BY GIFF JOHNSON
Marshall Islands Correspondent

Martinez

MAJURO, Marshall Islands — Secretary of the FSM’s Department of Transportation, Communications and Infrastructure, Carl Apis, reached out to the Guam Contractors Association in mid-February to brief association members on more than $400 million available for construction work throughout the FSM. He told the Guam construction industry representatives that the FSM will need to rely heavily on outside construction firms due to a scarcity of local contractors with the experience to handle large projects.

Apis said U.S. funding from the Compact of Free Association and the Federal Aviation Administration’s Airport Improvement Program is providing more than $280 million through 2023, the end date of the current Compact’s grant funding agreement.

But U.S. funding is only one piece of the construction pie supported by donors. The World Bank is providing more than $140 million for infrastructure development, while the Asian Development Bank has committed $44 million for new projects.

James A. Martinez, president of the Guam Contractors Association, told the Journal that “FSM local contractor capacity is limited. The FSM Government reached out to our association and contractors on Guam to offer this opportunity to work with their local contractors for these upcoming projects.”

As to whether the litigation between Pacific International Inc. and the FSM government over an earlier construction project poses concerns to Guam contractors, Martinez said it was up to individual contractors to make the call whether the work in the FSM is worth considering.

“I can’t comment on the ongoing litigation,” he said. “However, Guam contractors are savvy enough to navigate through these nuances. Ultimately, they will decide if these projects are worth pursuing and are profitable to their operations. The presentations gave them the opportunity to ask questions and learn more about the projected construction program in the FSM so at they can make sound decisions on whether to pursue the opportunity.”

The FSM national government’s fiscal 2019 audit notes a “litigation expense of $9,500,454 was recorded by the Department of Justice due to a loss in litigation” — a reference to the March 2020 arbitration panel’s award to PII, that remains unpaid.

The FSM “litigation loss,” however, remains only on paper, although there could be a ruling on the award following the April 8 hearing now scheduled in the FSM Supreme Court to hear oral argument on the arbitration award.

As the FSM government lobbies Guam-based contractors to engage in the FSM’s substantial infrastructure program, seven years after PII initiated legal action against the FSM government over the Chuuk road project — and despite both mediation and arbitration awards in its favor — PII has been unable to achieve a resolution to damages independent judges say it is due. (See adjacent story, “PII finally gets its day in FSM Court.”) mbj