O’Neill questions Micah’s K630mil deal
The National, Wednesday 5th June 2013
A MEMORANDUM of understanding signed by Public Enterprises Minister Ben Micah committing the State to a US$300 million (K630.27 million) satellite communications project from two Chinese firms has been questioned by the Prime Minister Peter O’Neill.
O’Neill is understood to have raised concerns over the memorandum with ZTE Corporation of China following the arrest of two senior executives of ZTE in Singapore by Singaporean authorities over corrupt practice relating to a community college project under the previous government.
The company has also been the subject of a US congressional inquiry over allegations of spying for the Chinese government.
The MoU agrees for the design, manufacture and launch of a project in orbit, delivery of PNG’s first telecommunication satellite by the China Great Wall Industry Corporation and ZTE Corporation this year.
Signed by Micah, the MoU committed him to recommend the project to the Government as an exclusive provider for the project.
ZTE senior vice-president Zhang Xiaodong signed for his company on Dec 21, 2012 in Zhenzhen.
Representatives of the two parties were to have met by Feb 28 this year to begin work on the project.
Between March 29 and this month, exploratory work commenced.
After the meeting, IPBC was to register a Kumul Aerospace Ltd and apply to NICTA for satellite slot 176.1E.
Finance Department (PNG) was to issue a loan application to China Exxim Bank and submit it to the Chinese embassy.
This month Kumul was to review and confirm the technical and commercial proposal and review the draft contract.
The satellite was to be launched at the end of 2016.
O’Neill is understood to have written to Micah to review the MoU with a view to terminate it.