Wed. Apr 1st, 2020

Construction industry to help mitigate impact of COVID-19

“Ongoing construction activities such as housing construction, road construction and other CIP projects are helping to fuel our economy at this time,” stated President Remengesau Jr. while urging continued patronage of local businesses.

National government’s FY 2020 Unified Budget had projected $66 million in local revenue this year, primarily derived from tourism and construction activities.  With tourism industry nearly gone this FY 2020, construction industry is now the largest local revenue contributor to the economy.

According to a report from the Office Capital Improvement Projectsthere are 54 ongoing national capital improvement projects this year worth over $31 million dollars. The projects were not all contracted out last year and include projects awarded in 2016, 2017 and 2018 in various stages of completion.

Out of the $31 million worth of projects, over $24 million have been awarded to contractors.  Of that $24 million awarded, $8.5 million in payments have been disbursed.  This leaves over $15 million to be disbursed for the awarded contracts.

Furthermore, the information revealed that out of the $31 million dollars projects, over $25 million are funded by outside funding sources such as Republic of China Taiwan stimulus grants, Compact II funds, and US FAA funds.  About $5 million worth of contracts are funded through local revenue.  Palau National Prison project is a locally funded with contract worth over $2.4 million.  As of March 2, $1.6 million has been disbursed for this project and it is about 81% completed.

In the last two weeks, Taiwan government had distributed over $3.6 million in development grants to the Republic of Palau.  These funds are allocated for some of these ongoing capital improvement projects such as CCTV Surveillance System PH I, BabeldaobIntrastate Road, Capital Standby Gen. Switchgear, Airai Ked-Ordomel Road, Improvements, Ngardmau State Office, NgiwalImekang Road Improvement, PeleliuState Building, Judiciary Standby Generator, CIP Office Building and Capital ComplexStandby Generator.

In addition to the locally managed projects, PPP (Public-Private Partnership) projects such as the Airport Terminal Building Renovation ($24m), New Landfill ($16m) and KASP ($24) are in progress.

Facilities improvements for Our Oceans 2020 Conference managed by United Nations Operations Services (UNOPS) in consultation with Palau’s CIP are also in progress.  The total cost of the improvements is over $14.7 million dollars.  Most of these projects have already been awarded and currently under construction.  The projects are funded through external funding sources and managed by United Nations UNOPS.

“We have been instructed to push to implement more projects, to inject more into the economy at this time,” stated CIP Director Brian Melairei.  There are still about $3million dollar worth of projects within $31 million that have not been put out to bid yet.

“We don’t see any major impact this COVID-19 will have on the construction industry other than possibly causing the delay of materials due to shipping,” stated Minister of Finance Elbuchel Sadang.

Meanwhile, according to recent information from the government, there are an estimated 700 locals and 1,400 foreigners whose jobs will be affected as result of COVID-19 impact on the economy.

Joint Leadership COVID-19 Impact Working Group has been created for the private sector and government to come up with possible solutions and assistance to help mitigate impact on businesses affected by this pandemic.