INFRASTRUCTURE, CONSTRUCTION & SERVICES
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.
Since 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.’
Saudi Arabian housing specialist Red Sea Housing came to PNG to build the site camp for the Exxonmobil-led PNG LNG project and has stayed on to complete several other construction projects.
General Manager Kenneth Clinton says the company is currently completing a K49 million project to build 150 three-bedroom housing units for police officers that will be completed at the Bomana Police Training College in Port Moresby.
Parliament approved the establishment of the APEC Papua New Guinea 2018 Co-ordination Authority, to deliver all logistical elements for up to 200 APEC meetings and events that will take place between 2015 and the end of 2018 (see page 12).
The estimated US$500 million development of Jacksons International Airport is already providing opportunities for PNG’S construction companies.
‘And that strategically is really important because that’s going to prepare the aerial gateway to PNG for the APEC infrastructure,’ says Kramer.
While the plans are yet to be unveiled, there is likely to be significant civil works surrounding the relocation of Port Moresby’s port to Motukea Island, currently the site of engineering and construction firm Curtain Brothers’ private port and shipyard.
Curtain Bros, which has been behind Port Moresby’s massive Harbour City development, is currently refurbishing 18,000-seat Sir Hubert Murray stadium, next door.