Lae Port Development Ground-breaking

Rt Hon Mekere Morauta KCMG MP, Minister for Public Enterprises
on the occasion of the groundbreaking for the Lae Port Project
Lae, Morobe Province, June 18 2012

Distinguished guests, ladies and gentlemen and my Parliamentary colleagues, it is a great pleasure for me to turn the first sod for this 800 million Kina project.

The new Lae port will be a significant addition to the national stock of transport infrastructure: projects such as this are vital for Papua New Guinea’s development.

Before I apply my shovel to the earth, I would like to welcome everyone who is present today, but particularly His Excellency the Chinese Ambassador and his wife; the Korean Ambassador; the Vice President of the civic works contracting company, China Harbor Engineering Company, Mr Jhao from Beijing; Mr Chang, manager of the regional office of CHEC in Colombo; Mr Deng Bo, the CHEC Lae Port Project Manager; CHEC managers and staff in PNG; the construction supervision consultant engineers, Korean Engineering Consultant Corporation; and our 70 per cent co-funders, the Asian Development Bank, to
Lae, capital of Morobe Province.

And of course I welcome landowners, other Lae people and business representatives, to
whom this project is so important.

On behalf of the Government, I congratulate China Harbour for winning this contract. It was
an internationally competitive tender. China Harbour won it on its strong technical expertise,
its experience in building similar and much larger projects, not just in China but throughout
Asia, and on price.

I also take this opportunity to thank the Asian Development Bank which is financing 70 per
cent of the cost of construction. The fact that ADB is a joint financier gives the Government
confidence in the contractors and their ability to complete the project successfully.

On our part, the Government’s representatives, IPBC and PNG Ports, have pulled out all
stops to facilitate the start of construction.

The new tidal basin, berth and terminal, which are expected to be completed in 2015, will
make a big contribution to the development of the Momase-Highlands region, particularly in
the resources, industrial and agricultural sectors. Lae Port is the most important port in the country, accounting for 60 percent of the nation’s trade, and has become one of the busiest in the south-western Pacific.

Lae needed this new port yesterday. It cannot meet current demand. It is congested, inefficient, and an impediment to national development.

As major resource projects start producing and construction of new ones, such as the Wafi
gold mine begins, the port would have become an even greater obstacle to regional and national development without this project.

The new facility will also spur other economic development in the region, including
agriculture, by helping to lower the cost of taking goods to local and international markets as well as reducing the transport costs of inputs.

Ladies and gentlemen, our Government has provided appropriate assistance to get this project
going. The Government approved the contractor’s use of the fast-track model for the LNG
Project to get specialist workers’ Labour and Immigration permits granted as quickly as

The Government has also waived duty on construction equipment for the duration
of the project.

In return we expect the contractors, as agreed, to employ as many local workers as possible
and to make the use of local contractors an absolute priority.

We believe at least 600 extra jobs can be created during the construction phase. In the
medium term, once this project is completed, it will help create more employment
opportunities for local people including as seafarers, port labourers, drivers and equipment
operators and office staff in port agencies and in local stevedoring and transport companies.

In the longer term I believe flow-on industrial and commercial development resulting from
the project can add several hundred more jobs.

It gives me great satisfaction to see that our government’s efforts to ensure local participation
have borne fruit already – local contractors and landowners have been employed to help
prepare the site. This also includes the hire of local equipment.

I trust that this good start sets the standard for the rest of the project.
There are a number of significant milestones to be reached this year:

    • Human resources mobilisation to be completed
    • Plant and equipment (local and Chinese) mobilisation to be completed
    • Site clearance
    • Site camp to be 90 per cent established
    • Dredging to start by August and expected to be 30 per cent completed
    • Reclamation of the container lay-down area to be finished

It is imperative that these milestones are met and that the project is completed on time and on
budget – so that the benefits flow to the Momase-Highlands region as quickly as possible. Ladies and gentlemen, in three years we will look around this area and we will probably not recognise it.

This port, along with the Wafi gold mine and other projects in the pipeline, will transform
Lae. Port Moresby will become the junior sister to Lae – I am sure all Morobeans will be
pleased about that.

Last month I had the privilege of visiting a number of projects constructed by China Harbour
in Singapore, China, Hong Kong and Sri Lanka – ports, airports, dockyards, roads, biodiesel
plants. Having seen their work elsewhere, I have every confidence in China Harbour’s ability
to complete the Lae port to the highest quality, on time, and on budget. We all look forward
to that day.

Thank you.


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