‘Locals lost market share’

By DALE LUMA
PNG Manufacturers Council chief executive officer Chey Scovell says many established local businesses in the building and construction sector have lost significant market share since around 2010.
Scovell told The National when providing an update on the sector that the concern was that the shrinking of local participation had happened during a decade of exponential growth in the sector.
“Around 2010, the State ramped up its use of EXIM China concessional funding which appears to have come with a conditionality that the contractor is from a stall of the People Republic of China state-owned enterprises,” Scovell said.
“The growth in the sector and profitability is evident by both rapid growth of these foreign SOEs now in PNG.
“Having established a foothold in our nation, it appears some of the senior managers have started their own construction firms and have replaced the shrinking or shutdown players that were here for decades prior.”
He said New Zealand had been a beneficiary of EXIM China projects “but their government has insisted on local partnership and strictly monitored the use of imported labour”.
“This is important to note, as despite the massive increase in the sector, we’ve seen a contracting of PNG citizen employment, especially in the middle to upper level management.
“For reasons unknown, we’ve also seen a very high level of foreign workers in these firms that appear not to be highly specialised labour.
“A significant body of work of the Manufacturers Council is encouraging compliant business activity and a level playing field.
“Our board and membership has struggled to reconcile the growth in this sector with the sharp decline in State revenues (collections).”