A Sea Change for the PNG Project Support Sector
by PNG Business News - July 15, 2021
A company that has operated in Papua New Guinea for 13 years recently announced that it has changed its name to PNG CR Services Company Limited.
Previously known as the Red Sea Housing Company, it has completed 127 major projects, constructing more than 15,000 project accommodation rooms and 750 support facilities for clients such as ExxonMobil, Oil Search, and the Australian Federal Police, while winning 18 awards during the completion of its construction work.
“We are rebranding to create a stronger image, signifying our commitment to Papua New Guinea and strengthening our position in the local infrastructure, camp construction and facilities management sector,” the company said in a statement.
“We are able to offer modular and containerised construction, facilities maintenance and management, MER and technical manpower. To further add value to our clients we provide project accommodation and offices facilities for lease in Port Moresby and at 11 Mile, outside Lae in Morobe Province,” it added.
PNG CR builds on its international connections and technical expertise through its parent company’s operations across four continents. The group’s business model operates under a design-construct-operate, A-Z solution to support the needs of its clients. This approach enables any concept to be effectively delivered since it is solely under the control of one contracting entity, creating a seamless flow that is efficient and robust, producing the quality product and service the group is recognised as delivering.
“We have years of local knowledge, a large national team to deliver projects, no supply chain disruptions, and provide an end to end service covering design, construction and operation,” the company added.
As a PNG company committed to driving national content, PNG CR’s recent community and social responsibility projects include the installation of Sexual Violence units across NCD and, in partnership with St Johns, an ambulance facility at the PNG CR facility in Baruni that will reduce ambulance response times for patients in nearby villages such as Baruni, Lealea, Papa, Boera and Porebada to less than 15 minutes.
Matt Cannon, the CEO for St John Ambulance, stated: “It’s through fantastic partnerships with companies like PNG CR, that enable us to provide essential medical services to the communities. It is great to see corporate clients giving back to the communities, even in tough economic times to those projects saving lives.”
PNG CR has also supported St Johns Ambulance in its Covid-19 response activities, donating equipment and essential infrastructure along with assisting SME development in the local area through creating a transport and waste management service, and a personnel agency company.
“PNG CR is your local partner in PNG, your partner for success. Please come to one of our offices or check our website for further details of how we can assist in your development project,” the company ended.
PNG Business News - July 11, 2022
Building Procurement that Benefits PNG
Photo: PNG CR’s 95 percent nationalised workforce manufactures buildings in-country and thus helps clients achieve their local content objectives It is readily accepted that prefabricated and modular building systems are better suited to Papua New Guinea than conventional modes of building. This is especially so for remotely located resource sector projects such as camps, but also for housing developments and large civil infrastructure projects including hospitals, schools, and government offices. There are several prefabricated and modular building providers in PNG, however they differ in the extent to which they ‘give back’ to PNG, as well as the extent to which they help their clients achieve their local content objectives. While cost is always a critical criterion for building procurement, companies are increasingly placing greater emphasis on building suppliers that make a meaningful contribution to PNG. Managing Director of PNG CR, Allen Tyson says that “most of the country’s modular and prefab builders are doing a similarly good job when it comes to corporate social responsibility, but they do differ when it comes to local content.” Having good local content credentials encompasses much more than a company ensuring it employs as many PNG Nationals as possible. It’s also about maximising the number of PNG owned businesses in their supply chains, as well as supporting and capacity building these businesses. PNG CR, with its 14 years’ experience providing world class modular and containerised buildings in PNG, implements a range of initiatives that maximise the incorporation of local businesses in their supply chains of large projects: Centralised procurement of local goods, Agricultural co-ops, Business start-up training, Assistance to scalability of local partners, Expansion of business partners at national levels, & Training and upskilling of local workforce. “In addition to making sure we have as many local businesses in our supply chains as possible, 95 percent of our 250+ workforce is Papua New Guinean” says Tyson. “This workforce is largely permanent, and we increase it by hiring more local workers when the need arises.” Unlike some of its competitors, which manufacture cheaply off-shore, PNG CR manufactures in-country. Tyson acknowledges this wasn’t always the case but says that over the last 14 years his company has established the capability to produce PNG made building solutions. According to Tyson, 80 percent of a typical PNG CR building (e.g., framing, cladding, roofing) is manufactured in-country. Manufacturing locally obviously has many benefits for PNG in terms of employment, upskilling, and reducing the reliance on expensive expatriates who send their money overseas. It also assists clients who procure PNG CR buildings with their own local content requirements. PNG CR has delivered a broad spectrum of buildings in PNG in addition to the 9,700 person camp complex with ancillary buildings it designed, supplied, and installed for the PNG LNG project back in 2010. The company has also provided PNG with several other camp and staff accommodation facilities, an airport terminal, a medical centre, an ambulance control centre, numerous offices, and many more buildings. As well as the buildings PNG CR supplies, the company also has full facility management capacity. Tyson says that this capacity is highly valued, particularly by resource sector clients with hundreds or even thousands of staff to accommodate and multiple buildings to operate. “We provide a design-manufacture-construct-operate model – essentially an ‘A to Z’ turnkey suite of solutions for clients. In short, we can take care of absolutely everything building-related which enables our clients to get on with their core business. Obviously dealing with one contractor like PNG CR who can literally ‘do it all’, is a lot easier than managing multiple contractors.”
PNG Business News - April 19, 2021
Bekker Says Contract Reviews Are Important
According to PNG Power Ltd, renegotiation and reviews of current contracts with independent power producers (IPPs) make the business healthier and more competitive (PPL). PPL managing director Flagon Bekker made the statement in response to questions raised by IPP industry groups (IP3) about PPL unilaterally reviewing and renegotiating current contracts and contractually negotiated prices to supply electricity to the grid. IPPs, according to Bekker, must be adaptable enough to evolve as fiscal, technical, and environmental factors change with time. “We asked IPPs to respond to a survey late last year where we asked them for their suggestions and next steps in dealing with the current commercial status quo,” he said. “In fact, we offered four or five alternatives to renegotiation. None responded.” According to Bekker, analysis shows that in terms of pricing, spending, and the overall economy, it is best to keep IPPs' share of the total market minimal. “Egypt is the best example of countries that have kept IPPs to a smaller share of the total (market) and found it easier to weather macro-economic shock and have greater freedom in deciding where to source finance for power investment in the future,” he said. “The IPPs not only make the macroeconomy weaker, but they are also the cause of their own problems. “PPL is leading to change this. “IPPs should not resist. “They should partner by suggesting solutions for the future. “PPL will send the survey out again and we hope they respond this time.” According to Bekker, there was a lot of analysis and support focused on post-negotiation evaluations, which shows that the renegotiation process contributes to the discovery of lessons and eventually the execution of those lessons. “Off the top of my head, here is a list of countries that have renegotiated PPAs in full or in part over the years: Philippines, Brazil, India, Argentina, Mexico, Turkey, Poland, China (among others),” Bekker said.
PNG Business News - March 31, 2021
PNG Ports Explains Their Decision to Deal with Covid-19
COVID-19 had a major impact on Papua New Guinea's exports and port movement, but the PNG Ports Corporation had taken political decisions to handle the situation. In recent months, the world has seen and continues to see a significant shift in everyday lives, which has had significant implications for industry, commerce, and transportation. The pandemic's emergence altered both economic and trade forecasts for 2020. New predictions have reduced forecasts to negative 4.9 per cent, down from an estimate of 3.6 per cent increase in container trade worldwide in the fourth quarter of 2019 to 2.5 per cent in January 2020. PNG Ports chairman Kepas Wali clarified that the company's earnings were the result of tight cost-cutting steps and prudent decisions taken by management. Last year, he said, the closing of borders and prohibitions surrounding the COVID-19 pandemic struck PNG Ports hard, which is dependent on trade. Despite COVID-19, PNG Ports has continued to operate all of its ports. “When COVID-19 hit the country and the world, the management of PNG Ports worked quickly and instituted certain protocols and prevention measures just so we can maintain our ports operations,” he said. “The management’s quick response to the situation has made it possible for all ports to operate during the hit by the pandemic through until now.” He said the pandemic's consequences on the company were expensive, but PNG Ports is happy with the positive results obtained by their management's swift reaction and aims to continue this going forward.
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PNG Business News - August 12, 2022
Going Green: FAO-led EU-STREIT PNG Programme provides green-powered facility to local agricultural authorities to effectively service rural farmers
EU Funded UN Joint STREIT Programme in Papua New Guinea establishes a renewable energy-powered facility to support local government authorities in East Sepik Province, in delivering effective services to rural farmers and entrepreneurs. With generous support of the European Union, the FAO-led EU STREIT Programme officially opened a new 3 cluster office building on 10 August 2022, to host the Programme along with the East Sepik provincial divisions of Agriculture and Livestock, Cocoa Board and the National Agriculture Quarantine & Inspection Authority. The new-look office building is powered by 189 solar panels, which significantly reduce greenhouse gas emissions and reduces the collective dependence on fossil fuel. The solar panels supply the building with 90 KW of energy, relieving the resident agencies and authorities from relying on fossil-generated electricity for their needs, including lighting, ICT, water pumping, and temperature control. This zero-carbon-emission facility has the capacity to accommodate around 90 experts, technicians and extension service officers. Equipped with 120 batteries, the building can support staff’s operation for 36 hours in case of experiencing high cloud cover. The building, currently co-resided by the Programme and provincial agricultural bodies, will be transferred over to the East Sepik Provincial Administration at the end of the Programme and will continue to provide a sustainable base for sustainable support to agriculture-related services in the Province. Officiating the opening ceremony, His Excellency Ambassador Jernej Videtič, Head of the European Union Delegation to PNG, in his address, said: “I am happy to be here and to see that things are moving in the right direction to bring sustainable benefits to the people of East Sepik” Ambassador Videtič further highlighted that “with resources from the citizens of Europe to fund the EU-STREIT Programme in providing training, tools and support, the quantity and quality of cocoa, vanilla and fisheries products will increase. The objective is also to protect these quality products in international markets under the EU-STREIT introduced initiative of Geographical Indication.” The East Sepik Acting Deputy Provincial Administrator, Mr James Baloiloi, in his speech expressed his appreciation to the EU for funding the EU-STREIT Programme and the interventions that the Programme is doing in East Sepik and Sandaun provinces. “The STREIT Programme has gone ahead to introduce a culture of agribusiness that now enables the people of this Province and the people of Sandaun Province to have cash income that can sustain their livelihoods.” Mr Baloiloi added, “this infrastructure and building supports us and facilitates the service delivery to our people in this Province as well as Sandaun Province.” Thanking the EU for its generous funding support, Dr Xuebing Sun, the EU-STREIT Programme Coordinator, said: “the Programme has generated substantial impacts at beneficiary, local institutions and enabling business environment levels. This would not be possible with good partnership, increased ownerships and leaderships of the governments and implementing partners.” “This co-residing and close co-operation among UN agencies and their national partners in this integrated space reflect the partnership approach taken by the Programme to sustainably develop agri-enterprise activities in the region,” added Dr Xuebing Sun, adding “the new climate-friendly facility, which is fully powered by solar energy, also provides a space to welcome, advise and serve the farmers, including interested women and youth, who play very important roles along agri-food value chains”. “This kind of ‘green investment’ enables a shift to a more green economy for local institutions and infrastructure to meet cocoa, vanilla and fishery value chains stakeholders” advised Anthony Bennett, the FAO Lead Technical Officer of the EU-STREIT PNG Programme. United Nations’ implementing partners supporting the FAO-led EU-STREIT PNG present in the office include the International Labour Organization (ILO), International Telecommunication Union (ITU), United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP). The EU-STREIT PNG is being implemented as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as implementing partners), is the largest grant-funded Programme of the European Union in the Country and the Pacific region. It focuses on increasing sustainable and inclusive economic development of rural areas through increasing the economic returns and opportunities from cocoa, vanilla and fishery value chains and strengthening and improving the efficiency of value chain enablers, including the business environment and supporting sustainable, climate-proof transport and energy infrastructure development.
Paul Oeka - August 12, 2022
CPAPNG annual meet to discuss global changes
Certified Practicing Accountants of Papua New Guinea will be hosting their 23rd annual conference with about 400 participants nationwide expected to attend the two day conference organized by CPA PNG in Lae Morobe Province from August 18 to19, 2022 CPAPNG was established in 1974 and has come a long way with a lot of achievements along the way. Over the years its membership grew from mere numbers to just below 2000 which includes 40% locals and 60% non-citizens. . The CPA PNG conference is one of CPAs three significant annual events on their calendar with this year's conference theme; Is PNG prepared for the recession?" The conference will see certain key leaders in executive management roles from both the public and private sector delivering presentations in line with the conference theme. CPA PNG's Executive Director Mr. Yuwak Tau said the theme of the conference was selected because there was a decline in the global economy and the general so when that eventuates small economies tend to be affected. He added that they have basically selected the theme that was current and appropriate so that members would find relevance during the course of the conference. “The meeting is to create intellectual and interactive discussions with seasoned business leaders to present and share their ideas and experiences to find probable outcomes within their business environment and industries in times of economic uncertainty”. Some of the topics to be presented by consultants are current significant issues such as crypto currency, transport pricing, bit coin block chain technology and stress management. This were some topics that people have heard about but have not really ventured into. Mr. Tau added that it would be quite hard to measure the benefits immediately but the participants will be able to look at insights shared during the conference that would be appropriate in the areas of employment, accounting, finance, auditing and others. The conference will create an environment where participants can also share information so That they can take points to apply in their work place and industries. In relation the Kumul petroleum Holdings had also presented a cheque of K50, 000 to support the coming event at their head office. The cheque was presented by KPHL's executive General Manager Corporate Affairs, Luke Liria and was received by CPA PNG Chairman Richard Kuna. Mr. Liria said KPHL has appreciated the effort put in by CPA PNG to ensure that its members in State owned enterprises and the private sector were given appropriate level of training and as part of KPHL's corporate social responsibility and commitment they hope that their support will continue to help the organization facilitate and make sure the accounting practices is of international standards. CPA PNG's Chairman, Richard Kuna acknowledged KPHL for their support and stated that he was looking forward to seeing KPHL being a big part of the upcoming conference.
Paul Oeka - August 12, 2022
BSP: Small to Medium Enterprises Loans reaches 60% rate.
Bank South Pacific's Financial Group Ltd Chief executive officer Mr. Robin Fleming has recently announced that the bank has granted more than K200 million as loans to small to medium enterprises under its credit scheme facility that the then Marape government had released to the bank to support Small to Medium Enterprise (SME) and local businesses during the peak of the COVID-19 pandemic. Mr. Fleming said about 1523 customer loans have been approved, that is about 60% of loan approval rates since 2019. Prior to this announcement BSP and the Department of Commerce and Industry (DCI) had agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million. The previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year. Fleming stated that even though they have exhausted and rolled out the bulk of the governments relief funds for SME's they will still be running the SME loan program under its credit facility scheme “At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility”. “There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility”. “The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to”. As part of the government SME relief funding, Commercial Banks were allocated K200 million with BSP Financial Group receiving K100 million, NDB K80 million and another K20 million was allocated to the department of Commerce and Industry BSP could not comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, the bank has also made it a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.