OBG talks to Stuart Bowman, Country Manager & Director, Leighton PNG

Interview: Stuart Bowman

How can the local construction industry benefit from increasing competition in order to bring its standards to international levels?

STUART BOWMAN: With competition increasing, the biggest issue confronting the construction industry in Papua New Guinea is how to cultivate productivity. The key to doing so is education. By introducing a contractor grading process similar to the Singapore Building and Construction Authority (BCA), contractors could be equipped with the knowledge to plan and enact initiatives that continually improve productivity. This would also encourage them to adopt the latest technology and methods. Like the BCA’s Certificate Course in Construction Productivity Management, a course for the industry in PNG should cover topics like definition and measurement of productivity; improving construction productivity during planning, design and building; site layout, deployment planning and site coordination; quality control; and good management practices. In Singapore, a contractor is required to have at least one of its directors attend such a course.

In what ways has the PNG liquefied natural gas (LNG) project changed the industry’s standards?

BOWMAN: To give credit where it is due, ExxonMobil has raised the bar in terms of project governance, quality of service, safety, environmental protection and community relations by imposing international standards on its contractors and, in turn, the subcontractors and suppliers working on the PNG LNG project. The experience those local subcontractors gained is invaluable, and the standards achieved are transferrable to other projects and can be used to win work, especially on the forthcoming LNG projects, which will also be to international standards. The LNG project’s emphasis on safety achieved remarkable results: many of the contractors completed their contract with zero “lost-time” injuries. As a result, a culture of safety is gradually developing where it is now accepted as the right of every employee to return home safely from the workplace.

What sectors might sustain the industry in the near term, given the currently low activity in mining?

BOWMAN: Over the next year or so the building sector will sustain the industry, especially in Port Moresby. The overheated state of the construction market due to the demands of the 2015 Pacific Games and other ongoing projects, such as the American embassy, ExxonMobil’s permanent facilities compound, Steamships headquarters, will generally continue into 2015. These, plus the developments proposed for the 2018 APEC Conference to be held in Port Moresby, will continue to see elevated activity associated with building construction through 2018.

Are the new waves of resource projects under way, such as the InterOil-Total joint venture, likely to sustain the industry over the medium to long term?

BOWMAN: I am optimistic about the industry’s next 10-15 years. I see a sustained level of construction activity in PNG generated by channelling revenues from LNG exports into infrastructure. Further brightening the prospects are the expected upturn in demand for minerals, and the advent of two proposed LNG projects.

Besides adding to sector capacity, what role can international companies play in boosting the capabilities of local companies and workers?

BOWMAN: Adding capacity is not the key contributor to boosting the nation’s capabilities; it is the up-skilling of PNG nationals and companies. The biggest impact on capacity-building comes from the style of the contracting model adopted, especially in the public sector. Collaborative contracting arrangements, such as alliancing and early contractor involvement, provide the ideal platform for international contractors to accelerate the transfer of technology to their local partners. The inclusive nature of this sort of contracting allows appropriate budgets for training, mentoring and coaching to be incorporated into the project’s delivery, thus helping to develop the abilities of local firms and workers.