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Papua New Guinea’s transportation sector looks to be turning a corner as a number of substantial infrastructure upgrades are now in full swing. Under the PNG Strategic Development Plan 2010-30 the government aims to expand the national road network from 8460 km in 2014 to 25,000 km by 2030 and raise the proportion of roads in good condition from 28.7% to 100%. The government is encouraging private sector investment through the infrastructure tax credit scheme, which is available to taxpayers that build infrastructure to support their mining, petroleum, natural gas, primary production or tourism activities. Improvements at ports, combined with the eventual relocation of government-owned facilities in the capital, should further ease congestion for domestic and international shipping lines, although monopolistic domestic shipping practices could offset some of the efficiencies gained. In the skies, much-needed improvements to the country’s airports and airlines should also improve efficiency, comfort and safety. This chapter contains interviews with Tim Blackburn, Managing Director, Swire Shipping; and Zoë Harrison, Country Manager PNG, DHL.

While communications will always be difficult in a country where much of the population is geographically isolated and the terrain is so challenging, the relevant infrastructure in PNG is quickly developing towards international standards – and at prices that are near to international norms. For example, prior to competition entering the market, mobile phone SIM cards were sold for $54; however, after a second mobile operator was introduced, prices dropped to around $10. As internet speeds increase, capacity improves and costs come down, ICT is set to become a more integral part of many Papua New Guinean businesses, as they seek to improve their competitiveness. If all goes according to plan, international connectivity is set to receive a major boost, local connectivity will become faster and cheaper, and costs will fall further. It is also likely that consumers will have more choice as new players enter the market. This chapter contains an interview with Jimmy Miringtoro, Minister for Communication & Information Technology.

In spite of the logistical challenges posed by Papua New Guinea’s geography, strong global demand for raw materials against the backdrop of the commodity super-cycle continues to fuel investment in the country’s mining sector. Mining and petroleum taxes are expected to increase their contribution to the national budget, rising from $331.6m in 2013 to a projected $406.5m for 2014. Joint-venture agreements have seen new mining activity being added to the country’s portfolio, which could help enhance gold, silver and ore output in the medium term. Notwithstanding the challenges facing the sector, which stem from the global economic situation as well as local regulatory uncertainties, the mining sector is projected to remain a major contributor to the economy for many decades to come, with Australia-based ANZ Bank forecasting gold and copper exports of $3.3bn and $3bn up until 2030. This chapter contains an interview with Byron Chan, Minister for Mining, and a viewpoint from Nigel Parker, Managing Director & CEO, Ok Tedi Mining.

The near future will bring positive change for the energy sector and the economy as a whole, as the investment and construction phase of the $19bn Papua New Guinea liquefied natural gas (LNG) project winds down and the first shipments of gas begin to flow. Progress is also being made in the utilities sector, with major power generation projects and the expansion of water and sewage networks. The billions of dollars invested in the PNG LNG project have trickled down across nearly all sectors of the economy, from services to real estate, as the country waited for export revenue streams to come on-line. The government will now start to see a more direct impact on its bottom line as LNG exports begin to move. How much progress takes place across the sector – and how rapidly it occurs – may rely in large part on government cooperation with the private sector and on ongoing changes to the regulatory framework. This chapter contains interviews with Peter Graham, Managing Director, ExxonMobil PNG; Michael Hession, CEO, InterOil; Peter Botten CEO, Oil Search; and Raka Taviri, Water PNG.

The market has seen several new entrants in recent years, with the total number of licensed insurance underwriters reaching 14 in 2014. While limited in size and reach, the insurance market in PNG recorded double digit growth in five years to 2013. Driven by the non-life corporate segment, growth has attracted a number of new players. However, the market remains shy of its potential, with low penetration for retail products, while large mining and hydrocarbon projects typically have their risks insured offshore. Establishing and enforcing consistent rules will be key to supporting medium-term growth. Expanding penetration for individuals and businesses will be critical as well, in line with the state’s financial inclusion strategy. This chapter contains interviews with Wayne Dorgan, Managing Director, Pacific MMI Insurance.

Although still fledgling, Papua New Guinea’s capital markets have strong prospects for growth as the economy looks forward to significant foreign currency inflows linked to the liquefied natural gas project and the development of new resource projects. With 13 dual-listed stocks on the exchange, share prices on the Port Moresby Stock Exchange are highly dependent on movements in foreign bourses, with a one to two day delay. PNG’s stock exchange is relatively shallow, with only 20 listed equities in total and one convertible note. The bourse has shown little growth since 2009, but, with prospects of a second major liquefied natural gas project and future mining deals, global investor appetite for frontier markets could broaden to PNG in coming years. Meanwhile, the strong growth in outstanding government bonds through primary auctions should generate enough momentum in PNG to launch a regulated secondary market in the near term. This chapter contains interviews with Richard Borysiewicz, General Manager, BSB Capital; and Ian Tarutia, CEO, National Superannuation Fund.