ASIAN DEVELOPMENT BANK PROBES CHARGES AGAINST PAPUA NEW GUINEA MP’S

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By Isaac Nicholas

PORT MORESBY, Papua New Guinea (June 15, 2000 - Post-Courier/PINA Nius Online)---Two Members of Parliament and a former ambassador have been referred to Asian Development Bank investigators for allegedly trying to solicit commissions from Canadian financiers for an ADB-funded project in Eastern Highlands province.

The three were named by the financier, Priya Financial Corporation, in a letter of complaint on March 22 this year to ADB's senior economist, Steven H. Van Der Tak, in Manila, Philippines.

The ADB has a clear policy to reject a proposal for award, not to finance a contract, or impose sanctions on consultants and firms if it determines that firms or consultants have engaged in corrupt or fraudulent practices in competing for the contract.

In this case, the project in question is the Eastern Highlands Road Maintenance and Upgrading Project, according to documents made available to The National yesterday.

The three men in question were not available for comments yesterday.

Priya Finance Corporation president Rod Yetman had complained in his letter that, "We have been requested to make certain payments to (three names) that are in violation of section 426 of the Criminal Code of Canada."

"We cannot under any circumstance be a party to this and therefore withdraw our interest in the project."

Upon receipt of the letter, ADB referred the matter to its anti-corruption unit, which is responsible for dealing with allegations of fraud and corruption in ADB-funded projects.

Rogello Talay, a senior audit specialist with ADB, said in a letter dated April 5, 2000, to Mr. Yetman: "To enable us to confirm these allegations, we would appreciate if you could provide additional details, including names of persons or firms involved in making the request, or any other evidence you may have."

The allegations came to light after an Eastern Highlands delegation visited Manila in February this year.

Prior to departure from PNG, a member of the delegation who is named in the ADB investigation wrote to another Canadian firm of public accountants asking for US$ 30,000 (about K 90,000 then) for hotel accommodations and incidental expenses for members of the delegation.

The delegation was to meet with the ADB officials to update them on the progress made on the projects in Eastern Highlands province.

Meanwhile, Kainantu MP Baki Reipa yesterday challenged Governor Peti Lafanama to explain the following regarding the road project:

*The link with potential Canadian source of funding;

*Whether ADB road project for Eastern Highlands was compromised as a consequence of questionable handling of potential Canadian source of funding which might not be forthcoming;

*The withdrawal of the potential Canadian financiers as a result of corrupt soliciting of a commission from them, which was now subject to internal ADB audit investigations;

*The ADB funding earmarked for Eastern Highlands might be suspended for as long as Mr. Lafanama and his cohorts remain in office;

* Why a total of K 3 million (US$ 1,228,500) was deposited directly in a joint trust account with ADB if it was counter funding for road project;

*Whether the engagement of the Canadian consultants was in line with proper tender procedures; and

*The terms and role of the engagement of REMCO (Resources Management Corporation).

For additional reports from The Post-Courier, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Post-Courier (Papua New Guinea).

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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