On April 9, 2014, the FSM PMU Contracting Officer awarded the completion of the Weno Road project to Saipan-based contractor, GPPC, Inc., thereby ending the speculation that Pacific International Inc. (PII) will be reinstated to complete the contract work. The FSM Government’s announcement follows the determination by the Surety, Century Insurance Company (CIC), that it would not honor its legal obligations under the bond. CIC had issued the Payment and Performance Bond for the Weno Road project which is contract insurance to the Government in the event of contractor default and obligates the Surety to fund the balance of the contract. In order to move forward and complete the project for the people of Chuuk State, the US Department of Interior, Office of Insular Affairs, has been requested to reinstate the project funding and also issue the additional grant funds necessary for completion.
FSM Department of Transportation, Communication and Infrastructure Secretary Francis Itimai, in his letter to OIA Director Nikolao Pula, reported that GPPC's final proposal received by the PMU on April 7, 2014, offered to complete to remaining contract work for $7,289,562.10. Additional sums were requested by the FSM Government to complete work previously performed by PII that is not acceptable and for additional work not part of the base contract for a total cost of $7,703,382.41. Secretary itimai's letter to OIA Director Pula notes that the total cost for GPPC to complete the contract work compare favorably with the estimated cost for the previous contractor in default, Pacific International, Inc., to complete the work. If the PMU would have kept PII on the project, the total cost, including PII claims, would have exceeded $10,200,000.
The letter to OIA concluded that, in the interest of keeping this important infrastructure project moving forward and in consideration of the best interest and the health and welfare of the people of Chuuk State, OIA should lift the suspension of Grant funds and award additional funds necessary to complete the project as soon as possible.
A more comprehensive coverage tracking the development of activities involving all parties along a timeline of events and decisions will be provided in a week.
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