HUD report highlights challenges, successes in local construction
A U.S. Department of Housing and Urban Development (HUD) briefing report on its funding to American Samoa states that a few large companies in the territory “are monopolizing the construction bids, increasing construction costs”, while construction bonds continue to be a challenge in the territory.
HUD’s Community Planning and Development briefing report was submitted at last month’s federal Interagency Group on Insular Areas (IGIA) annual meeting in Washington D.C., which was attended by insular area governors and congressional delegates along with federal officials. In attendance were both Gov. Lolo Matalasi Moliga and Congressman Faleomavaega Eni.
HUD "SUCCESS STORIES"
Under American Samoa’s “Success Story” category, the report points to the HOME Investment Partnership Program, which is one of American Samoa’s most successful Community Planning and Development (CPD) programs, according to the report.
“American Samoa has experienced a high demand for its HOME homeownership assistance program. The program has been successful in assisting families rehabilitate their homes and generate HOME program income through loan repayments,” the report states.
“Annually American Samoa receives about $350,000 in HOME funds and leverages an additional $400,000 in HOME program income for a combined total of about $750,000 a year" assisting American Samoa’s low income population, it says.
Under the category of “Issues/Impacts”, the report says Construction Bonding continues to be a problem for the territory. It says that the remoteness of American Samoa and the lack of access to Surety bonds for construction projects continue to be a local challenge. (Surety bonds are required for all federally funded projects)
“Generally, only large construction companies from New Zealand and other off-island States can afford to provide a surety bond, compared to small local construction companies that cannot afford to provide such bonds,” it says. “As a result, American Samoa is finding that a few large companies are monopolizing the construction bids, increasing construction costs in American Samoa.”
The report didn’t identify by name any of the New Zealand or other off-island companies in the report, however Samoa News can point out that the major companies that receive federal contracts are McConnell Dowell and Fletcher Construction, with Whitehorn Construction, which was awarded the airport road construction project last year, a newcomer on the scene.
In the “Priorities” category, the report says that economic development is a top priority of American Samoa and the territorial government intends to establish a micro-enterprise loan program to help small businesses expand business opportunities in the island. No other details were provided on the micro-enterprise loan program.
The Decent Affordable Home Loan Program (DAHLP) is a Community Development Block Grant (CDBG) low-interest loan program intended to assist American Samoans renovate and rehabilitate residential homes owned by very low income households.
The program has been around for six years, and many families have enjoyed their decent and affordable homes under this program, according to the briefing, which didn’t provide any other details.