The National Executive Council has given the nod to Papua New Guinea’s first special economic zone, in Gulf Province. Project Director Peter KenGemar tells Business Advantage PNG about how it could boost local jobs and investment.
Ihu Special Economic Zone (ISEZ). Credit: Office of Member for Kikori Open Electorate
Papua New Guinea’s Ihu Special Economic Zone (ISEZ) is a step closer to reality after receiving approval from the National Executive Council (NEC).
Special economic zones are designed to offer attractive investment opportunities for international businesses to help the country move beyond its reliance on the extractive industries and help grow small-to-medium business and to help encourage better utilisation of PNG’s other natural resources.
The benefits of the zones are set to include tax concessions and cheaper utilities but full details are pending following the ISEZ launch.
For now Peter KenGemar, Project Director, Ihu Special Economic Zone, says that the ISEZ is ‘beginning its negotiations with investors and developers’ with a view to a big boost in PNG jobs.
‘Just one timber processing facility could generate up to 200,000 jobs,’ KenGemar says. ‘If you look at fisheries, also that is another 200,000 and we are not talking oil and gas or petrochemicals; that’s nearly a million jobs there, the more we look at it.’
But the move away from reliance on resources is, ironically, dependent on one at least one of the extractive industry’s big-ticket projects: the Total-led Papua LNG project.
‘Papua LNG is critical for our project because some of the infrastructure programs we have in place to kickstart our project, the funding is underpinned by the infrastructure development grants that will be coming out of the Papua LNG project. This is a legislated benefit to the resource extraction area. We are front loading this benefit to our ISEZ Critical Capital Infrastructures Projects (CCIP) program. So, that is the money we are looking at for refinancing our program. We have learnt our lessons in PNG-LNG program whereby no major infrastructure projects were implemented and millions of dollars have been squandered.’
That said, KenGemar is not concerned about the potential delay of Papua LNG. The first thing ISEZ needs to do is establish the SEZ authority and ‘we are very happy with their lead time’.
Bringing in international investment including Foreign Direct investment into development of the industrial zones
Ihu Special Economic Zone’s Peter KenGemar.
The ISEZ, it is hoped, will stimulate foreign investment in PNG in areas like manufacturing and exports, and resource processing like marine and forestry. There is also a particular focus on petrochemicals downstream processing, with interest from around the world.
‘Those would be 100 per cent foreign direct investments. Mostly we are talking to Japanese, to Chinese companies and to American and Australian companies and some support services coming out of Manila in the Philippines,’ KenGemar says.
The key approvals from the National Executive Council include:
- the establishment of Ihu Special Economic Zone and ISEZ Development Company
- ISEZ Development Office to engage in discussions and negotiations with project development partners
- the Critical Capital Infrastructure Projects (CCIP) program for ISEZ
- Site Preparations and Management Budget of K105 million for the next five years during the development phase of the project
Watch KenGemar’s presentation on ISEZ and Gulf Province at last year’s Business Advantage Papua New Guinea Investment Conference.
Its a 50 years project with its own military base, air force base, marine base, school and so on.
Amazing..clike every successful business.. lets be practical and dream big. think big ,talk big, trial and error produces success and is better than being arrogant and negative..the world has become very small now due to technological advances in every respect .Either gulf n png does something now with its resources or sit and wait for the end of the world…
It is well planned and looks promising for Kikori district electorate to benefit from. With current government’s vision “Take back PNG”, Mr. Peter, are you saying that all timber resources within Kikori district to feed the mill in ISEZ, to come up with 200,000 jobs? Government has passed a policy to stop all round log exports in the future. That’s a good one!
How many people in Kikori electorate have qualifications commensurate to technologies that will be built in ISEZ?
Mr. Suve, Thank you. Forestry industry to Timber Industry, along the entire value chain of downstream processing, we will create more then 200,000 jobs both directly and indirectly. Kikori host 22% of the total forestry acreage across PNG, it is the second largest acreage alone. The infrastructure we starting to build now, creating jobs, comes with training facilities and on the job training. We will of course need experienced skilled hands for the first 5 or so years but all those jobs skills will be transferred to our locals in due course. That’s our plan. Create businesses and jobs for our people. Our ultimate goal.
Peter, Congratulations on the SEZ concept development you have designed and developed to date to make it happen soon.
I fully support your concepts about downstream processing to involve in your SEZ under your leadership. And I wish to support you with a well researched and designed Petrochemical Downstream Processing Plant (Integration of Ethylene Plant with PNG LNG Plants – Studied and researched at Curtin Unviversity in 2011 whilst studying Master of Chemical Engineering, and converted the same into a business case by doing an Economic Evaluation by research at the same Curtin Unviversity in 2019 whilst studying Master of Science Project Management. Full time prefeasibility studies and FEED done on the proposed project and it is already available to be utilized. We only need to look for and negotiate with a financial investor such as Japan and US oil and gas companies. I did the research for PNG government to take up in line with TAKE BACK PNG POLICY Vision, and the concept is floating around within the government economic departments since 2015 and following up but their review and action process is at a snail pace.
The Integration of Ethylene Plant is published on internet by Institute of Engineers PNG(IEPNG) dated 21 August 2019 (Author is me Yongi Andale) after a presentation was done at their Conference held in April 2017 on the theme Sustainability and Innovation. My contact details are: Email: Yongi_Andale@education.gov.pg OR Kanjippep22@outlook.com. Phone: +675 71367748.
Sometimes you have to dream big and think outside the box and try to help your own people and commend people that try to help your people
My Traditional landowners of Ihu were missed out big time on the set up of this project. To date they have been left out in total darkness and don’t fully understand the Special Economic Authority Act passed in parliament on the 13th of Feb 2020 which bind technical terms which Peter did NOT give them the time to engage an independent body to interpret the Act to my people. He was NEVER transparent and his project is questionable. We voted our Member for Kikori to bring basic service and not a sofisticated project owned by Peter and his wife and their tribeman as per IPA records. My people have the last say on the project. We are seeing enough problems in Port Moresby and our people cannot be marginalized.
Such mentality have denied our people access to better services, businesses, jobs, education, medical care. Ihu and entire Kikori has regressed since independence when rest of the country has moved forward. The literacy rate of entire Gulf since independence has dropped drastically such that today there are not many well trained engineers, lawyers, doctors, accountants from Gulf to go back to the province or the district to change and improve the statuesque. With the ISEZ project in partnership with Kikori DDA and GoPNG we are building roads, fixing airstrips, training our people for SME etc, etc. You cannot just sit and wait for things to fall free from the sky. You have to work honestly hard to bring change that our people need.
Peter is telling lies here. How could we have a timber processing plant operating now with about 1000 jobs could in the future be hiring 200,000 people with the already depleted forest? This is not right. A million jobs, that’s total lie!
Further more, nearly all the Ihu people do not have any technical qualification to build this city. Many will be just guards and cleaners. How do you address this Mr. Kengemar?
Hyperbolic and dillussional one timber mile can never create 200,000 jobs. Which planet does this guy lived??
you say that because you dont fully assess and understand the forestry resources and inventory that Kikori hosts. Kikori alone hosts 22% of the total forestry acerage in PNG and is the second largest in the country. The entire value chain of business from Forestry industry down to timber industry once done properly can hold down more then 200,000 jobs we estimate and even more both directly and indirectly. You need to do your owns maths to make such public statements against the data and project we have based on facts.
Inspirational. Is overseas support encouraged ?
My interest is marine-based industries.
It is impossible to create 200,000 jobs for timber processing facility and another 200,000 jobs for fisheries. Maybe 2,000 jobs for timber and another 2,000 for fisheries.
ABSOLUTELY CORRECT good sir.
A few will become very rich (just like they always have done) as they engineer the rape of Papua New Guinea by foreign interests.
People who cannot smell a dead rat in this are either 100% stupid or making money out of it somewhere.
Any special considerations given to our own national research papers (Conceptual/feasibility studies and FEED) and Economic Evaluation documents targeting downstream processing of oil & gas? Or are we just waiting for foreigners? We have completed reserach papers therefore we shall engage investors on contract basis in line witrh the vision ” Take back PNG and to make PNG the first richest black nation in the world?”