Vila Times

PNG Ombudsman blocked Government’s suspicious $US3 billion rental deal

PNG Ombudsman blocked Government’s suspicious $US3 billion rental deal
PNG Ombudsman blocked Government’s suspicious $US3 billion rental deal
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Papua New Guinea’s Ombudsman Commission prevented the government from committing to a suspicious $US3 billion rental agreement.

According to the leader of Opposition Patrick Pruaitch, had the Commission not investigated and intervened, a proposed 10-year build-operate-lease-transfer (BOLT) lease agreement would have cost taxpayers almost $US302 million annually in rentals in a 32-storey complex proposed for Waigani. He said the maximum height allowable in the area were for only 12-storey buildings, Post Courier reports.

“This negotiation was being concluded at a time when Government was in default over numerous rental payments that have resulted in the lockout of Treasury, Customs, the National Disaster Office and many other government offices. The current annual office rental budget is around $US70 million,” Mr Pruaitch said.

Mr Pruaitch said facts of the case were contained in the Ombudsman Commission’s recently published final report.

This is titled “Investigation into alleged improper decision by the Government Office Allocation Committee to engage Central Land Ltd to build a 32-storey Government Office Complex at Waigani Central in the National Capital District”.

According to Mr Pruaitch, the report said negotiations started in September 2012 when the former Minister for Public Service, Sir Puka Temu, wrote to Personnel Management John Kali, to negotiate a pre-lease agreement with Naima Investments Ltd.

He said at that time Naima had not submitted any proposal to Dr Temu. Mr Pruaitch said the scale of likely financial losses was beyond comprehension.

“The annual lease payment would have been adequate for construction of the proposed 32-storey Government building, which would have been owned outright with no additional lease payments needed,” he said. He said the report made findings of “wrong and improper” conduct against the Government Office Allocation Committee (GOAC). “Accusing Dr Temu and Mr Kali of “wrong conduct”, the report said both leaders had breached Section 39 and 40 of the Public Finances (Management) Act, 1995 and Part 13, of the Financial Manual.

“It also noted that the maximum height allowable for a building in the proposed area was 12-storey.

“Among its recommendations, the Ombudsman urged Dr Temu to inform the National Executive Council that no agreement has been executed and that NEC revoked its earlier decision for the State Solicitor to finalise a leasing agreement to be signed by DPM and Central Lands Ltd.

“The BOLT deal over a ten-year period would have impacted on the Government’s debt management strategies and burdened this and future generations through entrenched economic mismanagement,” Mr Pruaitch said.