Public enterprise business plans and budgets approved

Managing Director of IPBC, Mr Thomas Abe, said today the IPBC board had approved 2012 business plans and budgets for public enterprises.

“The plans submitted to IPBC for approval are now the official internal framework under which each public enterprise will operate,” he said.

“IPBC and the national government will closely monitor compliance with the plans.”

Abe said IPBC and public enterprises would renew their focus on continuous improvement to entrench commercial disciplines in their operations. Reform and rehabilitation will continue, with greater energy and commitment.

The emphasis will be on more-efficient organisational structures, cost-effective and productive practices at all levels, full compliance with due process and making customer service the number one priority.

"It is clear than from past years that public enterprises have lost their way," Abe said. 

"For example not one single enterprise has paid a dividend since 2007.

“That is unacceptable, and indicates the extent of the problems within these critical service providers.

"The practise of paying dividends was devised in 2002 as a way of enforcing commercial discipline within public enterprises, and making a return on some of the State’s investment in them.

"Public enterprises must remember that they are owned by the people of Papua New Guinea, and they are funded by the people of Papua New Guinea through taxes, licences and charges.

"People are entitled to expect a return on their funds to be put to good use – for example in the government’s decision to provide free medical care and to rehabilitate our public hospitals.”

 Abe said the O’Neill-Namah Government had refocussed the efforts of IPBC and the public enterprises it controls, giving more emphasis to service delivery.

This is reflected in the 2012 business plans, which focus on customer service standards, good governance and due process, financial efficiency and conformity to applicable policies and legislation.

The major projects and plans for each public enterprise are also outlined, including investment plans and targeted actions.

Abe congratulated Eda Ranu, which won two international awards during the year, and Air Niugini for achieving full and unconditional approval for their business plans. Conditional approval was given to the following enterprises:

• Telikom, subject to further review and consultation on capital expenditure and organisational restructuring.
• MVIL, subject to further review and consultation on capital expenditure and its investment policy.
• Post PNG, subject to further review and consultation on proposed strategies for financial services, logistics and investments.
• Water PNG, subject to further review and consultation on its organisational structure and its debt to the State.
• PNG Ports, subject to further review and consultation on major capital expenditure items.

The National Development Bank’s business plan and budget was not approved, pending consultation with IPBC.

Abe said: "Our reviews are showing there is a long way to go with reform and rehabilitation.

"But the hard work put in by IPBC and public enterprises over the past six months has shown us a way forward."

Border agency under scrutiny

By JEFFREY ELAPA

INVESTIGATIONS into the Border Development Authority start this week, Minister for Finance and Treasury, Don Polye says, The National reports.
Polye said this in response to questions raised by Milne Bay Governor John Luke during question time in Parliament last Friday.
Luke said the vessel Milne Bay Atolls had been bought from Indonesia at a cost of K5million, an inflated price when the actual price was a K2 million.
He said there were so many fishy deals involved in the purchase of the vessel as many people had benefited through commissions.
He said instead of serving its purpose, the vessel had been leased for five years and was now in Pomio, East New Britain.
He said the purpose of buying the vessel was to serve the people of Milne Bay but it had ended up in another location and not a border province.
He called for an investigation into the use of funds and the abuse of assets by the authority “before every asset disappears in the wrong hands”.
Western Governor Dr Bob Danaya voiced concern that his province was still waiting for two vessels to operate in his province and for surveillance along the border of Indonesia and Australia.
Polye agreed it was a very serious matter as there were many questions about the manner in which the authority had operated.
He said he had learned that the purpose and aim of setting up the authority had not been fulfilled.
He said the government had appointed a new chairman two months ago and an investigation will be conducted, starting this week.
He said the functions and powers vested under the Minister for Finance and Treasury would be transferred to the Department of Provincial Affairs when all investigations had been completed

Court rejects Asian’s request to leave PNG

By ANGELINE KARIUS

XUE Zhufu, one of the suspects charged with the attempted assassination of Chinese businessman Jason Tan, has been denied permission to leave the country, The National reports.
He had asked the National Court to leave the country on Jan 25 and return in time for the trial in March. He will now remain in the country until his trial.
His application for bail variation was denied based on insufficient evidence to satisfy the National Court.
He had paid K20,000 to the court registry and K5,000 as commission for bail and forfeited a 20% share from one of his company.
Zhufu filed the application, saying he wanted to seek medical attention and see his wife and child in China, whom he had not seen for the past two years.
Police alleged that on Jan 2, 2010,  Zhufu and Gao Changjiang – from Fujian province in China – in the company of others, drove along Bougainville Crescent, Paga Hill, in downtown Port Moresby, parking about 15-20m from Tan’s home, near the junction of Hayes Street.
They were believed to have been driving in a grey Nissan Sunny sedan, registration BCS 925, at the time.
Tan had left his JMart supermarket at Erima between 5pm and 6pm escorted by his property manager to his home when a gunman, who came out from the left hand side of the road, fired five to six shots at Tan’s vehicle with the intention of killing him, police say.
Tan was shot on his right hand.
The escort vehicle tried to run over the gunman to stop the attack but he jumped to the side, ran to the waiting vehicle and drove off.

Roll will be ready before June 23, says Trawen

THE electoral roll update for the 2012 general election is on schedule and should be ready before polling begins on June 23, Electoral Commissioner Andrew Trawen said, The National reports.
Trawen assured the people of Papua New Guinea that the Electoral Commission expected to release preliminary rolls in early February for public display and objections before they were finalised.
His response came after claims the roll update work was failing and it would not be ready in time for the start of polling.
“The electoral roll update work is progressing well on a 24-hour basis, with the recruitment of additional data processing officers, roll auditors and checkers plus the purchase of additional 30 computers to speed up work,” he said in a press conference yesterday.
On claims that the elections would not be free and fair, Trawen said the election was everybody’s business and he appealed to everyone to “take ownership of the elections that they are free, fair and safe”.
He said the delay in enrolment of eligible voters in some parts of the country was caused by the untimely release of funding by Treasury.
“Had the funding for the electoral roll update work been released by the department in a timely manner or front-loaded instead of on a ‘piece-meal’ basis all field work in the provinces plus electoral data should have been completed by now,” Trawen said.
He said as of yesterday, 22 million voters had been registered in the roll-out of approximately 4.3m eligible voters for the 2012 election.
“That’s like half of the voters already registered and the remaining should be done in the next few weeks.”
The electoral roll updates for the regions and provinces are:
lSouthern region – electoral data entry has been completed and preliminary rolls printed and ready for public display and objection for NCD, Central, Northern and Milne Bay. For Western, electoral data for North and Middle Fly electorates were yet to be sent in for data processing;
lNGI – West New Britain has completed the electoral data entry and printing of preliminary rolls, while East New Britain and New Ireland have their data entry almost completed, with parts of preliminary rolls printed and ready for public display. Field work is still in progress for Bougainville, with data yet to be submitted for processing;
lMomase – preliminary ward rolls for East Sepik, West Sepik and Morobe are almost printed and ready for objection while electoral data entry for Madang is still in progress; and
lHighlands – Eastern Highlands, Chimbu, Hela and Southern Highlands have parts of their preliminary rolls printed and ready for public display and objection while data entry is still progressing. For Jiwaka, Western Highlands and Enga field work is still in progress, with data yet to be submitted for processing

O’Neill: Election is on schedule

By JEFFREY ELAPA

THE 2012 general election is on schedule, says Prime Minister Peter O’Neill, The National reports.
He cleared the air on speculation that it could be delayed because of the slow progress in completing the electoral rolls, saying if it was up to him, the election would be moved forward.
“I deny speculations that the election will be delayed,’’ he said.
“If it was for me, I will have called for an early election but the laws are there and that the election will be conducted as scheduled although there have been problems with the electoral roll.”
O’Neill called the press conference to also confirm that the heads of the two disciplined forces – military and police – would remain in their posts throughout the election.
He assured the nation he had no plans to make any changes in the two forces because stability was required to conduct the election.
Police Commissioner Tom Kulunga and Defence Force Commander Francis Agwi were present during the press conference.
“We are getting ready for election and the two forces are ready with their election budgets and the overall plans are in place and we have to respect that,’’ he said.
“Therefore, I assure the people of PNG that there will be no change in the post of the commissioner of police or the commander of defence as I have confidence in both men to lead the force and conduct a successful election.”
Meanwhile, confidential documents obtained by The National revealed that the Minister for Defence Guma Gau and Public Service Minister Bart Philemon had prepared a cabinet submission to replace Agwi.
The correspondence, dated Oct 19, Dec 7 and Dec 12 last year by the two ministers to the public service commission, also listed the five names of colonels – who have overseas experience, training and exposure - as possible candidates for the post.
The documents stated that Agwi had to be suspended because of serious concerns over his conduct and performance which had led to morale and capacity problems in the force

Court bid sought on Prime Minister's post

By ISAAC NICHOLAS

PARLIAMENT will file a special Supreme Court reference to determine whether the law permits a person who is not a member of parliament to be prime minister, The National reports.
It will ask the court’s opinion on whether parliament has the power, by virtue of the Constitution and any other constitutional law, to rescind its previous resolutions and decisions.
Leader of government business Moses Maladina moved the motion seeking parliament’s approval last Friday, claiming Sir Michael Somare ceased to be an MP after Dec 9, 2011, and cannot hold the office of prime minister.
“I have taken advice and believe that the heart of the matter is the question of whether Sir Michael is still an MP after Dec 9, 2011,’’ he said.
“This is the date parliament endorsed a motion to rescind its earlier decision of May 17, 2011, which granted leave of absence for Sir Michael for the May meeting of parliament.
“We must realise that Fred Yakasa and the others are lying on the opinion of the court on Dec 12. The court made that opinion without being informed of the decision of parliament on Dec 9, 2011.
“Secondly, the court opinion did not invalidate any decisions that were taken by our government between Aug 2 and Dec 12, 2011.
“This means the court was not informed of the decision of parliament on Dec 9 to rescind its earlier grant of leave for Sir Michael.”
In his motion to parliament, Maladina said the court had only made a ruling based on a set of facts as of Aug 2, 2011.
He said everything that transpired after Aug 4 was not negated by the court.
“If Sir Michael was not a member of parliament after Dec 9, 2011, then the court has no power to install an ordinary citizen who is not an MP into the office of the prime minister,” Maladina said.
“The court’s opinion is good but the orders are not enforceable,” Maladina said.
“We have faith in the court system and must, therefore, go to court and seek redress.
“All these claims by Yakasa, (Hudson) Ramatlap and (Gabriel) Yer will fail automatically if the court agrees that Sir Michael ceases to be a member of parliament as of Dec 9, 2011.
“This parliament has the power to make laws. There is only one way that these laws can be set aside. This happens if the court finds that any sections, or parts of these amendments, are unconstitutional.
“The laws are superior to ordinary opinions or rulings of the court. Subject to the question of constitutionality, the laws made by parliament are paramount.
“We all know that rulings, decisions or opinions of any court can be negative by a law made by parliament.”
Maladina said neither Sir Michael nor Sir Arnold Amet had filed proceedings in court to challenge the validity of these laws.
“Surely, if Sir Michael ceases to be an MP after Dec 9, 2011, then the appointments by him of Yakasa, Yer and others are automatically null and void.
“Let us not play around with the cases of Yakasa, Yer, Ramatlap and (Graham) Osborne. Each of the claims is entirely dependent on whether Sir Michael is still an MP.
“If he is no longer a member of parliament, as this parliament has ruled, then he cannot hold the office of prime minister and appoint ministers, departmental heads and constitutional office holders.”
He said the motion was for parliament to file a special Supreme Court reference under section 19(1) of the Constitution:

• Authorise the speaker to sign the reference on behalf of parliament to make such amendments to the reference as he considers necessary or appropriate from time to time;

• Authorise the speaker to appoint a law firm and lead counsel to act for and represent parliament in this reference; and

• To endorse the following questions for an opinion from the Supreme Court:

• Does parliament have the power, by virtue of the Constitution and any other constitutional law, to rescind its previous resolutions and decisions? and

• Does section 141 of the Constitution permits a person, who is not a member of parliament, to hold office as prime minister?

Polye to launch political party

By JEFFREY ELAPA

MINISTER for Finance and Treasury Don Polye will launch a new political party today - after de-registering the National Alliance party, The National reports.
He and the 22 members of his faction would launch the Triumph Heritage Empowerment (THE) party at the Granville Motel in Port Moresby today.
Polye said “triumph” meant that as humans, “everyone shall use their intelligence given by God to creatively triumph over all shortcomings, problems and obstacles”.
He said “heritage” meant that every person recognised their heritage which emphasised family values, the main source of strength and character in a multi-cultural Papua New Guinea.
Polye said “empowerment” meant that as a party, “everyone shall pursue people empowerment policies and programmes that enable our people by giving them the mental as well as the physical capacity and strengths to make independent personal choices and decision for themselves and their families”.
He said the launching of the new party was the result of the resolutions passed to de-register the National Alliance in Mt Hagen early this month.
The parliamentary members of his faction are Jeffery Nape, Lukas Dekena, Sailon Beseo, Benjamin Poponawa, Yawa Silupa, Benjamin Mul, Miki Kaeok and Tom Olga from the highlands region.
Ano Pala, Mathew Poia, David Arore, Sali Subam, Mark Maipakai, Pitom Bombom, Alphonse Moroi and Andrew Mald are from the Papuan region; Peter Humpreys, Michael Sapau and Leo Dion from the New Guinea Islands.
Members James Gau and Buka Malai are from the Momase region.
The party has nine ministers in the O’Neill Namah government, five from the Papuan region and four ministers and the speaker from the highlands

Belden Namah on the state of PNG public enterprises

Speech by Deputy Prime Minister and Acting Minister for Public Enterprises,
Hon Belden Namah, MP, Member forVanimo-Green River,
to IPBC/Public Enterprise Chairmen and CEOs,
Grand Papua Hotel, Port Moresby, Thursday January 19 2012

Good evening chairmen and CEOs of IPBC and its public enterprises.

The IPBC board has met and has made some extremely important decisions that will have a beneficial impact on our citizens.

Those decisions, to be implemented by IPBC and individual Public Enterprises, will shape the provision of essential services to the people of Papua New Guinea, not just in the next 12 months but for a long time to come.

The O’Neill-Namah Government is determined to improve service delivery across the nation, and expects decisive action from IPBC and Public Enterprises.

The approval of Business Plans and Budgets for every one of IPBC’s Public Enterprises is the starting point.

Services delivered by these institutions include aviation, water and sewerage, motor vehicle insurance, harbors and ports, power supplies, postal services and telecommunications.

They are also responsible for managing State equity in the LNG project, providing financial support for economic and business development in rural areas, and for holding the state’s share in a number of private businesses such as BSP Limited.

These are critical roles and responsibilities that have not been fulfilled satisfactorily during the past 10 years.

Therefore my Government has made clear its intention to reform Public Enterprises through a program of continuous improvement.

As of now,they now have the finances and the plans to get on with the job.

There is a lot to do. For the past 10 years Public Enterprises have been allowed to float along without clear direction from the top and without clear plans and processes of their own.

The results of this lack of leadership, direction and decision-making have been revealed by IPBC audits, commissioned by the new Government, of all Public Enterprises.

We examined their finances, whether they are meeting their community service obligations or delivering services at an acceptable standard, and whether their corporate governance and accountability practices are satisfactory.

Some detailed investigations are still being carried out, but already it is obvious that there is room for significant improvement in different areas across all Public Enterprises.

Most importantly almost all Public Enterprises have failed to meet their minimum service standard requirements and have not focused on their customer requirements.

That is not good enough. The people expect much more from their taxes and the money they pay for services.

No Public Enterprise has paid a dividend to the National Government since 2007.

That is not good enough, either. It shows that efficient and responsible management practices, tried and tested in the commercial world, are not being followed.

Public enterprises must remember that they are owned by the people. The money invested in them comes from taxes, charges and fees paid by ordinary Papua New Guineans.

Some of the money invested in Public Enterprises must be returned to the people as a dividend.

The O’Neill-Namah Government this week decided to provide some free medical services to the public, and to rehabilitate the nation’s hospitals.

Some of the money to do this will come from Public Enterprise dividends. So I urge you this evening to redouble your efforts to make your businesses more efficient, and to pay dividends to the State.

Our investigations also show, worst of all, that Public Enterprises are ignoring due process.

We have seen that from some of the financial disasters of the last 10 years that are now being uncovered:

• The K3 billion-plus Abu Dhabi loan which we have had to top up by K900 million;
• The disappearance of K100 million of MVIL money, invested without proper authorisation, into a mystery bank account in rural Australia;
•  The loss of more than K50 million by IPBC and PNG Ports in failed investments;
• Unauthorised expenditure and borrowings, in the case of Telikom alone of K800 million;
•  The need to keep injecting millions and millions of kina a year into public enterprises, when that money should be spent on roads, education and health.

These types of failures over the past 10 years have contributed significantly to the inability of Public Enterprises to pay dividends.

The O’Neill-Namah Government has moved very quickly to start the reforms required to improve service delivery and to keep prices rises as low as possible.

The people of Papua New Guinea are the ultimate owners of all Public Enterprises, and the National Government on their behalf is charged with the responsibility of ensuring that they perform up to expectations.

All Public enterprises require rehabilitation and recapitalization, some more than others.

To do that we have given IPBC and its Public Enterprises new boards and in some cases new management.

We are already seeing some signs of improvement.

For example Eda Ranu has recently won two international awards, and has been given full approval by the IPBC board for its business plan. Air Niugini likewise has won full business plan approval.

There are other signs of efficiency gains within other Public Enterprises, and most importantly some innovative activities.

So there is some light at the end of the tunnel. The O’Neill-Namah Government will continue to monitor the performance of Public Enterprises over the coming years, and take appropriate action to encourage this sort of continuous improvement.

It is IPBC’s role to make sure that the new Government’s reforms succeed, and that the nation benefits from professionally managed, competent and efficient Public Enterprises.

I am confident that IPBC and its Public Enterprises now have the skills, the financial resources and the commitment to make big improvements to service delivery in the coming years.

Thank you.

Jails Minister mourns passing of Sinake Giregire

 Sai Sailon Beseo, Minister for Correctional Services and Kainantu  MP expressed sorrow and condolences to the people of Goroka and Daulo and the families and relative of the late Sinake Giregire, president of Country Party and the Highlands Farmers & Settlers Association,  on behalf of the Mmnistry and the people of Kainantu on the passing of a great leader.

Sir Sinake Giregire at his coffee garden at Asaroka, Eastern Highlands, in July 2000.-Picture by MALUM NALU

 Beseo said that immediately after Giregire left school in Finschhafen, he commenced his lifelong interest and work on the land by engaging in work as agriculture assistant at Aiyura agriculture research station and in saw milling and gold panning operations at Kainantu. 

Giregire also planted his first coffee at Avinakeno and with the wealth and knowledge he accumulated, he went back to Goroka in 1953 where he pioneered in coffee, vegetable farming and general trading business and in politics. 

Later,  he expanded his planting of coffee at Asaro and Banz and in introducing forestry-approved trees around Goroka, Daulo and Yonki, Eastern Highlands;  and Minj and Banz, Western Highlands.

 "Sir Sinake had a long association with Kainantu where he started his career that propelled him to be successful in his life and become a role model and encouraged and motivated many to work and live on and from the land," Beseo said.

"The people of Kainantu are proud that in his political ambitions he had continued to promote agriculture and utilisation of land since entering the political arena in 1957 as president of Asaro Watabung local government council.

"Kainantu district is proud to have provided the opportunity in knowledge, business and income for Sir Sinake to contribute to business, economics, agricultural and political development of this country.

 "Sir Sinake is synonymous with promotion of rural development and agriculture as the key for the prosperity for the country. 

"The people of Eastern Highlands will lose a mentor and a role model however, we are proud that Giregire made important contributions in business, politics and growth of this country and will remain the true father of the Constitution as being the only member of House of Assembly who served on all three comittees (Constitutional Development Committee, 1964-1968; 1968-1972; and Constitutional Planning Committee (1972-1975);  and one of the four nationals when he was appointed Undersecretary to Administrator (Public Utilities & Services) from 1964-1968; Ministerial Member for Agriculture, Livestock & Fisheries and Post & Telegraphs from 1968 to 1972."

 Beseo said that Giregire was architect of Eastern Highlands as one of first council pesident, member of the Eastern Highlands Advisory Council and the Eastern Highlands Area Authority, first coffee plantation and factory owner and  involvement with various business enterprise such as Highlands Commodity Exchange, Collins & Leahy Ltd and  Farmset Ltd, among others.

  Beseo said that Correctional Services valued his contribution to this country and would provide pall bearers and necessary honors at his funeral in Goroka or as required by protocol.

Basil calls for unity on Indonesian military jet incident

Minister for National Planning and Monitoring Sam Basil today urged the nation to remain united over the Indonesian military jet incident involving the Falcon jet.

 “No nation, however large or small, however rich or poor, however large or small its army, should be allowed to intimidate, coerce, manipulate and dominate another,” Basil said. 

 “That is one of the pillars that hold up the United Nations and the basis upon which Deputy Prime Minister  Belden Namah raised the issue on the November 29, 2011 incident.”

 Basil was referring to the much-publicised issue on an intercept by two Indonesian military jets on the Air Niugini-managed Falcon jet. 

Namah and his business partners together with Minister for Police ohn Boito and Basil were on-board as well flying over Sulawesi in the Indonesian air space when the incident happened. 

 “I am urging Papua New Guineans not to be swayed by malicious and untrue suggestions that the Falcon jet was carrying US$250 million," Basil said.

"That is a red herring – a mere diversion from the real issue. 

 “The Falcon jet was chartered by the Bewani oil palm project and was ferrying business partners in the project which included Deputy Prime Minister Belden Namah, Minister Boito and myself.

“I was there because the trip offered insights into oil palm project management which is useful in the light of the Tekadu oil palm project in my Bulolo electorate as well as the Markham Valley oil palm project in Morobe generally – not to mention that as National Planning and Monitoring Minister I would sooner or later have to deal with oil palm-related issues.

“As a commercial chartered aircraft, all of us were subject to the rigorous checks required under customs, immigration and civil aviation laws of the various countries where we landed. 

"That includes declaration if any one of us was carrying more than the equivalent of K10,000 in cash which we all complied with.  

"“With the kind of portfolio held by Boito and my own strong stance in fighting corruption shown in the Investigative Task Force Sweep, why would we be a party to money laundering or any kind of illegal activity for that matter?

“If there was the slightest sniff or suggestion of money laundering or illegality of any kind, I personally would have distanced myself from the trip.”

The Bulolo MP added: “Spearheaded by Mr Namah, we formed the new O’Neill-Namah Government that wants to see issues like lying over shares one holds, resisting and delaying legitimate Ombudsman Commission processes through the court system, unexplained missing Taiwan dollar-for-Ddplomacy funds, breaking multitude of PNG, Solomon Islands and international aviation laws highlighted in the Defence Force Inquiry into the Julian Moti Affair and extensive waste of funds in the Commission of Inquiry into the Department of Finance with no one charged or prosecuted to date.”

 Basil said that the Deputy Prime Minister, a national leader of Papua New Guinea hasdexpressed concern based on what was observed and the reports of the pilot and co-pilot on the incident involving the two Indonesian military jets.  

A diplomatic note has given to the Embassy of the Republic of Indonesia who have in turn responded suggesting discrepancies in dates approved when the Falcon jet would be using Indonesian air space and as justification for the actions of their military jets.

Prime Minister Peter O’Neill, as executive head of Government has accepted the response subject to clarification on the dates and assured the Republic of Indonesia on the importance of amicable bilateral relations between our two countries.

Basil said that he personally finds the Indonesian Embassy response shallow and wanting.

Referring to the Occurrence Report - O471-11 Apparent Intercept by Military Jet Aircraft over Indonesian Airspace by Captain Christopher Smith, Basil said that the Falcon jet despite being on course and on altitude was given a traffic alert on their traffic collision avoidance system and a resolution advisory which caused Captain Vincent Kipma to disengage the autopilot. He had to make a steep climb “to avoid a collision”.

 Following the “bizarre confrontation”, Captain Smith radioed Ujung control asking if they had the Falcon jet’s overflight permit which was issued on November 27, 2011 and valid for seven days.

The report states: “After several minutes, they responded with an affirmative. A phone call was then placed to Universal Weather from the flight phone explaining the engagement and to check the validity of the Overflight Permit. 

"They acknowledged that it was valid and said they would follow up with Indonesia on their end.”

Basil concluded: “I agree there is a discrepancy. 

"Someone is not telling the truth – and the truth as a way of sipping out despite best efforts to cover up – even by nations.”

Progress made on Purari hydro project

National Executive Council has endorsed a submission to take the next step towards development of the proposed Purari hydroelectricity scheme in Gulf Province.

The submission, presented to NEC jointly by the Minister for Public Enterprises, Sir Mekere Morauta, and the Minister for Petroleum and Energy, William Duma, envisions a project worth between $US5 billion and $US10 billion (K12-25 billion).

It would be the biggest power project in the Oceania region and one of the biggest projects of any sort in Papua New Guinea’s history.

“This is a very significant project that can transform the economy of the nation and in particular the Southern Region,” said Acting Public Enterprises Minister and deputy Prime Minister Belden Namah.

“It can bring power to hundreds of thousands of people in the Gulf, Western and Central provinces, create jobs in some very-disadvantaged areas, and spur agricultural and industrial development.

“The impact on national development and local economic opportunity of this one scheme should not be underestimated, and neither should its beneficial impact on living standards.”

The project is being promoted by the Government through IPBC in partnership with PNG Energy Developments Limited, a 50-50 joint venture between PNG Sustainable Development Limited and Origin Energy of Australia.

Substantial equity will be offered to the Government if the project goes ahead.

Cabinet supported the proposed scheme and directed that a working group of relevant departments and government agencies be formed to liaise with PNG EDL on a range of issues including ownership of assets, state equity, taxation arrangements and State, provincial and landowner royalties.

It also agreed to targeted import duty exemptions for the project and to consider exemptions from GST.

A K250-million study under which PNG EDL is looking at the project’s technical, social and environmental feasibility has already begun.

Preliminary studies show that the project could generate up to 2500 megawatts of electricity, almost four times the nation’s entire present generating capacity.

Its huge output could feed into the Port Moresby and Highlands grids and allow for the development of new industries, particularly in the Southern Region, as well as the export of electricity to Australia.

Power from the scheme would also be used for rural electrification in the Gulf and Western Provinces.

About 5000 local families could be supplied with power in the early stages, and up to 300,000 families when fully operational.