This was said this week by International Trade and Investment Minister Richard Maru, adding that the accounts for the authority had been frozen.
According to Transparency International PNG, the KPPA was established in 2008 by an Act of Parliament, The National newspaper reported.
But it has seen little development since its creation as the overseer of a free trade zone connected to the PNG gas export sector.
In August 2015, Petroleum and Energy Minister Nixon Duban appointed a board to oversee the development of the Konebada Petroleum Park.
But the National Research Institute in April 2017 released a report describing the KPPA as a "scam" and called for its immediate abolition.
Maru told The National that the Konebada Park would come under his ministry.
"The accounts have been frozen and from what I was told by the chairman of the special economic zone authority, we are going to close the organisation, lay off all the staff, and look at how we can move it to the special economic zone authority and oversee the administration of the park until we find investors who we can locate within the park," he said.
But Maru said the park, near Port Moresby, had already sold some pieces of land.
"We are going to look at how we can take back some of the land for the State as soon as we can," he added.
"Some already have buildings. There are about 1000 hectares there that need to be developed. We have a lot of investors interested in setting up in the park but our problem has been able to get cash under the PNG LNG project. We can't secure the cash for downstream processing inside the park."