Statement by the NASFUND Board on the burning down of the Burns Philp site

Date: 15 July 2009

 

As you are aware the historic downtown precinct known as the Burns Philp site was guttered by fire last Sunday night. Firstly let me say how fortunate we were, that there was no loss of life. The fire that ripped through the 5,000 square metre site covering nearly a city block is perhaps the worst fire ever in Port Moresby’s history. Sadly we have lost an icon that was the country’s most historic colonial building. The Board has resolved to do what ever it can to ensure that we preserve the Bell Tower and advice to date suggests that it remains possible. The adjoining walls however cannot be saved and now present a hazard to safety. They must be pulled down and application will be made after review by a structural engineer to pull the tops of the walls inwards.

NASFUND as you are aware purchased the precinct two years ago with the express purpose of long term redevelopment that would encompass preservation of the Burns Philp Building. We have over the last two years worked to lift fire and safety measures within the buildings and preserve the original Burns Philp buildings - of which we were two weeks off final restoration.

 

Some pertinent observations.

 

During that two year period, the Board has faced difficulties from a number of quarters in renovating the building. We were aware of regulatory authorities seeking kick backs before approving renovations. NASFUND and its contractor, Hornibrooks NGI refuse to entertain bribery as a means to “getting things done” and this was partly the reason we were faced with an unnecessarily long process in getting full approvals.

Secondly we have had a long drawn out process in trying to break the inherited contract signed between the previous owners and Tribal Den. They have used the district courts to frustrate the process unnecessarily and bolster a case which is in our view untenable. The Tribal Den proprietors have continually frustrated the renovation works and through “carelessness” on a number of times damaged the renovations that were carried out.

Thirdly, Tribal Den operated in a manner foreign to proper business practice. It was well known that girls known as “hostesses” (some allegedly under legal age) were operating in the night club; drugs and breach of trading rules were also common knowledge. Tribal Den refused to live up to its obligations under the Superannuation Act. The manner in which they operated appeared to be one of always “testing the system” – typical of an approach that was at the core of issues relating to the riots of a few months back. Of interest was that two of the people with involvement in Tribal Den have at some stage been deported. Essentially, their mode of operation is not what we believe the community expects nor should it tolerate.

Fourthly, NCDC officials on a number of occasions have warned that the building was a health hazard. We urged relevant authorities to issue notices and for them to seek court orders removing the tenants. Always, they backed off legal action and the issue would disappear. NASFUND could not take legal action as we were prevented by a court order vis-à-vis the lease dispute.

Finally, as only far back as ten days ago, NASFUND worked with NCDC officials to close the Tribal Den Hotel on the basis of;

 

1. Illegal internal constructions – Rooms and Ablutions (sanitary) areas not conforming to building standards
2. 24hr water leaks from the ablutions area damaging walls and adjoining space
3. Rotten timber
4. Inadequate lighting
5. Infestation of rats and vermin
6. Non provision of appropriate fire exits
7. Public nuisance including waste disposal and noise
8. Poor ventilation
9. Previous Hotel management obstruction of officials from entering the building – similar to that experienced by Hornibrooks and others in their dealings with Tribal Den.

 

NCD issued a notice of “Unfit for Human Habitation” on 7 July. Finally we had the tools to evict tribal Den without breaching the court order.

NASFUND and NCDC agreed to close the Hotel on Monday 13^th July at 7.00 am. To this end we sought co operation from the police and a security guard firm was employed to assist. NASFUND had engaged Hornibrooks NGI to brick up the site and Port Moresby Locksmith to change all locks.

This would then allow NASFUND to clear the building of illegal constructions, bring the adjoining building up to building board standards and stop illicit activities occurring in the precinct.

NASFUND having made arrangements for the building to be closed on Monday now finds that 12 hours before, the buildings including the hotel is guttered by fire. The precinct has been cordoned off and is now under the authority of the Fire Department who has commenced forensic investigations. Insurance assessors are also sending an investigatory team from Australia.

 

Questions by Members Answered

 

Question:          Was the Buildings insured

Answer:            Yes

 

Question:          Will NASFUND take a loss irrespective of insurance?

Answer:            Yes, estimated up to K4 million against NASFUND’s half yearly profit is K78 million

 

Moving Forward

 

As we come to terms with this new reality, the Board casts its eyes on the future of the site. We now have to turn loss and destruction into an opportunity. The Board is mindful of its obligations not only to its members but also to the community as a stakeholder. It is also mindful that as the leading PNG owned property developer at present, there are limits to further development by NASFUND as a single entity because of asset allocation restraints.

The following broad understanding has been resolved by the Board.

 

1. The destruction by fire of the sites now presents us with an opportunity to work in partnership in the renewal of Port Moresby Township in a way not seen before. It gives us both enormous scope and flexibility including open spaces and an arts application.
2. NCDC will be invited to be part of this city renewal.
3. If at all possible, the link to the past be preserved, meaning that the Bell Tower should be incorporated in any new developments.
4. The scope of the redevelopment will not include high rise type constructions, but medium density buildings with potential for restaurants and walkways.
5. The redevelopment will require joint venture partners suitable to NASFUND’s vision of a greater downtown Port Moresby.

Finally, NASFUND unreservedly apologizes for the inconvenience that has been caused by the byproduct of the fire including road closure and congestion. We will attempt to resolve these issues as quickly as possible. We also thank the Fire Brigade for their actions in ensuring protection of life and adjoining buildings and doing the best job possible under the circumstances.

 

For and on behalf of the NASFUND Board

 

John Jeffery

Chairman