PM seeks Aussie aid for pipeline project
The National, Copyright 2000
December 5, 2000
THE Government had asked Australian Prime Minister John Howard for financial help to complete the PNG to Queensland gas pipeline, Prime Minister Sir Mekere Morauta said yesterday in Sydney.
Answering questions from journalists ahead of his keynote address to the PNG Mining Conference in Sydney, Sir Mekere said PNG still needed US$350 million (over K1 billion) for the project.
"I have written to Prime Minister Howard outlining the project's profile, where we stand, it's importance to Papua New Guinea, and asked him and his government to consider extending some financial support," Sir Mekere said.
He had not specified an amount and had not yet received a reply from Mr Howard, he said.
However, details of PNG's request would be discussed at a top level meeting next week.
"Officials at the very highest level will be meeting 10 days from now to discuss details," Sir Mekere said.
"I was careful not to specify an amount except to say that we have US$350 million outstanding balance to raise and any support given would be welcome."
Sir Mekere said the pipeline would be an important safety net for PNG for the next 30-40 years, providing a source of growth and stability for PNG.
He said his Government had already moved to build a fiscal regime favourable to the project, including lowering corporate tax from 50 to 30 per cent.
The Government had also assured developers of its own participation in the project.
Meanwhile, global oil producer Exxon had agreed to be part of the project while Santos was "very seriously" thinking of following suit.
These factors, plus the measures implemented by the Government, should see the project proceed, Sir Mekere said.
The Government had already raised US$100 million from the European investment banks but needed another US$350 million to acquire 30 per cent equity.
However, he said the Government may have choice but to accept less than 30 per cent.
Sir Mekere said he was satisfied that the economic and social reforms he introduced after his election in July 1999 were well on track.
"Institutional strengthening, promoting investment, macro-economic stability, stabilising the kina - I'm very satisfied with the progress to date," he said.