Announcement of World Bank and IDA Provide Support for Third Highway Project in Papua New Guinea on May 29, 1980

FO.R IMMEDIATE RELEASE' ... . ... .. •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202} 393-6360 IDA NEWS RELEASE NO. 80/83 BANK NEWS RELEASE NO. 80/106 May 29, 1980 WORLD BANK AND IDA PROVIDE SUPPORT FOR THIRD HIGHWAY PROJECT IN PAPUA NEW GUINEA The final link in Papua New Guinea's Highlands Highway will be completed with the assistance of a $17 million loan from the World Bank and a $13 million credit from the World Bank's affiliate for concessionary lending, the International Development Association (IDA). The objective of the $42.4 million project is to support the economic and social development of the Central Highlands area where 40% of the population of Papua New Guinea lives. The majority of the people in the region are engaged in subsistence agriculture, and coffee, tea and • tobacco have been the major commercial crops. The region has a mild climate and relatively fertile soils, and earlier transport improvements have helped to extend commercial agricultural production. Provision of better and lower cost access to the port of Lae is expected to encourage further expansion of agricultural production in the Central Highlands. The major part of the project provides for improvement of 137 kilo- meters (km) of road from Kassam Pass to Daulo Pass. It includes road widen- ing and bituminous paving, replacement of eight bridges and repair of the other 24 existing bridges. Technical assistance will be provided to Papua New Guinea's Department of Works and Supply and Provincial Governments for improving the efficiency of road maintenance operations. Technical assistance to Provincial Governments for rural transport and simplified engineering of approximately 300 km of priority rur~l roads will be provided. Future rural transport projects resulting from these studies are expected to provide some isolated population pockets with transport for marketing their produce. Funds will also be provided for engineering of the 67 km road from Togoba to Wapenamanda, which was proved to be economically justified by a feasibility study undertaken as part of an earlier World Bank supported project. The $17 million World Bank loan to the Government of Papua New Guinea is for a term of 20 years, ·including a 5-year grace period, with interest at 8.25%'per annum. The $13 million IDA credit is for 50 years, including 10 years of grace. The credit carries no interest but bears a service • charge of 3/4 of 1% per annum to cover administrative expenses . NOTE: Money figures are expressed ·in' U.S. dollar equivalents. FORM NO. 1121 (5-76) T ECHNI CAL DAT A PROJECT: COUNTRY: TOTAL COST: Third Highway Papua New Guinea $42. 4 mi 1lion • BANK FINANC•NG: $17 million, fora.term of 20 years, includi_ng 5 years of grace with interest at 8.25% per annum IDA FINANCING: $13 million, standard IDA terms OTHER FINANCING: Government of Papua New Guinea IMPLEMENTING ORGANIZATION: Department of Works and Supply P• 0 • Box 11 08 Boroko, Papua New Guinea TELEX: NE 22114 PROJECT DESCRIPTION: The project consists of a) improvement and paving of 137 kilometers (km) of the Highlands Highway between Kassam Pass and Daulo Pass, including supervision by consultants, technical assistance to the Department of Works and Supply in contract management, and traini.ng of enginee. b) improvement of road maintenance including technical assistance and training of sta by consultants; c) improvement of rural transport; d) engineering of the Togoba- Wapenamanda road; and e) procurement of traffic counting equipment. PROCU.REMENT: Improvement and paving works will be carried out by contract following interm:~tional competitive bidding in accordance with Bank guidelines. Traffic counting equipment will be procured by international shopping. Small items with a value of less than $10,000 up to an aggregate of $50,000 will be purchased according to local procurement procedures. CONSULTANTS: Consultants will supervise the works on the H.ighlands Highway, provide technical assistance and training in maintenance, and provide technical assistance for the development of rural transport projects and road engineering. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 18% 1983 - 0 - •