The National, Monday, May 2, 2011
THE Mineral Resource Development Company (MRDC) has received the backing of its subsidiaries Petroleum Resources Moran (PRM) and Petroleum Resources Gobe (PRG) in the decision to invest in the Port Moresby Hotel and Casino project.
The Post-Courier ran a series of stories last week suggesting the project was in crisis, and criticised MRDC for investing in the project on behalf of the two subsidiaries.
The decision to acquire 5% equity interest in the project was made in early 2008.
Both PRM and PRG paid K11 million each for equity in the project with each having 5%.
There are other partners in the project.
A South Korean company, CMSS International, was the developer of the project. It had been suggested the company had not paid up its equity in full, resulting in the delay in the completion of the project.
Chairman of PRM Pape Punga said yesterday the landowner company’s investment in the project was safe.
“We were happy with the business prospect of this project and its return potential, and made the decision to invest. The fact an equity partner has caused the project to be stalled is a concern we are evaluating at present.
“My advice is that our investment is safe and this project will be concluded in due course, with or without this equity partner,” Punga said.
Chairman of PRG Philip Kende said they were confident of resolving the equity issue and proceeding with the project.
“This project has sound returns and I want to assure our stakeholders that suggestions our investment has been lost is not true. We are confident of moving this project forward soon,” Kende said.
Last week, MRDC managing director Augustine Mano issued a statement backing the project, saying the state backing and investment and tax incentives offered by the government for the project was one of the attractions for MRDC to invest in it.
This included 100% depreciation claim on plant and equipment, double deduction for export market development in relation to tourism under Income Tax Act, double deduction for staff training, 10-year corporate tax holiday and first casino operating licence.
“Any investor will be attracted with these kinds of incentives,” Mano said.
He said MRDC was concerned with the delay in construction of the hotel caused by CMSS International, and was planning its options to protect its investment and bring the project forward.
“MRDC remains committed to resolving this issue for the benefit of our stakeholders, even though this investment was done before my time as the managing director,” Mano said.