By GEORGINA MICHAEL
KUMUL Consolidated Holdings (KCH) held the groundbreaking ceremony for the Kumul Haus Development Project valued at K148 million yesterday at the former PNG Ports International Container Terminal Wharf, now Portside Garden, in downtown Port Moresby.
The event marks a significant milestone for KCH and its State enterprises. The project aims to reduce spending on office accommodation and create ownership and equity to strengthen the balance sheet.
Kumul Haus will operate under a Design, Build, Operate, Lease and Transfer (DBOLT)arrangement. The model leverages private sector investment and minimizes pressure on the National Budget.
Delivering the keynote address, Minister for State owned Enterprise William Duma commended all who enabled the project to reach the groundbreaking ceremony and beyond.
“The ground we breaking ceremony today is the foundation of a new chapter in how Papua New Guinea’s state enterprise sector manages, develops, owns and diverts its assets,” he said.
Duma said the project uses a DBOLT model, which he described as a “rent-to-own” model of “financial sense and strategic innovation.” Under the arrangement, development partner Drew Diet Joint Venture Phoenix Limited Company was selected through a rigorous open market tender approved by National Executive Council(NEC). The partner will design, finance, construct, and operate the building, then transfer it to KCH after 15 years.
“For those who do not know, KCH’s annual rental outgoing is K15 million per year. We hope to recover that and reduce it through this arrangement. Over the lease period, we’ll be able to recover the investment,” Duma said.
He said an independent cost-benefit analysis by FTI Consulting of Australia confirmed the financial benefit. At the end of the lease, full ownership of the building and land transfers back to KCH at no additional cost.
Minister Duma said Kumul Haus will house multiple SOEs to enable better coordination and engagement. The Ministry and Vice Ministry of State Enterprises, Kumul Consolidated Holdings, PNG Ports Corporation Limited, PNG DataCo, and other majority State-Owned Enterprises will relocate there.
“This ends decades of rental dependency and creates a true One-Stop-Shop for Papua New Guinea’s State-owned enterprise family,” he said.
Duma added that a number of companies have shown interest in the development. “We are very excited about this development. We want to encourage development as soon as possible and encourage other investors to come in and transform this waterfront precinct,” he said.
KCH Executive Manager for Infrastructure and Properties Freda Tabari also added that the Kumul Haus is one of the first development lots on 17 titles allocated by the Department of Lands. “We are grateful for this to have come,” she said.
“It will take about two and a half years to design and construct. We anticipate completion by the end of 2028 and for SOEs to relocate from the Harbour side to Kumul Haus in 2029.”