In March 2010, Islands Buiness Magazine reported that a new Chinese investor was to develop the Pacific Marine Industrial Zone (PMIZ), but scant details were available about the company. The details below are taken from that report.
The PNG government has named a relatively unknown Chinese investor to be the major developer of the Pacific Marine Industrial Zone project. The company, Shenyang International Economic and Technical Cooperation Co. Ltd, employs up to 100 people and is expected to develop the US$300 million Pacific Marine Industrial Zone project.
Shenyang’s website (www.csyic.com) is slow to load and there are scant details about its operations.
A promotional website for Chinese businesses says the company, formed in 1984, is ‘mainly engaged in contracting projects abroad and undertaking national foreign aid projects”.
The company’s annual sales are about 50-100 million yuan a year, which is about K30 million (US$11 million).
PNG Minister for Commerce and Industry, Gabriel Kapris named the company when asked by reporters. However, he could not provide any more details about them except to say it was the company named to develop the project.
The PMIZ project will be funded by a K202 million (US$71 million) concessional loan from Exim Bank of China. The main condition for the loan is that 70 percent of the project must go exclusively to a Chinese developer using Chinese technology, labour and equipment.
PNG firms can only bid for the remaining 30 percent of the contract that is if it becomes available. Another condition tied to the loan is that the main contractor’s profit margin will be 20 percent of the contract value.
Minister Kapris said the reason why the government decided to go to the Chinese was because it would be quicker to get the loan. He said if the government was to go to the World Bank, Asian Development Bank, AusAID, European Union or any other development partner, it would take a while.
“With China, it will be quite fast. They have given us a grace period of five years, with a loan repayment time of 15 years,” he said.
While the minister was certain about this developer, little was known about two other Chinese companies earlier named in line with the project. They are Shandong Fisheries Management Bureau (Shandong Haiyang Yuye Guanli Ju), and the Binhai City Xingfa Fisheries Group (Shandong Sheng Binhai Shi Xingfa Yuye Jituan).
Both companies have neither the national nor international experience with Shandong being a provincial government level agency and Binhai City Zingfa Fisheries Group a city or prefecture level company.
Meanwhile, work has already started on the project site in Madang despite opposition from some landowner groups. The 216-hectare site, which was originally a Catholic mission coconut plantation, has been cleared and fencing work progressing.
Minister Kapris says the government has made an initial investment of K28 million into the project and a further K44 million was allocated in the 2010 budget. A government team had returned recently from China and the loan agreement was expected to be signed at the end of March so that funds could be drawn down.
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