PM: Solwara, UBS loans inherited

By HELEN TARAWA
PRIME Minister Peter O’Neill says the Solwara and UBS loans are legacy issues inherited from the Somare government.
O’Neill told Parliament that the saga of the UBS loan came about because the Government wanted to secure an interest in Oil Search.
He was responding to Shadow Minister for Finance and Treasury Ian Ling-Stuckey’s questions about the KI billion in the UBS loan fiscal deal.
Ling-Stuckey claimed that another K400 billion was invested in the collapsed Nautilus deal which was destroying 120,000 job opportunities and the heath of the country’s workforce.
“When PNG LNG project shares were to be bought to secure our 19.1 per cent shares in interest in the PNG LNG project, Oil Search shares were mortgaged to IPIC (International Petroleum Investment Company), Sovereign Wealth Fund for United Arab Emirates,” he said.
“This is a fund that is controlled by the Royal Family and the government of United Arab Emirates.
“Our government officials at that time went there and mugged the shares and borrowed the money to pay for these shares in the PNG LNG project.
“That is an indisputable fact. I think it was A$1.6 billion (K3.7bil),” he said.
O’Neill said they mortgaged every state-owned entity of the country.
“So if we wanted to sell one of the planes of Air Niugini, we had to ask the Arab Emirates, literally we were mortgaged to the Arabs.
“The arrangement between IPIC, it is the same company not a public-listed company and has no transparent and accountable reporting company.”
O’Neill said this was the same company that was involved in the US$1billion (K3.3bil) scandal in Malaysia.
“The IPC fund is the same fund involved in the US1billion to the private account to the prime minister of Malaysia.
“Then Government went and dealt with the same fund, no accountability and transparency.
“The five-year term loan was due, the arrangement was that they will surrender back to us and we will pay them A$1.6 billion (K3.7bil) in the five years so we can secure our 10 per cent interest in Oil Search.
“We had to find the money to pay for the shares so the money was endorsed and Treasury negotiated the funds and we told IPIC we want shares back but they refused to return the money.”
O’Neill said Oil Search investment was a strategic investment to the Government. The company decided to offer the Government of PNG to secure the 10 per cent.
“We cannot afford to lose such an investment, this is why we have to secure the shares.
“We have lost a lot of money because of stupidity. The Solwara deal investment for undersea mining should not have happened.
“The business confidence in our country remains, and I give credit to the treasurer, our economy is doing well,” he said.
O’Neill explained that the investment that would be made in Papua LNG was over US$14bil (K47.3bil).
He said the treasurer provided details of the negotiations and agreement to Parliament.
“The negotiations were done with the Governor of Gulf from day one and he will be very happy.
“The landowners will do a development forum and I will stand on my record about protecting landowners, and ensure they get the right benefits,” O’Neill said.