The project is funded under a counter-part funding between the State and the China Export-Import Bank worth K513 million (US$160m).
Enga Governor, Sir Peter Ipatas, is now calling on the State to live up to its commitment.
Foundational work at the Enga Provincial Hospital has taken a rather slow pace, with funding constraints forcing contractor, the Guangdong Foreign Construction Limited, to limit its expenses.
The contractor is also indebted to suppliers and needs the funding component from the State to off-set arrears and pick up the pace of the construction.
“BNBM Hardware Lae, about K2 million we did not pay. Atlas Steel Lae, we should pay them more than K1 million,” said Xiaoshe Lu, Vice GM, Guangdong Foreign Construction.
“Before we use to pay every month. But now we cannot. So it’s spoiling our company name too.”
According to the funding arrangement, the Government will pay 15 percent or K77m (US$24m), while the China EXIM Bank counter-funds, through a loan, 85 percent or K436m (US$136m).
The China EXIM Bank only pays its component once the State pays its share.
According to Enga Governor, Peter Ipatas, only K24 million has been paid.
“Initially I think we paid K24m as counterpart, now K4 million came out of the Government, K20m came out from the Provincial Government. So already the State is behind by K20m.
“This year, we were supposed to get K20 million, we only got K4m. We have yet to get the K16m.
“We have to pay our counterpart so that the EXIM Bank can release their 85 percent.
“Secondly it’s a big project, the National Government must properly fund the project management team,” said Ipatas.
“So basically this project is being underfunded. It must be funded. I’ve made my position clear to the Prime Minister, and the Minister for National Planning, Finance and Treasury. These are our obligations. We can talk about PSIP or DSIP, but where is the national government on their commitment, especially with donors and people who are funding projects?
“So I’m appealing to the National Government to address that. I’m hoping they can address it, and that’s basically what their contract is talking about.
“We are not living up to our commitment to meeting our counterpart funding, which is 15 percent,” said the Governor.
The Enga Provincial Hospital will have 300 beds and a number of specialist healthcare departments.
With the current situation, construction is expected to be completed in 2021.
(Enga Governor, Sir Peter Ipatas)