RESTART OF PORT MORESBY AREA PAGA HILL PROJECT

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Particulars about the project: Project: Paga Hill Estate Development. Planned Projects: Hotel, office, residential, marina. Developer: Paga Hill Land Holding Co., Ltd. and Jones Lang LeSalle. Cost: US$ 300 million, about K 800 million. Year of launch: April 1998 Benefits: Employment, income, tourism, real estate Estimated completion date: 2010.

By Joe Kanekane

PORT MORESBY, Papua New Guinea (December 21, 1999)---The multi-million kina Paga Hill Estate Development project adjoining metropolitan Port Moresby has been given the nod to recommence preliminary work at the site following the signing of a document between the developer, the Paga Hill Land Holding Company, Ltd. and the National Capital District Commission (NCDC) Physical Planning Board.

This is despite the US$ 300 million (K 800 million) project being shelved by former Prime Minister Bill Skate following considerations then that there were health risks associated with it as well as other issues involving line government departments such as Environment and Conservation and Lands.

Mr. Skate's decision was a paradox as he had supported the idea of such an investment and the subsequent benefits it was to bring when the project was in operation.

The project was conceived in 1996 when Mr. Skate, who was then governor of NCD, addressed business leaders in Cairns, Australia, inviting them to invest in PNG. Following his invitation Jones Lang LeSalle assembled a team of experts and developed a concept for the project.

The site, which is one of the most sought after, has been the subject of constant demand by developers and investors alike.

This pact ends all delays and long-standing disputes between the developer and many government agencies including the NCDC, which has seen the project become three years behind schedule.

The two parties signed a Section 81 agreement, which clearly defines the responsibilities of each party.

The master plan approved in the section 81 agreement allows for major public amenity areas, a five-star hotel, office towers, residential accommodation and a marina. The master plan also includes a cultural center on the peak of Paga Hill.

According to the plans, the value of the total development will be in excess of US$ 300 (K 800 million). It is the larges single private property development ever to be undertaken in PNG.

According to the site planner of the project, Jason Natoli, the development will be built over a period of 7-10 years, with the first step being a detailed design of the various components of the estate.

"We are very excited. We have worked so hard over the last three years to develop a plan that would work for both the developers and the people of Port Moresby and finally we have found the successful ingredients for this major development," said Mr. Natoli.

He added that the next major step for the development will be detailed drawings, followed by building approvals, so that construction can begin.

According to Mr. Natoli, once the buildings are in place, the site will attract significant international investment and will create jobs for thousands of local people.

Fellow director of the Paga Hill Land Holding Company, Gudmundur Fridriksson, said the company knew that the project would have to adapt world standards, but appropriate to Port Moresby.

"We want to make sure that Papua New Guinea receives a development that the people of the country can use and enjoy but that is of a quality that will attract international funds to this wonderful country. The master plan certainly achieves that aim," said Mr. Fridriksson.

He said his company was working alongside Jones Lang LeSalle, the largest property advisor in the world, since its inception and has confirmed their avid commitment to the project and will use their extensive connections to launch the project into the next stage.

Concerns over how the status of the land was changed from public reserve to urban development/commercial lease were raised, with claims that Lands Department officials had breached the Lands Act in the process.

It was reported that strict conditions have been placed on the title. Among these is for the land to be developed within five to seven years. A failure would result in the loss of the title. Another condition is for 10 percent of the land to be developed as a public reserve and handed back to the NCDC to run.

This area would contain a cultural center, war relics, public parks and a cable car service.

Under the provincial and local-level government reforms, public reserves are to become the responsibility of the provincial governments, in this case the NCDC.

The PNG Lands Board in August 1997 awarded the 13-hectare land, known as portion 1597, Milinch Granville Fourmill Moresby, NCD, to Paga Hill Land Holding Company, Pty., Ltd., after the Lands department degazetted it as a public reserve to a commercial/urban development lease.

Paga Hill Land Holding Company won the title ahead of three other preselected tenderers – the National Housing Corporation, which has a number of units on the land, Noko No.96 and Gobe Hongu, Pty., Ltd.

The de-gazettal and relocation of the land was gazetted on December 18, 1997 in gazette number G113.

Since the board decision, questions have been raised as to the manner in which the status of the land was hastily degazetted and again gazetted. Government ministers and departmental heads were alleged to have abused their powers to see the project through.

The Independent

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