Govt borrows K191m more for Lae tidal basin project

 THE initial US$154 million (K350 million) for the Lae port tidal basin project has been depleted, forcing the Government to seek an additional US$85 million (K191 million) from the Asian Development Bank to complete the project.

Treasury Minister Don Polye said the initial amount was insufficient as the project value was based on a preliminary report.

He said the project was vital for the economy and the Government needed additional funding to complete it.

“This project, when completed, would be the catalyst for trade and development in the country,” Polye said after the signing of a supplementary loan agreement with officials of the ADB yesterday.

He said US$100 million (K225 million) of the initial amount was from ADB’s loan while the rest came from combined investment and government allocations.

He said much of the money was used on resettlement exercises during the initial stage of the project.

This was not part of the actual geotechnical study and cost analysis of the project and was a reason for the cost variation.

“This is a concessional loan that with an very low interest rate repayment of about 2%  for a period of 30 years with no strings attached. 

“The treasurer is the borrower and the implementer is the Independent Public Business Corporation (IPBC).”

He warned government officers and agencies to be wary of the consequences and do proper studies, scope of work and cost analysis to prevent cost variations.

ADB country manager Marcelo Minc said the ADB was pleased to be a part of the country’s development.

Minc said the project was vital as it would open up the country’s import and export capacity.

IPBC official Igimu Momo said the project would be strategic as it would connect PNG to Asia and the Pacific.

He said the project was expected to be completed at the end of 2014.