11 Nov 2009

PNG promises good governance to protect revenue from huge gas project

5:06 pm on 11 November 2009

The Papua New Guinea Government says it intends bringing in measures to ensure good governance and transparency to safeguard state revenues from the Southern Highlands liquid natural gas project and to maximise the nation's development potential.

The Minister for Public Enterprises, Arthur Somare, says these goals have already been the subject of discussions between the Australian and PNG Governments.

The talks were held after the Australian Government's Export Finance Insurance Corporation agreed to help finance the 15 billion US dollar project in exchange for a commitment that Australian goods and services would be used.

Mr Somare says the Australian Government wanted reassurance on the commercial risks of the project and was seeking clarity on whether it would transform both the PNG economy and Australia-PNG bilateral relations.

Australia's Minister for Trade, Simon Crean, says Canberra is ready to assist PNG to create a transparent, robust legislative framework that would ensure the revenues are properly managed and utilised.

Mr Somare says the Government is also holding discussions with the World Bank on how to avoid what's known as the Dutch Disease where a sharp upsurge in resource revenues can create negative impacts in other segments of the economy.