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Contracts going to foreign companies

PORT MORESBY, Papua New Guinea (The National, April 29, 2010) - Attorney-General Dr Allan Marat yesterday said PNG will gain very little from the PGK40 billion [US$14.6 billion] to be spent during the construction phase of the LNG project.

Dr. Marat, whose public comments had often raised eyebrows in Government, said all major contract and sub-contract works in the project were going to foreigners, and Papua New Guineans would be left with the crumbs.

He said he was forced to go public with his views after reading about foreigners picking up contracts in the project areas.

He said the Government had itself to blame for this, especially past governments, for failing to prepare its citizens for the development of its natural resources.

"My concern arose from the fact that past governments knew this country was blessed with resources, mineral and energy resources but, armed with this knowledge, nothing was really done to prepare our citizens for the exploitation of these resources," he told reporters at a press conference yesterday.

"We have wasted the last 33 years; we have not been proactive enough. We have not educated an elite group of Papua New Guineans to be ready to take a lead in this extractive industry. Why haven’t we done it?"

He said this failure has placed us in this situation, where PNG would gain far less than the 10 percent of the PGK40 billion promised under the national content plan.

"Now we read in the papers that another 20 foreign firms are bidding for contracts. So, where do we come in, at sub-contract, or sub-sub-contract, or further down?"

Marat said Papua New Guineans would be mere spectators as their resource was extracted and shipped overseas.

He said the economy would not benefit much from the PGK40 billion because most of it would go overseas, including wages of foreign employees.

He said during discussions with the developers and talks on the national content plan, he discussed this with Public Enterprises Minister Arthur Somare. "I have raised this with Somare, who spearheaded the whole project. And, he agreed that we might be getting less than the 10 percent of the national content plan," Marat said.

"But, perhaps, he did not push; maybe, there are other strategies. He took it well, and he said over the 30-year period, our position might improve with expertise and technical knowledge. I am not criticizing the Government. I am lamenting the past government’s failure to prepare us for something like this. We have been reactionary, rather than visionary."

Marat said he hoped that once the gas gets out, after 2014, PNG would have greater benefit.

Construction has begun at the LNG project sites, with the six major contracts having been tendered to foreign firms, the top being the construction of the LNG facilities at portion 152

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