The Chairman of Papua New Guinea’s Independent Public Business Corporation (IPBC), Paul Nerau, has flagged a ‘tsunami’ of government-backed development projects worth billions of kina, including the relocation of Port Moresby’s port and gas-generated electricity.

The IPBC’s Paul Nerau

The ExxonMobil-led PNG LNG project was a ‘first tsunami’, Paul Nerau told last month’s 2014 Papua New Guinea Advantage Investment & Infrastructure Summit.

Now that is up and running, it is time to look at other infrastructure projects and ensure they are built and managed professionally, he said, and that would involve a ‘second tsunami’ of investment, involving telecommunications, ports and energy.

Major telecommunications reform

State Owned Enterprises Minister, Ben Micah

Also at the Summit, the Minister responsible for the IPBC, Ben Micah, flagged that all state-owned communications infrastructure now owned by Telikom PNG, PNG Power, NBC, bmobile and other state entities will transfer to state wholesaler, PNG DataCo.

Paul Nerau further explained that Telikom’s wholesale business will be transferred to DataCo this year.

‘PNG DataCo will maintain the National Transmission Network [PNG’s broadband network], which will supply bandwidth to networked licence holders like Digicel, Telikom, bmobile and internet service providers on a wholesale basis,’ he explained.

‘We also plan to merge Telikom and bmobile back together under the one structure. And, with that, we hope to achieve efficiencies through the merger of bmobile and allow the sharing of infrastructure in terms of towers, network services, and other technical aspects.

He said the National Executive Council had made that the merger decision, ‘and we are going through the process of making that happen’.

Port developments

Nerau spoke about ‘huge undertakings’ in PNG’s port infrastructure, and reform in the way ports will be run.

This includes spending one billion kina to relocate the port of Port Moresby to Motukea Island and a further one billion kina developing the port of Lae.

Motukea Wharf precinct. Credit: PlanPac

The Motukea purchase will allow the development of the foreshore of Port Moresby’s central town area into a major development precinct in preparation for the 2018 APEC Summit.

‘A new 500-metre wharf at the Port of Lae there to allow us to bring in two ships each with a capacity of 5,000 containers,’ he said.

‘The extension of that wharf will give us an additional five hectares of storage space.

‘These are huge undertakings and we are looking forward to the growth of business in the port area.

‘Once the ports are built, we will go out and bid for tenders from national operators of ports. We want those ports to be operating to international standards so that we ensure maximum return from these operations that we are spending huge sums of money on.

‘We will ensure PNG Ports collect revenue to help its community service obligations to help other ports throughout the country.’

Reducing energy costs

Access, reliability, affordability and sustainability are the four key factors driving change in the power sector, Nerau said.

‘One of the most fundamental ways of reducing the cost electricity is through reducing diesel consumption. The national government has also acquired two gas turbine generators, which will supplement power demand by 30 megawatt in Port Moresby and Lae.

‘The government is investing in gas as an interim and that is currently being discussed between PNG LNG and PNG Power.

Purari River: Credit: Origin Energy

The IPBC are also looking at a number of hydro and geothermal projects, he said, adding a feasibility report on the Ramu Two hydro power project will be delivered to the IPBC soon and he expected talks on the Purari River hydro power project will restart shortly.

He also said a proposed geothermal project in West New Britain Province could provide 4,000 megawatts of power.

Before PNG Power can be partially or wholly sold off—which would appear to be a longer-term goal—Nerau said the first job is to unbundle the elements of PNG power.

‘These are the retail, transmission and generation elements. We are now also including landowners, because we have learnt that if you don’t include landowners in each project you end up with problems.’

Kumul companies

Nerau revealed the current valuation of the state-owned enterprises controlled by the IPBC as being ‘about K6 billion with a turnover of K5 billion in 2013-2014.’

Plans to reorganise government assets into three separate companies are on track, he said, although he had no timeline for when legislation would be passed.

Last year, Prime Minister Peter O’Neill announced that three companies would be formed: Kumul Petroleum (handling all petroleum and gas assets including PNG’s 16.575 per cent interest in the ExxonMobil-led PNG LNG project), Kumul Mining (which will control assets such as the nation’s stakes in Bougainville Copper Limited, OK Tedi Mining Limited and in the Ramu Nickel project) and Kumul Holdings (for all other state owned enterprises ).

‘It is going through the normal legislative drafting processes for when it goes through Parliament,’ explained Nerau.