Secrecy of financial arrangements and obfuscation of government budgeting has risen dramatically in the last two years. The Switzerland UBS loan is now history and no accounting has been given to Parliament or the people of Papua New Guinea. In the wake of the UBS loan, the country has been saddled with a new K1.5B loan from Credit Suisse. Has the Prime Minister invited any discussion from his ministers and the full Parliament on this new loan?
Most Members of Parliament are in the dark about the essentials of the UBS loan. Every MP should be demanding full disclosure of all the details on the UBS loan. What we know is the loan totaled K3.0B, making it one of the biggest loans in the history of the nation and greatly increasing the indebtedness of the country. The Prime Minister needs to realize that the UBS money are public funds and therefore need a full and public accounting.
We also know that most of the UBS money was used in March 2014 to buy 150 million shares of Oil Search at $A8.20 per share, which totals $A1.23B or approximately K2.46B at the time. Question: What happened to the other K540M? Peter O’Neill knows, but he’s not telling us. One or two others in high levels of government are also aware, but their lips are sealed.
Other questions: Was the loan rate for the UBS loan 12.3%? Did the conditions include a two year term for repayment at approximately K30M per month for just the interest payments, plus a three month grace period? By the time the K3B loan was repaid, did it cost the nation K3.5B or 3.8B or 4.1B? Was part of the UBS loan rolled over into the Credit Suisse loan? The Prime Minister knows, but he’s silent. The MPs need to demand answers!
Additionally we know that the spot price of oil worldwide ranged between $90 - $110 per barrel for three and a half years. On in late June 2016, about three months after the Prime Minister purchased the 150 million Oil Search shares, the price of oil fell off the cliff, dropping from $100 per barrel to $30 per barrel in January 2016.
The drop in the price of oil had a huge impact on the all the gas and oil companies, including Oil Search. Up until July 10, 2016 the price of Oil Search was below $7.00 per share. That’s a huge loss for A complicating factor is the Oil Search attempted to buy out Interoil earlier in the year, but the deal has not been finalized because Exxon/Mobil is making a competing offer.
A few MP’s, notably ex-Prime Ministers, have a good idea that corruption is being taken to new dizzying heights. In explaining why he voted with the opposition in the recent vote of no confidence, Grand Chief Michael Somare asked why the nation of PNG hasn’t experienced any of the benefits of the PNG LNG project. In a July 22, 2016 Post Courier article Somare states that 250 LNG shipments have left the shores of PNG providing income of $US220M per shipment. The PNG government share of that money is about 20%, which amounts to at least K10B.
Every Member of Parliament needs to be asking: “PRIME MINISTER, TELL US WHAT YOU ARE DOING WITH THE MONEY! IT’S NOT YOUR MONEY! IT BELONGS TO THE NATION OF PAPUA NEW GUINEA!”
At the next meeting of Parliament, the MPs need to be jumping up and down on the tables and demanding answers to the billions of kina of government money for the UBS loan and from income from the PNG LNG project. The Prime Minister and his ministers demand acquittals from MPs for their use of DSIP funds, which has varied between K1M and K15M, but somehow he thinks he’s exempt from giving accounting for UBS loans and LNG income. The Day of Reckoning is coming!
