K7mil gamble hits IEA

A K7 million investment by International Education Agency (IEA) for infrastructure development to generate additional revenue has turned sour, with the organisation now struggling to recoup that money.
On top of the K7 million, the IEA has also paid more than K3 million in legal fees after its Australian partner company took the “dispute” to the courts.
IEA, which manages 19 schools and four TAFE colleges in PNG, had partnered Juno Pty Ltd to develop a project in the country.
Sources told The National that both parties were to put in K7 million each but the Brisbane-based Juno, which is believed to be owned by two Australians and two Papua New Guineans, did not do so.
Juno also repeatedly drew down from the joint account and when questioned by IEA, it viewed the queries as a dispute and took the matter to the court in Brisbane about three years ago.
The sources said IEA’s lawyer did not try to get the matter heard in PNG even though the project was to be undertaken in the country.
They said IEA had been paying about K80,000 a month in legal fees.
IEA, which is a private non-profit organisation, recently appointed a new lawyer.
A spokesperson for the IEA board said they had wanted to develop the company’s land at Ela Beach to further strengthen the education services to the community.
He said the development would increase the return on investment to continue providing quality, affordable education for the next 40 years.
He declined to elaborate on the project, saying that the matter was still before the courts. The sources said the failed K7 million investment and mounting legal fees prompted the IEA to review its operating costs and staff benefit packages several months ago.
One of the first measures was the suspension of interest-free loans to staff which had amounted to more than K10 million.
The sources said just before the freeze was imposed, a senior manager received a large loan on top of what he was still paying off.
Another cost-control measure was the reduction of school fee benefits for national teachers.
However, the sources said senior staff at the head office were not only exempted from some of the cost-saving measures but were given significant pay increases in January this year.
Also exempted were expatriate teachers.
In response to questions from The National, a board spokesperson said the IEA had been reviewing the organisational structure for more than five years and that the exercise was still ongoing.
“It involves all levels of the IEA, from head office to all the 19 schools and TAFE nationwide,” he said. Teachers said there was no proper communication on the joint project, and review of salaries and benefits which had promoted some to leave.
Each IEA school has a board elected by parents and is managed by principals who report to the executive director based in Port Moresby.
IEA schools enrol more than 6000 non-citizen and citizen students each year and employs about 300 teachers.
It receives no government funding and school fees are dictated by the costs of operating the schools.