Sir Mekere: Sovereign Wealth Fund is last throw of dice for PNG

By MALUM NALU

Papua New Guinea has one last throw of the dice if it is to be put on a sound financial footing, according to Public Enterprises Minister Sir Mekere Morauta, The National reports.

He said when welcoming Air Niugini’s new Boeing 737 to Port Moresby on Wednesday that the ace up the sleeve was the new Sovereign Wealth Fund.

“I have suggested that the Sovereign Wealth Fund should earmark dividend flows from PNG LNG ‑ about K500 million per year – to be used to recapitalise our public enterprises, and to pay for the maintenance of national infrastructure  - roads, ports, airports, universities, hospitals - and the provision of rural infrastructure,” Sir Mekere said.

12mnmekere: The shame of Lae...the road leading to the Nadzab Airport is ridden with potholes.-Nationalpic by MALUM NALU

“I hope that the next government sees the wisdom and practicality of that.

“I also hope that it does not succumb to the temptation of winning political popularity contests – looking good but doing nothing and achieving nothing to solve our deep-seated problems.

“Governments and politicians are there to make decisions in the national interest, not to please vested interests or to entrench themselves in the comfortable seats of Parliament House.

“Most importantly I hope that it does not listen to the ignorant, self-interested mauswara that the opponents of reform inflict on us.

“Most recently vested interests and would-be politicians opposed NEC’s proposed solution to the constant power blackouts that the national capital suffers.

“The anonymous arguments they put in support of their case were non- arguments. 

“What they served up to the nation through the media – in particular with the connivance of the Post-Courier – was politically motivated and self-serving nonsense consisting of falsehoods, rumour, innuendo and smear.

“Facts appear to be a non-essential item in public debate these days.

“How long are we going to allow tens of thousands of families to suffer every day because there is no electricity for mothers to cook with or lights for children to do their homework by?

“How long are we going to allow people – the old, the very young, the ill and the frail – to be put at risk because there is no power or water?

“Why should we allow the job prospects of our children to be crippled because rather than hiring more workers, business needs to spend its money on generators and fuel?

“These are the consequences of the opposition to the reforms that the nation so desperately needs.”

Sir Mekere said it was his hope that the incoming government would make decisions based on the fact that the people of PNG owned public enterprises.

“Not unions and employees,” he said.

“Not directors and management.

“The people own public enterprises through their elected representatives. 

“And elected representatives have a duty to make decisions in the national interest. 

“Elected representatives are empowered directly by the people, and the people are the owners of these assets.

“One of the biggest failures we have as a nation is that decision-making is often on the basis of political convenience or pandering to sectional interests.

“It is my hope that the new government has the determination and the wisdom to make decisions solely on the basis of the common good.

“If the new Government does not prevent decision-making from being hijacked, we will continue our increasingly rapid slide down a slippery slope.”

Air Niugini pays K6.45 million dividend to government

Minister for Public Enterprises, Sir Mekere Morauta, on Wednesday accepted a dividend payment cheque from Air Niugini for K6.45 million.

The dividend is the first the airline has paid since it was corporatised in 1996.

Sir Mekere welcomed the payment, made at the unveiling of the airline’s new Boeing 737 airliner in Port Moresby on Wednesday.

“The principal that they must pay dividends is very important,” he said.

“It helps instil commercial discipline in public enterprises and it recognises that the people of Papua New Guinea, through the national government, are owners of these organisations and are entitled to a return on their investment.”

The cheque is to reimburse Air Niugini’s share of a K50-million dividend paid by Independent Public Business Corporation (IPBC) to the Consolidated Revenue Fund earlier this year.

Sir Mekere said this was the first year since 2007 that public enterprises have paid dividends.

“The fact that they are now able to do so reflects the reforms introduced after the O’Neill-Namah government was elected on the floor of parliament last year,” he said.

“My reforms, which focus on independence from political influence for IPBC and its public enterprises, accountability and transparency, efficient business practices and improved service delivery, are clearly working.

“There have been significant operational and governance improvements across all enterprises, and I look forward to a lift in service delivery standards in the coming years

.“I implore the incoming government to continue with these reforms and most importantly I hope they see the wisdom and practicality of earmarking some of the Sovereign Wealth Fund cash for infrastructure development and public enterprise rehabilitation.”

Three other public enterprises have paid dividends this year.

They are Eda Ranu with K3 million, PNG Ports with K15 million, and Water PNG with K500, 000.

Air Niugini gets new Boeing 737

By EMMANUEL MAIPE

Air Niugini has welcomed to its fleet of aircraft a new Boeing 737- 700 series aircraft to boost its capacity to serve international routes, The National reports.

 The new B737 is on a long-term lease from Dubai Aerospace Enterprise.

The New Boeing 737 being given the traditional welcoming ceremony by being hosed down by two fire trucks as it makes its way in.- Nationalpic by EKAR KEAPU

 Tts arrival to Port Moresby on Wednesday, has increased the number of aircraft fleet owned by the airline company to 22.

 This includes the Dash 8- 100/200/300 series, Q400, Fokker 100, and the Boeing 767 aircraft.

 The aircraft will operate international routes with the initial flights to the Australian ports of Brisbane, and Sydney, and then it will operate on Air Niugini’s newest route to Cebu in the Philippines.

 There will be two direct flights to Cebu in a week, one on Tuesdays and one on Thursdays.

 The aircraft’s inaugural flight will be to Cebu next Monday.  

 The aircraft may also service domestic routes once some airport infrastructure in the country is completed.     

 Officiating at the welcoming ceremony yesterday, Prime Minister Peter O’Neil said the B737 was the first of its type to be operated by Air Niugini.

 “This Boeing 737 is the first to be operated by Air Niugini,” he said.

 “With its versatility, range performance and low operating costs, this aircraft I am told, will be utilised on the high demand domestic routes when our airport infrastructure is ready.”

 O’Neil also praised Air Niugini’s board and management for their commitment to maintain services to the people of PNG and foreigners despite difficulties faced by the company.

 “Let me commend Air Niugini board, management and staff for their sheer commitment and hard work in ensuring continuous growth and expansion of Air Niugini, our national asset,” he said.

 “I have noted that Air Niugini has achieved with an unprecedented growth, from a nearly-insolvent airline to a profitable airline, increasing its aircraft fleet, routes, frequencies and profitability.

 “Within last six years the airline has created over 800 new jobs for the people of PNG.”

 Mean time, Air Niugini board is planning to acquire additional aircrafts to its fleet.

 The board plans on getting three new Q400, and one more B737- 700, one DHC8-200, and two ATR freighter aircrafts before the end of this year.

BSP returns to Arawa

BANK South Pacific on Tuesday became one of the first financial institutions and major businesses in Papua New Guinea to return to Arawa in the Autonomous Region of Bougainville since the Bougainville crisis 23 years ago.
Banking services in Arawa ceased around July 1989 when all major businesses and banks pulled out as a result of the looming crisis.
When BSP closed its doors then, it was a quiet exit, due to security concerns, and yesterday as it re-entered, there was a celebration and the bank was welcomed back with open arms.
BSP group chief executive officer Ian B Clyne, deputy chief executive Robin Fleming, head of security George Loverock, general manager retail banking Frans Kootte and manager branch operations John Brutnal travelled to Arawa to hand over the new BSP branch.
It is a containerised branch, a concept first delivered by BSP in 2010 when it opened a similar branch in Motukea outside Port Moresby.
Prior to the crisis, BSP Arawa had more than 30 staff and a good customer base.
Today, there are eight personnel and the bank is confident of growing its customer base again.
Clyne said BSP was back in Arawa after 23 years and the feedback received so far from customers and the people of Central Bougainville was one of appreciation and huge relief, as it eased the burden to travel out of Arawa to do their banking.
“BSP’s presence so far has made a huge difference by bringing this very essential service to the community,” he said.
“We have had very positive comments from the locals from as far as Buin and Siwai, who can now travel to Arawa to do their banking and return home on the same day as opposed to going to Buka where they would have to spend a night and return home the next day.
“The business community here in Arawa are also very happy about the branch because it is making banking easier for them in terms of cost, security and time spent and other costs involved in travelling to Buka.
“It is also interesting to note how technology has changed since 1989, where BSP Arawa now has two ATMs.
“BSP is the first to bring ATMs into Central Bougainville, that is because we mean business and it shows our commitment to bring banking services into the heart of the community.”
The bank is also aggressively rolling out its BSP Rural network throughout the country, and in Bougainville BSP is set to open two rural branches in the next few months in Wakunai and Buin

Bakani: Average price of exports drop by 17.9%

THE weighted average price of Papua New Guinea’s exports declined by 17.9% in the March quarter of this year, compared to the corresponding quarter of last year, according to Bank of PNG Governor Loi Bakani, The National reports.
“There was a 15.3% decline in the weighted average price of mineral exports, reflecting lower kina prices of all mineral exports,” he said in the bank’s March Quarterly Economic Bulletin.
“For the agricultural, logs and marine product exports, the weighted average kina price declined by 25.3% and was attributed to lower kina prices of cocoa, coffee, palm oil, copra, copra oil, tea, rubber, logs and marine products.
“The lower kina export prices reflected a decline in international prices combined with the effect of kina appreciation against the US dollar during the March quarter of 2012, compared to the corresponding quarter of 2011.
“Excluding logs, the weighted average price of agricultural and marine product exports declined by 26.3% in the March quarter of 2012, compared to the corresponding quarter in 2011.”
 

Prices of major exports falling

By MALUM NALU

THE international commodity prices of PNG’s major exports are generally trending downward, according to Bank of PNG Governor Loi Bakani, The National reports.
 He said in BPNG’s March Quarterly Economic Bulletin that although commodity prices rebounded in the first quarter of this year, it remained below the 2010 levels.
“As of May 25, 2012, the price of gold fell to US$1,572.4 per ounce, crude oil price dropped to US$104.09 per barrel, and copper declined to US$7,711.60 per tonne,” Bakani said.

Lower Watut villagers carrying out small-scale gold mining along the banks of the Watut River in Morobe province last Saturday.-Nationalpic by MALUM NALU

“The prices of major agricultural export commodities also declined up to May 2012 with coffee at 186.38 US cents per pound, cocoa at US$1,422.64, copra oil at US$1,030 and palm oil at US$1,015 per tonne.
“The decline in commodity prices meant lower export receipts and foreign exchange in the market.
“In kina terms, the export receipts were also lower because of the appreciation of the kina against the US dollar.
“Exporters of agricultural commodities have raised concerns that lower kina prices and the appreciation of the kina exchange rate have affected their export earnings.
“At the same time, the increase in their operating costs has reduced their bottom-line profits and resulted in the scaling down of some of their operations.”
Bakani said the downward trend in commodity prices had also led to narrowing of the trade account surplus in the balance of payments and reduced mineral tax revenue received by the government.
Given the lower tax revenues and increased spending in the lead up to  and during the national elections, he has warned the government to reduce the phase of spending and not to resort to domestic financing for funding of any excess expenditure.
He cautioned that if the level of expenditure was not controlled there would be serious consequences on the budget outcome for the year, and increase in government debt.
“It will be necessary for the new government to immediately review the 2012 national budget and make necessary adjustments to ensure a balanced budget is achieved for the year,” Bakani said.
He said PNG would continue to experience high economic growth this year due to significant domestic activities associated with the on-going construction of the PNG-LNG project and a general pick-up in private sector investments.
“These developments have benefited some sectors of the economy mainly the building and construction, manufacturing, transportation and commerce sectors, including hotel services and local food production,” he said.
“It can be expected that the LNG project construction phase will peak this year, and start to ease next year as construction winds down to completion.”
Bakani has continuously warned the government not to compete with the private sector during the construction phase of the LNG project because it would result in high prices, but to plan for major development and infrastructure projects to be implemented after the end of the construction phase.
“That would allow the government to engage the surplus labour and machineries released by the LNG project at lower prices,” he said

Charlie Benjamin, Ronny Knight win in Manus

People's National Congress candidate Charlie Benjamin has been declared winner of the of Manus Regional seat at 11.02 am today. 
This is the second declaration of the 2012 national elections after Peter O'Neill for Ialibu-Pangia,. Manus Open has also declared a new MP. 
Businessman and New Generation Party candidate Ronny Knight was declared at 12.56 pm.

Good prospects for Wafi-Golpu project

MOROBE Mining Joint Ventures general manager - sustainability and external relations David Wissink says prospects for its proposed new Wafi-Golpu copper-gold mine in Morobe province look very good.
“It’s a very exciting prospect,” he told The National during a short site visit by helicopter on Saturday.
“It looks very good.
“It looks to be a long-term, large-scale project for Papua New Guinea.”

An aerial view of the project site at Wafi on Saturday.-Nationalpic by MALUM NALU

A mineral resources estimate as at June 2011 estimated that Wafi-Golpu deposits contained 26.6 million ounces of gold and three million tonnes of copper.
The project contains one of the highest grade porphyry copper systems in Southeast Asia with average grades in excess of 0.5 grams per tonne gold and 0.9% copper, making the resource comparable with other world-class systems.
The project comprises a major epithermal gold structure known as the Wafi gold deposit with two porphyry copper-gold deposits, Golpu and Nambongu North, in close proximity.
Now in pre-feasibility stage in a joint-venture with Newcrest Gold of Australia, Wafi-Golpu is set to follow South African miner Harmony’s Hidden Valley copper-gold mine that came into production in September 2010, also in a joint-venture with Newcrest.
“With Wafi project right now we’re in the pre-feasibility stage,” Wissink said.
“That means we’re defining a lot of the studies,
“Hopefully, we should have a pre-feasibility document done by the end of July, sometime in August.
“So right now there’s a lot of drilling on site to define what the resource is.”
Wissink said MMJV was talking with the government to comply with all requirements and environmental permits.
The Wafi-Golpu project is located 80km from Lae and is easily accessed by sealed road to Timini-Demakwa and then via a 38km dirt base track to the project.
The site is 4km from the broad Watut and Markham Valley plains

Economy expands in first quarter of 2012

By MALUM NALU

THE domestic economy continued to grow in the first quarter of 2012, mainly driven by the continuation of the construction phase of the PNG LNG project and high government expenditure, according to the Bank of PNG’s March Quarterly Economic Bulletin released last Friday, The National reports.
 This develops as the kina continued to appreciate against most major currencies, and the level of gross foreign exchange reserves decreased from K8.794 billion (US$4.283 billion) at the end of March 2012 to K8.58 billion (US$4.196 billion) as at June 29, 2012.
Bank Governor Loi Bakani said continued credit to the private sector, strong private sector activity and increase in the level of employment in the private sector were all indicative of this growth.
“Domestic demand pressures associated with the strong economic growth continue to prevail and its potential impact on inflation has been a concern,” he said.
“However, the inflation outcome was lower than expected mainly due to lower imported prices and the appreciation of the kina, especially against the US dollar.
“Annual inflation to March 2012 was 4%, compared to 6.9% in December 2011.
“The strong kina had the effect of lowering landed prices of imports, including food and fuel products, than otherwise would be.
“The bank is still mindful of the domestic demand pressures associated with the strong growth and therefore, maintained a tight stance of monetary policy by keeping its official rate, the Kina Facility Rate (KFR), at 7.75% in the March quarter of this year.”
Bakani said data from the bank’s business liaison survey (BLS) show that the total nominal value of sales in the private sector increased by 3.1% in the December quarter of last year, compared to a decline of 0.2% in the September quarter, same period.
“Excluding the mineral sector, sales declined by 1.4% in the December quarter, after increasing by 3.4% in the previous quarter,” he said.
“Sales increased in the mineral, building and construction, manufacturing and retail sectors, while there were declines in the agriculture/forestry/fisheries, wholesale, transportation and financial/business/other services sectors.

Cocoa growing in the Lower Watut area of Morobe province. There were declines in the agricultural sector, according to the BPNG Quarterly Economic Bulletin.-Nationalpic by MALUM NALU

“By region, Momase and Southern regions experienced increases, while NCD, Highlands, Islands and Morobe recorded declines.
“Over the 12 months to December 2011, total sales declined by 5.4%.”
Bakani said the bank’s employment index showed that the total level of employment in the private sector increased by 1.1% in the March quarter of this year, compared to an increase of 1% in the previous quarter.
“Excluding the mineral sector, the level of employment also increased by 1.1% as the change in the mineral sector was negligible,” he said.
 “The level of employment increased in the building and construction, manufacturing, financial/business/other services, and mineral sectors, while it declined in the agriculture/forestry/fisheries, transportation, wholesale and retail sectors.
“By region, only Momase experienced a decline while all the other regions recorded increases.
Over the year to last March, the total level of employment increased by 5%, but excluding the mineral sector, the level jumped by 4.7%, Bakani said

Dream come true as books delivered to remote Watut

By MALUM NALU

A dream came true for 13-year-old Ngaru Nen in remote Maralina village in Lower Watut, Morobe province, yesterday Saturday - Saturday, july 7, 2012 -  as he delivered a container load of books from the USA for the children of three schools in the area.

In emotional scenes at Maralina, six hours by motorised canoe up the Markham and Watut rivers, Ngaru and his siblings Betty and Aral Jr presented the books to the children of Maralina, Uruf and Tsili Tsili primary schools. 

Watut man Aral Nen (left) and his children Aral Jr, Betty and Ngaru, and wife Mary, on the banks of the Markham River at 40-Mile outside Lae last Friday before leaving to deliver books from Milwaukee, Wisconsin, USA, to schools in the Lower Watut area.

 The Nen children had been collecting books for the children of Lower Watut since 2008, however, they ran into a hitch when their father could not afford the high cost of transporting the books to PNG.

They, their mother Mary and father travelled all the way from Milwaukee, Wisconsin, USA, too make the book presentation.

The Nen family is welcomed to Maralina

Morobe Mining Joint Ventures general manager - sustainability and external relations, David Wissink, turned Good Samaritan as he read about young Ngaru’s plight on Facebook.

From left are Aral Nen, wife Mary, children Ngaru, Betty and Aral Jr, and David Wissink of MMJV at Maralina on Saturday.

In January this year, thanks to Wissink, a container load of books and school supplies left Milwaukee for Lae, final destination Watut.

The books arrived in Lae earlier this year and were kept in storage by MMJV until the Nens arrived.

In another twist of fate, major Korean TV company SBS, heard about Nen’s story and paid for all his family to travel to PNG so that they could make a documentary on the life of the family.

Givers become receivers…Nen children (from left) Aral Jr, Ngaru and Betty are showered with gifts at Maralina on Saturday.

Immediately after the book presentation, the Nen family and the TV crew travelled to Nen’s Zenem village, where they will spend the next couple of weeks shooting the documentary,

The people of Lower Watut laid down the red carpet on Saturday to welcome the Nen family home to present the books.

A quietly-spoken Ngaru said he was glad that the books had reached Watut safely after his ordeal in putting them together.

“I hope that they are useful to you,” he told a crowd of Watut school schildren and the local community who gathered at Maralina.”

Ngaru addresses the crown at Maralina

Wissink heaped praise on Ngaru and his siblings.

“This is a good partnership,” he said.

“Thank you to Ngaru and his sister and brother.”