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Undelivered contracts cost PNG billions

K2.7 million hole in the ground  Sohe district near Kokoda (Post-Courier)
The K2.7 million hole in the ground near Kokoda (PNG Post-Courier)

| Asia Pacific Report

AUCKLAND - A one meter-deep hole in the ground is all there is to show of an almost K2.7 million state contract project in Papua New Guinea’s Oro Province.

The project was to design and build a community health building with support facilities for Kiorata in Sohe district.

The project is among others investigated by the State Audit and Recovery Taskforce initiated by the Justice Department which is working with nine other agencies.

“The contractor did absolutely nothing except dig a hole in the ground,” said PNG’s justice minister Bryan Kramer.

“The contractors involved in these failed projects have been taken to the national court for breach of contract.

“As with all the court proceedings filed by the taskforce, they will be asking for the projects to be completed at the contractors cost or funds refunded with interest and costs of proceedings.”

Last year the taskforce conducted site inspections of suspected failed projects despite payments having been made by government departments.

“The taskforce members travelled to the project sites, some of which are located in the most remote parts of PNG, and discovered that almost all the projects were not completed,” Mr Kramer said.

Many of the projects involved the construction of school buildings and health centres.

“Apart from some land clearing, most of the projects were not constructed at all.

“Some were 10 to 80% finished and others were complete but with poor design and materials so water was coming in or termites already eating away the timber,” Mr Kramer said.

“The taskforce compiled detailed reports with photographs which were used to file court proceedings for breach of contract.”

So far this year the taskforce has filed several court proceedings against contractors for failed projects which cost the government more than K7 million.

Every year PNG loses billions of kina because of undelivered government contracts.


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