LNG money seen to influence rates

Final financing deal to determine how much dollars to stay in local economy

By SHEILA LASIBORI

THE finalisation of financing arrangements with lenders towards the PNG liquefied natural gas (LNG) project is spreading some cloud over how the interest rates are going to perform in the coming years, The National reports.

This is because the final agreement will determine how much of the money lent would be retained in the local economy and how much would go back overseas.

If more dollars from the borrowings are retained in the local banking system, the play of the existing rate would be affected.

Generally, however, when the project gets underway, the rates will increase, according to Paul Crimmins, the head of Westpac’s relationship banking.

He said until financial close happens, it was yet to know what would be the internal contracts awarded to domestic and foreign companies on the US$15 billion (K40 billion) LNG project which was a US dollar denominated project.

These was part of the discussions during yesterday’s economic outlook seminar, part of a series of events marking Australian week cerebrations held at the Australian High Commission in Port Moresby.

Bank of PNG Governor Loi Bakani said: “Basically it comes down to the flows in and out of the country.

“At this stage, the financial close coming up … we are not yet able to get a clear indication of what contracts will be done locally and those in US dollars done overseas.”

He also said there were exemptions given to companies under the project.

“That is, where most of the transaction is going to take place,” he said.

ANZ’s Jim Yap said it all depended on the currencies’ strengths, when at the moment, the Australian dollar was floating on a high rate.

“Taking that into account, whilst the kina may have the ability to appreciate because the demand of the currency gets higher in view of the PNG LNG project … so there is an underlying demand, but in terms of cross currency exchange rate, it may be a bit of a challenge.”

Mr Bakani also said there was a working group putting together a submission for the proposed offshore sovereign wealth fund.

The submission is expected to be presented to the National Executive Council (NEC) in June.

“Once that is in place, that will take care of Government inflows,” he said, adding the inflows will be such that not everything will come into the country all at once.

Ombudsman loses powers

MPs vote 83-0 to remove watchdog inquiry rights

 

PARLIAMENT has taken the first steps to weaken the powers of the Ombudsman Commission, and establishing a parliamentary Ombudsman committee that will have powers to make inquiries of its own, The National reports..

Parliament voted 83-0 to amend section 27(4) of the Constitution to remove the powers of the Ombudsman in issuing directives to ministers and heads of departments.

Section 27(4) allows the Ombudsman to issue directives to prevent payments out of public funds, or trips by MPs, or other actions by these office holders if it (the commission) feels impropriety is involved.

For example, the commission has, in the past, used this provision to stop MPs taking overseas trips when it felt the trips were a waste of public funds.

The commission had also used this provision to prevent cheques issued by the Finance Department if it felt the motives were political.

The commission had, in the past, used this provision to block the release of electoral development fund cheques for MPs close to the 2002 and 2007 general elections.

The commission also froze the RESI funds last year using this provision after allegations emerged that millions of kina were misappropriated and given away without following proper procurement processes.

Some MPs themselves had gone to the media to complain about this misuse of RESI funds, particularly in Kerevat and Aiyura national high schools. But these MPs did not oppose the bill.

The amendments were introduced as private business motion by Esa’ala MP Moses Maladina.

Mr Maladina said section 27(4) had been used by the Ombudsman Commission on numerous occasions to stop the issuing of cheques, thus, preventing the implementation of Government policies and initiatives.

“We want to make it very clear for the purposes of Hansard that the action of the Ombudsman in issuing such directives using section 27(4) is wrong.”

Mr Maladina said from time to time, the Ombudsman had also utilised section 27(4) in issuing directives to airlines in an attempt to prevent leaders travelling to conduct their duties.

He said on many occasions, there had been public physical confrontations between officers of the Ombudsman and leaders at the international terminal.

He said it was not the intention of Parliament for the Ombudsman to utilise section 27(4) to confront leaders in this manner.

On the Ombudsman committee, Mr Maladina said the committee’s responsibilities were to address Ombudsman reports presented in Parliament and function like the Public Accounts Committee.

“Where the PAC deals with financial issues, the Ombudsman committee should deal with administrative issues.

“If, for example, lives are lost because of lack of medicine at the Port Moresby General Hospital and because people are turned away due to lack of beds, despite allocations of millions of kina in the health budget, it could be an issue which this committee can make a parliamentary inquiry,” Mr Maladina said.

 

House favours bill to have separate judges

THE National and Supreme courts will have separate judges sitting on benches of the two high courts, The National reports.

Parliament gave its first approval with an 85-0 vote for the bill relating to the appointment of separate and distinct judges to sit on the Supreme Court and National Court separately.

The amendments, tabled by Esa’ala MP Moses Maladina, stated that unlike other jurisdictions, “in PNG we have both judges presiding over both the National and Supreme courts”.

“This is not only inconvenient but also gives rise to the issue of capacity.

“We have come to a stage where the population has increased and are at a stage of development now where we require a separate and distinct Supreme Court with fulltime judges and a separate and

distinct National Court with

its own judges,” he said.

Mr Maladina said the amendments had been made in consultation with the Attorney-General and with the Chief Justice.

He said this was also in line with the law and justice sector white paper that was approved by Parliament.

In the law and justice white paper, the recommendation made by the Chief Justice and the judiciary was the creation of a permanent Supreme Court with the best judges appointed fulltime to that court.

The amended section 161 provided that the Supreme Court will not have fewer than five judges and those judges will be chosen from among the National Court judges.

Mr Maladina said section 164 of the Constitution also provided for the increase in the number of judges from 20 to not more than 40.

 

LNG 'landowners' protest for funds

DISGRUNTLED people, claiming to be landowners of the LNG project areas in the Southern Highlands province, fronted up yesterday at the Finance and Treasury office in Port Moresby and demanded quick payment of outstanding landowner funds, The National reports.

They printed placards stating that the operations of the multi-billion kina project would cease if their demands were not met by the Government.

The groups, claiming to be landowners of Hides, Angore, East Mananda, Juha, Moran and Kutubu threatened that the LNG project may not proceed if the Government failed to fast track the release of the funds.

They said the funds they claimed were the memorandum of agreement (MoA) funds, special segment grants (SSG) and other grants which they claimed was  promised to them by the Government.

Also, another disgruntled group gathered outside the office of the Department of Petroleum and Energy in Konedobu, demanding similar MoA and SSG payments.

Group spokesman, Adam Liyako, who claimed to be a landowner of Moran pipeline area, said the Government had promised them after the Kokopo forum last year that the payment of the funds would be made to all incorporated landowner groups (ILGs) but the Government had failed to honour its commitments to this stage.

He said the landowners had been living on hired vehicles and money in the city since last year and could not pay them off.

Mr Liyako said the fault lay with the Government to bring them to Port Moresby at the first place to attend the BSA forums and keep them waiting in vain without releasing the funds promised in them.

The spokesman said many of the landowners had passed away while waiting for the funds.

He called on the Government to fast track the payment if it wished to proceed with the project in their province.

 

Mystery woman rape under probe

POLICE in the National Capital District are investigating the alleged rape of Helen Mark Kuipa (pictured), the mystery woman “lawyer” who was caught on Saturday evening, The National reports.

National Capital District Metropolitan Commander Chief Superintendent Fred Yakasa confirmed yesterday that Helen has laid a complaint for rape, and this was being investigated.

The complaint for rape was registered at Boroko Sexual offences Unit.

Helen was allegedly raped while being held and questioned over her involvement in the Jan 12 break out at the Bomana Maximum Security prison. She was allegedly raped by a policeman.

Helen, who had been on the run and hiding in the city since the Jan 12 escape, was caught on Saturday evening at the Talai Settlement.

Police say her involvement in the escape of the 12 prisoners, including the notorious William Kapris, was central to its success. She was described as a key player in the whole operation.

She was cooperating well with police interrogations, and Yakasa had described her testimony as fitting the pieces to a jigsaw puzzle. But he was visibly angry when news emerged that the woman was raped by a policeman.

Chief Supt Yakasa said police investigations into the alleged rape had begun.

He said it was the work of one or two ‘rotten’ officers that give a bad name to Police and the force has no place for such officers.

“This cannot be tolerated. No prisoner or suspect should be attacked in this manner. This is the last thing you expect from a law enforcement officer. If the allegations are confirmed, the officer or officers will be hauled up to face the law,” Mr Yakasa said.

Helen Mark Kuipa, 26, of Kupalis village in Wabag, Enga province has been charged with one count of aiding the escape of a prisoner, breaching section 138(a) of the Criminal Code (chapter 262). She faces 14 other charges. She is expected to appear in court today.

The police Major Organised Crime Investigating –MOCIT Team is expected to continue their interrogation of Helen after that.

Prime Minister welcomes probe

PRIME Minister Sir Michael Somare has welcomed the Ombudsman Commission's initiative to investigate any leaders who has breached their roles and responsibilities, The National reports.

"In this instance, the Ombudsman chose to revisit the issue of Julian Moti's departure from PNG on a Defence Force aircraft," Sir Michael said in a statement yesterday.

"I had assumed that the Ombudsman report would be based on hard facts but, sadly, falls far short of this and relies on hearsay evidence.

"A number of serious irregularities were found in the establishment of the board of inquiry into the Moti affair and, on legal advice, Defence Minister Bob Dadae took note of the findings and decided not to pursue the matter," Sir Michael said.

He said the Ombudsman pursued the matter regardless of the flaws identified with the findings of the inquiry and the outcome of the Queensland supreme court hearings.

"I find the conduct of the Ombudsman Commission to be calculating, mischievous and lacking in transparency.

"Furthermore, I am surprised that the Ombudsman has called on the police to further investigate my role as prime minister in the use of a Defence Force aircraft to take Moti to the Solomon Islands.

"The Ombudsman, however, did not give any reasons for this damaging recommendation," Sir Michael said.

"I wish to state categorically that the findings of the Ombudsman are all based on circumstantial evidence.

"I call upon the Ombudsman to come clear on what offence under the Criminal Act they will use for possible prosecution against me.

"Without this, the motive of the Ombudsman Commission appears to be sinister and reflected a lack of objectivity and fairness in dealing with the matter at hand," he said.

 

 

 

K15 million road rehab launched

TRANSPORT, Works and Civil Aviation Minister Don Polye has launched the K15 million road upgrading and sealing project from 4-Mile to Mawan in Madang province  funded by the National Government, The National reports.

Mr Polye described the road improvement as an impact project that the local people must make use of to improve their lives by getting involved in agriculture, tourism, technical skills training and other life-improving ventures.

He was speaking at the project launching ceremony at Bau Vocational Centre in Madang on Saturday when the centre marked its 45th anniversary.

The new Transgogol High School and portable sawmill for Bau were also launched.

“This road is not just a road. It has meaning. It is to serve you the people.

“Link this road with economic initiatives,” Mr Polye said, adding that the 19.4km section being improved was part of the alternate national highway that would link the coast with the LNG project in the Highlands via Baiyer River.

Prime Minister Sir Michael Somare, who also attended the ceremony, backed the minister by saying that the alternate highway was needed to ease the burden on the Highlands Highway.

Sir Michael described the Highlands Highway as a colonial infrastructure that was not meant to handle the heavy traffic volume it carries today.

The road upgrading and sealing will be carried out by Lae-based national contractor, R & Sons Construction Ltd.

Managing director Thomas Ponah Pisimi, in thanking the national government for recognising local contractors, said they planned to deliver the project on time and meet government requirements.

He said R&Sons had delivered projects in Morobe and other parts of the mainland and they were pleased to be given another chance to improve roads in Madang.

The project launch was attended by government coalition heavies led by Sir Michael, Treasurer Patrick Pruaitch, Fisheries Minister Ben Semri, Madang Governor Sir Arnold Amet, Madang MP Buka Malai and senior public servants.

The road, high school and vocational centre projects were initiatives of Madang Open MP Buka Malai who expressed gratitude to the government for the funding support.

Mr Pruaitch launched the Transgogol High School while Sir Michael did the honours on the portable sawmill.

Mr Pruaitch also announced that the government allocated K1 million each to Transgogol High and Bau Vocational Centre.