It reportedly had 350 passengers on board while travelling from Kimbe, New Britain Island, to Lae on the mainland.
The rescue was halted at about 7pm with authorities saying 238 people had been rescued. The search would resume this morning. No deaths have been reported so far.
Earlier, Australia’s Maritime Safety Authority said 219 people had been rescued 12 hours after eight vessels and three helicopters were diverted to the scene where the MV Rabaul Queen went down.
AMSA spokeswoman Carly Lusk said a greater loss of life could have been avoided as sea conditions were good, with a 10 knot (18kmh) wind and a light swell, as the rescue mission got underway.
She said the ferry’s owners had reported 350 people on board the 47m coastal ship.
“We are getting more life rafts out into the water. There have been more reports of vessels sighting people in life rafts, so we’re hoping for the number (of survivors) to increase in the very near future.”
The PNG Maritime Rescue Coordination Centre said the ferry sank about nine nautical miles north-east off Cape Fortification, in the Vitiaz Strait.
The vessel, built in 1983, was travelling from Kimbe, West New Britain, to Lae, when it encountered trouble.
It sent out a distress signal that was picked up by Australia’s Rescue Coordination Centre in Canberra and the PNG centre in Port Moresby.
Four foreign registered vessels rushed to the scene, while two helicopters were dispatched from Lae to provide the coordination centre with updates.
Australia’s Maritime Safety Authority also directed another four ships, three helicopters and a fixed wing aircraft to help.
Ferry operator Star Ships said in a statement it lost contact with the MV Rabaul Queen at about 6am.
The ship’s owners said it had no information what caused the accident, adding the vessel sank quickly and without sending a distress message.
“Bad weather, I think (it is) believed to have sunk,” Star Ships spokesman John Whitney told AFP, confirming reports that there were up to 350 on board.
Rescue co-ordinator Captain Nurur Rahman said he was being fed information from a National Maritime Safety Authority agent on board one of the ships.
“’The dynamics of this thing are changing all the time, minute by minute,” he said.
Lae Chamber of Commerce and Industry president Alan McLay said the information he got indicated the ship went down at about 6am at a time when there was extremely high winds and the sea was very rough.
“The local villagers are very hesitant in venturing out to sea to assist the rescue in fear for their own lives (they know their own coast),” he told The National.
“It’s somewhere near the vicinity of Scarlett Beach, so it’s pretty
rugged coastline.”
McLay said the Rabaul shipping office in Lae was deserted, with a large crowd around it and no one could contact any of the management in Rabaul.
James Krimbu, a health worker at Braun Rural Hospital in Finschhafen, said from Finschhafen that the area had been experiencing very rough seas and strong winds, which was hampering rescue efforts.
“The district administrator organised boats to go out but they can’t because the seas are too rough.
“At the moment, they are on standby at Buki Wharf.
“They made a first attempt before lunch but they encountered rough seas and strong winds and they turned back.”
Martin Mosi, director of the PNG National Disaster Centre, said the cause of the disaster was not yet known.
“Is it weather? Is it overloading or is it something to do with the vessel itself? We do not know but that will certainly come to light very soon,” he said.
Star Ships, among PNG’s largest passenger ship operators, runs regular services to Kimbe which is a popular dive site that attracts tourists from across the world
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