In spite of the talk about an economic slowdown in 2016, Papua New Guinea’s capital, Port Moresby, is a city where plenty is still happening as 2015 comes to a close. Business Advantage International’s Andrew Wilkins reflects on recent discussions with Papua New Guinea business leaders.

The new Convention Centre in Waigani under construction.

While the major construction projects for July’s Pacific Games are now Games legacy, several major projects are still underway, many of them aiming for the city’s next major event: APEC 2018.

Close to Parliament Haus, Chinese and Papua New Guinean workers are working side by side on the circular convention centre that will host key APEC meetings. Meanwhile, in another of the five designated APEC zones across the capital, works are underway to transform Paga Hill into the venue for the APEC Economic Leader’s Meeting.

In Waigani, R H Group’s Stanley Hotel (formerly known as the Raintree) is nearing completion, while the ground has been cleared on PNG’s first Hilton property, part of the Star Mountain Plaza co-funded by three PNG landowner companies. At the airport, Coral Seas’ Gateway Hotel is adding rooms, while PNG’s top hotel, Airways, continues to upgrade its restaurants and is planning to build function facilities.

The Star Mountain Plaza project under construction. The development will feature PNG’s first Hilton Hotel.

Meanwhile, in town, Steamships’ twin Harbourside offices are presenting a glimpse of what the CBD’s waterfront could look like once Port Moresby’s busy port completes its planned move to Motukea Island: jetties, offices, boardwalks, cafés and restaurants with uninterrupted views of Fairfax Harbour, perhaps stretching from Paga Hill all the way to the Royal Papua Yacht Club.

New roads, new suburbs

While Motukea ramps up, major roadworks are under way to improve access to the new port.

The coastal road between Konedobu and Motukea Island is slowly being upgraded, while a new ring road connecting Gerehu with the administrative hub of Waigani will allow port traffic to avoid the increasingly busy Poreporena Highway from next year.

‘Currency exchange—or, more specifically, the length of time it is taking to make overseas payments in US dollars—remains a hot topic among business people.’

Motukea is part of the north-western growth corridor, which stretches out as far as the massive PNG LNG plant in Central Province and, on the way, Edai Village, a real estate development now taking shape.

The housing shortage in Port Moresby has been ongoing for some time, but Edai Village, and other developments such as the 290-home Gerehu Heights are attempts to meet demand, which is being partly fuelled by the PNG Government’s First Home Ownership Scheme, being offered through the country’s largest bank, BSP.

Brown and dry

One noticeable feature of Port Moresby right now is how brown and dry it looks—a reminder that PNG is currently experiencing a drought due to the prevailing El Nino weather system.

Steamships’ Harbourside offices.

Business Advantage PNG is just starting its annual PNG 100 CEO Survey and this year we’re asking business leaders specifically about the drought. While the final survey won’t be complete until early 2016, initial responses suggest it’s having a notable impact, particularly in the retail, agriculture, mining and logistics sectors.

With the traditional wet season about to begin, eyes are on the skies to see just how much rainfall it will bring.

Currency

Currency exchange—or, more specifically, the length of time it is taking to make overseas payments in US dollars—remains a hot topic among business people, who note that the Bank of PNG’s attempts to manage the falling kina have unwanted side effects, such as longer than usual queues at the petrol bowser, and delays to international deals.

Notwithstanding currency concerns, and the usual grumbles about state utilities and the time it takes to get work permits and visas for expat workers, generally there seems to be feeling that any downturn will be short-lived, and that the medium term prospects for PNG are still encouraging.

Indeed, as BSP’s CEO Robin Fleming noted to analysts at the release of his bank’s positive third quarter earnings last week, had ratings agency Standard and Poors held off issuing its most recent ratings until PNG’s well-received National Budget had been delivered earlier this month, it might have avoided downgrading BSP and giving PNG a ‘negative’ outlook.

Andrew Wilkins is Publishing Director at Business Advantage International, publishers of businessadvantagepng.com. His full economic update on PNG will be published in the 2016 edition of Business Advantage Papua New Guinea, out in March.