K2.7 million hole, other failed PNG projects land contractors in court

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The K2.7 million PNG hole-in-ground
The K2.7 million hole in the ground in the Sohe district near Kokoda ... as revealed by PNG's Justice Minister Bryan Kramer. Image: Post-Courier

Asia Pacific Report newsdesk

A one metre-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 Northern Province, reports PNG Post-Courier.

The project was for the design, pre-fabrication and construction of a community health post building with support facilities for Kiorata in Sohe district, and valued at K2,682,417 (about NZ$1.06 million).

“The contractor did absolutely nothing except dig a hole in the ground,” said Justice Minister Bryan Kramer.

This project is among others that have been investigated by the State Audit and Recovery Taskforce (SART) initiated by the Department of Justice and Attorney-General working with nine other State agencies.

“The contractors involved in these failed projects have been taken to the National Court for breach of contract,” Kramer said.

“These court proceedings are now before the National Court for orders to be made.

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

Suspect projects
The SART-conducted site inspections last year in some cases that were suspected of being failed projects despite payments being made, and had been referred to them by government departments.

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

He said many of these projects involved the construction of school buildings and health centres.

“Most of the projects were, apart from some land clearing, not constructed at all.

“Some were 10 to 80 percent finished, and others were completed but with poor design and materials used, so water was coming into the building during the rainy season, or termites were already eating away the timber used,” Kramer said.

“The taskforce compiled detailed reports with photographs, which were then used to file court proceedings against the defaulting contractors for breach of contract.”

This year the taskforce has filed several court proceedings against contractors from site inspections in 2020 for failed projects which cost the state more than K7 million (about NZ$2.8 million).

Billons of kina are lost to undelivered state contracts every year and the SART initiative uses the claims by and against the State Act 1996 to make claims against contractors for breach of contract.

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