PNG rural agency condemns ‘ghost projects’ in K1 billion delivery cash cow

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PNG's K1 billion Provincial and District Services Improvement Programme
PNG's K1 billion Provincial and District Services Improvement Programme . . . lack of acquittals an "open secret". Image: PNG Post-Courier

PNG Post-Courier

Papua New Guinea’s Service Improvement Programme worth more than K1 billion (NZ$440 million) has become a major cash cow for “irresponsible” leaders, says the monitoring agency.

In the past decade, the Provincial and District Services Improvement Programme has delivered much but has not achieved what it set out to deliver — vital government services like schools, health centres, roads and bridges, jetties to the rural population.

Its overseer, the Department of Implementation and Rural Development has now become concerned at the apparent abuse and misuse of public funds by political leaders and their district administration.

The DIRD now reports that a large amount of money has been spent on “ghost projects” which are not physically completed on the ground and cannot be monitored due to financial constraints among others.

Many are half complete health centres or abandoned school classrooms or teachers houses, says DIRD secretary Aihi Vaki.

“Not all of it has been properly acquitted kina by kina. Even the amount of money allocated by the Treasury Department to each district is unknown to the DIRD.”

However, Finance Secretary Dr Ken Ngangan has defended the transfer of the country’s service improvement budgets to the provinces and the remittance of funds by Finance Department as a policy initiative approved by Cabinet.

‘A misunderstanding’
“There is a misunderstanding of the legal framework for budget and expenditure management under which all public and statutory bodies operate,” he said.

“As reported, NEC Decision 240/2018 provided for DIRD oversight of PSIP/DSIP funds management and monitoring.

“Accordingly, the NEC decision was effectively put into effect through the 2019 National Budget process, in accordance with the provisions of the Constitution, PFMA and Appropriations Act, with PSIP/DSIP funds allocated to DIRD in the National Budget for management and monitoring.”

However, a concerned Vaki has termed it as an “open secret” known to the leaders and their district public servants.

He said the DSIP and PSIP acquittals were compounded by lack of surveillance and monitoring by his department staff due to lack of funding from the National Government despite request after request.

He said there were many issues encountered, some of which were reports of proposed ghost projects paid out and finding their way into the acquittal papers to DIRD.

District Services Improvement Project (DSIP) grants amounts to K960 million a year while provincial (PSIP) grants are K220 million a year. The total bill in a year disbursed by Treasury to MPs is K1.18 billion.

“Due to the increase in districts last year, this year’s allocation will increase to a whopping K1.239 billion,” Vaki said.

Concerns amplified
His concerns were amplified in 2021 by now sidelined Immigration Minister Bryan Kramer on multi-million kina projects in rural districts.

Kramer had said that projects were designed, pre-fabricated, and allegedly constructed according to the acquittals but in reality, there was nothing to show for on the ground.

Kramer, who was then Justice Minister, had also claimed that billions of kina were also lost to undelivered state contracts every year and investigations into some of these incomplete projects were made by the State Audit and Recovery Taskforce (SART) initiated by the Department of Justice and Attorney-General working with nine other state agencies with more than K25 million already recovered.

The current status of the SART since then is not known. Nor how much more they may have been able to identify or recover following the last update provided by Kramer.

These were examples of abuse and misuse on a national level, but on the DDA level, it was alleged that millions may have been squandered through unscrupulous and dubious project deals in rural areas.

Vaki was forthright in his revelation, adding that while 60 percent of MPs had made an attempt to acquit their funding, 40 percent had never provided evidence of how they had spent public money in their districts.

Republished with permission.

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