A senior Papua New Guinea Department of Finance officer has been arrested and charged with fraud after allegedly receiving 50,000 US dollars for a Port Moresby dam deal.
The Sirinumu Dam Landowners Association say that the Department of Finance Officer, Cain Wosai, demanded money in 2006 as a fee to assist in processing their deal.
The landowners say two of their officials, who have since been sacked, paid the money into Mr Wosai's account in March 2006.
Mr Wosai spent last night in jail and will face court this week.
The landowners from the Central Province, received 770,000 US dollars in royalties and compensation for a dam supplying all of Port Moresby's water as well as generating hydro-power for the city.
They threaten to shut down the water supply to Port Moresby if the case is not being investigated.