Some 1157 vessels called into Port Moresby in 2012, up from just 499 in 2009. Hardly surprising that Papua New Guinea’s ports, which were already suffering from congestion, have struggled to cope. There are signs of progress, however. Business Advantage PNG spoke with PNG Ports’ Chief Executive Officer, Stanley Alphonse, about PNG Port’s record profit and its ambitious plans for the future.

Business Advantage PNG (BAPNG): You recently announced your annual results …

Stanley Alphonse, CEO, PNG Ports Authority

Stanley Alphonse (SA):  This year, we’ve paid a dividend to the government totalling K17 million and we paid it in two batches. We paid recently K8.5 million which represents 50% as an interim dividend. The  balance will be paid once the statutory audits of our 2012 accounts are completed.

BAPNG: The number and sizes of ships arriving at your various ports has risen dramatically in the last three years. Do you expect this to continue?

SA:  Absolutely. In the last three years, volumes have been increasing. We do expect a bit of a slowdown this year, given that most of the construction phases of some of the major projects in the mineral and hydrocarbon industries are winding down. But nevertheless, statistics have indicated that vessel traffic is increasing. Not only that, but we are also experiencing an increase in the size of the vessels that are visiting us.

BAPNG:  Once the ExxonMobil PNG LNG plant is operating, will congestion ease at Port Moresby?

SA:  Port Moresby port, certainly. In Port Moresby alone, our numbers indicate that our storage revenues are significantly decreasing, and that’s very good because it shows the take-up rate is increasing. Consignees are responding to our pricing signal [PNG Port has raised its storage charges in recent times], and are getting their cargoes out of the yard, so we can get greater yard utilisation.

In terms of ship-to-shore productivity, major shipping lines to PNG have reduced their congestion charges significantly. This also shows that efficiency and effectiveness in terms of the productivity rates are increasing as well. So it’s a very good sign. Nevertheless, going forward, we will need to increase the size of our quay lines due to the increasing nature and size of ships that we are getting.

I would like to see the Port Moresby port move as soon as practically possible

BAPNG: Minister for Public Enterprises Ben Micah recently launched a 20-year corporate strategic plan for PNG Ports …

SA: When I came on board, I realised that an organisation like PNG Ports needed to have a strategic plan that looked forward 20 or 30 years, to act as the roadmap and blueprint to guide our operation going forward.

So, we’ve got that strategic plan and we have three-year rolling plans that complement and link to it.

With the first three years of the plan we’ve now put into place, we’re looking at first of all getting efficiencies and dealing with our infrastructure, by deploying mobile harbour cranes and rubber-tyred gantries and try to turn the ships around quickly. That’s the short-term plan.

But the medium-term plan? We realise that, while we try to increase productivity by using that shore-side equipment, at some point we will have to build more quay line—increase the quay line we have so that we can bring two or three ships in at once, and complement that with shore-side infrastructure.

And the long-term plan will of course be driven by the Government’s long-term aspirations and policy direction: to look at whether we can not only relocate Port Moresby’s port to a strategic location where we can have greater efficiencies coming through, but at the same time, have the intermodal transportation linking up to it so that the entire supply chain is very efficient.

BAPNG: Is there a concrete plan for a new port at Moresby?

SA:  Well the Government is determined and there is work underway. There is an inter-departmental committee set up, which includes PNG Ports, and a significant amount of work has been made already in terms of looking at the site and putting together the concept. I believe in the near future our project steering committee will be looking at the commercial arrangements—the financing of it—and, last but not least, would be the detailed design of it.

BAPNG: Will funding come from a public-private consortium or would the Government put up the whole amount?

SA:  The Minister made it clear during the launching of the strategic plan that he would take to Cabinet both a technical position and a funding proposal. So, once Cabinet makes a decision on the manner in which the project will be delivered, including the funding arrangement, then we will have an idea on how the project will be delivered and funded. Certainly, this sort of project will cost a significant amount of money.

BAPNG:  When would you like to see the port relocated and up and running up? Do you see it as a 10 year plan?

SA:  Certainly, I would like to see the Port Moresby port move as soon as practically possible, but I also recognise a lot of processes need to be followed as well as the technical and other studies, until we get to the construction side of it.

If anything, the lesson learnt in this country is that it is always prudent to get it right at the front end, so that we can get all projects done and delivered properly. Otherwise we get something we don’t want and spend additional money trying to fix it up again.

Certainly, we’d like to move out of Port Moresby’s CDB as soon as possible and free up the waterfront for other waterfront activities.

BAPNG:  And how are the plans for a new port at Lae, including the Asian Development Bank-funded Tidal Basin project?

SA: The dredging work is about 90% completed and they will then move on to constructing a quay line of about 240 metres that should complement our existing quay line of 720 metres. We’re looking at doing some arrangements, particularly as regards the overall port management and terminal operations at the new port, to get greater levels of productivity and efficiency going forward.

BAPNG: And when should that be finished?

SA: The best estimate I’ve been provided with is the middle of 2015.