Morobe shares in Ramu 2 blessings

The Ramu 2 hydro-electricity project will benefit both the landowners of Morobe and Eastern Highlands.
Even though the dam itself will be on Ramu River in Eastern Highlands, some of the facilities will be located in Morobe.
If all goes according to plan, the Chinese main partner, Shenzhen Energy, wants to start construction by March next year.
“It will take 69 months to complete and in commercial operation by November of 2024,” Shenzhen Energy president Wang Pingyang said.
“That will match the demand of the mines and the Ramu grid as well.” The project will be a private-public partnership venture with Shenzhgen Energy holding 70 per cent and the national Government, landowners and provincial governments holding 30 per cent. Shenzhgen Energy will run it for 25 years then hand it over to the Government.
Ramu 2 is a key infrastructure for national development and a key commercial asset for the country, says Minister for State Enterprises and Public Investments William Duma.
“The project is going to be built on State land,” he said. “There are some areas where you will require access to certain areas where we will have some arrangements with the landowners. Under this structure, we are taking 30 per cent in this equity, so that 30 per cent is shared between the State, landowners and the provincial governments.
“Once we get our 30 per cent share of the equity then we come and negotiate with the landowners and the provincial governments.
“Consultations have been done already.
“It is about timing. We should be able to resolve the remaining outstanding issues before the end of October.
“With the Ramu 2 project, we are building for the future. We are estimating that the population from one part of the region, for example in the Highlands region, we are looking at probably four to five million people or even six million in the next 10 to 15 years’ time and obviously, these people will need energy. Of course, you cannot rule out the possibility of manufacturing taking place in Lae or even further up in the Markham valley.
“We are building for the future and that is one of the reasons why the O’Neill government made the important decision to at least start this project.
“The first approval was given in 2015, and we still have three existing National Executive Council decisions which we have given approval for in this project, subject to negotiations that have been held in relation to the … design, the structure and the supporting infrastructure such as power lines, and roads. It will cost the consortium US$800 million, that is equivalent to around K3 billion.”
“Shenzhen Energy is one of the big companies in this part of the region. They are based in China, so they come with a lot of experience. They also have other projects in other parts of the world such as Africa.
“So it was not that easy. They all went through the process and finally the consortium led by Shenzhen Energy – comprising Shenzhen Energy itself and China Hydro – was selected by the Government. We as a country, do not have the money ourselves so that is why it is a bill-over transfer arrangement that we have entered into.
“After 25 years, the ownership will be transferred to the Government … we will then own it 100 per cent.
“You must remember that in the real world, there are no perfect projects or there are no perfect agreements, you have to give and take, so that is what we are trying to do
There might be some criticism but we just have to make those decisions for the good of our country.”
Kumul Consolidated Holdings managing director Darren Young said that there were added benefits such as employment.
“And with these massive projects, you will see jobs,” he said.
“I’d say there will be anything up to 900 employees just during the construction period and there will be experts there and there will be certainly lots of jobs for the people and certainly in the construction sector.
“As the minister said, there will be a lot of spin-off activities. We have access to roads, there is power generation and then there will be transmission of power from the turbines out to the projects sites out at Wafi and Ramu Noco. It is an exciting project.”
Pingyang was in Port Moresby last week to discuss the project, saying they saw it as a key infrastructure for Papua New Guinea.
“We are a publicly listed company in China,” he said.
“We are good in exploring the global market.
“The total assets of our company is more than US$16 billion and we are focusing on the power generation sector. Right now we own power plants, gas power plants, hydro power plants, wind farms, solar and the wastage energy.
“The total capacity of our company groups is beyond 12,000 megawatts. We are also involved in the supply of gas, waste treatment and other related business.”