K170 MILLION ROAD CONTRACT RECOMMENDED TO A NON-EXISTENT COMPANY BY WORKS

by JAMES PURENI PURAPIA

 A massive Highlands Highway reconstruction and upgrade contract has been recommended to be awarded to an inexperience company called Koroba Golding Joint Venture (KGJV) valued at PGK 170m. Department of Works, on May 2016 recommended that KGJV be awarded the contract (CSTB NO. 3333-RETENDER) to construct a 65km road from Halimbu to Kelabo in Koroba Lake Kopiago District of Hela Province under suspicious circumstances. According to the Technical and Financial Report provided by Department of Works and Implementation, KGJV is a joint venture company between Koroba Kopiago Holdings Limited and Golding Contractors PNG Ltd. KGJV was primarily formed as a joint venture company in partnership with an Australian construction company to bid for this project. The two companies are Koroba Kopiago Holdings Limited with one and half year life span whilst Goldings Contractors Pty Ltd, a Brisbane based construction company with more than 70 years of experience. This Australian firm is one of Queensland's privately owned company and Koroba Kopiago Holdings Limited (KKHL), a landowner company created by Koroba Kopiago JDP&BPC as its investment vehicle. The joint venture company has never executed any major construction projects with the government in PNG or any EPC type contract for that matter before which raises issues of capacities and resources to deliver the major project of this magnitude. This is the issue of concern people have the right to know. They lack imbalance in the implementation of this project in that it raises capacity issues and unnecessary operational delays as they do not have any machinery on site in PNG costing taxpayers extra burden if contract is eventually awarded in the near future. Furthermore, KKHL the landowner company was incorporated on the 29th of January 2014 with Investment Promotion Authority (IPA) bearing company number 1-100543. Company extracts obtained from Investment Promotions Authority (IPA) shows the local Member of Parliament Hon Philip Undialu as a Director. The local MP later submitted Form 16 ( Notice of Change of Directors) supported by a letter to Registrar of Companies on the 23rd December in 2014 advising of his cessation as a Director of the landowner company eleven months later after realising he will be instrumental in influencing both the Finance & Works Ministers' respectively. Subsequently, the surprise recommendation to award the contract raises a lot of questions on the tender processes denying equal opportunity for highly qualified local construction companies like Lorma Construction, Construct Oceanic Limited, Global Construction and others that are capable in terms of manpower, capacity, clear understanding of management skills and resources. The recommendation by Works Department for KGJV to be awarded the lucrative contract has been influenced by outside sources. Central Supply and Tenders Board (CSTB) would further recommend to NEC for approval in which it raises a lot of questions that the taxpayers would want to know. In this case, a fight ensured early this year between current MP Undialu and former MP John Kekeno at the Works headquarters during the tender opening process by CSTB. Mr Undialu's actions and most importantly presence at the bidders meeting has influenced a supposed to be independent decision. Such action of the leader is uncalled for as it displays conflict of interest and request appropriate authorities like Ombudsman Commission to investigate the leader of misconduct in office. We also call upon appropriate government entities to investigate Works department Secretary for failing to display professionalism in his conduct over public funds. On another note, documents obtained also indicates that the KGJV submitted its application of Certificate of Compliance (COC) with Internal Revenue Commission and was issued a valid COC Taxpayer Identification Number 500287021 effective March 01, to August 31 of 2016. It's an indication that whole process was pre-meditated and everyone knew who will be awarded the contract. That in itself is uncalled for and injustice to other construction companies who have equal rights to independently bid for projects and expect corruption free bid processes. It is indeed an absolute negligence of part CSTB to overlook set criteria and allow political involvement to influence its decision. CSTB in its Board Meeting No. M-11/2016 deliberately overlooked crucial defects in a tender bid process and wrote a letter in the 23rd of June 2016 to the Works Secretary in preparation for NEC submission. Total disregard to process and procedures have been absconded and political undue influences upheld to recommend Koroba Goldings JV with intent to defraud the independent state of Papua New Guinea. Among other qualified bidders, the CSTB sees fit to recommend an inexperience company to be awarded the contract without proper due diligence to this newly formed company to carry out this massive contract of concern. Something is terribly not right here regarding the recommendation to award this lucrative contract to a company that has no office, capacity and equipments here in PNG. Our local companies can do the job better than those JV companies with foreign interest. The people are now calling on the government to stop this type of corruption and undue political influences on contracts and promote 100% locally owned companies.

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