–blames MPI for not ‘effectively’ managing it

THE Auditor-General’s report on the construction of the new access road to the Cheddi Jagan International Airport (CJIA) has found that there was unauthorised work on the construction of 2.5 kilometres (km) of roadway from the Timehri Police Station to the terminal building at the CJIA.

That aside, it has also found that works were not completed according to contract specifications, in that only 1.7km of the required 2.5 km of roadway was constructed from the Timehri Police Station to the intersection of the road that leads to the airport.
The contract for this particular stretch of road was awarded to the local firm, BK International. And though it did not deliver by some 0.8km, there was no reduction in the contract sum for the reduced scope of work, the audit said.

By the auditor’s calculation, if the sum of $618.426M was approved to construct 2.5 km of roadway, then it would have cost the ministry $247.370M per km to construct the road.
“Using this established cost of $247.370M per km, the cost of constructing 1.7km should have been $420.529M. By paying $615.647M to construct only 1.7km of road, or $362.145M per km, this resulted in an increased cost of $195.118M or $114.775M per km,” the report tabled in the National Assembly Thursday stated.

As at September 2016, there were several outstanding works to be completed and according to the Audit Office, at the completion of its fieldwork on September 15, 2016, 0.30 km of roadway in front of the Timehri Police Station, the Guyana Defence Force (GDF) and the Guyana Telephone & Telegraph (GT&T) remained incomplete.
Also, the placing of concrete barriers, erecting of sign poles, road markings and signs were still to be completed.

OVERPAID

That aside, the report said BK International was overpaid sums totalling $76.620M for materials cost not recovered, full retention fees not deducted, and advance payments not fully recovered. This, the report stated, is in addition to the overpayment resulting from only constructing 1.7 km of road.

“The contractor was paid amounts totalling $72.133M for materials on site during the period October 11, 2011 to June 6, 2013. We observed that only the sum of $19M was recovered from payments to the contractor, leaving an outstanding amount of $53.133M to be recovered,” the report added. The balance of $2.778M on the contract sum has been deemed inadequate to recover the outstanding balance.

The ministry only retained the sum of $45.767M as retention fees. Retention fees were not deducted from four payments totalling $119.787M. “This resulted in the contractor being overpaid the sum of $11.979M, as a result of the ministry’s failure to retain this amount as retention fees in keeping with the requirements of the contract.”

Meanwhile, the contractor received two advance payments totalling $145.143M, representing 23.5 per cent of the contract sum, although the contract agreement stipulated only a 20 per cent mobilisation advance. The advance was required to be completely repaid prior to the time when 80 per cent of the accepted contract amount less provisional sums, has been certified for payments. The total amount paid on the contract amounted to $615.647M.

This included $20.563M, which was paid to the GT&T for the removal of the junction box. However, the full advance was not recovered, even though $595.084M or 96 per cent of the contract sum was paid to the contractor. The ministry recovered only $133.635M, leaving a balance of $11.508M still to be recovered.

REFUTES ALLEGATIONS on
The contractor has since refuted allegations that he was overpaid. In a statement to the media on Friday, BK International’s Chief Executive Officer (CEO), Brian Tiwarie said, “The reports are not correct…We categorically deny any claim of our company being overpaid. In fact, up to now the Ministry of Public Infrastructure owes money to the BK International Inc. for the said road project.”

Tiwarie said that the road diversion caused serious disruptions with GTT cables and, in an attempt to have the work completed at an early date, damage was caused to the cables.
Meanwhile, as it relates to the unauthorised works, the audit office said that an approved variation was not observed for three new items totalling $31.545M that were added to the original bill of quantities. “We noted that the contractor was paid sums totalling $46.111M for the new items. In the absence of an approved variation, we conclude that the amount represents unapproved works performed by the contractor.”

In addition, the Audit Office said it could not ascertain the reason for varying the Engineer’s Estimate to include the additional works or why an extra $14.566M had been paid.
It was also observed that the needs assessment and feasibility studies for the construction of the new access road were not done, and according to the Audit Office, the aforementioned is critical to assess whether the ministry had achieved its objective and whether the selected choice was the most economic one.
Moreover, it was found that the ministry failed to frequently monitor and supervise activities related to the construction of the road.

“We saw no evidence of proper monitoring and supervision by the Works Services Group (WSG) of the works carried out on the construction of the road, as regular monthly reports from the ministry and contractor were not presented.
“As a result, we must conclude that there was no proper project administration by the WSG,” the report stated.

EXCESSIVE DELAYS
In addition, there were excessive delays by the ministry in addressing problems identified by the contractor, especially for the relocation of the GT&T’s junction box that was an obstacle in the path of the roadway.
That matter was settled by a court order on April 30, 2014, and by virtue of the court ruling, the ministry and the contractor were required to pay 50 per cent, or $22.329M of the removal cost. It should be noted also that the invitation to tender was not widely advertised, and as such it is believed that fully qualified contractors could not have been aware of the invitation to tender, which was only published in the Guyana Chronicle newspaper.

The report noted that it was the responsibility of the Ministry of Public Infrastructure to manage the construction of the road in an “economic and efficient manner that ensured the works were in compliance with international best practice and the relevant laws, regulations and authorities.”
“Our findings revealed that there were serious challenges in the pre-tendering and contract administration and controls stages, which affected the scope of the work and timelines. As a result, we conclude that the ministry did not effectively manage the project for the construction of the new access road.”

It should be noted that the construction of the new access road from the Timehri Police Station to the terminal building at the CJIA was in keeping with the four-lane expansion project, and the expansion of the airport.
The works were slated to be completed within one year from its commencement on 12 July 2011; the access road remains incomplete. The construction of the road was initiated by the People’s Progressive Party (PPP) government.