SPECIAL ECONOMIC ZONES
New economic zones The development of special economic zones promises to boost the economy and help to create thousands of jobs. By Kevin McQuillan t the end of 2019, PNG’s Parliament passed the Special Economic Zone Authority Act, which provides a new policy and regulatory framework for the setup and operation of Special Economic Zones (SEZ) across PNG. It also lays out the benefits and concessions for investors, operators, suppliers and developers within each zone. In early 2020, Prime Minister James Marape said a 10-year tax holiday would be available for investments of US$20 million or more. Zones are planned for Gulf Province, West Sepik, Manus Island, Madang, Bougainville, Lae and Paga Hill in Port Moresby. One of the first projects to benefit is likely to be the Ihu Special Economic Zone (ISEZ) in Gulf Province, the 15-year plan that received National Executive Council endorsement in 2018. This transformative project will be developed in part to take advantage of increased business activity in the province expected to flow from the country’s second LNG project, Total’s Papua LNG project. Centred in the underdeveloped Kikori district of Gulf Province, the ISEZ project comprises a free-trade zone, petroleum park, an industrial zone, a technology park, forestry park, marine park, deep seaport and airport, a waste management facility,
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Peter KenGemar, Project Director of the Ihu Special Economic Zone. Credit: BAI
a township with hotels and resorts, and government and administration area, explains Peter KenGemar, its Project Director. ISEZ has set up an office in Hong Kong to facilitate marketing and promotion, and to cater for discussions and negotiations for foreign direct investment through private equity capital markets. ‘It will mean we can go ahead with developing infrastructure for the project, including a road network link to Kerema, wharves and
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jetties, township development, an airstrip, and a clean water and power supply,’ says KenGemar. The cost of stage one is expected to be K5 billion spread over five years. ‘We estimate that revenue will be about K10 to K12 billion annually when stage one is up and running. We estimate the ISEZ will create up to 25,000 jobs when it is fully operational and another 25,000 jobs indirectly.’ Kikori District currently hosts the Kutubu Oil export
