TELIKOM PNG CANCELS CONTRACT WITH VIRGIN ISLAND FIRM

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By Baeau Tai

PORT MORESBY, Papua New Guinea (The National, July 26) - The board of directors of Telikom PNG has decided to terminate its contract with Virgin Island-based company, Naputa, without cost to the State or Telikom.

Minister for State Enterprises and Information Dr Puka Temu has also asked the Independent Probity Advisor, Corrs Chambers Westgarth, of Australia, and the Ombudsman Commission to investigate claims that the Telikom board bypassed the Independent Public Business Corporation (IPBC) and Dr Temu by going directly to the Prime Minister for approval to contract for a second appraisal of Telikom assets.

A contract was said to have been signed with Naputa for K4.8 million (US$1.4 million), with over K2 million (US$621,000) paid in advance.

Dr Temu told a press conference last Thursday that "contrary to claims by the Opposition, no payments have been made to Naputa, nor will any payments be made in future for these services.

"I am surprised at the allegations given the strict probity oversight that has been conducted in relation to the Telikom transaction.

"I want to assure our people that if there is a Commission of Inquiry, we will open the books which will show that we have followed a prudent and transparent process with everything done with probity.

"What you have seen is a process that has gone for the last 12 months and the government is not doing anything in a rush," Dr Temu said.

Telikom is the first government entity to be sold under the current government's public, private partnership policy and IPBC is satisfied with the current deal they have struck with Econet Wireless of South Africa. Under the current partnership arrangement, the government sells 51% to the private partnership and retains 49% of the assets.

IPBC will present the Telikom deal to the government caucus this week, who will give the 'green light" for the National Executive Council to make a final decision on it.

Dr Temu said the challenge now is how to make the partnership work, and when NEC gives the green light, a presentation will be made to the media about the whole process because there has been a great deal of misinformation about the partial share sale of Telikom to Econet.

The Committee of Economics Ministers of the NEC and the Prime Minister met last Thursday with directors and management from the IPBC and Telikom to seek clarifications on issues raised by the Opposition and the media in recent days.

Dr Temu said the Prime Minister did authorise a review, but had no role in the selection of the advisory company.

"The Telikom board had been provided with comprehensive due diligence material from IPBC and independent sources confirming the market valuation and the financial and operational integrity of Econet and its partner Allied Technologies. In response, Telikom has now agreed to terminate the contract with Naputa," he said.

July 27, 2004

The National: www.thenational.com.pg/

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