Proposed development of 6 Mile Market Section 32 Lot 23 boroko
PURPOSE
This submission is to seek the Board's final approval for the proposed development of 6 Mile Market (Sec 32, Lot 23, Boroko) by City Pharmacy Limited (CPL).

FACTS & CONSIDERATIONS

  • The Board in its last two meetings approved the proposal from City Pharmacy Limited to develop the 6 Mile Market site into a formal market and supermarket with facilities for parking, ATM, Cafeteria etc.
  • CPL has drawn a site plan together with their preferred option for the way forward.
  • NCDC's preferred option as per the last meeting's resolution is to "lease the land for long term basis for monthly rent to be negotiated".
  • The management Infrastructure Development Committee (IDC) in its meeting dated 9 August 2011 deliberated the following options and endorsed the proposed BOT option as more attractive for NCDC with the nominal monthly rent just to claim ownership of the land and of a reminder to the next generation.

Options Deliberated

  • Outright sale
  • Long term lease on monthly rental basis – Board's preferred option
  • Joint venture
  • Build Operate & Transfer (BOT)

The consensus to the proposed option is based on the following facts:

  • Value of our land as per the valuation by a Valuer (appointed by CPL) Paul A Ikupu (Reg No PNG 34; AAPI [Aus] NSW No 14367) as on 16 August 2011 was K2,765,000. The Commission has also requested for fresh valuations under the proposed scenario being value of the land after the proposed rezoning.
  • The lease of the land has expired (a 39 years special purpose lease granted in 1967) and needs to be renewed.
  • The values of the market (K2.96 million) itself is more than the value of land (K2.76 million).
  • The BOT is for only the supermarket and other area where the development cost is estimated at K14.95 million excluding the land value.
  • NCDC has no immediate plans to develop the 6 Mile Market. With the reconstruction of the HM Highway, NCDC would like to see an integrated development of 6 Mile area and wants to push the criminal elements beyond the 6 Mile.
  • The proposed development is consistent with the policy of crating commercial hubs in each suburb to ease traffics in the existing commercial areas.
  • CPL will build all proposed structures and use the Supermarket for 20 years and transfer all the infrastructures back to NCDC.
  • NCDC can negotiate with CPL after the BOT tenure expires for lease based on market conditions prevailing by then.
  • CPL argued that their current rental arrangement with Steamships is less than the interest component of the total proposed development cost.

Proposed development features include:

  1. Public Market, Meri Safe Haus, Market Admin office and a public toilet.
  2. Car parking for market and super market customers.
  3. Access to the vegetable market from the car park.
  4. PMV Truck parking for Central's customers and those who want to terminate the journey at 6 Mile.
  5. Covered bus stop and taxi bays.
  6. Super market.
  7. CPL's traditional type super market – grocery, eatery, pharmacy and mini marts.
  8. Kids play and outdoor dining.
IMPLICATIONS
This is a win-win situation for both parties. NCDC has plans but does not have the resources to implement the plans. CPL has agreed to the BOT arrangement as they saw a vacuum in the 6 Mile area and the need for a supermarket to serve the people living along 6 Mile and Magi Highway but they don't have any land/building available to expand their businesses
The total cost of development excluding Land value is K17.91 million.
Cost of the Market alone is K2.9 million.

RECOMMENDATION

  1. The City Pharmacy to proceed with the proposed development of 6 Mile Market Land.
  2. Proposed BOT arrangement for 20 years and CPL to pay any nominal rent for the duration of the BOT to NCDC to instil ownership of the land. The title of the land shall remain under NCDC name and are not subject of any mortgage.
  3. NCDC to renew the lease of the 6 Mile market title with the Dept of Lands.
  4. To endorse to NCDPPB to rezone the land to cater for this development.
  5. Authorise the Governor to execute necessary agreements with CPL.
  6. Dated on this 16th day of August 2011.