Governor ill advised, says O’Neill

IALIBU-PANGIA MP Peter O’Neill says Morobe Governor Ginson Saonu has demonstrated his lack of understanding of basic project economics and financing by claiming that a 10 per cent equity in the Wafi-Golpu project will yield K6.5 billion.
O’Neill yesterday said Saonu had been ill-advised and needed to revise the cost of the equity.
“The facts are that Saonu has no comprehension of how mega resource project financing works, and is making baseless and misleading statements about equity,” O’Neill said.
He said Saonu needed to educate himself on the memorandum of understanding (MoU) that was already in place, which was signed following due diligence by state legal officers and provided for “real” returns to landowners, districts and provinces.
“The MoU that was signed by the O’Neill-Abel Government, and agreed by then Finance Minister James Marape, will deliver 53 per cent of income to the people, and 47 per cent to project developers over the mine’s life with positive cash flow from year one,” O’Neill said.
“The Governor appears to be making a false assumption that the State and developers will simply give him a 10 per cent stake in one of the world’s largest mining projects for free.
“This is wrong and just false promises to landowners by Saonu and Marape that has only served to unnecessarily delay the Wafi-Golpu project for over 12 months.
“His latest claim is even more damaging for all Papua New Guineans, including the districts, who right now should be benefiting from the project,” O’Neill said.
He said such baseless statements signals investors that PNG is not open for business
“Saonu should remember that such baseless statements signal to domestic and international resource investors, and the financial sector, that PNG is not open for business.