Day: November 7, 2013

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The Moti Affair

Mr. Julian Moti, an Australian citizen, had been wanted in Australia for serious alleged overseas child sex offences. He was at the centre of an international dispute following efforts by the Australian Government to extradite him from both Papua New Guinea and Solomon Islands to face charges[2] in relation to an incident alleged to have taken place in Vanuatu in 1997.[3]

After his arrest in Papua New Guinea in September 2006, Moti was released on bail pending an extradition hearing, but went into hiding in the Solomon Islands High Commission in Port Moresby. (He later claimed that his life had been threatened, and so sought sanctuary.)[7]

The Papua New Guinea and Solomon Islands Governments denied knowledge of his whereabouts, but on 10 October he was secretly flown aboard a Papua New Guinea Defence Force aircraft to Solomon Islands where he was arrested by officers of RAMSI on his arrival in Munda, Western Province.  When he left PNG, Moti was in breach of the bail conditions imposed by Madam Justice Catherine Davani of the PNG National Court, and had failed to appear at a PNG court hearing on 30 September.[8] The PNG Government declined to say who in the PNG Defence Force or Government had given the order to fly Moti out. In response, the Australian Government immediately cancelled planned visits by the PNG Prime Minister, Grand Chief the Right Honourable Sir Michael Somare, and Defence Minister Martin Aini, and postponed the annual Australia-PNG Ministerial Forum, and called for an investigation into the flight and prosecution of whoever was responsible.

A PNG Defence Force Board of Inquiry into the escape recommended that Sir Michael Somare and a number of his advisers be charged with offences in relation to the escape, including breaching PNG’s constitution. Sir Michael Somare sought to suppress the Inquiry’s report, challenging the Inquiry’s standing in PNG’s National Court. As yet the Court has not ruled on the validity of Sir MichaelSomare’s challenge to the public release of the Commission of Inquiry’s findings.[9]with the presiding judge likening Sir MichaelSomare’s attempts to suppress the findings of the report as a scandal on par with Watergate.[10]

Prime Minister Sir Michael Somare of Papua New Guinea reportedly “threatened local media with contempt of court over their calls for the official release of the PNG Defence Force Inquiry report that recommends he faces charges”[22] and Somare reportedly does not now support Mr Moti.[23] It does not yet reliably appear that any untoward payment has been made to Sir MichaelSomare for his alleged part in Moti’s passage through Papua New Guinea.

[It should be noted that Julian Moti was later extradited and after a trial it was concluded that he was not guilty. ]

This is an adaptation of the relevant excerpts from:
http://en.wikipedia.org/wiki/Julian_Moti

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Pacific Games Village Contract

This is adaptation of excerpts from
http://malumnalu.blogspot.com/2013/08/chinese-company-awarded-inflated.html

Overview

A Chinese company, China Railway Construction Engineering (CRCE) PNG, was awarded a contract worth more than K263 million to build the 2015 Pacific Games Village at University of PNG, despite the job being valued at only K190m.

Documents provided to The National show that CRCE was not in the top three of the 10 companies that bid for the contract, however, was approved ahead of the rest at an additional cost of more than K73 million to Papua New Guinea.

Sports and Pacific Games Minister Justin Tkatchenko, when contacted for comment, said there was “nothing sinister” about the awarding of the contract to CRCE.

A government source said a professional New Zealand engineering consultancy firm, Warren and Mahoney, did the scoping and estimation for the project which it said was worth K190m.

Moreover, the tender evaluation committee (TEC) of the Central Supply and Tenders Board (CSTB), disqualified CRCE from further evaluation, however, it was somehow awarded the contract.

The 10 companies that bid and their respective prices were:

  • China Railway Construction Group PNG (K149, 549, 896.90),
  • China Railway Construction Engineering PNG (K263, 973, 822.56),
  • Associated Builders (K389, 699, 629.50),
  • J4J Construction & Hardware Supplies (K179, 550, 813.20),
  • China Harbour Engineering Ltd (K153, 307, 006.19),
  • PNG Construction Ltd (K223, 437, 500),
  • Digara Construction Ltd (K226, 479, 798.16),
  • Fletcher Morobe Construction (K191, 453, 653.80),
  • JIC Niugini Engineering (K173, 236, 504.02), and
  • China Railway Group (K189,033, 309.98)

Fletcher Morobe Construction was recommended by the tender evaluation committee (TEC) of the Central Supply and Tenders Board (CSTB) to be awarded the contract at a cost of K191, 453, 553.80.

The other two top companies after that were China Harbour Engineering Ltd (K153, 307. 006.19), and JIC Niugini Engineering Ltd (K173, 236, 504.02)

“Members of the TEC assessed individual bids according to the evaluation criteria for technical scores out of 100, and average totals established to determine the ranking of the bids,” according to the TEC report.

“Emphasis was placed on technical scores for ranking individual firms, while financial capacity was assessed based on the available working capital.

“China Railway Construction Engineering failed to meet the annual turnover requirements and his (sic) failure to provide the working capital, liquid assets and/or credit facilities information, and no certificate of compliance to confirm payment of tax to the IRC, disqualifies him for further evaluation.

Fletcher Morobe topped with 84 out of 100 followed by CRCE (77.3), China Harbour Engineering (77.2), JIC Niugini (76.7), China Railway Construction Group (76.5), China Railway Group (74), PNG Construction (63.5), J4J Construction & Hardware (70.5), Digara Construction (61.3), and Associate Builders (61.2).

While currently there is no evidence of deliberate misdoing, we wonder:

  • What process and criteria was applied to the selection
  • Why other companies which did meet the qualification criteria and with lower prices were not accepted
  • Under what circumstances does the government consider it necessary to ignore the recommendations of the CSTB

This case is still evolving. Clear risks are  that:

  1. company is a unable to deliver on time
  2. the CSTB and its processes are bypassed
  3. later it transpires that inducements were involved
  4. later  a “shelf” company with little or no capacity wins a contract for say 270 million and then sub contracts back to one of the real companies which put in a  bid for 200 million. The shelf company then collects the 70 million for basically doing no work.
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