Public Account Committee slammed 'corrupt' Paga Hill land deals

While police are continuing to facilitate the forceable eviction of people living on Paga Hill in Port Moresby despite the protests of their local MP*, we should remember the Public Accounts Committee has already found the land acquisition by the developer was completely corrupt and fraudulent.

These are excerts from the PAC findings as recorded in their 2009 Report to Parliament on the inquiry into the Department of Lands:

Portion 1597 Milinch Granville, FourMil, Moresby At Paga Hill – Grant to Paga Hill Development Company Ltd.

  • P.60: “On the 18th December 1997 Paga Hill Land Holding Company (PNG) Pty. Ltd. Was granted an Urban Development Lease (UDL) over Portion 1597 Granville Port Moresby. This land comprises 13.7 hectares of Paga Hill in Port Moresby – virtually all the hill ... A large number of onerous conditions attached to the UDL – none of which, the Committee concluded, have been complied with by the Lessee”.
  • P.60: “The land was a Gazetted National Park and could not be granted away to private hands. The Committee finds that this land was of great National importance and a prime piece of recreational land for residents of Port Moresby. How the land came to be given to private speculators is a good illustration of the failings and corrupt conduct of the Department of Lands and Physical Planning. The continuing refusal of the Department to recover the land for the State well illustrates the continued acquiescence of the Department in corrupt dealings and clearly shows the extent to which private interests control the Department at the expense of the state and the citizens of Papua New Guinea. The Inquiry was seriously impeded by the Departmental failure to produce any records or documents at all concerning the issue of the original UDL or a subsequent Lease – despite a Notice and Summons to do so”.
  • P.61 “The following analysis of how this National Park came to be in private hands is therefore made with no assistance at all from the Department or its officers”.
  • P.61: “Portion 1597 Milinch Granville, Fourmil Moresby comprising two parts containing a total area of 13,1198 hectares was reserved from Lease by a Declaration in the National Gazette G59 dated the 10th September 1987 for the purposes of “Open Spaces” to be managed by the National Parks Board. In other words the land was preserved for future generations as a National Park. There were good reasons for this to occur. The Land is of considerable historical importance to the nation, containing as it does, Wartime Bunkers, Gun Emplacements, tunnels and, apparently, significant pre-historical sites. Further, the situation of the land in the centre of a growing city offers superior recreational facilities to the occupants of Port Moresby. It is now and will increasingly be a vital recreational area for central Port Moresby ... There is no apparent Gazettal of Revocation of the Reservation of Lease or the Certificate Authorising Occupancy of Land until the National Capital District Physical Planning Board by Meeting 2a/2000 rezoned the land from Open Space to Commercial, Part Residential, Part Public Institutional and Part Utilities by Gazette Notice dated 22nd May 2000. Precisely, how, why and at whose request this was done remains totally unclear in the absence of documents or records from the Department ... In or about 1995, the National Parks Board ceased to exist. There was no management of the Park and it is fair to assume that speculators saw the land as ripe for acquisition. The State, in general, and the Department of Lands and Physical Planning in particular allowed and cooperated in the taking of this National Park [62] from the citizens of Papua New Guinea by profiteers who, subsequent events showed, had no capacity to develop the land at all ... Four applications for grant of this Land were referred to Papua New Guinea Land Board No. 1991 (Item 2) each seeking a grant of a Business (Commercial) Lease over the land – one of which was Paga Hill Land Holding (PNG) (sic). The Land was still a National Park. The Committee can establish that Land Board No.1991 purported to convene on Friday 22nd August 1997 ... It seems that the Land Board No 1991 recommended that “Paga Hill Land Holdings PNG” (sic) be granted a Lease over Portion 1597 Milinch Granville Fourmil Moresby .... [63] An Improvement Covenant is clearly set out in that UDL. It requires improvements to a value of K 300 million to be undertaken in the first five years of occupation ... As of March 2006, there is no development on the land at all. How the Land Board concluded that the Grantee could meet the Improvement Covenant is unknown in the absence of any documentation”. 
  • P.65 “The failure to comply with the UDL covenants, particularly the Improvements Covenant, should have resulted in the Department forfeiting the Lease – or at the least, not issuing a Business Lease. More properly, the Department of Lands should have channelled the Lease years ago on the basis that it was unlawfully issued”.
  • P.65 “In 2000, a company called Paga Hill Development Co. (PNG) Ltd was formed”.
  • P.66 “On the 01/09/2000, a Business Lease over Portion 1597 Granville was granted to Paga Hill Development (PNG) Ltd. This Lease was registered as State Volume No. 24 Folio 159. How and why this new Company, rather than the original Grantee, was able to obtain this Lease is unknown. The Lease should have been issued to the same company that held the Urban Development Lease.
  • P.66. “The Department itself states that the UDL has not been surrendered – so two Leases appear to exist over the same land. In a memo to the Secretary for Lands, dated the 18th March 2003, the issue of the Business Lease is described as ‘dubious’”. Notes that the issuing of the lease was illegal.
  • P.67, the rent for the land should have been K250,000 p.a., in a “handwritten notation” it was reduced to K50,000. No one knows who was the offer who reduced the rent.
  • P.68: “This means that with the active collusion of the Department, the state has lost a minimum of approximately K 900,000 from 2000 until 2005 ... “The Committee was advised that the Lessee could not pay even this reduced amount. A Departmental Officer then agreed to allow the Lessee to pay the Land Rent over a period. This Officer had no power to do so.”
  • P.69 – It appears Rommily Kila Pat the Department Secretary was responsible for the rent reduction and extension.
  • P.69 “As if these illegalities were not enough, on the 21st October 2002, the then Minister for Lands agreed to a request from the principal of Paga Jill Development Company limited, to waive all past and future rentals until January 2006. The reason for the request by the Lessee was that the Land Rental could be better used in resourcing international investors to develop the land – a contention with which the Minister agreed” But the Department refused to accept the waiver.  
* Read more about the forced evictions:
Dame Carol highlights corruption in Paga Hill Deal