High Costs Plague New Morobe Shipping Service

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by Scott Waide – EM TV, Lae

When the Morobe Coastal Shipping Services was established last year, after the liquidation of the Lutheran Church owned Lutheran Shipping, the decision was viewed as a necessary step to maintain a vital shipping service.

But less than one year since the company’s establishment, the management has revealed that maintenance costs on two vessels, bought for K2 million, were expected to cost slightly more than the purchase price when the refurbishments are done.

The Maneba and Gejamsao formerly owned by the now liquidated Lutheran Shipping, were bought using funding from five districts in Morobe.

While the decision may have people wondering about future profitability, the move has been defended by Kabwum MP, Bob Dadae, who says service – not profits – is not the primary motive of setting up the company.

So far, it has been a journey of twists and turns in the Morobe shipping industry. In May last year, Lutheran Shipping underwent voluntary liquidation. The company was brought to its knees by a combination of high operating costs and poor management.

Today, the chairman of the company was given a cheque of K500,000. This is part of the K1 million per district commitment the five districts made when they set up the company.

The management says they hope to become profitable in future, but for the next two years they will require government subsidies to survive.

The demise of Lutheran Shipping left a void in the passenger shipping sector – not just in Morobe but in the whole Northern region of Papua New Guinea and the New Guinea Islands. Costs of goods and services have risen, and the uncertainty of travel has crept in.

The Kabwum MP says, the company wants to first provide a service and then look at making profits.

 

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