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Air Niugini selling property portfolio, outsourcing ancillary services

AIR Niugini is undergoing a restructure exercise which includes the sale of its property portfolio and the outsourcing of its ancillary business operations, it has been revealed.
Kumul Consolidated Holdings Limited (KCHL) managing director Isikeli Taureka said it was part of a restructure plan for state-owned entities.
He told The National that the KCHL was working with the national airline on the restructure plan which included the sale of Air Niugini’s property portfolio.
“We are working on their restructuring plan,” Taureka said.
Ancillary business operations to be outsourced through the public-private partnership include catering, ground support, information technology, call centre and sales.
Taureka said it was part of the Government’s divestment programme.
“The programme was put in place to outsource non-core operations and reduce the cost base,” he said.
The airline in August laid off some workers because of the impact of the Covid-19 on its operations.
Air Niugini chief executive Bruce Alabaster said some of the company drivers were offered alternative employment with another company to provide bus services to airline staff.
The airline had paid them their redundancy entitlements.
Alabaster said Air Niugini acknowledged that the situation was unfortunate but its focus would always be on delivering safe and cost-effective air travel.
Meanwhile on PNG Power Limited, Taureka said power purchase agreements by independent power producers (IPP) must be in line with the overall plan of PNG Power.
“We need to upgrade the infrastructure but the most important thing is that we must have an IPP power purchase agreement that takes into consideration growth and demand,” he said.
“We just cannot put on unsolicited power projects. They have to fit in the overall plan of PNG Power.”
He said the KCHL would review the process in which IPPs were being engaged.
“IPPs forced into the equation will be reviewed. They put so much pressure on PNG Power,” he said.
“The important thing is that these IPPs are all fuel switch so getting away from fuel oil to gas.”
Taureka said gas was only transitional.
He sees the future in hydro renewables which is where the Government needs to invest in.