The National, Tuesday July 9th, 2013
THE Resource Owners Federation of Papua New Guinea has congratulated the Government for recognising that the fly-in fly-out practice by the extractive industry has drained PNG of its economic, social and infrastructure development benefits.
Federation president Jonathan Paraia said in a statement yesterday that building a township in each mining project area would not cause any major problems.
“It is economically viable to build such a township to accommodate fly-in-fly-out workers instead of flying them in and out every four weeks or so from their place of employment,” Paraia said.
He said apart from this, there were many economic benefits that would be derived from such an arrangement.
Based on the 1997 National Research Institute findings on the economic impact of the fly-in-fly-out arrangement for a mining project in PNG, among others, the following consequences were noted:
- The direct loss is the personal consumption transferred from the local economy to overseas organisations. This part mainly consists of that portion of wages and salaries which would have been consumed locally, but have now been transferred elsewhere; and
- Using the national income accounting equation, it is estimated that on an average the annual loss of national income is between approximately K5.2 million and K13 million. Considering the multiplier effect, the annual loss must be approximately K11 million.