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Old 10-04-18, 10:00
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SYDNEY, Oct. 20 (Xinhua) -- Australia's Oil Search has been brought in to build the 2018 APEC leaders summit venue in exchange for tax credits as Papua New Guinea (PNG) continues to face significant fiscal shortfalls while it battles an economic crisis.


Though final engineering, design and costing are to be finalized, the ground turning of the multi-story APEC House commenced on Thursday on an island being reclaimed just off the capital Port Moresby's foreshore.


"The design of the building is based on the shape of a lakatoi sail and will showcase the sailing tradition of our people," PNG Prime Minister Peter O'Neill said in a statement.


The nation however is in the depths of its second worse recession in history with growth being officially revised down to 2.2 percent in August from the 4.3 percent projected in the 2016 budget. Just two years ago when it was named to host the APEC summit in 2018, PNG was growing at 13.3 percent, the fastest in the world.


O'Neill has vowed his country will deliver a "truly Pacific APEC," but also "the most cost effective in the history of the forum."


As such PNG has partnered with Australian oil and gas producer Oil Search - who has significant stakes in PNG's oil and gas sector - to shoulder the burden in exchange for lucrative tax credits.


O'Neill said the petroleum producer built the Sir John Guise Stadium - used in the 2015 Pacific Games - and financed other projects under similar circumstances.


"The people of the nation have not had to put the cost of the building up front, and Oil Search has once again demonstrated its strong commitment to building out nation."


It's a double-edged sword for PNG however as by not shouldering the upfront building costs, they have dramatically narrowed their tax base over the short to medium .
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