Kumul Submarine Cable Network Project (KSCNP)

The KSCNP was one of the high priority projects included in the Framework Agreement on Development Cooperation between the People’s Republic of China and the PNG Government signed on July 8, 2016 when former Prime Minister Peter O’Neill visited China. The agreement led to the subsequent development and execution of a project financing agreement between PNG and EXIM Bank with actual project implementation starting in November 2018 with a three phase approach. The KSCNP was implemented over 17 months, beginning on November 17 2018 and ending its third and final implementation phase on June 2, 2020.

PNG secured a loan for the KSCNP project from China’s EXIM Bank for an estimated US$270 million (K879 million). The loan from EXIM Bank accounts for 85 percent of the project’s costs while the remaining balance of 15 percent was to be provided by the government of PNG. At the Provincial level, an additional US$56,423 (K200, 000) was contributed by the West New Britain Provincial Government to connect public institutions in its own province to the cable network. To date, West New Britain is the only province to undertake this arrangement.

There is an evident lack of transparency and accountability associated with this project: much of the documentation concerning planning, budgeting, expenditure, and reporting is not publicly available. The senior officers of key government agencies directly responsible for planning, supervision and management of the project, especially the Departments of Treasury and National Planning and Implementation and PNG DataCo, have refused to either meet with the researchers or provide vital information on the project. This makes it difficult to assess if this project complied with the country’s procurement policies and guidelines.

Without the actual project loan agreement, the amount of the loan obtained for the KSCN project is unclear. There are three different loan figures quoted in the social and printed media: US$270 (K879 million), according to the KCH official website; US$200 (K661 million) was officially announced by Hon. William Duma, State Enterprises and Investment Minister in August 2018; finally, US$279 million (K1 billion) was reported by a former PNG government advisor. It is difficult to ascertain if the project was completed as planned and within the loan-funded budget ceiling without vital project information.

The information provided by the Treasury Department on the annual budget estimate presented only mere information on annual actual allocation of funds. It includes information on projected budget allocations for the immediate future with a brief background on the project, however it lacked detailed information on the project implementation status, including loan drawdowns and financing terms, other stakeholders that are involved in project implementation, and change of scope (if any).