Construction slowdown underway

Business, Normal

The National, Thursday 20th of February, 2014

WITH the PNG LNG project moving towards production, a downturn in Papua New Guinea’s building and construction sector is underway, softened somewhat by the national government’s injection of infrastructure spending.
But there is still plenty of work to be done, Business Advantage PNG reported.
At the height of the construction phase of the ExxonMobil-led PNG LNG project in 2012, the construction sector contributed 16% of PNG’s gross domestic product (GDP).
But with the completion of the project, the building and construction industry sector expected to fall by 8% this year, according to PNG Treasury estimates.
Kramer Ausenco chief executive Frank Kramer told Business Advantage there was now much more construction capacity. Kramer Ausenco was one of the largest engineering and project management firms in the South Pacific region with about 120 staff based in Australia, the Solomon Islands, Vanuatu, Fiji, Samoa, Tonga and PNG.
“There is now much more construction capacity in PNG.
“This is good, but we must always ensure there is significant national content in the industry.”
The firm had a number of major projects just finished or about to finish early this year, including stage two of the Windward Apartments complex at Ela Beach, while the new harbour side office building for Steamships was 70% complete.
Among its new projects is the new K250 million (US$98 million), 300-bed Enga Hospital, expected to start in the second half of the year.

; the K85 million (US$33 million) refurbishment of Marea House in Waigani, a K100 million (US$39 million) complex for the Western Highlands Development Corporation in Mt Hagen.
There are also several hundred million kina worth of roads and bridges for the Ok Tedi Development Foundation.
“I think construction activity will be quiet for the better part of this year and we can expect to see some level of activity starting to ramp up again in 2015,” Kramer said.
Despite his “quiet” year, he estimateed he had already secured about 85% of budgeted revenue for this year.