Prime Minister Peter O’Neill refuses to step aside after corruption claims, courts approve UBS loan repayments and Papua New Guinea’s financial system is worth nearly K40 billion. Your weekly digest of the latest business news.

In an extraordinary week in politics, which saw the Attorney-General replaced and a new Police Commissioner appointed and then arrested, Prime Minister Peter O’Neill appears to have side-stepped a warrant issued to force him to answer questions about the long-running ‘Parakagate’ enquiry being conducted by anti-corruption body, Investigation Task Force Sweep.

O’Neill described the warrant as a ‘politically motivated stunt’, and has promised an independent commission of inquiry into issues surrounding the payments.

In a related move, Investigation Task Force Sweep was also officially disbanded by the National Executive Committee, PNG’s cabinet.

* * *

Prime Minister Peter O’Neill. Credit: Post-Courier

Prime Minister Peter O’Neill has been granted court approval to continue repayments of the government’s US $1.2 billion loan from Swiss bank UBS. The judgement will not impact the Ombudsman Commission‘s investigation into the loan, which is due to be concluded by the end of June. 

* * *

PNGSDP Chairman, Sir Mekere Morauta

The chairman of the PNG Sustainable Development Program, Sir Mekere Morauta, has told the company’s AGM it has done nothing wrong to deserve the vicious attacks by the government. He said legal actions against the government in Singapore and Washington have cost K2 million so far.

* * *

The deputy governor of the Bank of Papua New Guinea, Benny Popoitai, says the country’s financial system has assets worth K38.66 billion, with an expected fall in foreign exchange reserves to K6,744.6 million this year from K6,912.1 million last year. Assets include the banking sector which stands at K30 billion, superannuation K8 billion and life insurance K0.47 billion.

* * *

Treasurer Patrick Pruaitch says PNG’s Gross Domestic Product (GDP) is expected to rise by a massive 21% next year, following the commencement of LNG exports. He said this year’s GDP growth would be around five to six percent.

* * *

The PNG Chamber of Mines and Petroleum has disagreed with a suggestion by the tax review committee to replace the current tax credit scheme with a 150% tax deduction scheme.

* * *

Airlines PNG has modified its Dash 8 aircraft so pilots are unable to make the mistake that caused a fatal plane crash in Papua New Guinea three years ago.

* * *

State Investment Minister Ben Micah has told PNG Power Ltd and The Independent Public Business Corporation to talk to New Zealand companies about how to develop geothermal and hydro power, saying PNG could potentially produce 20,000 megawatts of electricity.

* * *

Duran Housing project site. Credit: EMTV

China State Engineering Corporation, developer Niule No 16 and the National Housing Corporation have signed an agreement to finance and build 40,000 houses in a satellite town at Duran Farm outside Port Moresby. Local building materials will be used for the pre-fabricated houses, rather than using imports.

* * *

West New Britain Provincial Government and Trukai Industries have signed an agreement to establish a commercial rice plantation at Kapore.

* * *

Taiwanese fishermen unload tuna for export from Palau. Credit: AFP

Gold miner Newcrest Mining will pay A$1.2 million in penalties over claims it selectively disclosed information to analysts, under a settlement reached with the Australian Securities and Investment Commission. It also says it expects to generate free cashflow of around A$100 million and be cashflow positive in the 2015 financial year.

* * *

The head of the Parties to the Nauru Agreement (PNA), Dr Transform Aqorau, says Pacific nations could reduce their dependency on international aid by retaining more value in their fishery. PNA members have agreed that from next year, the fishing day fee for foreign fishing vessels will rise from US $6,000 to a minimum of US $8,000 per boat.

* * *

More Pacific leaders have criticised Australia’s moves to try and form a conservative international climate change alliance, saying it will only isolate Australia further in the Pacific.