PNG LOSES 1.5 BILLION KINA IN ILLEGAL UBS-OSL LOAN REFINANCING
by MICHAEL JOSEPH PASSINGAN
Prime Minister Peter O’Neill has just cost
Papua New Guinea almost K1.5 billion because of his reckless, corrupt and
unnecessary borrowings. The loss is on the refinancing of his illegal K3
billion UBS-Oil Search loan.
The deal was done in secret in Sydney earlier this
month to avoid having to reveal the massive loss that the Prime Minister, UBS
and Oil Search have inflicted on the nation. Details of the deal were not
revealed when Kumul Petroleum MD Wapu Sonk announced it over the weekend.
Mr
O’Neill’s secret loss comes at a time when the Government is virtually
bankrupt, unable to pay public servants and cutting spending on essential
services such as health, education and power generation.
It will add to the
record and illegal levels of debt already incurred by the Prime Minister. It
will contribute to further worsening of the living standards of ordinary Papua
New Guineans. The refinancing of the UBS-Oil Search loan is even worse than the
original illegal deal. And it is just as illegal because it does not have the
required approval of Parliament.
According to leaks from the PM’s Department
and the banks, led by UBS, that have made millions from the deal, the
refinancing is for a total of about $A1 billion (K2.10 billion). But only about
$600 million (K1.26 billion) has gone towards the refinancing itself.
The
balance of about $400 million (K840 million) is a PENALTY - payable to UBS and
its agents - imposed on the PNG Government for not being able to settle the
original deal by the due date.
Under the original sweetheart deal, personally
arranged by the Prime Minister and Oil Search CEO Peter Botten, the State’s 150
million shares were bought in March 2014 for $8.20 each. At the time the deal
was agreed to, on or about February 13 Oil Search shares were worth $6.65. So
the State has also lost about $232.5 million (K488 million) on the shares
themselves.
There is a further foreign exchange loss of K143 million, so the
total kina loss is about K631 million. When the K631 million losses are added
to the PENALTY, the total cost to Papua New Guinea is K1.47 billion. The only
people to benefit out of this illegal and corrupt deal are the Prime Minister
and his cronies, UBS and Oil Search. Ordinary Papua New Guineas have been left
to bear the burden of their greed.