Communique from the 29th Australia PNG Business Forum and Trade Expo

Communique from the 29th Australia PNG Business Forum and Trade Expo

The Gateway Hotel, Port Moresby, 14 to 16 April 2013

PNG Business Forum 2013The 29th Australia Papua New Guinea Business Forum, held at The Gateway Hotel, Port Moresby, from 14 to 16 April 2013 with the theme “Infrastructure: Time For Action”, was attended by 298 delegates, partners, trade exhibitors, media and speakers.

The Forum was attended and addressed by The Hon Peter O’Neill MP, Prime Minister of Papua New Guinea, Senator The Hon Matt Thistlethwaite MP, Parliamentary Secretary for Pacific Islands Affairs of Australia, and a range of expert speakers from the public and private sector.

The Henry Kila Memorial Address was delivered by Mr Warren Hogan, Chief Economist of ANZ Banking Group, who spoke of the business and economic opportunities for Papua New Guinea in the Asian Century.

Delegates welcomed the positive comments by the Prime Minister of Papua New Guinea and the Australian Parliamentary Secretary for Pacific Island Affairs about their governments’ commitment to the bilateral relationship, noting that Australian investment in Papua New Guinea exceeds its investment in China.

The Forum welcomed the overwhelming consensus and support from both sides of Papua New Guinea politics to address infrastructure deficiencies, including the Prime Minister’s commitment to allocate PGK1.5bn to infrastructure in 2013. Major roads and ports, the key to private sector supply chains, will be undergoing maintenance and upgrade. Projects include the Highlands Highway, Lae Port and the upgrade of the Jacksons International Airport. He also explained the recent decision by his cabinet to consolidate State assets under a single entity known as Kumul Holdings Ltd, and assured the private sector that this restructuring is critical to allow greater commercial outlook and efficiency for the utilisation of State assets. He also explained the decision to devolve a significant part of the national budget to sub national governments was in direct response to bring resources to provide services more directly to many Papua New Guineans. The Prime Minister encouraged Australian businesses to seek opportunities in these infrastructure projects. Delegates strongly welcomed the Prime Minister’s commitment to work collectively with the private sector to assist government in its efforts to improve infrastructure and to fully engage in the formulation of the development of Kumul Holdings Limited.

Supporting the Papua New Guinea Government’s commitment to improving infrastructure, the Parliamentary Secretary for Pacific Island Affairs emphasised that such investment provides the foundation for growth. He detailed the support the Australian Government is committing to providing in road upgrades, human resource development, education and health. He noted that the strong relationship between the two countries has entered a new but relevant phase with the initialing of the Economic Corporation Treaty. Such progress indicates the great opportunities present in further developing trade and investment between both countries.

The Minister for Planning, Monitoring and District Development reiterated the Prime Minister’s views on the strong commitment to improving infrastructure, highlighting that implementation is critical and government agencies are regularly meeting to align and improve service delivery. The Deputy Opposition Leader supported the government’s focus on infrastructure, but cautioned that without proper accountability well intentioned programs may be abused and as a result, delivery of vital services of improving infrastructure to local level governments will not occur. He also highlighted the challenges of efficiently delivering services to many Papua New Guineans who are the provincial government systems.

The decentralisation arrangements have delayed the immediate attention to the districts and local level governments.

Senior officials from relevant government agencies provided useful discussions on the operational and policy arrangements implementing the government’s vision on infrastructure. Deputy Secretary for Treasury highlighted the ongoing developments of the Sovereign Wealth Fund as an important facility to ensure macroeconomic stability as well as a vital mechanism to finance major infrastructure projects in the coming years. Secretary for Transport highlighted features of the draft National Transport Strategy’s focus on integrated transport routes to maximize options for stronger linkages on supply chain delivery. While the Chief Executive Officer of PNG Ports Corporation Limited mentioned investments in upgrading vital ports for efficient delivery of stevedoring and related services. It was noted however that these developments although positive, great challenges remain in the capacity to implement them.

Delegates heard presentations on the challenges posed locally by the current state of infrastructure. Poor roads and dilapidated ports which result on irregular transport services have greatly affected supply chain routes resulting in poor returns on markets and investment. Innovative private sector and government intervention has resulted in various partnerships to improve the current state. However, further analysis is required to create sustainable operations. Such activities include the road upgrades private companies are required to deploy when a washout occurs and the recent acquisition of ships by the Border Development Authority. These investments require structured partnerships with the government and private sector. Public private partnership may provide the means to progress these issues.

Acting Secretary for Commerce and Industry and the private sector organisation chairs of sub committees in tax and infrastructure discussed the excellent progress of public private dialogue through the National Working Group Improving Business and Investment Climate. Such a forum has removed hostilities and built important dialogue in progressing a conducive environment for business growth. This pathway provides a conducive environment for dialogue and participation of the private sector in the projects the Independent Public Business Corporation are pursuing for rehabilitating and developing new infrastructure assets for State Owned Enterprises.

The energy and electricity session identified efforts by PNG Power Limited in addressing energy challenges through recapitalizing assets, building new ones, Independent Public Power suppliers and Public Private Partnership programs. Indeed the current capacity of 15% penetration needs to be increased and this is a vision for PPL. The presentation from IFC provided useful examples on how these relationships have occurred in other parts of the region and may provide a useful guide for PPL’s progressive policy.

In the Resource Update, CEO for Esso Highlands Limited indicated 80% of the construction is completed. While the remaining 20% is still significant, sales for the first gas are on track for 2014. Long term commitment for building the physical and human infrastructure is priority and this is indicative of the large investments. The Wafi–Golpu project update indicated the pre feasibility study has been completed. It identified a world class ore body is present. In utilizing this opportunity, community and national participation is critical. Working towards this vision, the project has engaged in developing human resource and community involvement which are providing immense opportunity for Papua New Guineans.

The Forum endorsed work being done by the Councils with the Australian and Papua New Guinea Governments through formal and informal mechanisms, including facilitating business travel between both countries, expanding the business and economic relationship and improving the business enabling environment in Papua New Guinea.

The President of the Australia Papua New Guinea Business Council invited delegates and trade expo booth holders to attend the 30th Australia Papua New Guinea Business Forum in Cairns, Queensland, from 18 to 20 May 2014.

PORT MORESBY
16 APRIL 2013

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