In the OEK version of the proposed Fiscal Year 2011 budget passed on third and final last week, that a provision in the financial package stated that out of the $115,000 funding, $100,000 will be set aside for the Ngardmau Free Trade Zone.
“Of this amount, $100,000 shall be earmarked for the purpose of conducting a feasibility study for the development of Ngardmau Port. These funds shall be disbursed in accordance with the applicable laws of the Republic.”
Under the proposed measure, the project should undergo bidding.
However in earlier interviews, Sen. Joel Toribiong said that a certain Truk Pacifica Development Corporation will conduct the feasibility study report.
Toribiong said that in order for China Shenyang International, Economic & Technical Cooperation to grant a loan of $40 million to develop the Ngardmau port into an international commercial port within the area in Ngardmau State, a feasibility study of the project is required.
According to an article in Island Business stated that the firm had granted a similar loan to Papua New Guinea in the amount of $90 million.
The article further stated that the government of PNG said that the main condition for the loan is that 70 percent of the project must go exclusively to a Chinese developer using Chinese technology, labor and equipment.
It also wrote that “other PNG firms can only bid for the remaining 30 percent of the contract that is if it becomes available. Another condition tied to the loan is that the main contractor’s profit margin will be 20 percent of the contract value.”
The firm is said to give quicker loans compared to other international organizations such as World Bank, Asian Development Bank, AusAID, European Union or any other development partner.
Earlier an article from a Taiwanese newspaper reported that the Taiwan opposition Democratic Progressive Party warned Palau of making such a deal since it could be a start of a diplomatic relationship between China and Palau.
The said proposed deal has caused controversy among Taiwan lawmakers.
Palau is among the six Pacific nations which has a diplomatic relationship with Taiwan.
In June, Sen. Hokkons Baules and Toribiong made the trip to the Philippines to meet Narciso Cauguiran, the Chinese firm’s regional agent.
Cauguiran is the owner of the Truk Pacifica Development Corporation, the Philippine- based company that is eyed to conduct the study.
The company’s office it was learned is located in a private home above a dental clinic in Cavite.
Cauguiran is a special advisor to President Johnson Toribiong.
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