Case 1.2-Pacific Maritime Industrial Zone

Case 1.2-Pacific Maritime Industrial Zone

The Pacific Marine Industrial Zone (PMIZ) was approved by the National Executive Council (NEC) as a concept in 2004 but was not officially commissioned until November 2015 when Prime Minister Peter O’Neill travelled to Madang and declared it open (Albaniel, 2016). A concessional loan was obtained from the Chinese government’s Exim Bank to fund what later became known as the Pacific Maritime Industrial Zone (PMIZ).

The Chinese state company China Shenyang International Economics and Technical Cooperation Corporation was appointed project manager. Information from Madang indicates that the first tranche of the concessional loan was used to clear and build the fence around the site at Vidal, north coast Madang for a township to be established (Journalist, 2017).

Just like Bautama, the project proponents did not publish information showing the terms and condition of the concessional loan, the expenses list, and the repayment schedule. According to China Aid Data, an online platform that provides information on Chinese development finance earmarked for Africa, the China Exim Bank gave $US74 million to PNG in January 2011 for the project. The total cost of the project was $US95 million with the other $US21 million to come from the PNG government (AidData, 2016).

The project was to be completed on November 24, 2015 but to date there is little to show on the ground, raising questions as to whether the first tranche of the concessional loan was accessed and disbursed. In March 2017 Trade and Commerce Minister Richard Maru revealed that the PNG government is negotiating a new $US150 million loan from the Exim Bank of China for the same project (National, The National, 2017).

Update as of 2018

The Pacific Marine Industrial Zone (PMIZ), later became known as the Pacific Maritime Industrial Zone, was approved by the National Executive Council (NEC) as a concept in 2004 but was not officially commissioned until November 2015 when Prime Minister Peter O’Neill travelled to Madang and declared it open(Albaniel, 2016). Initially, a concessional loan of US$74 million was obtained from the Chinese government’s Exim Bank to fund the PMIZ project (Post Courier, 2016).The initial total cost of the project was $US95 million with the other $US21 million to come from the PNG government (AidData, 2016).

In July, the Secretary for the Department of Commerce and Industry Andrew Liliura said that the initial loan was cancelled after only 10 percent of it was released by the Exim Bank (i.e. US$9.5 million) as per the loan contract (Post Courier, 2018). The PMIZ project was then re-scoped and a new and revised loan was confirmed at US$156 million (K484 million) for the operation of the first phase (Post Courier, 2018).

Under the initial concessional loan of US$74 million, contract for phase one of the PMIZ was not processed through the Central Supply and Tenders Board, but was instead awarded to a Chinese state company China Shenyang International Economics and Technical Cooperation Corporation under a condition of the concession loan(Post Courier, 2017). Information from Madang indicates that the first tranche of the concessional loan was used to clear and build the fence around the site at Vidal, north coast Madang for a township to be established (Journalist, 2017). However, a review of the government management and expenditure on the ground work on PMIZ project by the Department of Commerce and Industry revealed a K30 million expenditure with very little to show for (Post Courier, 2017). Commerce and Industry Minister Wera Mori stated during a presentation that shockingly K4 million was spent on the main gate alone (Post Courier, 2017). He further stated that, “despite sufficient funding, the status of the 2.47 kilometer access road is unsatisfactory, including a 400m segment of the road for which K5.5 million was already paid”; and that, “survey and physical zoning remains incomplete, despite K2.25 million paid to land mark valuers eight years ago” (Post Courier, 2017). This is a clear indication of the mismanagement of public funds.

Just like Bautama, the project proponents did not publish information showing the terms and condition of the initial concessional loan, the expenses list, and the repayment schedule.

In July 2018, the Secretary for the Department of Commerce and Industry Andrew Liliura said that  as soon as the process and loan requirements of the revised US$156 million are completed, operation for phase one will go ahead (Post Courier, 2018).

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