STEAMSHIPS-LED CONSORTIUM LEADS BIDS FOR 16 PAPUA NEW GUINEA PORTS

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By John Apami

PORT MORESBY, Papua New Guinea (July 30, 2002 - The National/PINA Nius Online)---A consortium led by Steamships Trading Company Ltd. has been selected as the preferred buyer of the 16 ports run by the former Papua New Guinea Harbors Board.

Steamships, Papua New Guinea's largest trading company, has been spearheading the bid to take over the country's ports under the privatization process.

The consortium, PNG Ports Ltd., includes Consort Express Lines and the Papua New Guinea Maritime Workers' Union. It has agreed to make an up front payment of K 20 million (US$ 5,106,000) plus working capital of K 4.2 million (US$ 1,072,260) for PNG Harbors Ltd.

The offer was by far the best from three separate bids.

It included a promise by Steamships that it would spend K 70 million (US$ 17,871,000) on capital improvements over the next eight years, providing major improvements to port operations that appeared to be deteriorating.

The terms of the offer were disclosed in a confidential submission prepared for the National Executive Council by Prime Minister and Acting Minister for Privatization, Sir Mekere Morauta.

A submission is now before the National Executive Council for formal approval to lease 16 PNG Harbors Board port facilities and the sale of certain assets to PNG Ports Ltd.

The submission follows a detailed study undertaken by chartered accountants KPMG.

The consortium involves Steamships Trading Company with 60 percent, Consort Express Lines Ltd. with 30 percent and the PNG Maritime Workers' Union superfund with 10 percent.

Steamships also holds one-third shareholding in Consort Express Lines.

According to information received, the consortium will make a K 20 million (US$ 5,106,000) upfront payment and lease the facilities for 25 years.

The offer is for a 25-year lease of the 16 ports and related commercial infrastructure, as well as purchase of plant and equipment and working capital.

Other bidders were:

New Britain Palm Oil Ltd. bid for Kimbe port as a stand-alone entity and Pagini group bid for Oro Bay as a stand-alone entity.

According to the submission, PNG Port Services Ltd., as the operator of the 16 ports, would favor its own downstream operations, such as stevedoring, over other competitive providers.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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