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Infrastructure Marea Haus, colloquially known as the ‘pineapple building’, in Port Moresby’s Waigani district has long been a symbol of under investment in maintenance. Once used by PNG’s Prime Ministers, the building has lain empty for years due to safety concerns. Now, however, the building is being fully renovated under a public–private partnership with Oil Search Limited. The project is being funded under the National Tax Credit Scheme, which allows businesses investing in essential infrastructure to offset the cost against their tax liability.

A new surge in construction projects A range of new projects under way or about to start will revive the construction sector after the completion of the construction phase of the ExxonMobil-led PNG LNG project.

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ince the completion of the PNG LNG project, the sector has been in a lull, but the development of Jacksons International Airport, new housing, the relocation of the port of Port Moresby and preparations for the 2015 Pacific Games and the 2018 APEC summit are all providing a boost to the sector. A decision on a second LNG plant in Gulf Province led by France’s Total SA, expected by the end of 2015, will also be factored into construction and infrastructure planning.

Bullish about growth ‘There are lots of Papua New Guinean construction entities that sort of sprung up from the PNG LNG experience, and some of them are predominantly Papua New Guinean owned, so they’re about but they’re going to have some difficulties in maintaining their momentum because of the lull of activity,’ explains Frank Kramer, CEO of engineering firm Kramer Ausmenco (PNG). ‘But there is a residual level of activity that’s still in the country that we see as an opportunity for us to grow our business,’ says Kramer. Kramer is bullish about the prospects for his own business: ‘We’ve got a strategic growth plan that between now and 2018 we want to significantly increase our numbers from 120 people to something like 300 or 350, and correspondingly in

our revenue levels will increase. In doing that, we are actually extending our skillsets a little bit beyond our traditional horizons.’

Housing on the agenda ‘The construction area I have most optimism about is housing,’ says the CEO of the Manufacturers’ Council of PNG, Chey Scovell. In May 2014, the PNG National Government and Bank of South Pacific announced a partnership to provide affordable housing for public and private sector employees. The Government’s 2015 budget provides the initial capital of K200 million. State-owned land will be given to homeowners. The government has identified unused land in Port Moresby as suitable for 40,000 new homes. In addition, Planning Minister Charles Abel says he plans to give away 2,000 land titles in each province. Private residential developments such as the 500-home Edai Township outside Port Moresby are also in the pipeline. However, Scovell is concerned that the government may exempt imported prefabricated housing and materials from import duties. The local industry is competitive on price, he says, ‘so if Cabinet rejects that idea, that would be the most positive aspect for local manufacturing.’ 19

Business Advantage Papua New Guinea 2015  

Annual business and investment guide to the Pacific's largest and fastest-growing economy