The New Zealand government says it hopes an electrification aid project that was halted in Papua New Guinea can still be completed if security improves.

Work on the Enga Electrification Project in PNG’s Enga province has stopped due to ongoing violence around the project area in Tsak Valley.

New Zealand spent NZ$6.7 million over the last six years on the project which aimed to connect at least 4000 households to electricity.

• READ MORE: NZ pulls plug on $6.7m power project in Papua New Guinea amid tribal violence

It was part of combined efforts with the US, Australia and Japan to help 70 percent of PNG homes get connected by 2030, as agreed to in 208 when PNG hosted the APEC Leaders Summit.

However, contractors had to be withdrawn from the area after a surge in tribal fighting in August last year, according to a spokesperson for the Ministry of Foreign Affairs and Trade.

“Ending New Zealand’s involvement is a disappointing outcome, particularly given New Zealand’s longstanding and extensive efforts to deliver energy infrastructure in Enga Province,” the spokesperson said.

“New Zealand is working on a transition plan with partners in Papua New Guinea. It is hoped this will allow for the successful completion of the project if security improves.”

Northern lines installed
The ministry said 13.5 KM of distribution lines in the North of the project area were largely installed but were yet to be commissioned or connected to houses.

It said 12km of distribution lines in the south of the project area remained at various stages of construction.

Meanwhile, PNG’s Foreign Minster Justin Tkatchenko told local media that New Zealand would hand over equipment from the project to PNG Power Limited, a state-owned entity.

This article is republished under a community partnership agreement with RNZ.

A number of small contractors in Papua New Guinea are still waiting for positive feedback for money owed to them by government agencies after 12 years.

A 2015 Post-Courier front page picture showed a man, David Goli, who chained himself at the then headquarters of the Education Department at Fincorp Haus to protest over not being paid for the programme work.

He is still waiting today.

• READ MORE: Other PNG finances reports

The contractors, who are mostly small businessmen and women who were engaged by the Education Department, NCD Education and the Library and Archives, to carry out work under a pilot project worth K500 million (about NZ$224 million).

The contractors were engaged under the RESI (rehabilitation of education sector infrastructure) programme, NCD Education RESI and the Library and Archives development programme.

They provided the service and also used their own funds to carry out the work with the promise of being paid but to date they are still waiting.

These RESI programme, NCD Education RESI and the Library and Archives development programme, according to the current representatives of the contractors, was during the term of the government of the late Sir Michael Somare and Sir Puka Temu in 2007.

Balance awaited
Three separate payments were made in 2009, 2011 and 2013, but up until now, some 12 years later, they are still waiting for the balance of their payment.

The leaders of the group, chairman Joe Kelta Kombie, deputy chairman Paulus Wembri and James Pijape came in person to the Post-Courier office at Konedobu expressing their concern on the delayed payment.

They said the issue of this payment had gone through various stages, including the Education Department’s refusal to pay because of bogus claims.

That resulted in a number of audits to determine genuine contractors which were done by three separate agencies but yet the payments were not forthcoming despite numerous representations to the department.

They also claimed that current Prime Minister James Marape was fully aware of this programme and the plight of the contractors because at that time he was Education Minister before being moved to another ministry.

“The Prime Minister knew our problem at that time. He was the one who took our matter to NEC [National Executive Council] where K96 million [NZ$43 million] was made available in 2015, but the department did not pay,” the three representatives said.

“Recently there was an NEC decision made in November 2022 to allocate some monies for this payments, but as contractors and people owed, we don’t know how much NEC has approved.

Confidential details
“The submission made to NEC for this outstanding payment has been kept confidential for reasons known only to the department. We don’t know the list of contractors, the amount that is going to be available and we are suspicious that we may not be paid at all again.”

They are now calling on the Prime Minister, Education Minister and the Secretary to come out and tell them if they will ever be paid.

“We totally agree and support this governments policy on SMEs.

We were once on that path but after spending on these three programmes and hoping to be paid, we are now left with nothing. Please listen to our plight and pay us what is owed to us,” the men said.

Todagia Kelola is a PNG Post-Courier reporter. Republished with permission.

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.

• READ MORE: PNG’s Justice Minister Kramer takes on contractors over unfinished jobs
• Other PNG state audit and recovery reports

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.

Billions of kina are lost to undelivered state contracts every year in Papua New Guinea and investigations into some of these incomplete projects have begun with more than K25 million (NZ$10.3 million) already recovered.

Justice Minister Bryan Kramer told the PNG Post-Courier yesterday that the State Audit and Recovery Taskforce (SART), an administrative inter-departmental team headed by the Department of Justice and Attorney-General (DJAG), was examining these contracts and would prosecute default contractors.

“The exact value of the contracts the taskforce is currently investigating, from only three government departments it is assisting — Health, Education, and Lands and Physical Planning, is K283,140,015.96 (about NZ$116.5 million).

• READ MORE: Other PNG news reports

“When you take into account that most, if not all, government departments and state-owned enterprises give contracts annually, we are talking about funds in the billions,” Kramer said.

“But there is no mechanism in the government system to hold contractors liable if they do not fully deliver their contracts.

“The only way is through the Claims by and Against the State Act 1996 which has not been used since its inception.

“In the SART initiative, we are using this act to make claims against contractors for breach of contract should they fail to uphold their end of the bargain,” he said.

First site inspection
“The taskforce started work in 2019, and in 2020 conducted its first site inspection on various contracts referred to them by departments across the country.

“The team audits the contract entered into by the state and its departments and agencies and ensures that the contractor has completed the task.

“If the contractor has not delivered the project, then the Attorney-General will commence civil court proceedings for breach of contract under the Claims by and Against the State Act, and criminal proceedings under the Proceeds of the Crime Act to recover the misapplied state funds through the Office of the Public Prosecutor.

“The SART is working with the Department of Education and Department of Health to recover funds paid for a number of classrooms and health centres that have not been built, even though monies were released for these projects.

“The taskforce is also assisting the Department of Lands and Physical Planning (DLPP) to recoup outstanding rental arrears for state leases where the current outstanding is K241 million.

“Of that amount, K28 million has been recovered by the team.

“Every year approximately K34 million is lost in unclaimed state lease rental arrears in Port Moresby alone because it is statute-barred in accordance with the Frauds and Limitations Act and cannot be recovered,” Kramer said.

Recovery proceedings
“The DLPP cannot commence recovery proceedings in court to claim the outstanding rental arrears because they are not mandated to represent the state in court.

“This power lies with the Attorney-General utilising the Claims By and Against the State Act 1996.”

Statute barred describes a legal action that cannot be brought to court because too much time has passed.

He said the collaboration with the Attorney-General, SART and the DLPP to recover the outstanding rental arrears would be strengthened going forward.

He thanked the Attorney-General and DJAG Secretary Dr Eric Kwa for his leadership and the members of the taskforce for their commitment to all the cases.

The state agencies that make SART are, Department of Treasury, Department of Finance, Department of National Planning and Monitoring, Department of Implementation and Rural Development, Department of Provincial Affairs, Department of Lands and Physical Planning, National Procurement Commission, Office of the Auditor General, and the Royal PNG Constabulary.

“The partnership between agencies is effective to ensure the taxpayer’s hard-earned money is used where it should be.”