By MALUM NALU
Leading Papua New Guinea export crop palm oil has called for unprecedented public investment in infrastructure to offset the effects of the dreaded “Dutch Disease”.
Industry representative Ian Orell made the call last Friday at a workshop focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
“Priority must be unprecedented public investment, through public-private partnership, in reconstruction and maintenance of roads, roads, roads, bridges, ports and social infrastructure – starting now,” he said.
Orell said there must also be assistance with transport subsidies, fuel subsidies, enhanced tax credit schemes and others.
“Lower PNG kina value of exports and greatly elevated production costs will mean severe bottom line impacts,” he said.
“The existing crippling operating costs associated with the country’s failing transport infrastructure will become critical.”
He said palm oil was already suffering because of the LNG with “damaging HR losses to the boom sector”.
“Many mechanics, engineers, welders, HGV drivers, etc, are leaving (for LNG),” Orell said.
“New recruits are not available.
“HR costs are being driven up.”
He said the palm oil industry was also hard hit with Education Department’s technical vocational education training (TVET) suspending apprenticeship courses.
“Palm oil industry currently has more than 300 apprentices,” Orell said.
“We are being asked to establish our own equivalent facilities.”
Sunday, April 03, 2011
Coffee industry to be affected by LNG project
By MALUM NALU
The liquefied natural gas project could have disastrous implications for Papua New Guinea’s coffee industry, according to Coffee Industry Corporation economist Kessy Kufinale.
He said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
In an apparent reference to the dreaded “Dutch Disease”, where a mineral boom leads to an appreciation of the exchange rate, Kufinale said this appreciation would negatively impact on kina export revenue for coffee.
He painted the scenario of a 10% appreciation in kina against the US dollar from 0.339 - 0.3729.
“Given price 100 US cents per pound, results in a loss of K35 million, 10% of total coffee revenue,” Kufinale said.
“Any change in the export price always affects the producers, not middle men.
“A combination of lower export prices and appreciated exchange rate could spell disaster for our agricultural export industries.
“Our export products will become dearer, hence, less competitive on the world markets.
“Agricultural export producers are currently enjoying high prices and a fall in price will result in more plantations, especially, going out of business.”
Apart from ‘Dutch Disease’, Kufinale said the coffee industry was already losing a significant portion of its skilled labour force to LNG.
“Coffee exporters and plantations have reported that they have lost workers to LNG,” he said.
“This creates skills gap within these organisations.
“To retain skilled workers would add to their already high labour costs.”
Kufinale said major freighting companies operating along the Highlands Highway were shifting to service the LNG and neglecting the long-established coffee industry.
“Smaller coffee exporters, especially nationals, are resorting to small private truck operators, despite the higher risks this entails,” he said.
Kufinale said the port facility in Lae was unable to handle increased traffic.
“Delayed shipments due to congestion is potentially damaging to PNG’s reputation as a reliable supplier of coffee,” he said.
Kufinale said appropriate fiscal, monetary and exchange rate policies needed to in place to mitigate these negative impacts on the competitiveness and sustainability of PNG’s agricultural export commodities
“LNG windfall revenues must be invested in agriculture, particularly in areas like infrastructure development; rehabilitation and expansion; quality improvement; freight subsidy; and research and extension.
“Investments in the agriculture sector that have had significant impact on the lives of our rural citizens abound.
“Use these as guides to invest windfall LNG revenues if our economy and its people are to be continued to be sustained long after LNG is gone.”
The liquefied natural gas project could have disastrous implications for Papua New Guinea’s coffee industry, according to Coffee Industry Corporation economist Kessy Kufinale.
He said this at a workshop last Friday focusing on the impact of LNG on the PNG economy, with particular reference to agriculture.
In an apparent reference to the dreaded “Dutch Disease”, where a mineral boom leads to an appreciation of the exchange rate, Kufinale said this appreciation would negatively impact on kina export revenue for coffee.
He painted the scenario of a 10% appreciation in kina against the US dollar from 0.339 - 0.3729.
“Given price 100 US cents per pound, results in a loss of K35 million, 10% of total coffee revenue,” Kufinale said.
“Any change in the export price always affects the producers, not middle men.
“A combination of lower export prices and appreciated exchange rate could spell disaster for our agricultural export industries.
“Our export products will become dearer, hence, less competitive on the world markets.
“Agricultural export producers are currently enjoying high prices and a fall in price will result in more plantations, especially, going out of business.”
Apart from ‘Dutch Disease’, Kufinale said the coffee industry was already losing a significant portion of its skilled labour force to LNG.
“Coffee exporters and plantations have reported that they have lost workers to LNG,” he said.
“This creates skills gap within these organisations.
“To retain skilled workers would add to their already high labour costs.”
Kufinale said major freighting companies operating along the Highlands Highway were shifting to service the LNG and neglecting the long-established coffee industry.
“Smaller coffee exporters, especially nationals, are resorting to small private truck operators, despite the higher risks this entails,” he said.
Kufinale said the port facility in Lae was unable to handle increased traffic.
“Delayed shipments due to congestion is potentially damaging to PNG’s reputation as a reliable supplier of coffee,” he said.
Kufinale said appropriate fiscal, monetary and exchange rate policies needed to in place to mitigate these negative impacts on the competitiveness and sustainability of PNG’s agricultural export commodities
“LNG windfall revenues must be invested in agriculture, particularly in areas like infrastructure development; rehabilitation and expansion; quality improvement; freight subsidy; and research and extension.
“Investments in the agriculture sector that have had significant impact on the lives of our rural citizens abound.
“Use these as guides to invest windfall LNG revenues if our economy and its people are to be continued to be sustained long after LNG is gone.”
‘Con’ palm oil projects on the rise
By MALUM NALU
The palm oil industry has warned the people of Papua New Guinea to be wary of “con” oil palm projects appearing all over the country.
Palm oil representative Ian Orrell, in a no-holds barred presentation, told a workshop focusing on LNG and agriculture last Friday that this was all done with the purpose of logging, and was already giving a bad name to the established industry.
Agriculture Minister Ano Pala and his department acting secretary, Anton Benjamin – who have been supporting such special agriculture and business lease (SABL) projects all over the country – were not present to hear Orrell’s words as well as other important agricultural matters, as they had left for China the previous day.
Orrell said this “virtual” palm oil industry had seen the emergence of many “oil palm” agro-forestry projects, all with a focus on securing forest conservation areas (FCAs).
He said there was a land grab using SABLs, with over 5.3 million hectares lease-lease back (LLB) to third parties, which is land alienation, usually for 99 years.
“Most profess to be for ‘palm oil’ development,” Orrell said.
“This poses a massive reputational risk for the country and its palm oil exports.
“This will directly affect our market access and is blocking real development opportunities from real investors.
“The ‘real’ palm oil industry must take, and is taking, an active role in supporting awareness, opposition and mitigation activities to prevent these abuses of customary land and resource rights.”
Orrell said there had been no government support for the “real” palm oil sub-sector, with over 15 years of government facilitation of new palm oil developments - “which has led to?”
He questioned the national development strategic plan 2030 (DSP2030) and national agriculture development plan (NADP) aims to triple palm oil exports by 2030, as well as an expressed strong desire for new investors.
“It appears PNG is being advertised overseas as a large available ‘land bank’,” Orrell said.
“Departments and politicians are courting any entrepreneurial proposal, no matter how little expertise, credentials or lack of financial capacity is exhibited.”
The palm oil industry has warned the people of Papua New Guinea to be wary of “con” oil palm projects appearing all over the country.
Palm oil representative Ian Orrell, in a no-holds barred presentation, told a workshop focusing on LNG and agriculture last Friday that this was all done with the purpose of logging, and was already giving a bad name to the established industry.
Agriculture Minister Ano Pala and his department acting secretary, Anton Benjamin – who have been supporting such special agriculture and business lease (SABL) projects all over the country – were not present to hear Orrell’s words as well as other important agricultural matters, as they had left for China the previous day.
Orrell said this “virtual” palm oil industry had seen the emergence of many “oil palm” agro-forestry projects, all with a focus on securing forest conservation areas (FCAs).
He said there was a land grab using SABLs, with over 5.3 million hectares lease-lease back (LLB) to third parties, which is land alienation, usually for 99 years.
“Most profess to be for ‘palm oil’ development,” Orrell said.
“This poses a massive reputational risk for the country and its palm oil exports.
“This will directly affect our market access and is blocking real development opportunities from real investors.
“The ‘real’ palm oil industry must take, and is taking, an active role in supporting awareness, opposition and mitigation activities to prevent these abuses of customary land and resource rights.”
Orrell said there had been no government support for the “real” palm oil sub-sector, with over 15 years of government facilitation of new palm oil developments - “which has led to?”
He questioned the national development strategic plan 2030 (DSP2030) and national agriculture development plan (NADP) aims to triple palm oil exports by 2030, as well as an expressed strong desire for new investors.
“It appears PNG is being advertised overseas as a large available ‘land bank’,” Orrell said.
“Departments and politicians are courting any entrepreneurial proposal, no matter how little expertise, credentials or lack of financial capacity is exhibited.”
Friday, April 01, 2011
Wafi-Golpu gold deposits threefold
HARMONY Gold mining company, Africa’s third largest producer of the precious metal, has revealed that the company’s Wafi-Golpu joint venture with Newcrest Mining Ltd in Papua New Guinea may be three times the size of its next biggest mine, The National reports.
According to a presentation posted on the Harmony website, Wafi may yield as much as an annual 700,000 ounces of gold and 320,000 tonnes of copper.
The company was still working on sizing up the resource.
Harmony, which produced 1.43 million ounces of gold last fiscal year, was digging mines abroad as depleted South African reserves became more difficult and dangerous to excavate, coupled with rising cost of labour and electricity.
In the financial year ended June 30 last year, Harmony’s Tshepong mine yielded about 217,000oz of gold.
The company climbed 3.66 rand, or 2.7% to 99.61 rand - the highest level since April 2009 close of the Johannesburg trading, giving Harmony a market value of US$6 billion.
Wafi may add US$1.5 billion to US$2 billion, or about 40%, to the value and make the company a takeover target, RBC Capital Markets said last week.
Wafi’s content was estimated at 16moz of gold, 4.85mt of copper and 55,000t of molybdenum, or a total gold equivalent of 38.5moz, according to the presentation.
It added that only Freeport-McMoran Copper & Gold Incorporated’s Grasberg mine in Indonesia and Ivanhoe Mines Ltd’s Oyu Tolgoi deposit in Mongolia have higher gold equivalent grades.
Harmony’s management last year estimated the cost of building a mine at Wafi at US$2.5 billion to US$3 billion.
According to a presentation posted on the Harmony website, Wafi may yield as much as an annual 700,000 ounces of gold and 320,000 tonnes of copper.
The company was still working on sizing up the resource.
Harmony, which produced 1.43 million ounces of gold last fiscal year, was digging mines abroad as depleted South African reserves became more difficult and dangerous to excavate, coupled with rising cost of labour and electricity.
In the financial year ended June 30 last year, Harmony’s Tshepong mine yielded about 217,000oz of gold.
The company climbed 3.66 rand, or 2.7% to 99.61 rand - the highest level since April 2009 close of the Johannesburg trading, giving Harmony a market value of US$6 billion.
Wafi may add US$1.5 billion to US$2 billion, or about 40%, to the value and make the company a takeover target, RBC Capital Markets said last week.
Wafi’s content was estimated at 16moz of gold, 4.85mt of copper and 55,000t of molybdenum, or a total gold equivalent of 38.5moz, according to the presentation.
It added that only Freeport-McMoran Copper & Gold Incorporated’s Grasberg mine in Indonesia and Ivanhoe Mines Ltd’s Oyu Tolgoi deposit in Mongolia have higher gold equivalent grades.
Harmony’s management last year estimated the cost of building a mine at Wafi at US$2.5 billion to US$3 billion.
Bench warrant sought for arrest of doctors
By JACOB POK
AN application for a bench warrant to arrest the doctors on strike is expected to be made at the Waigani National Court this morning, The National reports.
The National Doctors Association and its members have been cited for continuously failing to comply with last Friday’s court orders restraining them from going on strike.
The court will, today, also hear submissions on contempt proceedings against the doctors for defying the court order.
Justice Catherine Davani yesterday upheld last Friday’s restraining orders pending the hearing of the substantive matter.
She issued the orders while dismissing the doctors’ motion to set aside the restraining order.
Davani also noted that the doctors’ claims where not related to the previous agreements but were new, ambiguous and unregistered.
She said the NDA, being professional men and women, had circumvented the law and established processes to achieve their goals.
“That is a dangerous trend and one that can lead this nation to anarchy as other unions and citizens of this country are observing with interest.
“This court will not condone the NDA’s claims and condemn it in the strongest possible terms,” Davani said.
“The processes in relation to the resolving of industrial claims are available to the citizens of this country and must be utilised.
“There are no short cuts.
“Parties should not resort to strike action at their whim. Rules and processes must be followed.
“In this case, we have professionals, being doctors, who are uncompromising and will not allow due processto take its course. That, again, should not be allowed to happen,” Davani said yesterday.
She earlier warned NDA executives to refrain from “flaunting” their issues in the media, while they continued to go on strike and described their actions as “fervently breached of the court order”.
AN application for a bench warrant to arrest the doctors on strike is expected to be made at the Waigani National Court this morning, The National reports.
The National Doctors Association and its members have been cited for continuously failing to comply with last Friday’s court orders restraining them from going on strike.
The court will, today, also hear submissions on contempt proceedings against the doctors for defying the court order.
Justice Catherine Davani yesterday upheld last Friday’s restraining orders pending the hearing of the substantive matter.
She issued the orders while dismissing the doctors’ motion to set aside the restraining order.
Davani also noted that the doctors’ claims where not related to the previous agreements but were new, ambiguous and unregistered.
She said the NDA, being professional men and women, had circumvented the law and established processes to achieve their goals.
“That is a dangerous trend and one that can lead this nation to anarchy as other unions and citizens of this country are observing with interest.
“This court will not condone the NDA’s claims and condemn it in the strongest possible terms,” Davani said.
“The processes in relation to the resolving of industrial claims are available to the citizens of this country and must be utilised.
“There are no short cuts.
“Parties should not resort to strike action at their whim. Rules and processes must be followed.
“In this case, we have professionals, being doctors, who are uncompromising and will not allow due processto take its course. That, again, should not be allowed to happen,” Davani said yesterday.
She earlier warned NDA executives to refrain from “flaunting” their issues in the media, while they continued to go on strike and described their actions as “fervently breached of the court order”.
Clouds, crew factors in air crash
BAD weather and inadequate pilot experience contributed to the 2009 Kokoda plane crash which killed all 13 people on board, including nine Australians, transport investigators said in their final report released yesterday, The National reports. The Airlines PNG flight, captained by Jannie Moala, slammed into the side of a hill as it made its way to Kokoda from Port Moresby on Aug 11, 2009.
According to Civil Aviation’s aviation investigation commission, the plane crashed while in controlled flight, meaning there had been nothing wrong with the plane itself.
Although the day had been very cloudy, the crew had attempted a descent using visuals only and it did enter a stage where instruments needed to be used.
The co-pilot had not been qualified to fly using instruments.
Senior AIC investigator Sid O’Toole said that the aircraft was well-equipped in terms of its multifunctional unit including navigational, weather, terrain avoidance and warning systems.
“When the crew commenced the descent through the Kokoda Gap in the reported rapidly changing weather conditions, they committed themselves to a course of action that they could not be assured of completing safely,” the report said.
The difficult conditions of the flight would have tested the crew, it added.
“It was probable that during the descent, the crew were required to manoeuvre the aircraft to remain clear of cloud, or regain that status, and in so doing, impacted terrain,” the report concluded.
The crash happened around 11.14am, about 20 minutes after it took off from Jackson International Airport.
The AIC attributed some responsibility to Airlines PNG, saying it had no emergency procedures in place should pilots needed to rely primarily on flight instruments.
But it also did not rule out the possibility that the co-pilot had become incapacitated before the crash, although it noted he had appeared to be in good health.
In response to the accident, the civil aviation safety authority is in the process of legislating for cockpit voice recorders to be installed in all aircraft that carry nine or more people.
CASA PNG has also set up a new chief medical officer position and shifted responsibility for incident reporting to the accident investigation commission.
Despite PNG being a signatory to the Chicago Convention on International Civil Aviation, it previously had neither a compulsory or voluntary reporting system.
Airlines PNG has also since employed new visual flight procedures.
According to Civil Aviation’s aviation investigation commission, the plane crashed while in controlled flight, meaning there had been nothing wrong with the plane itself.
Although the day had been very cloudy, the crew had attempted a descent using visuals only and it did enter a stage where instruments needed to be used.
The co-pilot had not been qualified to fly using instruments.
Senior AIC investigator Sid O’Toole said that the aircraft was well-equipped in terms of its multifunctional unit including navigational, weather, terrain avoidance and warning systems.
“When the crew commenced the descent through the Kokoda Gap in the reported rapidly changing weather conditions, they committed themselves to a course of action that they could not be assured of completing safely,” the report said.
The difficult conditions of the flight would have tested the crew, it added.
“It was probable that during the descent, the crew were required to manoeuvre the aircraft to remain clear of cloud, or regain that status, and in so doing, impacted terrain,” the report concluded.
The crash happened around 11.14am, about 20 minutes after it took off from Jackson International Airport.
The AIC attributed some responsibility to Airlines PNG, saying it had no emergency procedures in place should pilots needed to rely primarily on flight instruments.
But it also did not rule out the possibility that the co-pilot had become incapacitated before the crash, although it noted he had appeared to be in good health.
In response to the accident, the civil aviation safety authority is in the process of legislating for cockpit voice recorders to be installed in all aircraft that carry nine or more people.
CASA PNG has also set up a new chief medical officer position and shifted responsibility for incident reporting to the accident investigation commission.
Despite PNG being a signatory to the Chicago Convention on International Civil Aviation, it previously had neither a compulsory or voluntary reporting system.
Airlines PNG has also since employed new visual flight procedures.
K100m windfall for public servants
Public servants to get hefty pay rise
THE government is putting an additional K100 million in the pay packets of all public servants, The National reports.
Cabinet approved the pay increase yesterday.
The increase “is better than they have been asking for” and would cover striking doctors as well, acting Prime Minister Sam Abal said last night.
Details of the deal will be presented by Public Services Minister Moses Maladina as soon as the details have been finalised.
Abal said: “The Somare government is conscious of the rise in cost of living in recent days. We have to keep up with the speed of things happening.
“We have decided to increase the pay packets of public servants across the board. I want public servants to respond positively to this by improving on their productivity, efficiency and effectiveness.”
Abal said: “Public servants should be happy but at the same time we are putting a challenge before them.
“This is the carrot but the stick will come later.”
While the exact terms are still being negotiated, Abal said the wages bill of the state would increase by more than K100 million.
The bill for salaries and emoluments for this year was projected in the National Budget at K2.494 billion, an increase of K541.3 million compared with last year.
The largest increase in personnel emoluments for national departments this year was attributed to hospital management services (K16.8 million), Correctional Services (K17.4 million) as well as full superannuation funding of K220 million.
The K100 million announced yesterday was additional to the projected increase.
Abal said the government was overhauling and streamlining the entire public service general orders, including the pay structure.
Where legislative changes are required, the necessary bills will be drafted and go before the next sitting of parliament in May, Abal said.
Public servants are still owed a 6% across-the-board salary increase by their employer but Abal indicated the deal approved by the government was superior.
At the same time, he called on striking doctors to return to work and let the industrial machinery to sort out their grievances.
He said the government was responding positively and doctors should respect this.
He said: “Something has gone wrong but we are reasonable. We will increase their pay rates.
“In return, they must come honest and serve the people.
“We should not be irresponsible and try to coerce or force by intimidation and threats.
“That is for people with less intelligence, not professionals like doctors.”
THE government is putting an additional K100 million in the pay packets of all public servants, The National reports.
Cabinet approved the pay increase yesterday.
The increase “is better than they have been asking for” and would cover striking doctors as well, acting Prime Minister Sam Abal said last night.
Details of the deal will be presented by Public Services Minister Moses Maladina as soon as the details have been finalised.
Abal said: “The Somare government is conscious of the rise in cost of living in recent days. We have to keep up with the speed of things happening.
“We have decided to increase the pay packets of public servants across the board. I want public servants to respond positively to this by improving on their productivity, efficiency and effectiveness.”
Abal said: “Public servants should be happy but at the same time we are putting a challenge before them.
“This is the carrot but the stick will come later.”
While the exact terms are still being negotiated, Abal said the wages bill of the state would increase by more than K100 million.
The bill for salaries and emoluments for this year was projected in the National Budget at K2.494 billion, an increase of K541.3 million compared with last year.
The largest increase in personnel emoluments for national departments this year was attributed to hospital management services (K16.8 million), Correctional Services (K17.4 million) as well as full superannuation funding of K220 million.
The K100 million announced yesterday was additional to the projected increase.
Abal said the government was overhauling and streamlining the entire public service general orders, including the pay structure.
Where legislative changes are required, the necessary bills will be drafted and go before the next sitting of parliament in May, Abal said.
Public servants are still owed a 6% across-the-board salary increase by their employer but Abal indicated the deal approved by the government was superior.
At the same time, he called on striking doctors to return to work and let the industrial machinery to sort out their grievances.
He said the government was responding positively and doctors should respect this.
He said: “Something has gone wrong but we are reasonable. We will increase their pay rates.
“In return, they must come honest and serve the people.
“We should not be irresponsible and try to coerce or force by intimidation and threats.
“That is for people with less intelligence, not professionals like doctors.”
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