By BOURA GORUKILA
THE O’Neill government’s Union Bank of Switzerland (UBS) loan transaction in 2014 was the worst transaction in the history of the country, former Petroleum minister William Duma told a commission of inquiry yesterday.
Duma, who is Hagen Open MP, told the inquiry that the country had lost millions and some of them were decommissioned for refusing to agree on the transaction.
He said the Government should only borrow money to build hospitals, roads and fund public infrastructures such as schools which the people should benefit from, not to buy shares in a public company.
“You are not a private investor, you are a Government, you borrow so that the public benefits,” Duma said
“There was no cost benefit analysis done by National Economic and Fiscal Commission.
“There was no thorough review by the ministerial gas committee or the ministerial economic committee.
“If we look at it now, where we are, or what we gained out of the transaction?
“We lost millions.”
Duma was questioned regarding his affidavit where he stated that he was asked by then prime minister Peter O’Neill to have lunch straight after the passing of the National Budget for 2014.
“Soon after parliament had passed the 2014 Budget, O’Neill asked me to have late lunch with him at the national parliament member’s dining room,” he said.
“While waiting to be served, he explained to me the need for the State to maintain strategic shareholding in Oil Search because under the IPIC (Independent Petroleum Investment Company) deal, the State’s shares in Oil Search had been mortgaged and it was highly likely we would lose our shareholding in Oil Search if IPIC refused to hand back the State’s shares.
“My immediate response was that the State should not borrow to invest in a speculative industry such as the oil industry, but, try its best to retain its interests through its current shareholding in Oil Search.
“But, if he still wanted to pursue it, he should have ensured that the borrowing was included in the 2014 Budget paper for approval in the Budget which the parliament had just approved hours ago.
“I told him that he should have discussed this with the Treasurer Don Polye before passing the budget.
“O’Neill responded by saying he just wanted to hear my views.”
Duma said he did not know what O’Neill was thinking at that time.
He said he was decommissioned by O’Neill as petroleum minister on Feb 24, 2014, for unknown reasons.
He was in Sydney at that time.
“The prime minister didn’t have an audience with me or tell me why I was decommissioned,” Duma said.
“I formed the view that I was de-commissioned as minister because I had indicated to him (O’Neill) back in Nov 2013, that it was not a good idea to borrow large sums of money to buy shares in a speculative industry such as Oil Search industry.
“Because under the Oil and Gas Act, sections 99 and 100 state that the minister for petroleum and energy authorises transfers or dealings or interests in oil Act matters.
“So I had expressed my views earlier on to the prime minister.”
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