There are claims that the Papua New Guinea Government lost nearly 26 million US dollars to fraud and bogus claims from money set aside to rehabilitate the Highlands Highway.
A consultancy, Mori Resources, says the fraud was pushed by public servants colluding with dishonest villagers, compelling the state to put the rehabilitation project on hold.
The National newspaper says this has disrupted all rehabilitation and upgrading work on major roads in the country.
It reports that the Asian Development Bank, which loaned the money to fund the project, has pulled out.
The Deputy Prime Minister and Minister for Transport and Works, Don Polye, says this is corruption by state agents and contractors who are collaborating with the people.
Mori Resources said less than four million US dollars would've been paid to the landowners if proper procedures had been followed.
It says compensation was only due to owners whose structures were within a forty metre corridor of the highway.
Mori Resources had used satellite mapping to precisely identify who were genuine claimants.