Prime Minister Peter O’Neill has promised a better deal for landowners in their pursuit of equity in the PNG LNG Project.
When the Umbrella Benefit Sharing Agreement (UBSA) was signed in Kokopo in 2009 to pave the way for the LNG project, the Somare Government offered the landowners equity in the project, at a price of US$250 million for 1 per cent equity. It was agreed then that the Government would offload 4 per cent equity to the landowners. That means the landowners would have to raise $1 billion to pay the State for the equity. Prime Minister O’Neill told Parliament yesterday the price offered was not fair for the landowners. "They were given a raw deal. We are now negotiating with NPCP to give the landowners a better deal, at a price they can afford. We did not set that price. It was set by the previous government." He was answering questions raised by Opposition Leader Don Polye during Question Time in Parliament. Mr Polye had asked if the Government was going to the bond market to raise money through a sovereign bond to pay for the landowners’ equity. He asked if money meant for landowners like royalty and dividends would be held as collateral against the bond or loan being sought. Prime Minister Hon. Peter O’Neill said Mr Polye was confusing sovereign bond being sought by the Treasury Department and Central Bank to fund Government debts, with funds being sought for landowners’ equity. "We are not raising funds through sovereign bond to pay landowner equity. I don’t know where the former World Bank chairman got that from. "We are negotiating with NPCP to get a better price for the landowners. We have to be fair to the resource owners. Landowner entitlements from the LNG sales are safe. Their royalties are parked with the Central Bank until the clan vetting exercise and the dispute resolution undertaken by Justice Ambeng Kandakasi are completed." Prime Minister Hon. Peter O’Neill said the sovereign bond being sought by Central Bank and Treasury was a different thing. "Governments all over the world, including the biggest economy the US, seek trillions of dollars in the bond market to finance debt and infrastructure projects. "Sovereign Bonds are cheaper than Treasury Bills and are over much longer term. The US$2.5 billion we are seeking will bring in much needed foreign currency, and will also be used to retire expensive debts that we currently have. "We have to manage our economy in a responsible way and that is what we are doing. "The Opposition Leader must not distort facts to incite landowners. These questions have the potential to undermine the process that is underway to secure the bond."
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