MTTP development process 238. Project Development
will not normally be included in the succeeding year’s Cycle
budget request. • Post-evaluation review of
selected key or
Line agencies and provinces will be requested to supply
representative projects for
information to the DOT similarly as for capital projects.
impact and achievement of
It is important that the achievement of milestones in project outcomes.
project development, approvals and post-implementation • A framework and process
assessment be structured with detail being provided at a that formally incorporates
level appropriate to the size of the project. It is also these stages and includes
important that some degree of independent external external audit will be
checking or audit be involved, again depending on the developed, it is suggested by
size and nature of the project, so that there can be an appropriate subcommittee
confidence that projects are being developed and of TSCMIC.
implemented efficiently, with integrity and to the required
standards. It is suggested that an appropriate subcommittee of the TSCMIC be responsible for
developing this approvals framework.
28.4 TIPS Project Prioritisation Review
The TIPS 2010 economic evaluation model, once the

structure of the model has been suitably verified and 238. TIPS Model Enhancement
amended and the data inputs verified, will be used for The TIPS model will be further
early stages of project evaluation and prioritisation. For developed and improved for
more advanced stages of project prioritisation, standalone ongoing use by the DOT, and
economic and financial analysis will be substituted, using other more detailed methods
methods such as HDM-4 for road projects, as used by (such as HDM-4 for roads) will
DOW and NRA. HDM-4 will also be used for determining be used for detailed project
the most cost-beneficial forward road maintenance evaluation and prioritisation
programme, including routines, specific, periodic
maintenance and rehabilitation. The TIPS 2010 model will 239. Requirement for
be improved and updated, benchmarking against more Consistency with this NTS
detailed analysis. The transport agency SOEs and
statutory authorities (PNGPCL,
The transport agencies, provinces and DOT will liaise to
NMSA, NAC, PNGASL, NRA,
ensure that consistent and accurate project information is
NRSC/RTA), will ensure that
gathered and shared for projects, the level of information
their forward development and
used being consistent with the stage of project
expenditure plans are consistent
development.
with the NTS and MTTP
28.5 Integration with SOE Forward Plans
The transport agency SOEs and statutory authorities (PNGPCL, NMSA, NAC, PNGASL, NRA,
NRSC/RTA), will ensure that their forward development and expenditure plans are consistent with
the NTS and MTTP.
299
References Consulted in Preparation of the NTS

The following is list of the main published reference material, background working papers and data
produced and consulted during the course of preparation of the NTS and MTTP. The list is not
exhaustive and does not reference information such as PNG Budget submissions and papers,
National Department of Statistics data and unpublished information provided in response to working
group meetings and direct requests from agencies, and media reports.
NTS Background Reports and Working Papers
Allan Kennaird Consulting Ltd (2010), Land Transport Institutional arrangements and Regulation of
Vehicles, Drivers and Transport Services, 6 Sep 2010.
Bone, I, Beca International Consultants Ltd (2009), Preparation of the National Transport Strategy
(NTS) and Medium Term Transport Plan (MTTP), ADB TA 7214-PNG, Contract S18494, ADB
Project Manager’s Inception Report, Revision 1.2, 30 Nov 2009.
Bone, I, Beca International Consultants Ltd (2010), National Transport Strategy - Issues, Revision
1.3, 11 May 2010.
Bone, I, Beca International Consultants Ltd (2010), National Transport Strategy - DOW, NRA and
Road Fund, Working Paper, Revision 0.1, 21 May 2010.
Bone, I, Beca International Consultants Ltd (2010), National Transport Strategy - Review of
Strategies and Corporate Plans, Revision 0.3, 31 Jul 2010.
Bone, I, Beca International Consultants Ltd (2010), National Transport Strategy - Port Regulation
Working Paper, Revision 0.2, 22 Nov 2010.
Bone, I, Beca International Consultants Ltd (2011), National Transport Strategy - Review of Prior
Transport Plans, Revision 0.96, 20 Dec 2011.
Department of Transport (2008), National Transport Strategy, Scope and Implementation Plan,
Version: 1.2, 18 Nov 2008.
Sammons, A (2011), Regulation of Coastal Shipping and Cabotage Rules within Papua New
Guinea, Technical Assistance Consultant’s Report, Jan 2011.
Wirasinghe Consulting Inc (2012) Peer Review of the Inputs on Urban Transport for the National
Transportation Strategy, Feb/Mar 201.
Previous Transport Sector Plans
Department of Transport (1993), Transport Infrastructure Development Plan, 1993 to 2003, Road
Sector, Apr 1993
Department of Transport and Civil Aviation (2000), National Transport Development Plan, 2001 to
2010, Volume 1 Infrastructure, Institutional and Legislative Reform, Oct 2000
Department of Transport (undated ca 2005), Review of the National Transport Development Plan,
2001 to 2010, Volumes 1&2
Department of Transport (undated ca 2005), National Transport Development Plan, 2006 to 2010,
Volume 1 Infrastructure Improvement, Institutional and Legislative Reforms; Volume 2 Infrastructure
Investment Program.
300
Strategies and Corporate Plans of Transport Sector Agencies
Civil Aviation Authority of Papua New Guinea (2006), Corporate Plan 2006 to 2008 and Beyond
Civil Aviation Authority of Papua New Guinea (2009), Infrastructure Investment Plan, Long Term
(2010-2030).
Civil Aviation Authority of Papua New Guinea (2010), Project 2010 Definition Document
Department of Transport (undated ca 2006), Corporate Plan 2006-2010
Department of Works, Papua New Guinea (undated ca 2008), Corporate Plan 2009-2012
National Maritime Safety Authority (2008), Corporate Plan 2008-2012
National Maritime Safety Authority (2008) Ministerial Cabinet Briefing Paper, August 2008
National Maritime Safety Authority (2009) Business Plan and Budget
National Road Safety Council (2011), 2007 Road Safety Data Report
National Road Safety Council (2011), Papua New Guinea Road Safety Review, Discussion Paper
PNG Air Services Ltd (2011), 2010 Annual Report
PNG Air Services Ltd (2011), Corporate Plan 2011
PNG Ports Corporation Ltd (2011), Annual Report 2008
National Strategies and Plans
Department of National Planning and Monitoring (2010), Development Strategic Plan, 2010-2030
Department of Provincial Planning and Local Government Affairs (2010), National Government
Position on Power Sharing and the Proposed National Framework, Discussion Paper
National Strategic Plan Taskforce (2010) PNG Vision 2050
Department of National Planning and Monitoring (2010), Medium Term Development Plan 2011-
2015
Government of PNG (2012), The Alotau Accord
Public Private Partnership Taskforce (2008), National Public Private Partnership Policy
Government Transport Policy Statements
Minister of Transport, Policy Statement to the House of Representatives, 2009
Ministry of Transport and Civil Aviation (2000), Civil Aviation Policy 2000 for Papua New Guinea
Strategies and Plans of Other Government Agencies
Border Development Authority (ca 2010), 10 Year Development Master Plan 2010-2020
Department of Lands and Physical Planning (ca 2006), National Framework for Physical Planning
2007-2037
Department of Lands and Physical Planning (2010), National Urbanisation Policy. 2010-2030
301
ICCC and Tourism Promotion Authority (2006), Tourism Sector Review and Master Plan 2007-
2017, Sep 2006
Ministry of Agriculture and Livestock, National Agricultural Development Plan 2007-2016, Volume 1
Policies and Strategies
Ministry of Agriculture and Livestock, National Agricultural Development Plan 2007-2016, Volume 2
Implementation Plan
Office of Rural Development, Corporate and Strategic Plan 2008-2012
PNG Department of Education (2004), A National Plan for Education 2005-2014, ISBN 9980-85-
448-0
PNG Department of Education (2009), Achieving Universal Education for a Better Future, Universal
Basic Education Plan 2010-2019.
Strategies and Plans for Cross Cutting Issues
Department of Environment and Conservation (2007), New Strategic Directions
Department of Environment and Conservation (2010), Papua New Guinea’s Fourth National Report
to the Convention on Biological Diversity, United Nations Environment Programme - Global
Environment Facility
PNG National AIDS Council, Papua New Guinea National Strategic Plan on HIV/AIDS 2006-2010
National Department of Health (2010), PNG National Health Plan 2011-2020
Office of Climate Change and Development (2010) Climate-Compatible Development for Papua
New Guinea, March, 2010
Oversight and Regulatory Agencies
Independent Consumer and Competition Commission (2006) Review of the PNG Air Transport
Industry
Independent Consumer and Competition Commission (2007) PMV and Taxi Fare Review
Independent Consumer and Competition Commission (2007) Review of the PNG Coastal Shipping
Industry
Independent Consumer and Competition Commission (2008) Stevedoring and Handling Services
Pricing Review
Independent Consumer and Competition Commission (2010) Review of PNG Harbours Regulatory
Contract
Independent Consumer and Competition Commission (2010) PNG Ports Regulatory Contract,
2010-2014
National Economic and Fiscal Commission (2009) Review of Inter-Governmental Financing

Arrangements (RIGFA)
National Economic and Fiscal Commission (2009) Closing the Gap - Review of All Expenditure in
2007 by Provincial Governments
National Economic and Fiscal Commission (2009) Walking the Talk - Review of All Expenditure in
2008 by Provincial Governments
302
National Economic and Fiscal Commission (2010) Green Shoots of Change – The 2009 Provincial
Expenditure Review
National Economic and Fiscal Commission (2010) Step Two The Ripple Effect – The 2010
Provincial Expenditure Review
Development Partner Strategies and Plans
Asian Development Bank, PNG Country Operations Business Plans 2011-2012, 2012-2014, 2013-
2015, Country Partnership Strategy 2011-2015 and ADB project documents
AusAID, Transport Sector Support Program – various documents, annual plans and reports
World Bank, PNG Country Partnership Strategy 2013-2016 and project documents
Transport Sector, Project Planning, Feasibility and Design Studies
CPCS Transcom, Deloitte Touche Tohmatsu (2007), Strategic Plan 2007-2011, for PNG Ports
Corporation Ltd
Jacobs Consultancy (2010), Port Moresby International Airport Master Plan, for National Airports
Corporation, Jacobs Consultancy, Ottawa and Canberra, May 2010
Parsons Brinkerhoff, Reihbein AOS, KPMG (2009), Strategic Airports Management Plan, December
2009
PNG Transport Infrastructure Priorities Study (TIPS) 2010
The TIPS study was carried out by a consultant group headed by KPMG and supported by GHD
and Rehbein AOS.
Report B - summary of initial data collection, 25 Feb 2010
Report C - on data availability and review, 25 Mar 2010
Report D - on detailed methodology for project benefits assessment, Apr 2010
Report E - preliminary ranked list of national transport infrastructure priorities, Jul 2010
Report F - report on national transport infrastructure priorities incorporating feedback from the
stakeholder Working Group, 18 Apr 2011 revision
Report G - report on recommended approach and work required to undertake a comparable study
of sub-national transport infrastructure to provide for prioritisation at the provincial level, 12 Nov
2010
Report H - Draft Final Report, 20 Apr 2011 revision
Report P1 - report on the approach to provincial consultation, 4 Mar 2010
Report P2 - progress report on first round of provincial consultation, 25 Feb 2010
Report P3 - final report on first round of provincial consultation, 31 May 2010
TIPS Model User Guide, Mar 2011
Excel TIPS model, version 17 Mar 2011
303
Mapping
Geobooks Mapping of PNG Provinces – Population, Physical, Settlements and Infrastructure

Assets and Transport Routes, Sanborn, University of PNG, 2010
PNG Reference Atlas, Geographics Mapping of PNG, 2004
Other Reference Material
Civil Aviation Infrastructure Development Investment Project (CADIP), Investment Program and
Project 1 Investment Plan, 2011 (pers com.)
Garmut R. and Ganilau R. (2010), PNG Universities Review, Report to Prime Ministers Somare and
Rudd, May 2010.
National Airports Corporation, Papua New Guinea (2011), Location and Category of Secondary
National Airports, (pers com.)
National Airports Corporation, Papua New Guinea (2010), Aerodrome Directory, 1st Edition, Feb
2010
PNG Ports Corporation Ltd, Port Data, Website Accessed Sep 2009
PNG Forestry Authority (2009), Papua New Guinea Forestry Outlook Study, Asia Pacific Forestry
Sector Outlook Study II, Working Paper ADFSOS II/WP/2009/19, FAO, Bangkok 2009
Links to Official PNG Websites Accessed
Asian Development Bank, PNG http://www.adb.org/countries/papua-new-guinea/main
AusAID Economic and Public Sector Program, Gender http://pngepsp.org/gender
AusAID Transport Sector Support program http://www.pngtssp.com/
Consultative, Implementation and Monitoring Council, http://www.inapng.com/cimc/index.html
Department of Agriculture and Livestock http://www.agriculture.org.pg/
Department of Finance http://www.finance.gov.pg/
Department of Lands and Physical Planning http://www.lands.gov.pg/
Department of National Planning and Monitoring http://www.planning.gov.pg/
Department of Treasury, including National Budget Papers http://www.treasury.gov.pg/
Department of Works and Implementation http://www.works.gov.pg/
Independent Public Business Corporation http://www.ipbc.com.pg/
Mineral Resources Authority http://www.mra.gov.pg/
Ministry of Inter-Government Relations, Department of Provincial and Local Level Government

Affairs http://www.igr.gov.pg/
Motor Vehicle Insurance Ltd http://www.mvil.com.pg/
National Airports Corporation http://www.nacpng.com/
National Economic and Fiscal Commission http://www.nefc.gov.pg/
304
National Maritime Safety Authority http://www.nmsa.gov.pg/
National Research Institute http://www.nri.org.pg/
National Roads Authority http://www.nra.gov.pg/
National Statistics Office http://www.nso.gov.pg/
PNG Air Services Ltd http://www.pngairservices.com.pg/
PNG Forestry Authority http://www.forestry.gov.pg/
PNG Liquefied Natural Gas Project http://www.pnglng.com/
PNG Ports Corporation Ltd. http://www.pngports.com.pg/
PNG Sustainable Development Programme http://www.pngsdp.com/
World Bank http://www.worldbank.org/en/country/png
305

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Copyright © Department of Transport, 2013

5.6 Overseas and Coastal Shipping Demand Growth ......................................................... 84

11.2 Development of the Land Transport Institutions........................................................... 136

15.3 Development of a Sector-Wide Education and Training Strategy ................................ 182

24 Funding Projections and Funding Gap ............................................................... 248

Mapping .................................................................................................................................. 304

POM - Port Moresby (airport code)

o Volume 1 – National Transport Strategy Summary

The Department of Transport is the leading Government department

Hon. Ano Pala MP

Minister for Transport

Introduction from the Secretary

Papua New Guinea faces many challenges in the development of its

Secretary for Department of Transport

1 Introduction – Preparation of the NTS

1.1 The Purpose of the National Transport Strategy

The economic and social activity of the nation and its

1.2 The Medium Term Transport Plan

The Medium Term Transport Plan 2014 to 2018 (MTTP)

1.3 Timeframe and Activities

1.4 Background Papers

1.5 Review of the NTDP 2006-2010 and Earlier Sector Plans

1.5.1 Strengths of the NTDP

1.5.2 Weaknesses of the NTDP

However, the review also showed the following weaknesses.

Institutional and Process Weaknesses:

Document Structural Weaknesses:

Document Technical Weaknesses:

 Transport Demand – there was no discussion of the determinants of transport demand

1.6 Analysis of Implementation Progress of the NTDP

1.6.1 Policy and Institutional Components

1.6.2 Infrastructure Investment Components

1.6.3 Lesson Learned and Applied in the NTS

Part A – Sector Vision, Profile and Guiding Principles

2 Vision and Goals

 bring 95% or more of the population within easy

3 Guiding National Vision and Plans

Transport is a sector of the economy that facilitates

3.2 The Millennium Development Goals

Table 1 – Provincial Comparison for Millennium Development Goal Indicators

Health and Morbidity

3.3 Vision 2050

Wealth Creation  Encouragement of  Support to education  Transport investment to

Institutional Development  Relaxation of market  Institutional reforms  improved technical and

Security and International  Regulate aviation  Establish a  Invest in port, ship,

Environment Sustainability  Regulatory policy to  Incorporate  Climate change

Spiritual, Cultural and  Community services  Coordination  Assist church-

3.4 Development Strategic Plan and Medium Term Development Plan

Restoring the existing main transport infrastructure is also

The second priority corridors for development by 2030 are:

Table 3 – Economic Corridors and Corresponding Road Links

3.4.2 Missing Link Roads

Table 4 – “Missing Link” and Corridor Roads

3.4.3 The 16 Priority National Roads

Figure 2 – Missing Links

Table 5 – The NTDP 16 “Priority” Roads

3.4.4 Road Financing

The Government is committed to the construction of quality roads that do not

3.4.5 Ports and Shipping

Source: DNPM, DSP

Figure 3 – DSP Projected Increase in Port Container Traffic

Source: DNPM, DSP