Housing commission ‘insolvent’

THE National Housing Corporation (NHC) is technically insolvent; Parliament was told last week.
When presenting the company’s annual report, Housing Minister Dr Kobby Bomareo said the financial position as of December 2022 to May 2023 was gross liabilities totalling K47 million.
These included:

• PAYROLL liabilities K30.3 million;
• OUTSTANDING staff entitlements K1.1 million;
• CREDITORS/service providers K14.8 million;
• OUTSTANDING audit fees K0. 8 million.

Bomareo said: “For the record, NHC is technically insolvent given its cumulated liabilities over the years and will definitely need adequate injection of funds from the Government to bail itself out of this financial predicament.
“In addition, the Department of Finance is yet to transfer a sum of K34 million from the ‘wrong code’ rental payment to NHC coffers. The current practice is such that all rented property payments are made to the Department of Finance consolidated revenue account whilst NHC receives nothing and therefore the DoF must agree to reverse this method of payment forthwith.”
The outstanding amount would not only boost the NHC efforts to renovate rundown properties nation-wide but would also help towards building new houses for citizens. This would in turn generate much needed revenue, the Minister said.
The NHC is temporarily occupying a property at ATS at 8-Mile, Port Moresby while it headquarters at Tokarara is being refurbished.
Bomareo also reported that there are “leakages and grey areas” in the daily operations of the NHC and a case in point was the payment of hefty allowances to officers sitting on three PIP funding project meetings.
On staff matters, NHC has a total approved positions of 322 but has managed to fill 199 positions.
The company is also plagued by serious ‘skills gap’ resulting ‘poor performance and incompetency’, he said.
An external professional recruitment firm will commence organisational restructure and recruitment.
Bomareo also informed the house that the NHC has 9,847 properties throughout the country. Southern region has by far the largest of this stock with 6,864 followed by the Highlands with 1168. Mamose has 1082 and NGI 734.
From these rental for properties in the Southern region comes in at K15 million, Highlands K8.56 million, Momase K5.43 million and NGI with K4.56 million. A triple ‘V’ (verification, valuation and validation) exercise is to be conducted to determine the correct number of properties, rightful tenants and rent defaulters.
Bomareo said the four big accounting firms, KPMG, Ernest & Young, PwC and Deloitte will be solicited to bring about the necessary financial and administrative reforms as well as put in place a feasible investment plan for NHC to be self-financing in future.
An outcome of this exercise will be to have a digitised asset management inventory system for NHC.
NHC has a total 300 legal case outstanding. This is reduced down from the previous 600 with the external legal assistance. A total K3.3 million was saved through this exercise, the minister said.
One of the unsettled legal matters isthe matter of 75 prime properties vested to the National Housing Estate Ltd.
NHEL was dismantled by Cabinet in 2022 and the properties were transferred back to NHC but it is now matter of contention between NHC and the liquidator.

Tomuriesa asks Paita to explain diversion of service grants

DEPUTY Opposition leader Douglas Tomuriesa has asked Finance Minister Rainbo Paita to explain why the district service grants (DSG) for Milne Bay and Northern over the last term of Parliament were diverted to Kerema.
Tomuriesa, during the Parliament session on Friday, said just before the national elections in 2020, the DSG funds for the two provinces were all paid to Kerema.
“We lost those funds that were supposed to be paid to our districts,” he said.
He said former secretary for Finance Dr Ken Ngangan confirmed that those funds were being paid to Kerema.
“If warrants were issued for DSG funds for our districts, why were this funds redirected or paid to Kerema Open?” he asked.
He also questioned the minister if he was aware and when he would replace these funds and have them paid to electorates that were affected.
“I want to inform this house on the current status of the DSG,” he said.
Paita said the status of DSG were discretionary and non-discretionary component.
He said both components were about K250,000 each totaling K500,000.
He clarified that the funds were administrated by Department of Implementation and Rural Development (DIRD) and not Finance Department.
Paita denied that warrants were released for the two provinces.
“I did not seen any letter or anything to do with this particular issue as this is the first time he (Tomuriesa) is raising it and I am being aware of this matter on the floor,” he said.
“From what I know, when funds are released for DSG, they are ministered by DIRD and not Finance Department.
“DIRD comes under me so I will asked the department to check if that statement is true and those funds have been directed to another district.”
He said in the past, finance secretary could pick up funds allocated to another province and choose to divert to another.
“And when he say Kerema, I am hoping that is the Kerema MP because it’s the non-discretionary funds, which would be paid to the district member at this time,” he said.
Paita assured that he would investigate if the claims were true.
He said if so, than why were the funds paid in that way.
He said that DIRD released DSG when districts produced reports.
“Even some districts have not collected their funds because of the issues of reports,” he said.
“Only when the reports were given, those DSG funds are released.
“If districts and members and governors have not acquitted for previous years, the department has a strict policy on not to give DSG funds. The department can only give funds based on acquittals.”

PNG seen as a transit point for illicit activities

GIVEN the country’s geographical location, Papua New Guinea serves as a transit point for illegal activities like drug and human trafficking, and smuggling, says Internal Security Minister Peter Tsiamalili Jr.
Tsiamalili said these activities contributed to the deterioration of internal security and could have broader regional implications.
“The white paper that will be drafted will help to address this as it will contain a framework to strengthen border control measures to address these issues.
“It will also address other issues like illegal migration, smuggling, and transnational crimes, and will enhance collaboration with neighbouring countries and regional organisations to monitor and secure borders effectively,” he said.
Tsiamalili said the white paper would also enhance intelligence collection, analysis, and dissemination capabilities to proactively identify security threats.
“And promote cooperation and information sharing with regional and international partners to combat transnational crimes,” he said.
Tsiamalili said through the white paper, he hoped to address transnational crimes affecting the country.
Meanwhile, the white paper would also establish protocols and procedures for responding to emergencies and emerging threats, including natural disasters, civil unrest, and terrorist activities.

Govt project exhausts K28mil with hardly any house

A GOVERNMENT-funded housing project that started in 2014 at the outskirts of Port Moresby has so far consumed K28.5 million with hardly any house on the ground.
Housing Minister Dr Kobby Bomareo told Parliament that the project, called the Durand Housing Project, had produced ‘mixed results’.
Among the ‘mixed results’, a sum of K4 million was paid to the Australian company North Build, in 2022 to remove 40 asbestos houses built by the previous Chinese contractor.
“This is an oversight from the previous NHC management team and a drain on the limited project budget,” Bomareo told Parliament.
Presenting a statement on the state of the National Housing Corporation to Parliament, Bomareo said the Marape administration had further allocated K20 million to expedite the physical construction work on site.
The Prime Minister warned last week that the three construction companies identified for the work must be on the ground and delivering by December 2023 or their contracts would be terminated and replaced by others.
The three out of six developers, namely PNG Resource Ltd, Rhodes PNG Ltd and China Steel, had been directed to erect 2-4 bed-room demo houses on site for government agencies and the public to view and select based on their choice and affordability.
Total of 48 government departments and agencies had registered their interest to buy property at Durand Farm.
Four government agencies had signed already an MoU with NHC to buy land at Durand Farm. Minister Bomareo said he had stalled any further MoU signing until there are actually construction work taking place on the site.
In other development noted by the Minister, the NHC head office refurbishment had been allocated K18 million since 2011 but the work had been progressing at a snail’s pace.
Maintenance work was ongoing at the NHC properties at Manu Autoport in NCD and other NHC flats and houses.