Jamaica
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$10-BILLION OVERRUN

The National Works Agency (NWA) incurred cost overrun totalling US$63.4 million (J$9.8 billion) for rehabilitation work on five of six main roads under the Major Infrastructure Development Programme (MIDP), an audit of the state agency’s books has determined.

Further, higher-than-anticipated costs of US$3.9 million were incurred for fixtures on two of the six roads.

The findings are contained in an Auditor General’s Department (AuGD)report on the NWA, which was tabled in Parliament on Tuesday.

The 55-page report, which was the subject of contention in the House of Representatives for more than a month, was submitted to House Speaker Marisa Dalrymple Philibert on June 6.

However, Dalrymple Philibert, in a move described as unprecedented, sought to reverse “parliamentary practice” by holding the report and two others from Auditor General Pamela Monroe Ellis for two months before tabling them.

Dalrymple Philibert had defended her decision, noting that she was guided by Section 30 of the Financial Administration and Audit (FAA) Act.

Section 30 of the law provides for “the auditor general’s report on a public body to be tabled where the minister with responsibility for that public body fails to report to this Parliament within a two-month period”.

That decision has since been partially walked back after it was determined that the section does not apply to executive agencies such as the NWA.

The performance audit was conducted to determine whether the NWA had managed the implementation of capital projects effectively, efficiently, and economically to maintain the country’s main road network to achieve value for money.

Monroe Ellis and team reviewed expenditure for six of seven major roads selected for infrastructure development and rehabilitation under the MIDP.

Of the six road projects, five experienced additional time and costs, based on project rescoping, implementation delays and price variations, the report said.

SIGNIFICANT RESCOPING

Mandela Highway, Constant Spring Road, Hagley Park Road, and Ferris Cross to Mackfield projects all experienced significant rescoping during the construction and rehabilitation phases of works.

As a result, the report said additional costs for four of thoroughfares totalled US$16.54 million, or approximately J$2.4 billion, while NWA saved US$351,860 (1.7 per cent) in respect of the Marcus Garvey Drive Improvement Project.

Additionally, the report said that the decision to replace water and sewer pipelines after work began to expand the Mandela Highway, Constant Spring, Barbican, and Hagley Park roads contributed to additional project costs of US$46.9 million, or approximately J$7 billion.

The AuGD report said that the NWA was responsible for determining the scope of roadworks and project cost by negotiating the bill of quantities and prices with the main contractor, China Harbour Engineering Company (CHEC).

However, the original scope, which was limited to expanding the capacity of the existing road infrastructure under the control of NWA, did not consider the impact of the National Water Commission-managed underground water and sewer lines.

CHEC subsequently discovered leaking pipelines that would negatively impact the rehabilitated road infrastructure.

NWA indicated that it did not know the conditions of the pipes prior to the start of work and that based on the potential risk of pipeline failures due to ageing infrastructure, and risk of digging up the road to rehabilitate these pipelines, the Government took the decision to expand the projects to include ancillary (waterline and sewerage) works.

In March 2018, the Ministry of Economic Growth and Job Creation and CHEC entered into an agreement for the US$46.9 million to replace the pipes.

Added to that, NWA saw a 158 per cent increase in the in the cost for boundary and ancillary works for the Constant Spring and Hagley Park roads.

The report said the NWA indicated that provisional costings were informed by best estimates based on the length of the road, the type of wall, and associated ancillary works.

The NWA said in the case of the two roads, there was a difference between provisional and actual measurement and costs, as the actual cost for boundary walls and the widening of roads was higher by US$3.9 million relative to the original contracted provision of US$2.5 million.

The report said geotechnical, hydrological, and geological issues, additional excavation, construction of new retaining walls, additional drainage, among other factors, led to additional costs totalling $882.13 million for the Junction main road rehabilitation works, relative to the original contract cost of $597.8 million.

The AuGD has indicated that moving forward, the ministry and NWA “should adopt a whole-of-government approach for the implementation of major road infrastructure projects”.

Added to that, Monroe Ellis said both parties should take steps at the pre-contract stages of project implementation to ensure that designs consider all prerequisites, infrastructure needs and terrain to minimise modification during the implementation stage.

“This could better inform budgetary requirements.”

kimone.francis@gleanerjm.com