28 Apr 2003

Asset sales in PNG eroded by sweet heart deals

3:14 pm on 28 April 2003

A Papua New Guinea committee responsible for the planned sale of three state owned assets says they are either insolvent or barely able to meet their operating costs.

The National newspaper reports the chair of the Independent Public Business Corporation, Dr Moseley Moramoro saying the financial viability of Air Niugini, the water and sewerage company Eda Ranu, and PNG Power are being eroded because of "sweet heart deals" with contractors.

Dr Moramoro says inappropriate contractual arrangements with the private sector are eroding the value of these state assets.

He says other problems include poor corporate governing structures which leave them open to political intervention as well as substandard reporting and accountability measures.

Dr Moramoro says these problems are the reasons why there is little interest from international bidders for Air Niugini, PNG Power, Eda Ranu and only one expression of interest so far in Telikom.