Infrastructure back on the agenda


Infrastructure has been the subject of heavy discussion in the past month. Unreliable telecommunications and utilities were two of the major impediments identified by our 2020 PNG 100 CEO Survey, and I was able to ask State Enterprises Minister Sasindran Muthuvel about the government’s plans to reform PNG Power, Kumul Telikom and other state-owned enterprises at a special POMCCI breakfast last month.

Minister for State Enterprises Sasindran Muthuvel

Image: State Enterprises Minister Sasindran Muthuvel discusses the future of PNG Power and Kumul Telikom with BAI’s Andrew Wilkins at a special POMCCI business breakfast in Port Moresby last month. (Credit: BAI).

Muthuvel’s response put partial privatisation of SOEs back on the agenda. (Certainly, the government doesn’t have the money to recapitalise SOEs itself, as it commenced an IMF monitoring program last month.)

In Sydney last month, bankers made their play for a share of infrastructure lending, as Australia’s Pacific Step-up looks like it’s finally making headway  – two years on from the announcement of the PNG Electrification Partnership at APEC 2018.

Expect more coverage of power and telecommunications from us in coming weeks.

Business Advantage PNG 2020

We have just published the 15th annual edition of Business Advantage Papua New Guinea – the definitive annual snapshot of PNG’s economy.

It’s available free online here, but if you want us to send a hard copy to your office, just email us with your name, company and street address (this service is for subscribers only).

FX and law and order

Poor infrastructure isn’t the only impediment holding PNG business back. Two other perennial issues, the foreign exchange shortage and law and order, continue to cause problems. Westpac’s order book for FX has doubled in size since Christmas, according to its Senior Economist Justin Smirk. He discussed the prospects for improvement this year with the Institute of National Affairs’ Paul Barker.

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Meanwhile, we considered the ongoing causes of the FX shortage, just as the World Bank’s latest report on PNG flags a further currency squeeze.

Focus switches to mining

With some wondering if PNG is losing its place in the LNG queue, there was some positive news from the mining sector a few weeks ago.

The legal issues that were causing the Wafi-Golpu copper-gold project to founder appear to have been removed and we should see negotiations start up again for a mine agreement. It isn’t as big as P’nyang and Papua LNG, but Wafi-Golpu will still make a big difference, especially to Morobe Province, should it get a green light later this year.

Technology and innovation

The commissioning of the Coral Sea Cable system has been slightly delayed, but there is plenty to think about. PNG is launching its own e-Government program, dubbed ‘State in a Phone’, later this year.

PwC’s Mohammad Chowdhury and Jonathan Seeto are arguing for further market reforms to allow PNG to make the most of the cable. Meanwhile, Deloitte’s Alberto Cimas has provided you with some cybersecurity advice.

‘Doing Business in PNG’: your resource

The Doing Business in Papua New Guinea page on our website continues to add invaluable content. This month, we have added a legal guide to business in PNG, compiled by Dentons PNG. It joins profiles of every major industry sector and province in PNG, and much more – much of it available exclusively to our subscribers.

Bookmark the page. More helpful information is on its way.

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