Lae roads cost K200 million for just 20km

By MALUM NALU

A Department of Works (DoW) report into rehabilitation and upgrading of Lae city roads shows almost K200 million has been spent on just 20km of roads, some of which are incomplete and have already started falling apart, from 2009-2012.

In Stage 1 alone, more than K24 million was spent on a little over 4km of roads, while in Stage 2 more than K104 million was spent on a little over 15km of roads.

The rehabilitation and upgrading of Lae City Roads - Stage 1 commenced around 2009.

The DoW was involved in the supervision of the following projects through their provincial establishment in Morobe province:

·         A 1.496km section of Huon Road junction between Milford Haven /Huon Road junction to Huon Road/7th Street junction for K9, 118, 558.87.This project was undertaken by Dekenai Constructions Ltd. This project was physically and financially completed. This project involved reconstructing the road from the sub-base layer to surfacing with double seal coat with asphalt surface finish;

·         A 1.466km section of Huon Road between 7th Street/Huon Road to Huon Road/Markham Road junction for K10, 279, 659.16.This project was undertaken by East – West 1 Ltd and completed both physically and financially although there were some delays and got completed in early 2011.

·         A 1km section of Boundary Road between Highlands Highway/Boundary Road junction to Boundary/Huon Road Junction for K3 million.This project was undertaken by Lae Engineering Contractor Ltd. Although the payments were made in full, physical work was not completed. The work under this project is still outstanding; and

·         A 0.7km section of Huon Road from Boundary Road to Bumbu Road Junction for 2.1km.This portion of works was carried out by FTM Constructions Ltd under the close supervision of Lae City Authority and Gure Kule Konsultants. The supervision was changed to NME Internationals and then to DoW at its final stages.

Company singled out in Lae roads report

By MALUM NALU

A private company NME International (PNG) Ltd has been singled out in a damning Department of Works (DoW) report into rehabilitation and upgrading of Lae city roads, which shows that  there was massive foul play in awarding of contracts amounting to almost K200 million.

The report has been given to Task Force Sweep by DoW to investigate.

The report reveals that four contracts were procured for Stage 1 amounting to K24.4 million,  12 contracts were procured for Stage 2 amounting to K104.3 million plus variations, an additional K28 million was appropriated in 2012 to settle outstanding claims, and additional funding of K27.39 million is require to complete the remaining balance of works.

The government only transferred the administration and management of Lae roads rehabilitation and upgrading to DoW in August 2012 to ensure successful completion of ongoing works.

Stage 1 works commenced in 2009 with contracts given to Dekenai Construction, East-West 1 Ltd, FTM Construction and Lae Engineering Ltd.

“In line with the National Government’s aspiration to upgrade the Lae City Roads to a Standard Urban City Road status, K50 million was allocated in 2010 supplementary budget,” the report says.

“By the virtue of the appropriation bill, the funding was allocated to DoW,  however, the projects were hijacked at the central agencies and Central Supply and Tenders Board (CSTB).

“NME International (PNG) Ltd (NME) was engaged as State’s representative to manage all aspects (design, procurement, project management) of these projects.

“A detailed audit has been undertaken to establish the project financial and physical status.

“The audit reveals that 12 contracts were procured which equates to K104.3 million, including variations.

“The State erred from the beginning by awarding contracts above the K50 million funding appropriation.

“Additional K28 million was appropriate in 2012 to settle outstanding claims certified by NME as well as completing the outstanding works under Stage 2.

“Most of these projects were procured under certificate of inexpediency (COI).

“There was no justification for the expedited procurement for such important projects.

“Ample time should be given for proper planning and technical design necessary to make informed investment decisions.

“Consequently, lot of ambiguities and variations has surfaced, thus DOW is doing its best to address and conclude these projects.

“NME scoped for concrete pavement works, a highly technical task.

“There was no proper design to guide contractors.

“Most contractors lacked experience in such projects and were not familiar in executing it.

“Inefficiency of unskilled contractors in concrete pavement and buildable design resulted in poor performance and slow progress.

“Engineers’ estimates were unavailable to compare and review the contractor’s prices.

“All contracts were awarded as per contractor’s pricing.

“These prices were further inflated by variations due to poor scoping and design.

“Department of Finance (DOF) paid over K30million in advance to contractors to commence work.

“Some commenced as expected, however other did not commence until October 2012.

“Due to misprocurement, some contracts have been suspended awaiting further instruction from CSTB.”

Port Moresby embarks on K800 million road projects

By MALUM NALU

 

Port Moresby has embarked on a massive roads development which will cost up to K800 million, according to city manager Leslie Alu.

He said these projects included the K318 million four-lane arterial road from Poreporena Freeway to 9-Mile by China Harbour Engineering (CHE), K160 million Kookaburra Street to Erima Flyover by Hawkins, K84 million Gordon Industrial Area by Global, K77 million four-lane road from Erima to 9-Mile by Dekenai, K62 million 6-Mile to Jackson Airport road by Hebou, and K52 million Paga ring road by Curtain Bros.

The Kookaburra St – Erima Flyover in 3D from Hawkins. There will be a roundabout underneath at Erima Junction, which is in contractor Dekenai’s scope.

Construction is set to commence in mid January  2014 and ground breaking planned in mid December 2013.-Pictures courtesy of NCDC

Work is already progressing at Gordon Industrial Centre, Erima to 9-Mile, 6-Mile to Jackson Airport, and Paga Ring Road.

Alu said the receipt of the environmental permit from the Department of Environment and Conservation last  Friday would fast track loan approval from the Exim Bank of China for the four-lane arterial road from Poreporena Freeway to 9-Mile.

Construction of the Kookaburra Street – Erima Flyover is set to commence in January 2014 with groundbreaking planned for later this month.

“We haven’t found out whether the Exim Bank has approved the loan or not,” Alu said.

“As soon as they receive the environmental permit, the process will continue.

“It’s one of the conditions of approving the loan.

“As soon as this permit is received by the bank, they’ll approve it.

“Construction should start pending approval by the Exim Bank.

“We anticipate that we should start by February.”

Alu said contractor Hawkins already had the plan for the Kookaburra Street to Erima Flyover in place.

“Hawkins has already started on Kookaburra Street,” he said.

“They’ve just completed geo-technical studies.

“They’ve already got preliminary drawings of what it should look like.”

Alu is keeping his fingers crossed that these two projects will be ready in time for the 2015 Pacific Games.

“They will be completed before the Games start,” he said.

“When the (Exim) bank doesn’t approve the loan, there will be further delays, but we feel that the timing of construction in March 1 next year will be ample time to finish the job.

“We’ve got a time frame and we’re keeping within the time frame.

“The only concern us the Kookaburra road, but I think it will be done on time before the games.”

Comedy of errors in Lae roads

By MALUM NALU
 

There has been a comedy of errors in Lae road designs including concrete pavements, a report released  by Department of Works (DoW) reveals.

The rehabilitation and upgrading of Lae City roads is an on-going project consisting of various stages, with Stage 1 completed and Stage 2 still in progress, and two projects under Stage 3 have commenced.

Dekenai Construction, East West 1, FTM Construction and Lae Engineering procured four contracts for Stage 1 amounting to K24.4 million.

Shorncliffe, Dekenai Construction, Cameron Construction, FTM Construction, East West 1 and R & Sons procured 12 contracts procured for Stage 2 amounting to K104.3 million plus variations.

“There was no proper design and engineer’s estimates initially for all the contracts in Stage 1 and 2,” the report said.

“Also, the rates for existing contracts are quite high.

“The initial scope of works is very poor.

 “In some contracts, bill of quantities (BOQs) is excessive while in others, total opposite.

“Proper procurement process was bypassed to procure these projects.

“The National Executive Council (NEC) condition of contract is new. 

“Most contractors are not familiar with this condition of contract.

“The NEC conformed contract documents have major irregularities and contradictions.

“Examples of such are the appointment and responsibilities of the employer’s representative, the engineer/project manager and the engineer’s representative/supervisor.

“This was not clearly spelt out in the agreement, contract data and in the condition of contract.

“The option of concrete pavement is new in Papua New Guinea.

“Very little or no detailed scope of works, technical drawings, standard works, quality control management plan, environmental management plan and traffic management plan were provided to the contractors in Stages 1 and 2.

“This has delayed the completion of all the projects and seriously impacted the quality of the finished concrete roads.

“Cost blow out is also evident due lack of technical information.”

In stages 1 and 2, projects were managed by NME, Lae City Authority and DOW at various stages and the employers’ representative was Department of Finance (DoF)).

“DOW’s involvement was minimal or nil until August 2012,” the report said.

“These contracts were executed under certificates of inexpediency (COI).

“Mismanagement of the projects under Stage 1 and 2 in design/construction and financial is evident.

“The government directed projects funds to the DOW to manage and execute the remaining works under Stage 2.

“Stage 3 projects were awarded in August 2013.

“Contractors have mobilised on site and commenced works.

“The cost of these two projects is K42million.

“Both projects are programmed to be completed in June 2014.

“Works has commenced and in progress.”

Implementation a key challenge for 2014 PNG budget - ADB

PORT MORESBY, PAPUA NEW GUINEA (2 December, 2013) –Improving the implementation capacity of public agencies to deliver the government's investment plans will be a core challenge for improving service delivery in 2014,according to anew issue of the Asian Development Bank's (ADB) Pacific Economic Monitor (PEM), released today.

 

Thereport, a tri-annual economic review of ADB's Pacific developing member countries, says government funding for health, education, law and order, and infrastructure in Papua New Guinea (PNG) is expected to continue its rapid growth in 2014, increasing by almost 30% over 2013 levels.

 

Underpinning this expenditure growth is an expected 21% increase in domestic revenue collection,stemming partly from planned improvements in tax compliance and enforcement which are expected to bring in an additional K750 million in 2014.

 

The reportsays the 2014 budget projects a fiscal deficit equivalent to 5.9% of GDP in line with the government's Medium Term Fiscal Strategy 2012–2017 and keeping public debt at broadly sustainable levels.

 

"Infrastructure is the biggest winner in the 2014 Budget, with its K2.7billion in funding constituting a 46% increase from 2013. While the government's increasing prioritization of expenditure towards key development enablers of infrastructure, education, health, and law and order is welcome news, the real challenge for 2014 will be one of implementation," said Aaron Batten, ADB's Country Economist in PNG. 

 

For example, although the Department of Works and Implementationreceived a 60% funding increase in 2014,  more than 97% of the increase in funding is for additional capital works, meaning there is limited new funding for the maintenance and operational activities related to these new projects.

 

To maximize the development impact of its budget allocations, a larger focus will need to be placed on recruiting and training a much larger pool of skilled Papua New Guineans to be able prepare, deliver, and ultimately maintain these new assets.

 

Papua New Guinea joined ADB in 1971. It is ADB's largest partner in the Pacific in terms of loans for public and private sector development.

 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2012, ADB assistance totaled $21.6 billion, including cofinancing of $8.3 billion.