Australia will spend $580 million to upgrade ports in Papua New Guinea, enhancing some of the country’s out-dated infrastructure, providing useful facilities for use by Australian and allied warships, and – perhaps most importantly – warding off investment by China.

Under an agreement signed by Prime Minister Scott Morrison and PNG PM James Marape in mid-January, Australia will provide a series of loans and grants for work on a number of priority ports, all in PNG’s north and on islands.

Through this investment, the Lae Tidal Basin will be PNG’s largest port with an enhanced capability to handle container traffic from Southeast Asia, and possibly becoming a regional hub for exports to the Pacific.

Works will also be undertaken at Kimbe on the north coast of New Britain, Lorengau on Manus Island, Kavieng in New Ireland, Vanimo in West Sepik, and Wewak in East Sepik (see map below).

Australia is already assisting PNG to renovate the Lombrum Naval Base on Manus Island for use by PNG’s patrol boats, and also by Australia and the US. Though nominally intended for PNG’s Guardian class patrol boats, it could accommodate larger vessels.

China has already demonstrated an interest in boosting ties with PNG, in mid-2020 signing a $200 million deal with the PNG government to export seafood directly to the Chinese mainland and to develop the local fishing industry. At the time, China’s ambassador to PNG talked up a potential free trade agreement.

Under its massive Belt and Road Initiative launched a decade ago, China’s CCP has supported developing nations through investment in their infrastructure projects. But it has been accused of using this investment as ‘debt trap diplomacy’ by saddling small nations with infrastructure debts they can’t readily repay, for which China has sought concessions in return.

Announcing the ports deal, Mr Morrison made no mention of China, instead saying it was about enabling and supporting the sovereignty, independence, and self-sufficiency of PNG. “Infrastructure strengthens economies, creating the conditions for long-term jobs growth,” he said. “Bigger ports mean greater access to global trade opportunities.”