Team probes state contracts which were breached

National

A STATE audit and recovery taskforce team is examining some government contracts in which billions of kina have been lost because of contract breaches, says Justice Minister Bryan Kramer.
The team led by the Department of Justice and Attorney-General audits contract entered into by the State and ensures that the contractor has completed the task.
If not, civil court proceedings by the Attorney General will start.
Kramer said the value of contracts being investigated in the departments of lands and physical planning, health and education alone was K283,140,015.96.
“When you take into account that most, if not all, government departments and state-owned enterprises give out 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.”
The taskforce started work in 2019.
Last year, the team conducted its first site inspections on contracts referred by departments around the country.
The team is working with the departments of education and health to recover funds allocated for classrooms and health centres which had not been built. The taskforce is also assisting the Lands and Physical Planning Department in recovering rental arrears on State leases which stands at around K241 million.
Only K28 million has been recovered so far.
“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.