Lelang questions K6 billion loan

By KONOPA KANA

RADICAL Opposition Shadow Minister for Treasury and Finance Joseph Lelang lashed out against childish comments made by the mineral-rich Hela province Governor Anderson Agiru in a daily paper last week.
Mr Lelang was referring to Mr Agiru’s comments against the opposition’s persistence in cautioning the O’Neill-Dion government against borrowing the K6 billion controversial loan from EXIM Bank of China in an article on the National Newspaper on last Friday.
He said: “If Agiru does not understand what I am saying then he should shut up and go run his province because I am a legislator and mandated open member for Kandrian- Glouster Electorate in West New Britain Province.”
According to Lelang, his arguments represent the interests of his people and the nation in trying to avoid a situation wherein the burden of repaying this loan will extend into the future.
He said that the K6 billion Chinese loan deal must never be allowed because the Government cannot justify why it is getting such a huge amount of money on loan which - in itself - is equivalent to the National Government Budget of 2010 which was handed down by then Finance and Treasury Minister Patrick Pruaitch in the Somare regime years.
Mr Lelang also said that royalties and dividends from the Gas Project will come when gas is first exported in 2014 but taxes to the Government will come in 10 years from now and it’s the taxes from this Project that is now being pre-committed by this Government who are likely not to repay on time.
“That is why it is in their interest that they must know why Prime Minister O’ Neill went to China and borrowed K6 billion without a plausible reason and what is obvious is that the Government failed to fully scope and design a public investment project before they went out and secured the loan,” he said.
He said that now that they are back from China, they are now scrambling around trying to look for projects to fund which have raised questions like - “Is this the action of a responsible government?”


By ISAAC NICHOLAS

PAPUA New Guinea can borrow up to US$5 billion from the EXIM Bank of China over a period of time to address some of the major infrastructure projects and help achieve the Government’s development agenda in the next five years, Treasurer Don Polye has revealed.
Mr Polye said the Prime Minister had announced that up to K6-7 billion loan facilities from the EXIM Bank which he supported but stated that PNG could draw down even much more from the Chinese Bank.
“The indication that we have made to the Chinese Government and EXIM Bank is that PNG can draw down over time up to US$5 billion,’’ Mr Polye said.
“The critics out there are saying why are we going over there? It is too much. How can we repay? I say it looks too much and if you can spread that money over a period of time and draw down within our fiscal strategies, we can do that responsibly and it can happen and we can address our infrastructure development quite easily.
“You know that apart from your own budget and internal revenue that comes with the PNG economy, you know that there is a facility out there that you can capitalise on and you can continue to address all the challenges and development needs over the years within a given period,” he said.
The Treasurer said according to reports available to his Treasury department, the Highlands Highway will cost between K2-3 billion for total reconstruction and the Yonki hydro project phase two will cost a further K2 billion to address the country’s energy needs in the short term.
“That is why EXIM Bank of China is the right bank that is more appropriate in our current economic times and we are approaching them to partner with us in our development efforts,” Mr Polye said.
“I will say that we will never have a time like this. Over many years we have been hoping to have conditions like this, hoping to have a stable kina, political stability, favourable macro economic conditions and we have bilateral relations and friends and financial institutions that like to help PNG.
“We have to look out of the box in mobilising enough resources. We can do it within domestic financial markets but it’s not enough. We would like to do some impact projects so EXIM Bank of China is the proper option available to government now.’’
He said he was driving this in support of the Prime Minister in mobilising the country’s resources to grow and sustain an economy where everybody participated in the positive impact of the change.