PNG MINISTER CLAIMS TO HAVE UNCOVERED MASSIVE

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FRAUD
Development funds released, not used for projects

By Isaac Nicholas PORT MORESBY, Papua New Guinea (The National, Jan. 6, 2010) – In Papua New Guinea, a Government minister claimed yesterday he has uncovered a major fraud involving 220 million kina [US$81.4 million] in Memorandum of Agreement (MoA) funds.

Minister for Labour and Industrial Relations Mark Maipakai claimed the alleged fraud involved the Office of the Minister for National Planning and District Development, chairman’s of Landowners Association in Kikori, a foreign company and a contractor.

Mr. Maipakai, who is Member for Kikori, said in a statement that the fraud involved the funding of 220 million kina [US$81.4 million] for 10 major projects in Kikori district in Gulf province.

He said the projects were approved in a special National Executive Council (NEC) Decision No.199/2008 dated Sept 18, 2008, and initial funding of 60 million kina [US$22.2 million] was appropriated in the 2008 Supplementary Budget and an additional 30 million kina [US$11.1 million] was appropriated in the 2009 development budget.

He said a project submission which identified at least 10 projects was used to gain the release of the funds, but the money was never spent for the purpose, or projects in the submission.

The minister provided copies of documents obtained from the Department of National Planning and Monitoring and the Ministry of National Planning and District Development to support his claim.

Mr. Maipakai called on the Minister for National Planning and District Development Paul Tiensten to explain to the people of Kikori, Gulf province and the nation as a whole, what criteria he used to authorize payments of MoA funds.

He questioned why Tiensten ignored directions from the Office of the Prime Minister on these projects.

"The question is why have funds been released without proper project submission, status reports, proper accounting and acquittals?" Mr. Maipakai asked.

He said the money was to fund Kikori to Kaiam road (40 million kina [US$14.9 million]), Kaiam bridge (12 million kina [US$4.4 million]), Kaiam to Baina road (30 million kina [US$11.1 million]), Kopi to Wouwobo road (25 million kina [US$9.3 million]), Kikori to Omati to Koumaio road (25 million kina [US$9.3 million]), Kikori airstrip redevelopment (35 million kina [US$13 million]), Kikori hospital redevelopment (15 million kina [US$5.6 million]), Kikori port development (10 million kina [US$3.7 million]), Kikori Ferry and Marine Livelihood project (8 million kina [US$3 million]), and Kikori housing project (10 million kina [US$3.7 million]).

Mr Maipakai alleged that funds paid to landowner associations had not been expended on any of the major development projects in Kikori.

"This is a daylight robbery that Mr. Tiensten must explain to the people of Kikori."

Mr. Tiensten, who was contacted in Brisbane yesterday, denied the allegations of fraud.

He said MoA funds were commitment to landowners for key projects to be delivered as State commitments under the Kutubu, Gobe and other commitments.

Mr. Tiensten said Cabinet approval of "Gulf major projects" under Decision 199/2008 follows submission by hour Kikori landowners associations and not the provincial government and Kikori Joint District Planning and Budget Priority Committees (JDP&BPC).

He said the four Kikori landowner associations signed the Kokopo benefits sharing agreement for the Liquefied Natural Gas project and the Government, in return, made commitment to facilitate the release of MoA funds to them.

Mr. Tiensten said, on April 29 last year, with the support of the Treasurer and Finance Minister approved the release of 36.3 million kina [US$13.4 million] to various Kikori Landowner Associations for nominated projects and initiatives approved by NEC.

He said of this amount 18.7 million kina [US$7 million] was released to three landowner associations (Kikori Oil Pipeline Landowner Association, Mesebe Landowners Association and Omati Landowner Association) and 17.6 million kina [US$6.6 million] payable to Kikori Gas Pipeline Association was held back pending completion of acquittals.

He said the acquittals had been completed and the 17.6 million kina [US$6.6 million] was ready to be released to Kikori Gas Pipeline Landowners Association (KGPLA).

Mr. Tiensten said the State released 20 million kina [US$7.4 million] to Kikori JDP&BPC with no acquittal to-date, and Mr. Maipakai should explain how he spent this money.

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