Cabinet approves cancellation of housing project contract
Public Servants dream of owning a home has been shattered.
This is due to Public Service Home Ownership Program being terminated by the Government.
Prime Minister Peter O'Neill this afternoon announced that Cabinet has decided to terminate the PSHOP contract after many months of negotiations between the Department of Personnel Management and the contractor, Australasia Pacific Panel Limited.
Mr O'Neill said the simple fact was that significant increases in property development and building costs over the last five years had made it impossible for the contractor to deliver fully serviced land and 200 houses at 8-Mile, NCO, for the "fixed price" contract.
"The contractor, Australasia Pacific Panel Limited, has offered to fully repay all monies it has received by way of progressive payments under the contract, a total of K31.52 million," Mr O'Neill said .
He said the repaid funds would be credited back to the PSHOP Trust Account and would be used, together with the existing funds in the trust account, to help develop a revised housing scheme for public servants.
"The Government has directed the Department of Personnel Management to develop a revised scheme without delay," Mr O'Neill said .
He commended Australasia Pacific Panel Limited for its offer to repay monies it had received from the State for the PSHOP project.
“The vast majority of cancelled contracts with the State end up costing the State millions of Kina.
“It is to the credit of the contractor, and its executives and affiliates that the monies advanced by the State are being repaid in full.”
Mr O'Neill said it was unfortunate the project was simply not able to proceed because costs had escalated beyond reason, but the Government was strongly committed to developing an alternate scheme as soon as possible.
Public Servants dream of owning a home has been shattered.
This is due to Public Service Home Ownership Program being terminated by the Government.
Prime Minister Peter O'Neill this afternoon announced that Cabinet has decided to terminate the PSHOP contract after many months of negotiations between the Department of Personnel Management and the contractor, Australasia Pacific Panel Limited.
Mr O'Neill said the simple fact was that significant increases in property development and building costs over the last five years had made it impossible for the contractor to deliver fully serviced land and 200 houses at 8-Mile, NCO, for the "fixed price" contract.
"The contractor, Australasia Pacific Panel Limited, has offered to fully repay all monies it has received by way of progressive payments under the contract, a total of K31.52 million," Mr O'Neill said .
He said the repaid funds would be credited back to the PSHOP Trust Account and would be used, together with the existing funds in the trust account, to help develop a revised housing scheme for public servants.
"The Government has directed the Department of Personnel Management to develop a revised scheme without delay," Mr O'Neill said .
He commended Australasia Pacific Panel Limited for its offer to repay monies it had received from the State for the PSHOP project.
“The vast majority of cancelled contracts with the State end up costing the State millions of Kina.
“It is to the credit of the contractor, and its executives and affiliates that the monies advanced by the State are being repaid in full.”
Mr O'Neill said it was unfortunate the project was simply not able to proceed because costs had escalated beyond reason, but the Government was strongly committed to developing an alternate scheme as soon as possible.
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