Sir Frederick Reiher, chief executive officer of Australasia Pacific Panel Ltd, the contractors for the project at the western end of Jackson International Airport said yesterday the dispute with the national government had been dragging on for the past two years.
He said the government had paid K28 million (out of K39 million contract sum) on the project that he claimed had a market value of between K35 million and K45 million.
Of the K39 million allocated, only K11 million remains to conclude the project.
Sir Frederick said last night: “With the remaining contract money of K11 million, a total of 50 houses can be built including those already built.
“House price is the main contractual issue that has remained unresolved for more than a year between the contractor and the government.”
He also said there would be significant price variation to cover the significant costs escalation over five years from the public tender as a result mainly of the LNG project start-up.
The impact of the LNG was not provided for in the contract.
Sir Frederick was responding to yesterday’s report in The National in which PNG Party president Robert Akunai said about 65,000 public servants had been waiting for four years for the project to be completed.
Akunai had visited the site and found only 10 houses had been built and another four uncompleted.
“Since the signing of the contract in August 2009, two years were lost to the project as a result of a protracted regulatory (planning, building and land titles) approval process involving a number of government agencies, and a delay over the last 12 months with the resolution of the contractual dispute,” Sir Frederick said.
“The allotments will have minimum market values of K150,000 per block.
“We, the contractor, remain very keen to resume the construction of houses as soon as possible.
“We were made an offer by the government some six months ago to resolve contractual issues. We agreed in writing to that offer.
“Despite follow-up letters, we are still awaiting the government to formalise the agreement and restart the project.
“The frustration we have experienced at the delay in finalising negotiations has been made even worse by the fact that we have a fully operational factory ready to meet the demand under the contract.”
Former attorney-general Sir Arnold Amet yesterday called on Prime Minister Peter O’Neill and Housing Minister Moses Maladina to clarify how the money for the project has been expended.
Sir Arnold tried to raise the issue at question time in parliament but Speaker Jeffrey Nape ruled invalid his questions.
Sir Arnold said later the speaker’s reason was ridiculous as the matter was an important and an ongoing issue.
He said that O’Neill, then the public service minister and Maladina, as his successor in Sir Michael Somare’s government, should explain how the money for the project had been used.
“I am calling on O’Neill and Maladina and the contractor to give a full audit report of how the money was used and how many houses they have built.”