Plan for $39b city on Australia’s doorstep

A Chinese company plans to build a city on Australia’s doorstep in a move set to inflame tensions between Beijing and Canberra.

A Chinese company has approached the Papua New Guinea (PNG) government with a proposal to build a $39bn city just kilometres from Australia’s sea border, according to leaked documents obtained by The Australian.

Hong Kong-based WYW Holding asked PNG Prime Minister James Marape in April to sign off on a “build operate transfer” deal to build the city on the island of Daru, situated just two kilometres Australia’s border in the Torres Strait.

If approved, the “New Daru” would be passed onto PNG after an unspecified period of Chinese control.

“We hope that you and your government will agree to engage with us on this ambitious plan which is, as you are aware, predicated on an agreed Sovereign Guarantee based on a long-term BOT contract between and for the ­mutual benefit of both parties,” The Australian quotes WYW Holding chief executive Terrance Mo as writing.

A spokesman for Mr Marape told The Australian he was “unaware of such projects”.

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Treasurer Josh Frydenberg said he would “wait until more details” were available.

“We have a close relationship with the PNG government … let’s not jump to conclusions here,” he said on Friday.

“Let’s wait for more details do become available. I am not going to go into see what our government knows about various matters.

“Our relationship with Papua New Guinea very strong, it is a very co-operative relationship, it is multifaceted.

“Between Prime Minister Morrison and Prime Minister Marape there is a constant dialogue.”

It comes after a Chinese company last year signed a memorandum of understanding to build a $200m industrial fishing complex on Daru.

The revelation alarmed some national security experts who feared the site, which would be located 15o kilometres from the Queensland mainland, would double as a Chinese military facility.

Concerns were also raised the commercial fishing complex would decimate traditional fishing practices in the Torres Strait.

Daru is the capital of PNG’s impoverished Western Province and has a population of just 15,000. The town has also been ravaged by an extremely drug-resistant strain of tuberculosis.

The Australian Strategic Policy Institute’s Jonathan Pryke downplayed the chances of the project, saying most Chinese workers sent to Daru would contract the virus.

“I won’t believe it’s happening right up until they break ground,” he told NCA NewsWire.

Mr Pryke said even if construction began, there was no guarantee the project would be completed given China’s record of development in PNG.

Beijing previously pledged to build a university in the electorate of former PNG leader Peter O’Neill, a plan Mr Pryke said had amounted to “a bit of land clearing and four demountables”.

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