PETER O’NEILL’S ROLL OUT OF THE ILLEGAL K6 BILLION CHINESE EXIM BANK LOANS

by BARRY PISIMI

On or around September 2012, immediately after Peter O’Neill was installed as the Prime Minister, he (O’Neill) took a huge delegate to China, organised by his sidekick, Ni Cragnolini. It was openly reported that a loan of K6 billion was obtained from the Chinese Export-Import Bank (Exim Bank) to fund certain rehabilitation of ailing infrastructures. One would have thought that PNG Powers rundown and incompatible power generation and distribution equipment would be first priority. NO!

The K6 Billion was never appropriated in the 2012 National Budget, nor was it captured in the subsequent budgets in 2013, 2014 and 2015. We really don’t know whether that loan was obtained and if so, did the money ever enter PNG?

One of the mandatory conditions of Exim Bank loans is that a Chinese multi-national corporation, mostly State owned enterprises, has to be nominated to deliver the projects identified by the recipient country. Under this arrangement, the funds remain in China. Only the project is delivered to the recipient country. The recipient country then repays the loan with concessional interests to Exim Bank.
It now appears more clearly that the Exim Bank loan of K6 Billion was actually signed and procured illegally –without the mandatory Parliamentary approval. It is believed that this is one of those so called “off balance sheet debts” that Department of Treasury is repaying.

Sources within government reveal that there was no debt financing plan to obtain this mega loan. That information seems credible because the loan is not covered in the Budget Strategy documents of 2012 – 2015. That is further cemented by the type of projects that this loan is used for and they are:
1. Lae – Nadzab 4 Lane Super Highway
2. Lae Wharf
3. NCDC new City Hall
4. 9 Mile to Baruni 4 Lane Super Highway
5. Confarm to Togoba 4 Lane Super Highway
6. Jacksons International Airport Redevelopment approved for K1.5billion on 16/12/15

The projects are never tendered and are being rolled out in tranches. The super highways are unnecessary. There is no traffic jams on the existing roads. Whoever did the feasibility studies, if any, to justify these projects must have lived in another planet and assumed the realities.

So if there was no plan and need for this loan, as it clearly seems now, then what was the real reason for this loan? When one organises a huge loan successfully like the K6 billion, you are looking at at least 5-10% Success Fee (Commissions). Who would have made that money?
After the loan, Ni Cragnolini is believed to be buying properties left-right-centre in Gold Coast and Brisbane in trust for PM.
The K3 billion loans from UBS Bank is another of those illegal loans obtained by PM O’Neill without Parliamentary approval, which does not benefit PNG in any manner or form. Imagine the kind of commissions/success fees made in that arrangement.
So for personal benefit, someone has mortgaged the future of this country in the pretext of infrastructure developments.