Papua New Guinea: Sustainable Highlands Highway Investment Program

Sovereign Project | 48444-002

The Asian Development Bank is working with Papua New Guinea to upgrade the Highlands Highway, which runs through the country's most populous region. The program will improve and maintain over 400 km of the highway and incorporate road safety features and logistics services for agriculture. The highway is the key link for Highland communities moving produce to Lae, the nation's largest seaport.

Project Details

  • Project Officer
    Khpalwan, Bashirullah
    Pacific Department
    Request for information
  • Country
    Papua New Guinea
  • Modality
    • Grant
    • Loan
    • ND
  • Sector
    • Transport
Project Name Sustainable Highlands Highway Investment Program
Project Number 48444-002
Country Papua New Guinea
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
MFF Facility Concept 0099-PNG: Sustainable Highlands Highway Investment Program (formerly Land Transport Improvement Investment Program)
Government of Australia US$ 11.50 million
MFF Facility Concept 0099-PNG: Sustainable Highlands Highway Investment Program (formerly Land Transport Improvement Investment Program)
Ordinary capital resources US$ 610.00 million
Concessional ordinary capital resources lending US$ 70.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Sector / Subsector

Transport / Road transport (non-urban) - Transport policies and institutional development - Urban roads and traffic management

Gender Equity and Mainstreaming Some gender elements
Description The Highlands region of Papua New Guinea (PNG) consists of seven landlocked provinces where approximately 40% of the country's population resides, most of whom are involved in rural smallholder agricultural production. Aside from abundant and underemployed labor resources, the region is endowed with agricultural and mineral resources which serve as an engine of growth for the national economy. Characterized by relative high levels of the national agricultural production of fresh produce and cash crops, mainly coffee, tea, and cocoa, the region contributes a third of gross domestic product; while the region's mineral and petroleum resources account for nearly 80% of national exports. The 1,200 km long 2-lane national Highlands Highway is the lifeline for the Highlands region connecting 1,800 km of regional and feeder roads and servicing the region's people particularly those in the rural hinterland. The highway traverses the Highlands region connecting it to the coastal provinces and the country's main port in Lae.
Project Rationale and Linkage to Country/Regional Strategy Access to basic services and the movement of goods and people is heavily reliant on the Highlands Highway. The mountainous terrain, poor highway conditions owing to a lack of systematic and consistent maintenance, coupled with washouts and landslides common during the rainy season make the highway unreliable and impassable at times. With climate change the frequency of extreme rain events are projected to increase. At present, more than 70% of the highway is in fair or poor condition, while for 90% of the road length, the safety rating for vehicle occupants and pedestrians is two star and below. In its current state, the road conditions pose serious road safety hazards to users and pedestrians, with levels of fatalities and injuries far in excess of comparable countries in Asia and the Pacific. High-potential agricultural products from the region bear high trade costs, limiting access to domestic and international markets. Poor road conditions and lack of adequate transport accessibility and services infrastructure such as bus stations and rest stops, and absence of logistic facilities for agricultural products restrict the development of value chains needed for perishable and high value products. Given the preponderance of rural population involved in agricultural livelihood activities, the present condition of the Highlands Highway is a major constraint hindering the region's future social and economic development and opportunities for sustainable and inclusive growth.

Increased opportunity for equality and prosperity in rural areas (Development Strategic Plan, 2010-2030)

Attainment of well-integrated, safe, affordable, and financially and environmentally sustainable transport systems that efficiently serve the economy and people of PNG (National Transport Strategy, 2014-2030)

Improved access to health and education, and living standards of the people of PNG (National Strategy for Responsible Sustainable Development for Papua New Guinea)

Project Outcome
Description of Outcome Increased efficiency and safe movement of people, goods, and services between the Highlands Region and markets
Progress Toward Outcome

1. PMO Construction contract awarded in Q4 2018.

2. 3 civil works contracts awarded in Q4 2018.

Implementation Progress
Description of Project Outputs

The 430 kilometer of two-lane rural Highlands Highway from Lae Nadzab airport to Kagamuga airport in Mt Hagen, is rehabilitated, upgraded, and effectively maintained

Road safety on the national Highlands Highway increased

Transport logistics and services in the Highlands Region improved

Institutional capacity of the DOW to deliver the investment program and sustain its benefits strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

PMO construction contract was awarded in Q4 2018.

To be conducted once PMO is fully established.

Not yet due.

3 civil works contracts awarded in Q4 2018.

Not yet due.

3 civil works contracts awarded in Q4 2018. Contracts include construction of bus stops and bus shelters as part of the improvement works.

3 civil works contracts awarded in Q4 2018. Contracts include construction of roadside markets as part of the improvement works.

3 civil works contracts awarded in Q4 2018. This will be part of the Contractors obligations.

Not yet due.

Not yet due.

Not yet due.

Not yet due.

Not yet due.

Not yet due.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects Category B. The project will involve rehabilitation, upgrade and maintenance of the existing road. The sites are not in protected areas and have no particular or special value for biodiversity conservation. Impacts will be site specific and can be readily mitigated.
Involuntary Resettlement Category C. The project does involve land acquisition or resettlement since all works are in the existing government owned right of way. A due diligence report has been prepared for the project and a land acquisition and resettlement framework has been prepared for the investment program.
Indigenous Peoples Category C. An IPP will not be required, however, IPPF was prepared in event of need for an IPP in future tranches. The project will ensure that local communities actively participate and receive culturally appropriate benefits.
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders including government, civil societies, and development partners were consulted during the project design phase.
During Project Implementation During implementation, government, civil societies, and development partners will continue to be consulted and will directly participate in implementation.
Business Opportunities
Consulting Services TBD pending approval
Procurement TBD pending approval
Responsible ADB Officer Khpalwan, Bashirullah
Responsible ADB Department Pacific Department
Responsible ADB Division Papua New Guinea Resident Mission
Concept Clearance 13 May 2016
Fact Finding 05 Dec 2016 to 16 Dec 2016
MRM 21 Mar 2017
Approval 22 Jun 2017
Last Review Mission -
Last PDS Update 12 Jun 2019

MFF Facility Concept 0099-PNG

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 840.00 Cumulative Contract Awards
ADB 680.00 - 0.00 0.00 %
Counterpart 148.50 Cumulative Disbursements
Cofinancing 11.50 - 0.00 0.00 %

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan