The Prime Minister of Papua New Guinea has defended the withholding of payments to Bougainville, and claims the autonomous government is mis-spending the money it does get.
Peter O'Neill says the national government has honoured the first of five 100 million kina payment commitments made last year but it is not happy with the way it was spent.
The President of Bougainville John Momis has accused the national government of delaying payments for years that have been due to it under the Peace Agreement.
He says they might sue the national government.
Mweanwhile Peter O'Neill says the next four years of payments will be spent directly on infrastructure projects, including resealing and upgrading roads, bridges, airports and the Arawa township.
"We are not pleased - and I'll say it frankly - with the way the money that we have given has been managed. It has not been spent on the intended purposes which was to build infrastructure on the ground in Bougainville and now our government, as we have the right to do so, we will have hands-on approach in management of those key infrastructures."
Peter O'Neill says many of the claims in Bougainville for wages were not legitimate.
