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Philemon queries loan
By BIBIAN BARRENG
THE proposed K200 million loan
from the Japan Bank of International Corporation to finance Port
Moresby’s water supply system has come under fire from former Treasurer
Bart Philemon.
Mr Philemon said yesterday he had fought strongly against the project
when it was first mooted while he was the Minister for Treasury and
Finance and at that time the proposal was for K300 million.
He said Eda Ranu was a commercial entity and should raise funds based on
its own capability to service such loans and not to add to the financial
liability on the State.
Mr Philemon said the project was for a small fraction of residents only
in Port Moresby where the pipe would run from Idubaba, through Hanuabada,
Paga, Koki and to KilaKila/Gabutu areas but will not link up with
Hanuabada and other settlement areas.
He was critical of State Enterprises and Communications Minister Arthur
Somare’s statement published in yesterday’s newspapers which gave an
impression that it was for the whole city.
Mr Philemon said Port Moresby was already benefiting from a “build,
operate and return” concept of water supply upgrade funded through
Malaysian financiers and there was no need for another foreign loan to
add to PNG’s foreign debt for the benefit of “a small fraction of the
city’s residents”.
“Why not borrow K200 million to provide water for the five million
people of PNG, many of whom a suffering from lack of clean water?” he
questioned.
“This is one example of helping the well-off people at the expense of
those who have nothing, it’s an irresponsible decision by this
Government to continue to pump more money into Port Moresby,” Mr
Philemon said adding the city’s water and sewerage services come under
Eda Ranu which is a commercial entity like Air Niugini and PNG power.
“Why should the rest of the country suffer at the cost of a few elites
in Port Moresby,” he said.
Meanwhile, in Port Moresby Eda Ranu chairman Timothy Bonga defended the
deal, saying it would relieve pressure building on the current sewerage
system.
Mr Bonga said the city was currently enjoying good quality of water
since Eda Ranu commissioned the new supply improvement project last
year.
“With the good quantity of water, we also have good quantity of waste
water and this waste water not only has to be disposed but is also
putting a lot or pressure on the current old sewerage system, which I
have time and time again described it as a “time bomb” just ready to go
off,” he said.
Mr Bonga said this was a priority project that will ensure waste water
is disposed in an environmentally friendly manner.
Funding for the project at the cost of K200 million will come from the
Japan Bank for International Co-operation that is subject to approval by
the government of Japan.
Mr Bonga said the repayment of the loan would take 40 years with 10
years grace period at 0.4% interest rate.
He said the loan repayment cost would be shared between the Government
and Eda Ranu with the State to take care of the exchange rate, however,
all these have yet to be finalised through the negotiating team
comprising the Treasury Department and Independent Public Business
Corporation (IPBC).
 
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