Good omens for new Somare Government

AFTER a highly successful five-year term that saw unprecedented job growth and large investments in infrastructure, the omens remain good for Prime Minister Sir Michael Somare and his ruling National Alliance party. By Brian Gomez

A 10-member interim Cabinet has been announced, five of whom are NA members. The remainder are leaders of NA coalition partners.

There has been public concern about who would take on the role of Treasurer in the coming government but sources indicate the individual will come from the NA ranks.

Following the defeat of the well-regarded Mines Minister Sam Akoitai, it is understood Sir Michael is keen to ensure the successor is a capable and respected individual because of the sector's growth potential.

In the next five or six years there will be more foreign investments flowing into the mining sector than was the case over the previous three decades, with the $US820 million Ramu nickel project likely to come on stream in late 2009.

The Nautilus gold and base metals deep-ocean mining operation will start by the end of 2009, and the $US1 billion Yandera copper-molybdenum project should follow about two years later.

Ramu Nickel will represent the first time that a mineral will be processed to LME-grade metal prior to export, adding considerable value to the country's export and generating employment. It will also be the first time the country exports nickel and cobalt.

Power for Ramu Nickel and Yandera will be provided by newly built hydro capacity.

Confirmation from InterOil that its Elk gas discovery in Gulf Province is adequate for the first train of its proposed LNG facility could result in its Liquid Niugini Gas operation getting the government green light by year-end, making it another first for PNG.

Sir Michael, who has said he is likely to step down as Prime Minister in the next one to three years, is keen to ensure his next term in office will provide a massive boost to national development after almost three decades of lacklustre performance.

Government sources told another supplementary budget is likely to be brought down, as early as next month, which will provide for additional expenditures of 1.3 billion kina ($US451.8 million).

This represents the surplus from the 2007 budget that has resulted from conservative projections on copper, gold and oil export revenues.

Rural and urban infrastructures, neglected for the past two decades because of lack of funds, have received a cash injection from three previous supplementary budgets amounting to 2.4 billion kina.

However, much remains to be done, particularly in improving rural road networks so more subsistence farmers can benefit from sale of cash crops locally and on export markets.

With the coalition partners also having control of most of the 19 provinces, there is scope for coordination between the National Government and most Provincial Governments, providing a platform for broad-based national development.

Provinces that will advance most in the next few years will include the oil and gas-rich Southern Highlands and Morobe and Madang Provinces, where there will be a big boost in mining activities.

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