1. Papua New Guinea
  2. Local government PPP landscape

Local government PPP landscape

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  • Overview

    Rural Primary Health Services Delivery Project

    Number of SNGs

    • Municipalities
      N/A
    • Intermediate
      N/A
    • Regional/State
      N/A
    • Total Number of SNGs
      N/A

    SNG Expenditure (% of GDP)

    • Total SNG Expenditure
      N/A
    • SNG Current Expenditure
      N/A
    • SNG Staff Expenditure
      N/A
    • SNG Investment
      N/A

    SNG Expenditure (% of govt. expenditure)

    • SNG Expenditure
      N/A
    • SNG Current Expenditure
      N/A
    • SNG Staff Expenditure
      N/A
    • SNG Investment
      N/A

    SNG Revenue (% of GDP)

    • SNG Revenue
      N/A
    • SNG Tax Revenue
      N/A
    • SNG Grants
      N/A
    • Other SNG Revenue
      N/A

    SNG Revenue (% of govt. revenue)

    • SNG Revenue (% of govt. revenue)
      N/A
    • SNG Tax Revenue (% of govt. tax revenue)
      N/A
    • SNG Grants (% of govt. grants)
      N/A
    • Other SNG Revenue (% of other govt. evenue)
      N/A

    SNG Debt Profile

    • SNG Debt (% of GDP)
      N/A
    • SNG Debt (% of govt. debt)
      N/A

    Transfers to SNGs from National Government

    • SNG Transfers Score
      B
    • Score for Transfer Allocation System
      B
    • Score for Info Transfer Timeliness
      A
    • Score for Collection and Reporting of Fiscal Data
      D

    GDP = gross domestic product, govt. = government, N/A = not applicable, SNG = subnational government.

    Note: The Public Financial Management and Accountability Assessment report, developed by the World Bank and other development partners, comprised scoring of various indicators by rating them from A to D. These ratings, as per criteria stated in the Public Expenditure and Financial Accountability (PEFA) framework, are broadly interpreted as follows:
    A = good performance that meets international standards (i.e., the criteria for the indicator are met in a complete, orderly, accurate, timely, and coordinated way);
    B = a level of performance ranging from good to medium by international standards;
    C = a level of performance ranging from medium to poor; and
    D = a process or procedure that is either nonexistent or not functioning effectively.

    Sources: UCLG. 2016. Subnational Governments around the World—Structure and Finance. https://www.uclg.org/sites/default/files/global_observatory_of_local_finance-part_iii.pdf; International Monetary Fund. 2015. Papua New Guinea Public Expenditure and Financial Accountability Assessment. Washington, DC. https://www.pefa.org/sites/pefa/files/assessments/reports/PNG-Aug15-PFMPR-Testing-version-Public-with-PEFA-Check.PDF.
     

  • Local Governance System in Papua New Guinea

    Papua New Guinea is a federal constitutional monarchy. National, provincial, and local are the three levels of government in Papua New Guinea. It consists of 20 provinces, the national capital area of Port Moresby, the autonomous region of Bougainville, and 89 districts.

    There are a total of 318 local governments, also known as local-level governments (LLGs), consisting of 31 urban LLGs and 265 rural LLGs. The composition or the functions and responsibilities of the urban LLGs and rural LLGs have a slight difference. The main governing legislation is the Organic Law on Provincial Governments and Local-Level Governments 1995, and the Local-Level Governments Administration Act 1997.1

  • Infrastructure Development Plan of Local Governments

    In each province, LLGs compile their plans and budgets for submission to a district development authority. The provincial governments, working with LLGs, are primarily responsible for the implementation and oversight of the resulting 5-year development plan.1  LLGs create their own plan using the plan of their respective wards, incorporating it into the district plan. The district’s key role is to integrate the "top-down" planning of the province and country with the "bottom-up’"planning of the LLGs.2

  • Sectors for Potential PPPs with Local Government Projects

    The national government provides most of the public services with support from the provinces and LLGs. Local governments are responsible for road and parks development, collection and disposal of refuse, health and environment protection, economic promotion and tourism, and water supply. LLGs are empowered to enter into PPPs and church partnerships.1

    Government Contracting Agency Preparation Agency Project Title Estimated Project Cost Estimated Concession Period Status
    ($) (K)
    UA UA UA UA UA UA UA
    • UA = Unavailable

  • Revenues for Local Governments

    Most LLGs are dependent on the national government for funding their recurrent and development budgets. Only a few urban LLGs collect fees and rates.

    Local governments may levy

    • taxes, fees, and charges for community services;
    • public entertainment taxes;
    • general trading license fees;
    • domestic animal license fees;
    • billboard fees;
    • fees for small-scale logging; and
    • other charges, fees, and fines.

    The Department of Provincial and Local Government Affairs supervises locally raised taxes through budget approval and reporting.

    The standard grants available for local governments include

    • administration support grant (unconditional),
    • staffing grant,
    • development grants, and
    • town and urban services grants.

    LLGs are given a direct allocation of K10,000 annually, made to each of the 6,186 council wards. They are also given K500,000 annually for service improvements.

    As legitimate governments, LLGs can apply for loans to assist in delivering services. However, commercial banks hesitate to lend to them due to the lack of steady income flows to repay the loans. Some well-established business arms of LLGs do take out commercial loans.

    Source: Commonwealth Local Government Forum. 2019. The Local Government System in Papua New Guinea. Papua New Guinea. http://www.clgf.org.uk/default/assets/File/Country_profiles/Papua_New_Guinea.pdf.

  • Borrowings by Local Governments

      2011 2012 2013 2014 2015 2016 2017
    Agriculture UA UA UA UA UA UA UA
    Industry UA UA UA UA UA UA UA
    Services UA UA UA UA UA UA UA
    Finance UA UA UA UA UA UA UA
    Total UA UA UA UA UA UA UA
    • UA = Unavailable
      2015 2016 2017 2018 2019 (up to May 2019)
    Total regional loans realization (K) UA UA UA UA UA
    Total regional loans realization ($ billion) UA UA UA UA UA
    Regions (number) UA UA UA UA UA
    Utilization UA UA UA UA UA
    • UA = Unavailable

  • Budgetary Allocation to Local Governments

    According to the Budget 2020, approximately $1,066.24 million (K3,689.4 million as of June 2020) from the total expenditure is allocated to the provinces.1 In 2017, this amount was approximately $918.56 million (K3,178.4 million as of June 2020), which increased to $1,029.11 million (K3,560.9 million as of June 2020) in 2018.2

  • Credit Rating of Local Governments

    Papua New Guinea does not have a domestic credit rating agency and the local governments are not being rated.