The Minister for Finance & Implementation, Hon. Rainbo Paita MP, said in response to the recent headlines on the issue of Government being locked out of its offices, that the Marape-Rosso Government is taking a proactive approach to office accommodation and introducing a long-term strategy to provide greater value across the country for Government office accommodation.
Minister Paita said, “For far too long our government has not received the best value from the private sector for office accommodation. Lease costs are high with little investment to maintain building standards and even today the landlords are trying to lock out those officers out, whose roles are to manage these arrears and get payments sorted.”
The Minister further explained that “the answer is to enter a coordinated Public Private Partnership (PPPs) where the benefits of the construction, financing, and management lead to an asset for our State and its citizens. Instead of paying lease costs with no ultimate benefit to the State, we will work with private sector partners under a PPP/ BOLT model whereby the private partner will build and operate the building for the State through a lease and when that lease expires, the ownership of the building will be transferred to the State.”
The Marape-Rosso Government has prioritised debt reduction and fiscal repair as a foundation economic management policy and has made a commitment to settle its debts including Government’s utilities, office accommodation rentals and the claims with the Arrears Vetting Committee.
The Minister said he was looking forward to the substantial benefits that will be realised by the implementation of PPPs for this country to enable private sector participation in the implementation of public policies aimed at the development of the country and the collective wellbeing of our citizens.
“Using BOLTs as an accommodation policy not only offers Government greater value, but it also provides us with a long-term lift in our economic growth and sees the buildings back in the hands of the people. The benefits of these projects stay with us and don’t lead to our longer term invested wealth being transferred away from the people.”
The first two office accommodation developments under this program were approved by National Executive Council in 2021 for the Waigani Precinct and the commercial agreements were concluded earlier in 2022 after legal clearance. As part of the rationalisation of existing lease arrangements, the identified agencies are expected to relocate to the new buildings before the end of 2022 and after 15 years under the lease agreement, ownership of the two buildings will be transferred to the State.
“Today I announce that our Government will now move towards finalising a 10-year strategy to build a Government Office Precinct using BOLT public private partnerships. This precinct will accommodate all Government agencies along a single connected network and is transformative as we ensure that Government is accessible and available to the people and that services will be more efficient by being in one single area,” the Minister stated. “I invite the private sector including the superannuation funds to take advantage of this opportunity to strategically partner with Government to build the Government Office Precinct.”
Minister Paita further highlighted that PPPs offer a structured approach to partnering with the private sector to realise value and share risk appropriately in a sustainable manner, so it is applicable to infrastructure but also other soft sectors of the economy such as economic management, health, education, public service efficiency and information communications technology.
“PNG must have a specific PPP framework suited to its economic and political environment and developed in a way that flexibly supports the delivery of public infrastructure. As the Minister responsible for PPPs, I will initiate an update to our frameworks so that the PPP Centre with support from an advisory team with international experience can drive greater value and proper risk allocation for the State,” the Minister concluded.
Hon. Rainbo Paita, MP
Minister for Finance & Implementation