Canberra, undated
Confidential
Papua and New Guinea and IBRD/IDA
During 1963 the World Bank made a full-scale economic survey of the Territory and, in March 1967, the Bank sent another mission to the Territory to up-date its information and to make a preliminary examination of four projects the Government had submitted to it for consideration.2 These projects were agricultural development, telecommunications, road development and the Upper Ramu hydro-electric power scheme.
Agricultural development
Proposals were putto the Bank for assistance for five separate sub-projects: palm oil, smallholder coconuts, plantation coconuts, smallholder rubber, and livestock. Financial assistance sought for these projects amounts to $A7.6 million. An Appraisal Mission visited the Territory earlier this year to examine these sub-projects. The Mission’s Report is not expected to be completed until mid–June. It is understood, however, that the Mission is likely to recommend an IDA credit of about $A4 or 5 million, to cover part of the costs of implementing the livestock, palm oil and plantation coconut schemes. If the agricultural package proposal is approved by the Bank’s Loan Committee, we would be formally invited to send a negotiating team to Washington. The timing of negotiations is also subject to the replenishment of JDA funds.
Telecommunications project
The Bank has been approached for assistance to improve the trunk line telephone network in Papua and New Guinea including the Port Moresby-Lae-Madang and other major links. An Appraisal Mission visited the Territory late last year to examine this proposal. In March last, the Loan Committee of the Bank approved a loan of $5.4 million towards a total telecommunications programme of about $Al4 million to be implemented by the Administration’s Posts and Telegraphs Department. Negotiations covering the terms of the loan commenced in Washington on 22 May.
Road development
Further consideration of the road project (Goroka–Mt. Hagen–Mendi) suggested by the 1967 Bank mission has been deferred until after the projected United Nations Development Programme survey of transport facilities of the Territory has been conducted. Negotiations for the UNDP transport survey commenced in Washington on 14 May. It is expected that the transport survey will commence in June and will take eighteen months to complete.
Upper Ramu project
Another project which has been discussed with the Bank is a major hydro–electric scheme on Ramu River. The 1967 Bank Mission reported that the full development of the proposed Ramu River scheme would, at this stage, be premature in view of the high capital cost and the limited demand for power. Certain studies concerning the economics of thermal versus hydro power, and of the possible development of Stage 2 Ramu before the expensive stage Stage 1, have been recommended.3
[NAA: A1838, 936/20 part 6]
1 Gorton visited the United States from 23 to 31 May.
2 See Document 99.
3 Warwick Smith visited Washington in late May for the purpose of ‘exploring World Bank policies and attitudes … as they affect Papua and New Guinea, and to help ensure a proper understanding as far as they concern his department … and the Australian Administration’ (cablegram 1435, DEA to Washington, 10 May 1968, NAA: A 1838, 936/20 part 5). He also travelled to New York for discussions with UNDP officials (see cablegram 408, Plimsoll to Shaw, 11 May 1968, ibid.).