No guarantee on LNG spin-offs

CHAIRMAN of Huri Kinu Development Corporation in PDL 1 and PDL 11 Peter Laki is in order when he calls for government instrumentalities to ensure landowner companies benefit fully from the K120 million seed capital made available.
Laki, who is also a signatory to the licence-based benefits sharing agreement (LBBSA), has called on Commerce and Industry Minister Gabriel Kapris to consider all submissions by landowner companies for the business development grants.
We should add that time is flying and this process is progressing at a far slower pace than it should.
The fault really should be laid at the government’s feet and, in particular, the Department of Commerce and Industry.
While the various agreements such as the umbrella benefits sharing agreement and LBBSA were being pursued, the department ought to have set its machinery in motion to ensure landowners interested in participating in spin-off businesses had their businesses registered.
It needed further to have ascertained with the developer, ExxonMobil, what class of businesses the local people could participate in and just how many opportunities were available.
In the absence of such an assurance, the department, and indeed the government, is today going to be inundated with never-ending requests from landowners interested in participating in spin-off businesses.
Spin-off businesses are not going to be limitless. The major contracts for the construction phase of PNG LNG have been let already and all of it has been taken by big companies from overseas with a wealth of experience and skills.
These firms will be looking for partners with ample skills and experience in-country. These types of sub-contracts in construction, roadworks and clearing, pipe-laying and such are also already taken or accounted for.
So what other spin-off benefits are we looking for here?
In the absence of a dedicated list, we are at a loss to know what exactly local businesses can be engaged in, and how many of such opportunities still exist.
We must realise that construction has kicked off and this project is not waiting for anybody to catch up. There are time constraints for this project and deadlines to meet. Time wasted in this multi-billion-dollar project means money burnt, so it is full steam ahead for the project.
Spin-off businesses will just have to catch up or they miss the boat. It is likely many will miss the boat and that is going to be a point of contention that the government is going to have to deal with.
Laki’s comments are just the beginning. Wait until the rest find out they have missed out on opportunities – perhaps, because they were put in the picture way too late.
The government has asked landowners to register their companies to receive the seed capital. We do not know when that request went out.
Landowners who have registered their companies are now clamouring for the seed capital. But, it is not seed capital alone. Once the companies have got their money, they must have opportunities to participate in LNG-related business spin-offs.
As referred to earlier, just where and what they can participate in is uncertain.
To our knowledge, the process is a little different.
PNG LNG has been advertising for a long time now, inviting registered companies and other service providers to register on-line with the project. The companies and individuals were to supply full details and address.
The way we read it, the project would then select on a needs basis which goods or service provider was most suited to its needs and would call them up.
The seed capital business is going to give companies hope that once they secure the money, they are guaranteed a job.
We stand to be corrected, but we do not think that is the way it is going to work. A lot of people are going to end up very disappointed and, therein, lies a potential threat to the project.
It is best that the government spells out clearly what opportunities exist and in what area.
Laki is absolutely right when he says the government has failed in the first place in educating landowners on businesses.