He said this when responding to Ambunti-Dreikikir MP, Johnson Wapunai, in Parliament on Tuesday.
Wapunai said there were rumours the project would not begin because the Government had no funding.
O’Neill said the project will be launched early next month and the funding for the project has been secured through a Czechoslovakian EXIM Bank Loan and counterpart funding from the Government.
“The Government has signed off on a concessional loan from Czechoslovakian Government,” said O’Neill.
“Government has also released K37 million to the Austrian Government and Austrian Bank as counterpart funding for the project.”
He added: “I want to assure the good Member and his people that the first class hospital will be launched in early September, and I will be in East Sepik to launch the project.”
The Czechoslovakian EXIM Bank Loan, to the tune of K172 million, was signed off in December 2017 by Charles Abel.