The chairman of PNG Sustainable Development Program Limited, Sir Mekere Morauta, said he feared for the future of the Ok Tedi mine – and the flow of benefits to Western Province – under Government ownership.
Under the majority ownership of PNGSDP, it had become a very successful mining company, professionally managed, transparent and accountable and highly profitable.
It is unique in the world in the way it uses its money for extensive environmental remediation and community development – schools, clinics, airstrips, housing for health workers and teachers, agriculture projects, roads, bridges, wharves and so on – through PNGSDP and Ok Tedi Development Foundation.
“The Prime Minister’s proposal to expropriate without payment the PNGSDP shareholding of 63.4 percent, which the company holds on behalf of Western Province, is very destructive to the nation, to Western Province and to investor confidence,” Sir Mekere said.
“It would jeopardise the capacity of OTML to continue its environmental and developmental work and its contribution to the state in taxes and dividends.
“OTML would become yet another State-Owned Enterprise, joining all the others in the ward for the chronically ill, without a cure in sight.
“People should be aware that the major reason that PNGSDP has been so successful is that it has a strong governance structure, which ensures it remains free from political interference.
“Majority state ownership of OTML, as the Prime Minister is proposing, would leave it wide open to political interference and all the consequences we know so well.
“Poor management lacking commercial discipline, lacking capital, lacking technical expertise.
“The result would be a decline in profitability and hence a decline in dividends, a decline in the value of the asset, poor operating standards, job losses, and technical and environmental compromises.”
The Prime Minister was already interfering politically in company affairs in a number of ways.
“He has instructed the OTML management and Board not to declare and pay the 2012 dividend. What that means is he is waiting to be 100 percent owner and receive all the dividends, leaving Western Province with nothing.
“Then yesterday the Prime Minister announced that OTML would be managed by a new company, and that the failed Tolukuma mine would also be managed by that company. That is political interference.
“He is already interfering when the state is only a minority shareholder. Imagine what the interference would be like if he got 100 percent control of OTML.
“I want to know why he wants to saddle the highly profitable OTML with the highly unprofitable Tolukuma mine and what impact that will have on dividend returns to Western Province?
“Further, what does he mean by his statement that there will be a new management company?
“Who are going to be the shareholders? Who is going to have the management contract?
“Will this be just another front company for siphoning off millions and millions of kina?
“All the secrecy surrounding this matter is highly suspicious. The public needs to know the details so it can make informed judgments, not just be spectators.”
Mekere Morauta
Chairman
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