Put hold on benefit payments


THE Komo local level government (LLG), home of the PNG LNG Project, has called on the Government to stop payment of benefits due to impacted provincial governments, local level governments and communities pending an appropriate benefit split between the Southern Highlands and Hela.
The benefits as per the Umbrella Beneficiary Sharing Agreement (UBSA) signed between landowners and government leaders from Southern Highlands and the State in 2009 include:

  • ROYALTY benefit of 2 per cent provided by the State to landowners, affected provincial governments and local level governments;
  • FREE equity of 2.7 per cent participating interest in PNG LNG to project area landowners and local level governments for greenfield areas;
  • DEVELOPMENT levy of 2 per cent of the wellhead value, calculated per the provision of the Oil and Gas Act and the LNG Gas Agreement, available to the provincial governments and the local level governments; and,
  • INFRASTRUCTURE Development Grants (IDG): An amount of K1.2 billion has been allocated by the State equally over two five-year periods, commencing in 2010 for infrastructure development and maintenance in the affected Project areas and provinces.
    The Minister for Petroleum Kerenga Kua should not authorise any of such payments pending the split between Southern Highlands and Hela on the benefits because Hela now is a new province.
    We will put the Government on notice through a petition that will articulate outstanding matters that needs to be attended as priorities to ensure smooth and proportional flow of those benefits.
    I would like to point out that the Komo LLG should be given the cut that it rightfully deserves.
    All benefits due to Komo LLG under the UBSA and LBBSA as per well head value are yet to be paid since the project agreements signed back in 2009.
    We want an audit of all the beneficiary funds that went into the coffers of the Hela government before the Government can proceed with the distributions.
    As far as the beneficiary issues with the PNG LNG Project is concerned, the fact remains that the UBSA & the LBBSA were signed between the Southern Highlands government and the State and not between the then non-existent Hela Government.
    Hela came out as a result of the PNG LNG Project – the creation of Hela was a condition for PNG LNG operations.
    It is only appropriate for the State to put on hold all benefits due to Hela and Southern Highlands pending the appropriate split.
    It will be irresponsible for the Government to continue distributing pending the split.

Charles Haluya,
Hela Deputy Governor and Komo LLG president