FRANK SENGE KOLMA
LAND leases granted by the PNG Lands board selected at random by the Public Accounts Committee show blatant disregard for laws and processes in every instance studied.
No records exist for much of the land dealing and the PAC has drawn the conclusion that this might be standard practice, indicating that almost all State land might suffer from the same.
One case studied is portions 109 and 110 in Madang province at the site of the township serving Ramu nickel project.
This land was owned by the Evangelical Lutheran church, which held an agricultural lease issued in 1924 for a period of 99 years – plus an extra five years to take account of the period of the World War II.
This lease for 83.989ha is good until 2027.
In 2005, the church discovered that its title had apparently been cancelled for no apparent reason and an agriculture lease issued to the Ganglau Landowner Company Limited.
The PAC has satisfied itself that the “land had been compulsorily acquired – unknown to the church and by some means reissued to the current leaseholder by a Lands board decision”.
The original owner had no knowledge of this and has received no compensation whatsoever.
Said the PAC in its report to Parliament: “Clearly, the department has failed in its duty to protect the lawful titleholder.
“The committee cannot understand how this situation was allowed to occur. It seems that the Department of Lands has no control over its officers, maintains no effective oversight of dealings or is an active party to these illegal dealings.”
In another instance, a parcel of prime land in the heart of the Boroko business district in Port Moresby has been sitting with no improvements and land rent in arrears for well over three years within which improvements were to be made under the contract.
A business lease for allotments 2 and 3 of section 111 covering 0.22ha at Boroko, was granted to a certain Bluehaven No. 7 Ltd by Lands board 2006 of 1999.
The lease sets the land rent at K19,825 per annum and an improvement covenant to a value of K200,000 within the first three years.
As of Feb 8, 2006, the land rent arrears was K129,704.38 and no improvement at all had taken place. The land remains vacant and undeveloped.
The PAC concluded that the lessee was in breach of the lease conditions, but no effective attempt has been made by the department to forfeit the land.
It further concluded that there was no tender price at all.
“The land was given away,” it said. “Land rent is 5% of the unimproved value. Using the assessed land rent, the unimproved value of the land was K396,500.
“The reserve or tender price should have been K237,900. The State has lost this amount together with the land rent arrears – a total of K367,604.38 to date.”
No files or records relating to the grant of the lease were produced at all.
In view of the obvious breach of obligations and the Public Finance Management Act, the PAC made recommendations for the secretary of the department to be referred to the Public Prosecutor.
At allotment 69, section 229 at Hohola in Port Moresby, the PAC also discovered “arrogant disregard of departmental officers for decisions of the Lands board and the law and the failure of past and present departmental management to control or reverse or even acknowledge illegal dealings”.
A special purpose lease was granted to the Sisters of Charity in 1999 by Lands board 2014, for the purpose of building a hospice for the dying and, in particular, for HIV/ AIDS sufferers on this land. The grant was gazetted on Dec 23, 1999.
Willing Pacific (PNG) Pty Ltd, applied for a town subdivision lease (TSL) in 1991.
A TSL can only be granted for five years. The registrar ultimately gave Willing Pacific a residential lease over the land in 1999, despite the grant to the Sisters of Charity by the Lands board.
This lease was for a 99-year period, despite the fact that the applicant had only applied for a five-year lease and that the land had been granted to the Sisters of Charity.
Said the PAC: “In doing so, the committee concludes that the registrar has completely ignored the Lands board’s recommendation and has acted unlawfully.
“In the absence of documentary records, how this State lease came to be issued is not known but
the committee concludes that the issue was unlawful as the land was granted to the Sisters of Charity.
“The TSL could and should not have issued in the absence of a sub-divisional plan and the actual provision of infrastructure on the land. Only when those services are established can such a lease be issued.
“Once again, the State has lost land to private hands for no benefit, a lease has been issued illegally, the department has failed to take any steps to rectify the situation, the land rental is in arrears with no attempt to forfeit the lease, the improvement covenant has not been complied with and the Department of Lands has done nothing to fulfil its statutory duties.
“In short, the department has allowed the lessee to control the dealing instead of the department controlling it.”
The PAC concluded that Willing Pacific was given with no reserve price paid to the State, with land rent assessed at K450 per annum for the first 10 years – which means the unimproved value of the land was K45,000 – an extremely low figure.
Even on this valuation, the reserve price should have been K27,000.
The committee found that the issue of this lease was “not transparent and is attended by illegality”.
The lease was not advertised or tendered, but simply issued in defiance of the grant by the Lands board.
A letter was finally received from a Daniel Katakumb from the department on June 27, 2005, advising Sisters of Charity that Willing Pacific had indefeasible title and that the Sisters should buy the land from that company.
“This statement is wrong in law,” the PAC said. “Clearly, the department is not intending to rectify the grant according to law, but are content to act as a sale agent for the leaseholder.”