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PNG Business News - May 18, 2021

Construction of New Terminal Building for Momote Airport Well Underway

The new terminal building for Manus' Momote Airport is well underway and starting to take shape. This project should be finished by November of this year. The Momote Airport upgrade is part of a series of high-impact projects financed by the Asian Development Bank's multi-tranche Financing Facility (MFF) loan and the Government of PNG's counterpart funding totalling K99.6 million under Tranche 3. The Civil Aviation Development Investment Programme (CADIP) is handled by the National Airports Corporation's project implementation team. Allen Guo Investment Limited (AGI), a subcontractor, designed this architectural masterpiece in collaboration with China Harbour Engineering Corporation, the lead project contractor, and the NAC project team. This new facility will have a VIP lounge, a large departure lounge with 139 seats, passenger check-in counters, an arrival lounge with luggage conveyor belts, baggage screening machines, close circuit camera TV (CCTVs), a kiosk, restrooms, and other amenities. Should direct flights from abroad become available in the near future, it will also provide on-arrival VISA and Immigration counters to process foreign passengers. The airport's improved aircraft runway pavement, which was reinforced and covered with an asphalt surfacing finish, complements the current terminal building. In April 2021, the runway length was expanded from 1810 meters to a total of 2010 meters to accommodate B737 800 or equivalent capacity aircraft. The construction of a new airport market building, which is approaching completion, as well as the installation of a water source and an airfield lighting system, are also part of the Momote Airport's modernization programs.

Business

PNG Business News - May 18, 2021

Scovell: Finance and High Taxes are Pressing Problems for Downstream Processing

Finance and high taxes, according to PNG Manufacturers Council chief executive officer Chey Scovell, are two of the most pressing problems in the downstream production of PNG goods. According to Scovell, downstream processing is a capital-intensive industry that requires a large sum of money. He also suggested that the government consider lowering corporate and goods and services taxes. Scovell said that good road connectivity should be a government priority, as this would allow goods to be shipped quickly and efficiently. He said that the new government freight subsidy was unsustainable and that it was incentivizing people to rob from coffee and cocoa plantations in order to take advantage of the subsidy to export and sell their produce. Prime Minister James Marape, who paid a visit to Paradise Foods Ltd's Queen Emma chocolate factory, urged businesses to expand into downstream manufacturing to support the economy and domestic industry. According to Marape, the firm also imports corn for some of its goods, which he claims could be supplied locally. “This factory needs (local) corn,” he said. “I just came out of a processing line that is importing corn. We can grow corn in PNG.” Marape was ecstatic to see the company innovate, create opportunities, and concentrate production locally. He said that the Queen Emma chocolate production demonstrated the country's ability to transition from selling raw materials to producing value-added goods. “We want to go downstream to certify our local market, as well as export to economies around us,” he said. “I am happy to see an industry that has been in existence outside of political motivation and incentives. They have been at work since 1945. I am totally overwhelmed. And if there is any way that the Government can assist with fiscal support in these tough times.”

Business

PNG Business News - May 18, 2021

Gaming Industry Reopens

The gaming industry in Papua New Guinea has resumed regular operations, in full accordance with COVID-19. The decision was made following discussions with the National Gaming Control Board and the National Control Centre. Both Gaming Machine sites have reopened, and bookmaker sites will reopen next week. Imelda Agon, the NGCB's Acting CEO, praised the move while reiterating the industry's readiness to follow COVID-19's tight guidelines. “We are grateful to the NCC for relaxing the restrictions on the gaming industry. The reopening of the industry will see hundreds of ordinary Papua New Guineans going back to work and the return of normal business”, said Agon. She went on to say that the COVID-19 pandemic had harmed the gaming industry.

Business

PNG Business News - May 13, 2021

National Airport Corporation to Focus on Redevelopment Projects

The National Airports Corporation plans to devote more resources to the redevelopment projects at Kavieng, Tari, and Mendi airports as part of the Civil Aviation Growth Investment Program. With the exception of three airports, all airports under the CADIP program are on a budget, according to NAC acting managing director Rex Kiponge. Apart from Jackson Airport in Port Moresby, Kiponge claims that the majority of the country's airports are unable to handle the newly launched F100 aircraft. “The introduction of F100 aircraft has deteriorated the condition of runways in PNG. Under CADIP, fencing and runway length deficiencies will now meet the F100 and ICAO requirements. CADIP was implemented to meet the minimum PNG Civil Aviation Rules (CARS) and the International Civil Aviation Organisation (ICAO) standards and recommended practices in all the 22 airports in the country. “The F100 aircraft require a minimum runway length of 1900 metres –– only three airports meet this requirement.” The F100 will be able to land at 12 airports thanks to a CADIP runway length upgrade. Port Moresby is now the only province that meets the operating criteria for F100 planes. Standby control, security fencing, apron parking, runway, taxiway, and apron strength, and a runway length suitable for takeoff at maximum payload are all part of the 22 airport upgrades. Kiponge recently visited the three airports and expressed his satisfaction with the development. Contractors have already finished construction on the security fence at Kavieng Airport, and work on the runway extension is going well. Once the runway extension is complete, the contractors can begin work on the terminal. He mentioned that the runway extension at Tari Airport is complete, and contractors are currently working on the apron, which will be finished until the runway extension is completed. Owing to the contractors' inability to obtain materials for the runway at Mendi Airport, NAC has requested that they redo the runway before moving on to the other areas. “Despite whatever issues within NAC, I will ensure that all 22 NAC’s airports undergoing upgrading will be completed and I will put in a lot of efforts and focus to makes certain work is done well and completed,” Kiponge said.

Business

PNG Business News - May 13, 2021

Govt to Focus on Downstream Processing

The government is putting a lot of effort into encouraging downstream production in the region. This was said by Prime Minister James Marape during a visit to Paradise Foods Company Limited. “We are focused on downstream processing as far as going forward is concerned –– instead of exporting raw products,” said Marape. “We want to go downstream to satisfy our local markets as well as export to economies around us.” PNG is fortunate, according to Marape, to have access to 60% of the world's gross domestic product (GDP) through the APEC network. “As well as, not just the APEC network, but in the vicinity of PNG’s accessibility to markets, we have over 4 billion people from the Pacific, Northern Asia, Western Asia and Northeast Asia put together. “So to satisfy our local markets in PNG for our 8 million-plus people, as well as the opportunity of exporting to markets closest to us like our neighbouring countries.” Marape has stated that he supports downstream production and marketing of PNG's natural resources both locally and internationally. “Today, I am privileged to visit an industry that has been at work since 1945, and I’d like to thank Paradise Foods Company Limited for doing a wonderful job and feeding our country.” Marape promised that the government will help the industry and market.

Business

PNG Business News - May 13, 2021

Papua New Guinea put on World Map by Port Moresby Nature Park

With its foreign awards and recognitions, the Port Moresby Nature Park continues to place the country on the map. The Zoo and Aquarium Association of Australasia's (ZAA) biannual Gala Awards event has Nature Park as a finalist in three different award categories. The Zoo and Aquarium Association Awards are a recognition and appreciation of exceptional achievement accomplished as a result of our member zoos and aquariums' commitment and important efforts, as well as their positive effect on conservation and animal welfare. The park is a finalist in exhibit design for small scale development for its Reptile Haus, the first of its kind in PNG, as well as exhibit design for large scale development for ‘Plumes of Paradise,' the park's eight aviary bird of paradise precinct complete with educational area, and finalist in the community engagement award for Snaketastic. Michelle McGeorge, the chief executive officer of the Port Moresby Nature Park, expressed her pride in the team and park on the announcement, saying that this experience is akin to the zoo Oscars, and that being recognized alongside some of Australia and New Zealand's largest zoos is a true homage to the Nature Park's impact and professionalism. “This is not the first time that the Nature Park has been nominated in the biannual ZAA awards, with the park actually winning two awards. In 2016, Nature Park won the innovation award for its efforts in establishing what is believed to be one of the first globally established sister zoo partnerships between a developing and developed country zoo with the park partnering with Zoos Victoria. “We’re excited to share the above announcement with the rest of PNG, that we’re up against some of the biggest zoos in Australia and New Zealand in the Zoo and Aquariums Association (ZAA) Awards this year,” she said. “Such is great news for Port Moresby Nature Park and Papua New Guinea as a whole for earning international recognition through environment conservation.” The park will engage in three separate formal online presentations before a strict selection panel in the next step of the award judging process, and the winners of each division will be chosen and revealed at a formal award dinner ceremony at Taronga Zoo in Sydney in early August. The park's mission is to encourage others to protect PNG's special biodiversity.

Business

PNG Business News - May 12, 2021

Barker: More Positive Economic Outlook

According to Paul Barker, executive director of the Institute of National Affairs, there are more optimistic economic signals in the wind right now. “Commitments with Barrick on Porgera, and with Total over Papua LNG will provide some boost to business confidence, and should see restoration and operations commence at Porgera during 2021 and restored production and exports. The recent fiscal stability agreement and the new agreement between the Government and Total on project terms and timelines should see some restoration of the disbanded project team and other preparatory work, albeit that the task of financing and any construction and development remains well into the future.” Barker also noted that some commodity prices had improved, citing some PNG extractive and agricultural products, as well as oil and gas, gold and some agricultural crops, and vegetable oils, as well as coffee, which was just beginning what seemed to be a successful harvest. “This will provide a useful reprieve, including for the majority who depend upon the agriculture sector and will also work its way through in improved revenue to the State in due course. PNG cannot simply await improved prices for enhanced incomes,” he said. “It needs to be able to invest and diversify its economy, build-up its human capital, both skills and work discipline and standards, stop driving prices up for businesses and the cost of living for households by disrupting markets, or signing up over-priced infrastructure projects, including for power.”

Business

PNG Business News - May 12, 2021

Investment Condition Critical

According to an economist, improving benefit-sharing agreements for resource programs necessitates a thorough understanding of the future gains from those projects as well as the conditions offered in other countries. The government "owns the assets and is the regulator," according to Paul Barker, executive director of the Institute of National Affairs. “So, it is in a strong position to negotiate on its own terms and benefits on behalf of other stakeholders, notably the customary landowners,” he said. However, he cautioned the government to be wary of possible contradictions between its regulatory position and that of potential shareholders, especially on social and environmental issues. The Wafi-Golpu in Morobe, Papua LNG, P'nyang, the Pasca A offshore oil and gas, Frieda River copper and gold, Woodlark and Porgera are only a few of the billion-kina resource ventures that have yet to get off the ground in PNG. “It should, generally, avoid the need to commit to costly equity participation entailing major upfront commitments and heavy borrowing by the State,” Barker said. He said the Government “clearly has more important duties to its citizens with its limited resources, notably providing basic quality infrastructure and services”. “Equity in corporate ventures is more of a luxury when public goods are as poor as they are in PNG,” he said. “And when the State is able to secure sound revenue through taxation and other mechanisms and benefit-sharing arrangements, so long as over-generous investment incentives have not been offered. “Acquisition of equity should occur particularly in diverse investments overseas and at home, rather than domestic extractive projects with limited life-spans. “And it should be made through a well-managed and accountable sovereign wealth fund, rather than from up-front borrowing – that is, from savings rather than costly commercial borrowings. “Awareness of the realistic project returns are also crucial when recognising the potential investors negotiating position, with respect to its other global options,” Barker said. “Papua New Guinea needs to have competitive investment conditions if it wants international (and domestic) investors to develop projects or other goods and services, but clearly it doesn’t want to be taken for a ride with unduly generous conditions, which provide inadequate benefits to the State, or the public it serves.”

Business

PNG Business News - May 10, 2021

BSP Group Forecasts Economic Growth This Year

In its first quarterly Pacific economic and market (PEM) perspectives for 2021, BSP Financial Group Ltd forecasted 3.5 per cent economic growth for PNG this year. The bank estimated that the global economy will rise at a rate of 6% in 2020, up from a predicted -3.3 per cent in 2020 when the world was struck by the Covid-19 pandemic. The resumption of Barrick Niugini Ltd operations at the Porgera gold mine, as well as PNG LNG's forecast to expand PNG's liquefied natural gas (LNG) industry, were credited by the Pem insight for the recovery of the PNG economy. The signing of the agreement between Barrick and the government was well-received by the business community, according to BSP Group CEO Robin Fleming. He said that the agreement had given companies much-needed interest in the mine production restarting operation, which would bring foreign exchange into the country and improve loan and domestic economic development. Though PNG's economy is projected to recover, Pacific island countries have been hit hard by the global tourism slump, despite the virus's low prevalence. The economies of these countries are forecast to grow at about 9% below pre-pandemic peaks. Owing to expanded fiscal investment on infrastructure, Vanuatu's economy is expected to grow to 3.2 per cent in 2021, up 12.4 per cent from 2020. Although the kina remained unchanged against the US dollar in the first quarter of 2021, the dollar strengthened against most other currencies as higher-than-anticipated economic and job growth raised inflationary fears and fueled optimism that the US Federal Reserve would tighten monetary policy sooner than expected. The country's total foreign reserves fell from US$2.7 billion (K9.39 billion) at the end of December 2020 to US$2.41 billion (K8.31 billion) on March 18, 2021. The drop in reserves was mostly due to external government debt servicing and Central Bank intervention in the foreign exchange sector to increase liquidity. BSP's results and targets for the year were outlined in the paper, with the key target being access to the Australian stock exchange. “If successful, we will have access to alternative source capital to fund future growth ambitions, deliver services to our customers and enhance existing shareholder liquidity,” Fleming said.

Business

PNG Business News - May 10, 2021

Morobe Government Partners with National Airports Corporation

To put agriculture and fisheries into aviation, the Morobe Provincial Government has collaborated with the National Airports Corporation. The Morobe Provincial Government has been preparing for four years. In Port Moresby, the Morobe team headed by Governor Ginson Saonu signed the Agriculture and Fisheries Partnership via Aviation with NAC acting managing director Rex Kiponge and his team. Governor Saonu said that this is a significant initiative by MPG and that he will assist in its promotion because it will serve his people all the way down to the rural stage. Mr Kiponge stated that NAC welcomes the collaboration with MPG to grow the Nadzab Airport into a hub for local farmers, fishermen, and small- and medium-sized businesses to carry their produce and catch to be exported. Agriculture and Fisheries through Aviation is an MPG project to make Nadzab Airport a centre for local farmers, fishermen, and SMEs to sell their produce to other parts of the world and even foreign markets, allowing cash flow and bringing revenue back into the country. Elizabeth Bradshaw, managing director of Morobe Resources Holdings Limited, said the team has spent over four years researching, organizing, and raising support for the project in the province, and has ticked both the pros and cons. “This is an initiative of the Morobe Provincial Government to create an Air Cargo Hub of the Pacific at the Nadzab Airport not only for Morobe Province but for PNG. “We have planned this for years and we are aggressive to see this become a reality. “We have secured a partnership with some international parties who are ready to support us and we will meet with the Agriculture and Fisheries department this week to present our initiative,” she said. According to Bradshaw, securing their relationship with NAC is the most crucial move in the process because NAC is in charge of all airports in the region, and the partnership is just the beginning of what's to come because this effort will help both MPG and NAC.

Business

PNG Business News - May 10, 2021

Mendi Airport Redevelopment put on Hold

The Southern Highlands Province's Mendi Airport Redevelopment scheme has been placed on hold. The redevelopment of the airport, which was scheduled to be completed in October this year, has been placed on hold, according to NAC acting managing director Rex Kiponge, due to the contractor not having the right materials for the runway and a disagreement among the landowners in Mendi. According to Kiponge, he visited the project site last week to do an inspection, and NAC discovered that the materials used to build the airport's runway were not the correct materials because the contractors struggled on their end, so the contractors were advised to re-do the runway. “I have to admit, we faced a lot of issues not only in Mendi Airport redevelopment but through all the airports under the CADIP Program. The contractors will redo the airport runway and the work on the terminal has not started as yet,” he said. According to Kiponge, there have been several landowner disputes that the provincial government is responsible for resolving. He said that he is eager to resolve the issues and complete the project under CADIP before the Asian Development Bank's deadline of November 24, 2021. The Mendi Airport Redevelopment project includes upgrading the current runway pavement to accommodate Dash 8-400 (Q400) and ATR 0-70 aircraft, as well as the construction of a new terminal building and other developments such as NAC Staff quarters, a tractor shed, an engineer site office, and a powerhouse. CADIP 1 is a sub-project funded by the Asian Development Bank's multi-tranche funding facility loans, and the ADB needs to see proper progress on all project sites completed during the availability timeframe before moving on to CADIP 2, which is scheduled for 2022-2024.

Business

PNG Business News - May 10, 2021

Gaming Board is Looking at Casino Tourism to Boost Economy

The National Gaming Control Board is looking at casino tourism as a way to boost PNG's economy and tourism. Last week, the National Gaming Control Board met for the first time with newly selected board members after almost two years. Members of the corporate chamber, women's council, churches, and non-executive directors from the Departments of Finance, Treasury, and Community Development make up the NGCB team. The board of directors discussed revenue-generating operations as well as job openings. The creation of a casino with the cooperation of the Paga Hill Development Company under a Special Economic Zone program is one of the activities that the NGCB will be venturing into, according to NGCB Chairman Clemence Kanau. While the chairman recognizes that this measure would face strong resistance, he remains enthusiastic about the prospect of turning the country into a gambling tourism destination. Since last year, COVID-19 prohibitions have kept gambling websites and bookmakers closed. The NGCB board also discussed the implementation of COVID-19 steps at gambling establishments, the development of internet gaming, Total Automated Betting Software, the launch of lottery, and on-stream bingo.

Business

PNG Business News - May 07, 2021

Businesses Face Positive Outlook

The Market Conditions Survey showed that company morale is high, with 70% of businesses have continued operations in the fourth quarter of 2020. Businesses continue to face challenges due to lower consumption and market demand. According to the Corporate Council of PNG Market Conditions Survey, businesses have seen a steady turnaround between the first and second quarters of 2020, with 70% of businesses working in existing market conditions. At the end of 2020, the majority of companies experienced a financial loss, with Covid-19 regulations cited as the main factor impacting the industry. The delay in approving resource ventures, the closing of activities due to COVID-19, the closure of the Porgera Mine, a lack of foreign exchange, and the global and local economies are all contributing to the revenue decrease. In addition, since September of last year, job rates have remained steady, according to the survey. Although the travel and hospitality industry has been struck the hardest by the pandemic, there has also been evidence of a significant knowledge deficit on the government stimulus plan, with 75% of businesses claiming they have not gained from it. Based on the study, restoring consumer interest, fixing foreign exchange problems, paying loans to the private sector, and the government focusing on driving resource ventures are only a few of the recommendations. 

Business

PNG Business News - May 07, 2021

Basil Visits France for Trade Discussions

Sam Basil, the Deputy Prime Minister and Minister for Commerce and Finance, is in Paris this week for trade negotiations with Franck Riester, the French Minister Delegate to the Minister for Europe and Foreign Affairs. The two ministers met to discuss ways to improve PNG-France economic relations. Both ministers want to see more coordination in new areas such as renewable energy, especially as part of the French Development Agency's (AFD) Pacific mandate being expanded. They applauded the signing of an agreement between the government and Total, allowing the PAPUA LNG project to resume after two years of negotiations. DPM Basil was told by Minister delegate Riester of France's support for Papua New Guinea in its war against COVID-19. France has thus sent humanitarian aid to the PNG government, including tents, Covid kits, antigen scans, and travel respirators, to assist the government and its people, who are suffering from a deteriorating health situation. This assistance is part of a FRANZ deal between France, Australia, and New Zealand to coordinate relief to people impacted by natural disasters in the Pacific region, and it is a tangible example of the Indo-Pacific steps being taken. “We are happy to underline that the first visit of a government official since the beginning of the Covid Crisis was in France,” Riester said.

Business

PNG Business News - May 07, 2021

Puma: Aviation Industry Hit The Hardest

Puma Energy, a fuel and energy provider, has pointed out that the aviation industry has been struck the hardest. Puma Energy country manager Hulala Tokome mentioned that Puma supplies 100% of the country's jet fuel needs, demand remains poor, which is in line with a global downturn in travel that has also affected this country. He said that while most of Puma's business in PNG has remained robust, the company's employees have played a key role in this by operating in bubbles and being segregated at the refining camp, shift working at our terminal and aviation facilities, and 60% of the head office workers working from home. “Demand for aviation fuel remains at about half the level before COVID struck and recovery will be closely tied with the nation’s recovery from the pandemic,” said Tokome. “This is not only true of aviation but many other industrial sectors where we are seeing companies going out of business or in distress, thousands of people out of work and suffering as a result.” He said that the country's future is in jeopardy and that everyone in PNG has a part to play in its recovery. “We know that the pandemic can be controlled from observing other countries, but it will depend on all of us working together,” said Tokome. “The government sets the recovery plan and enabling policies and regulations to stimulate the economy, the private sector needs to adapt to the changing environment, and all of us need to observe the Niupela Pasin measures and change our behaviour to avoid infection and reduce transmission as fast as possible. “That means changing lifelong habits, wear masks, step up for hygiene, avoid crowds, isolate yourself when sick, minimise travel, and work virtually where possible. “It is clear that vaccination will play a major part in recovery and research has already been shown it can reduce the rate of infection, severity and spread of the disease.” He explained that this is a personal choice, but he urges all Puma employees to get vaccinated as soon as possible, on top of all the work they've already done in implementing stringent modern COVID work initiatives and transitioning to new ways of working to keep their families secure and healthy.

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