The Noble Center development in PNG raises questions not only about the People’s Republic of China’s money diplomacy, but the due diligence and standards of transparency and integrity, applied to social development projects by international organisations like the Asian Development Bank.
The most prominent PRC construction company operating in Papua New Guinea is unquestionably the China Railway Construction Engineering Group (CRCEG).
It has enjoyed a dream run winning Asian Development Bank contracts, and Belt and Road contracts, ultimately funded by the PNG Government.
Some years ago China Railway Construction and Engineering announced it was planning to build PNG's tallest building, which it has named the Noble Center. It appears that CRCEG has built similar "Noble Center" complexes in a dozen or more countries which have signed up to the Belt and Road program.
The 23 floor complex near the Port Moresby waterfront ended up being a project undertaken in a joint venture with a state owned entity, PNG Ports Corporation.
As usual there is a total absence of transparency when it comes to the terms of the joint venture, but I am assured the Ports Corporation exposure to the project is relatively minor. As I will explain below it no doubt drew on its past experience with CRCEG in having a limited exposure.
It would seem the project cost around $200 million to "complete". It was finally "completed" a few months ago. PNG Ports moved into two floors as arranged – but promptly moved out a couple of weeks later!
PNG Ports has clearly been very unhappy with the construction by CRCEG of "Noble Center" for some time. It commissioned two independent mechanical engineering and air conditioning firms to carry out detailed inspections of key safety and other aspects of the building.
Both firms reported to PNG Ports that there were dozens of serious defects in the construction, many of them with significant fire safety and structural implications. They essentially recommended the building was unfit for occupation without massive repairs/adjustments being made. No wonder Ports PNG moved out!
Fortunately it seems that so far PNGs regulators agree with the assessment of the independent consultants. And there is real hope even the highest levels of the PNG Government (with some notable exceptions) will stand firm.
Let there be no doubt about it, this is a huge embarrassment for the Peoples' Republic of China, and for its largest operator in Papua New Guinea.
This is not the first time the performance and competence of CRCEG has been called into question in Papua New Guinea. But it might just be the first time anything has been done about it!
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