Minister for International Trade and Investment, Hon. Richard Maru met with the leaders, ward members and landowners of the proposed Labu Special Economic Zone (SEZ) in Morobe Province yesterday, led by the CEO, Mr. Tobias Kulang. They met with Minister Maru to tell him their dream to start an industrial park in their 9, 000 hectares of land and also to tell him that they were holding discussions to sort out land issues and have the project started. Two big investors, PNG Ports Corporation and Kumul Petroleum Holding Limited are already the lead investors in this proposed SEZ if they can secure State titles for the proposed SEZ wharf and industrial park area. Land ownership issue is the only hold up to this exciting SEZ development.
“Investors invest on a long-term basis and need security of land tenure before they can invest in the industrial park. You must sort out landowner issues and obtain a clear legal title of the land before any serious work to progress the wharf and industrial park can go ahead,” said Minister Maru.
“I am happy that you have discussions going on to sort out land issues and I am also glad to hear that the landowners would convert their land value to an equity which is very good. Both domestic and international investors will want to come and invest if you are able to make the industrial park in the proposed SEZ very attractive with offers like much cheaper and very reliable supply of electricity, unlike the current pathetic situation in Lae where there is constant power blackouts and industry has to resort to running their businesses on standby generators and electricity is expensive compared to the rest of the region. There must also be a good high quality sealed road to the proposed industrial park and the wharf,” Minister Maru said.
CEO and Chairman of Japan Development Institute (JDI), Dr. Shoichi Kobyashi in his comments at the meeting said that SEZs like the proposed Labu SEZ have worked in other countries provided that the land was given for next to nothing to attract investors to locate in the Industrial Park and there was cheap and reliable electricity, cheap and reliable water supply, good roads and other required enablers for such development.
“Also, such large industrial parks will only succeed if there are large anchor tenants locked in first before work starts in the construction of the international wharf and the industrial park. Other investors will move into the park when there are anchor tenants,” Dr. Kobayashi added.
Minister Maru requested Dr. Kobayashi to recommend some similar industrial parks around the world that has a wharf and an industrial park similar to the Labu proposal so the leaders and management of the proposed Labu SEZ and the Morobe Provincial Government can visit those SEZs to learn from their successes and failures before they finalize their business concept and commit financial resources.
“I want them to have look at similar parks before they can finalize their own business concept because. We all have a duty to make sure the Labu SEZ succeeds for the benefit of everyone including the country,” said Minister Maru.
Minister Maru also said that any detailed feasibility studies must include the Nadzab International Airport facilities to take Tuna from Lae and Madang directly to Japan on daily flights if we can aggregate enough volumes of tuna for the very lucrative Japanese market. Thailand and Biyak in Indonesia do daily flights to Japan today with fresh tuna.
Minister Maru encouraged the Morobe Provincial Government to become an equity partner in this project because the province will benefit from over 50, 000 new jobs that will be created if the project goes ahead and the province will also earn millions in new GST income on a long-term perpetual basis.
