Moves to reserve small businesses for locals, Court rescinds orders preventing Ok Tedi from dumping waste and BSP records 11% profit increase. Your digest of the week’s business news.
A law bringing back ‘reserved businesses’ will be tabled in Parliament during the May sitting. Trade Minister Richard Maru says the new law means foreigners will have to sell their small businesses like trade stores and bakeries to PNG nationals. Maru says there will be a grace period for foreign businesses to leave, and their businesses will be bought back by nationals at a commercial market rate. A number of provincial governors support the move to bring back the reserved list.
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Court orders preventing Ok Tedi Mining Limited from dumping mine wastes into the Fly River have been stayed. Justice Derek Hartshorn has ruled there was a likelihood that a quite significant amount of revenue would be lost to the State and others if the stay was not granted.
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Bank of South Pacific has reported an 11% before tax profit increase of K607 million for 2013. Its after tax profit is K436 million. Board Chairman Kostas Constantinou said most of the bank’s 19% revenue growth had come from foreign exchange earnings. He said ‘extremely aggressive’ competition in the corporate lending sector in PNG and Fiji had affected net interest income.
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Komo Runway. Photo courtesy Malum Nalu
Civil Aviation Minister Davis Stephen says the government is talking with ExxonMobil about using Komo International Airport to help the agriculture and business sectors and for use by the Defence Force for training. With a runway of 3200 metres and 45 m wide, Komo has the longest runway in the country.
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Public Enterprises Minister Ben Micah says a new state-owned enterprise, PNG Dataco Ltd, will now oversee the development of the country’s information, communication technology and infrastructure. He says it will also take ownership of the national transmission network.
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The World Bank has allocated an extra US$30 million (K69 million) to the Productive Partnerships in Agriculture Project (PPAP), PNG’s single largest agriculture initiative, which will benefit up to 60,000 coffee and cocoa farmers and their families. The extra funding will allow the number of partnerships to double from 25 to 50, increase services to participating farmers, including nutrition and literacy training, and increase its support to women farmers. A key component has been a programme to overcome the effects of the cocoa pod borer.
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The European Commission will spend US$ 1.28 million (K2.9 million) to create ‘business clusters’ in Papua New Guinea, Samoa, Tonga and Vanuatu over the next seven months. Johnny Engell-Hansen, Deputy Head of Delegation, says comparable successful business clusters include the Silicon Valley in the US and Bangalore in India for the IT sector.
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The National Fisheries Authority has given K1 million to Microfinance Bank Ltd joining Nationwide Microfinance Bank to provide official fisheries industry credit. The NFA is spending K15 million over the next three years for small startup maritime or aqua business projects.
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Gold miner Niuminco has restarted pilot mining at its Edie Creek mine in Morobe Province, after receiving a 10-year renewal of the lease (ML44). It has also acquired a 100% interest in another exploration licence (EL 1365) from Terenure Limited and NVL PNG Limited. Edie Creek production levels are expected to treble to between 90 ounce and 120 ounces of gold per month from 90 ounces from April 2014.
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Disgruntled land-owners of the Simberi Gold Project in New Ireland Province are expecting to meet mine management this week, after shutting down operations at the weekend. The Simberi Mining Area Association chairman Joachim Mazerr says a main concern is the recruitment of 168 expatriates, after more than 100 locals were laid off, when gold prices plummeted late last year. St Barbara, owner of the mine, has recorded a net loss of A$87.2 million (K190.51 million) in the six months to December.
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The newly-launched Jiwaka Indigenous Business Council in the Highlands has received K3 million funding from the Jiwaka provincial government’s share of GST revenue to help local businesses.
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SVS stores’ owner Wahju Hanafi has revealed plans to roll out 300 more Supa V stores throughout the country. Hanafi launched the retail chain’s ninth SVS store at Taurama last weekend. Eight other stores—using shipping containers—now operate in villages and suburbs in NCD.
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Farmers in the Markham valley in Morobe Province have asked the government to help revive the cattle industry. They say cattle farming was ‘very viable’ in the past, and with the price of corned beef now K10 per kg in retail stores, it is timely for the government to boost small cattle farming businesses.
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The Reserve Bank of Australia has kept the cash rate on hold at a record low of 2.5 per cent, but indicated it wants the Australian dollar to keep falling. The Australian dollar fell to US$89.69c shortly after the announcement. Governor Glenn Stevens said he wanted the currency closer to US$0.85.
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Re. Reserved Businesses for PNG Nationals.
This does the local entrepreneurs little or no favours. It may seem that the idea of selling existing foreign owned businesses to locals will assist, but how?
PNG Nationals should be encouraged to set up shop off their own bat, and, the competitive stimulus from the existing foreign owned businesses should/would add to the quality of the service/products on offer by all. Removing the existing competition would be molly-coddling to the extent where people who have little or no skills are entering the market because they’ve been offered the opportunity on a silver platter, however, that is of course, if they are funded into the purchase in the first place. Which highlights the obvious question that, if they are competent enough to open a business in the first place and grow it steadily through sound management, or produce a business plan/model that would ensure that they received the appropriate funding in the first place to start up their own businesses, then why bother with the idea at all.
Re: The Stay Orders per Ok Tedi
I am astounded that Justice Derek Hartshorn has ruled that stay orders be granted to continue dumping waste into the Fly river system, on the basis that a quite significant amount of revenue would be lost to the State considering that a larger amount may be at stake if the State were found liable for further damaging the already devastated eco-system of the Fly River.
Referring to the words of the minister for commerce and trade, Honorable Richard Maru, I totally agree with him. Foreigners especially Chinese, not only owning trade stores and bakeries in towns and urban centers, but have already moved to village markets and local communities to set up their trade stores. In a positive way, they can own bulk stores and deal with local retailers to redistribute their Asian products to local retailers do their business. It is not to send them away to their countries but to politely ask them to spare small businesses to locals to at least participate in business to enhance the living standard of the society in their respective localities. almost all stores in the country are owned by asians epecially chinese. It is good to give space and participate.