Abal: Grants are not cash handouts

Main Stories, National

The National – Wednesday, December 22, 2010

ACTING Prime Minister Sam Abal warned yesterday there will be no cash handouts in Port Moresby for landowners expecting grants from the government for projects in their areas.
Abal said he was concerned that so much misinformation on the project grants agreed under the petroleum and gas projects had led to a groundswell of complaints, accusations, anxiety, threats, assaults on government officers and damage to government properties.
“Memorandum of agreement (MoA) and development agreement (DA) project grants are non-cash benefits. I must emphasise here that these are not cash handouts.
“These benefits are obligations the national government has contracted to in formal agreements to provide in the form of infrastructure projects and granted by way of section 173 under the Oil and Gas Act,” Abal said in a statement issued last night.
“Such infrastructure projects include public roads, bridges, schools, clinics, hospitals, etc. 
“These capital work are provided to improve the welfare of our people in the petroleum project areas.”
He said cash benefits included royalty and equity, and these were received directly by affected beneficiary landowners and affected provincial and local level governments.
Abal said by the end of last year, the state expended a total of K536.6 million, both directly and through the Tax Credit Scheme, on MoA projects.
“A significant portion of this funding went directly to landowner companies without any tangible infrastructure development. This practice cannot continue if we want to improve our people’s well-being.”
He said the state had a list of payments done to landowner companies and a financial and physical audit would be undertaken on the payments made.
The principals of landowner companies would be required to acquit for the funding provided to them and provide independent certification that the projects had been implemented, he said.
Failing to acquit these defaulting landowner companies will not be able to access further funding.
For the business development grants, Abal said K120 million was allocated to be disbursed to all PNG LNG projects area licences, and of the total, K30.792 million had been paid and the remaining balance of K89.208 million would be paid this week.
The Commerce and Industry Department is responsible for the disbursement of these funds to landowners.