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NOUMEA, New Caledonia (Oceania Flash, Jan. 12) - France's representation in New Caledonia, the High Commission, last week stepped in to redress the French Pacific territory's Loyalty Islands province 2004 budget, local media reported.

French High Commissioner in New Caledonia, Daniel Constantin, said the controversial budget "failed to show balanced accounts " and showed discrepancies between receipts and expenditure.

France argues the budget, endorsed on December 18, 2003, fails to make provisions for recurrent debts totaling an estimated 1.4 billion French Pacific Francs (US$14 million), including CFP 89 million to New Caledonia's social security scheme and CFP 96 million to Air Calédonie International.

Another controversial element of the budget was a special CFP 100million CFP (US$1 million) grant aimed at salvaging the province's public maritime company, Navimon (which was placed into liquidation in November 2003) and bail it out of its financial woes.

The financially troubled Loyalty Islands Provincial Assembly (located Northeast of New Caledonia's main island) passed its 2004 budget last month. It totaled CFP 11 billion.

Constantin has now asked New Caledonia's Auditor General office to review the contested budget and to submit its revised version by the end of this month.

French authorities were earlier reported at one stage to have been contemplating more drastic measures, such as suspending the management of the province and taking over.

January 13, 2004

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