Highway to Change: The Foreign Connection
The real estate and land markets in Papua New Guinea are slowly gaining traction as new developments both in policies and construction begin to commence. These includes both factors for future changes and ones that are currently underway. But what exact impact do these developments have for businesses inside the said industries for citizens and non-citizens? A closer examination might help.
Land Use Regulation Reform
A partner at Leahy Lewin Lowing Sullivan, John Leahy – on his viewpoint for the Oxford Business Group – weighs in on the amendments being proposed by the Minister of Lands and Physical Planning, Mr. Benny Allan. Allan is seeking for a reform on foreign ownership, special agriculture business lease abolition, and a Land Board restructuring. Leahy mentions that there remains to be concerns with these proposed changes.
Take for example the appeal to restructure the Land Board where Allan aims to remove administrative and political interference. While this has been a welcomed proposal, Leahy explains that businesses remain concerned that there won’t be enough independence with the proposed board members that will be coming from the Lands Department. There is a fear that a strong presence might cancel out or even hurt the objective. But Leahy says that suggestions have also been made by the business community to address this issue.
A compromise is also in order for the special agriculture business leases (SABL) as businesses would prefer the policy to stay the same, except for a few minor changes in the Land Act, section 102 to restrict issuance to incorporated land groups. Allan also aims to limit the State lease issuance to just the citizens of PNG.
Though there may be a few minor revisions that may prove helpful to further strengthen the real estate sector, the proposal has already been laid out. And whether this will bring about improvements in the sector depends on whether or not they will be approved.
Having been sealed a couple of times before, the East Cape Road in Milne Bay is once again being sealed – this time, by nominally State-owned Chinese construction company COVEC. In the ground breaking of the project, Hon. Douglas Tomuriesa, Kiriwina Goodenough MP, says that the government has been spending funds for reconstruction projects each year. And each year, funds that could have gone through different sectors like tourism, health, and education go through for the rebuilding of these infrastructure.
As a result of this, Hon. Tomuriesa challenges the construction company to ensure quality and strength to make the reconstruction last. He says, “This is not the first time this road has been sealed; this will be the second or the third time, it will be sealed and I hope the construction company ensures the road lasts.”
This is a challenge COVEC is willing to take. A representative from the company, Brian Hu, mentions that they are confident in delivering the government’s desired outcome in two years. Hu explains that their experience and their connection to the country is one of their assets. He said, “We are a foreign company but all our employees reside in the country, and we have been in PNG for 21 years.”
This development will also be in partnership with the World Bank which has funded the sealing of the Alotau to East Cape Road in Milne Bay. Ben David who is a representative of the Australian Government says, “This project is a reflection of the long term friendship without our two countries.” The whole project for the 51-kilometer road costs an estimated $29 million and is expected to benefit both the directly affected areas and the surrounding areas in Milne Bay. Charles Abel, Alotau MP, explains that the project will potentially increase economic activities in the area, especially the Alotau people.
Both the ongoing development in policy and infrastructure aims for a better economic standing. But more than a better economic outlook, there are also people in between all of these developments that may or may not benefit from them directly. What is important though is that there is already a dialogue and an initiative by the government and big organizations to help not only bring stability but also convenience for its citizens in PNG.