Church decides to wind down its business arm

 THE national council of Evangelical Lutheran Church in PNG has resolved to wind down its business arm Kambang Holdings Ltd but will preserve and downsize the Lutheran Shipping Service.

This has come about after ELCPNG general secretary Albert Tokave and treasurer Noreo Keindip signed a resolution of the shareholders to place the company in liquidation through registered liquidator David George Guinn from last Monday.

However, the Lutheran Church has provided shipping services for 107 years and has now committed itself to continue the service but on a smaller scale in passenger and small cargo services to remote areas.

It will maintain two passenger vessels and operate on a “cost recovery basis”. It also hopes to purchase a new ship while willing to run vessels purchased by the government without political affiliations.

The council, after considering a report from the appointed committee of the 29th ELCPNG Synod in January, confirmed the status of troubled Luship that confirmed serious weaknesses in the company’s operations.

The committee recommended a new company board and management while acknowledging the fifth assessment, reporting serious mismanagement.

The council admitted that persisting Luship issues also distracted the church from its main mission – living out and witnessing the Gospel. 

The issue also caused tensions and conflicts among church leaders and followers.

In the late 1990s, Luship failed to renew its fleet and reliability of the services deteriorated over time.

In 2010, Luship stopped paying its dues, owing 18 creditors over K10 million for the use of properties, causing considerable security damage, including loss/transfer of the church’s pension fund.

The council realised that downsizing of Luship and voluntary liquidation of Kambang Holdings Ltd (KHL) had painful consequences for its employees. 

But the new shipping service was believed to be sustainable with good management and governance that would increase passenger and cargo services.

The ELCPNG will incorporate its trading name “Lutheran Shipping”.

The council acknowledged that employees had waited for too long for old vessels to be repaired. 

More recently, they had experienced irregular salary payments.

The council called on Prime Minister Peter O’Neill to honour his promise and support the painful, costly but constructive move through an interest-free loan facility for five years.

The council also considered the offer and appreciated the increasing role of the government to bail out Luship by initiating a joint venture in setting up Morobe Coast Shipping Services.

After considerations, the church council opted to withdraw from the complex dynamics of commercial activities and politics as ELCPNG was inadequately equipped to perform in such environment.

The council decided to seek partnership with professional companies, not to sell land but participate in the development of properties through land and gradually increase its capital.