Mt Hagen, Papua New Guinea’s third-largest city and the centre of the country’s populous Highlands Region, is once again starting to receive attention from investors. Business Advantage PNG discovers why.

An artists’ impression of the new Steamships/Tininga Wonye Dobel development in Mt Hagen Credit: Steamships

With an official population of just 47,064, the city of Mt Hagen in PNG’s Western Highlands Province might seem, on the surface at least, to represent a modest opportunity for investors.

However, as a key logistics point along the region’s major artery, the Highlands Highway, it is a major service centre not only for the nearby Wahgi Valley agricultural zone, but also for much of PNG’s most populous region as a whole. (According to PNG’s National Statistics Office’s 2021 estimate, the Highlands region is home to 4.57 million Papua New Guineans, and growing.)

‘Steamships in many ways is returning to the Highlands’

This explains why several of PNG’s major companies are increasing their commitment to Mt Hagen.

New ground

Mostly notably, ground was broken in September 2022 on a new branch for bank BSP – phase one of the large retail-led Wonye Dobel development being created by Steamships Trading Company in partnership with Mt Hagen-based retailer Tininga.

Steamships’ Rupert Bray

‘Steamships in many ways is returning to the Highlands,’ Rupert Bray, Managing Director of Steamships, told the recent 2023 Business Advantage PNG Investment Conference.

‘We’ve got a mixed-use development already in Mount Hagen, in the Hagen Central shopping centre [also with Tininga] and we have an investment in the Highlander hotel and some other minor properties there as well.’

‘With a population growth of the Wahgi Valley and the broader Highlands, with the development of agriculture and with the development of smaller-scale business, [the new development] will be several hundred million kina worth of investment.

‘We hope that detailed design will be completed by the end of third quarter this year and commence development early in 2024.’

Phase two of the 38,000 square metre, two-storey mixed use development will see supermarkets, homeware centres, restaurants and more finance and government support services.

‘They’ll be ready to go in there probably within 18 months of breaking ground,’ said Bray. ‘In due course, we will look to bring in more investors into that project.’

Investment support

Steamships’ and Tininga’s Wonye Dobel investment is not the only one. It follows the Brian Bell Group’s April 2022 opening of a K40 million new shopping centre close to the centre of Mt Hagen. Telco Vodafone PNG also opened an outlet in town in March this year.

Further investment in Mt Hagen will be supported by two other notable developments.

Firstly, ongoing improvements are being made to the Highlands Highway under the National Government’s signature Connect PNG road-building program. This is already facilitating better and more efficient movement of people and goods across the region and is expecting to continue to do so in coming years.

Secondly, with lack of finance considered to be a brake on Mt Hagen’s development as a city, there have been concrete moves to improve its financing, along similar lines to that already achieved with some success in PNG’s second city, Lae.

Under the Mt Hagen City (Amendment) Bill 2023, passed by Parliament in June this year, the Western Highlands Provincial Government will be obliged to allocate 25 per cent of the GST revenue it receives to the city from 2024 onwards, which should bolster local services and infrastructure.