US demands money back after failed school project

Transcript

The United States has demanded that the Marshall Islands pay back 800,000 US dollars given to it to build a school that Majuro now says can't go ahead.

The money was eight years ago under the Compact of Free Association after the government said landowners had approved construction of the school on Majuro.

The money was then spent on design work, but last month, the US was told that the school couldn't go ahead because the documentation didn't actually give authority for land use.

Our Marshall Islands correspondent, Giff Johnson, says Washington is now saying that if the money isn't paid back by July, it may withhold other payments.

GIFF JOHNSON:  For a long time, I would say seven or eight years at least, there has been a plan to build a new elementary school for a downtown school that had to be closed down some years ago.  The plan was to use landfill and essentially come up with a model school using US money provided through the Compact of Free Association.  So a site was selected, landowners signed off on agreements for use of the property and then based on that a lot of money was paid for the site's specific design work.  Then at a meeting last month between the US and the Marshall Islands, the Marshall Islands said they had just determined that they couldn't move ahead because the documentation didn't give the government authority to use the land.  The US said well then essentially the US position is the money was spent improperly because the government told the US they had authority to move ahead.  Now they are saying that they don't and $800,000 was spent on this project so the US is saying they want to get reimbursed on this.  I think this becomes a very political issue because seven or eight years ago the community in this area of Majuro that is known as Uliga got together, worked out arrangements with the landowners and they were paid a certain amount of money to sign off on what is known as a 'quick claim deed'.  That was done and everything looked like it was in order but in the Marshall Islands land is a very controversial, difficult issue to work around for any kind of development.  There are leaders who don't recognise this quick claim process and maybe feel that the land is being improperly alienated or something like that.  It becomes a political issue where they won't accept the quick claim process and essentially say they don't want to build it there so that's undermined the construction of this new school.

JAMIE TAHANA:  What for the school now?  Is it just not going to be built?

GJ:  I have heard that there's some talk about doing it in a different neighbourhood by just using some existing property which clearly wouldn't give it the same kind of area for developing facilities but given now we have an election looming in November, I very much doubt that anything will move ahead on this in advance of the election.  I would think that the school project would probably just end up on hold.

JT:  And we also have the government in a quandary now because Washington is threatening to withhold further payments or something because of this $800,000.

GJ:  They are saying reimburse it or if not then we can withhold upcoming, because there is monthly grants and infrastructure grants annually are around 12 million dollars so clearly this could be deducted from future payments. The Marshall Islands is disputing this, saying that essentially that it was agreed by both sides four years ago that this money could be spent on this.  I think the Marshall Islands point is that there was no attempt to do anything unproper.