Four-lane expansion on Audit Office radar

Aug 04, 2013 News

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By Keeran Danny
The delayed East Bank Demerara Public Road four-lane expansion project is being scrutinised by the Audit Office. The findings and recommendations will be highlighted in the Auditor General’s 2012 Report.
The contracts for the three Lots beginning from Providence to Diamond Housing Scheme entrance were awarded to Dipcon Engineering Services Ltd, GEICO Construction Company in association with General Earth Movers, and BK International.
They were signed on October 3, 2011 with a duration of 18 months. Delays to the project, particularly Lot Three, from Diamond ‘high bridge’ to Diamond Housing Scheme entrance which was stalled for several months, were blamed on poor weather conditions and existing utilities. The project is now expected to conclude early next year.

Observers believe the pace of the project could have hastened if adequate resources – human and machinery – were dedicated to this major project. A Partnership for National Unity (APNU)’s Parliamentarian, Joseph Harmon, had expressed concern that the contractor, BK International, responsible for Lot Three, is “somewhat overwhelmed” with projects.
However, BK International in a press statement had distanced itself from the delay in East Bank Demerara road project and is blaming utilities and other elements involved.
According to a source, BK International is engaged in two other projects that are also delayed: building the head regulator for the northern relief channel on the Hope Canal; and widening a section of Timehri Public Road into a four-lane thoroughfare. Even with these outstanding projects, the company recently won the bids for two sea defence projects in Essequibo.
However, BK International is not the only company with more than one large project, that is executing works on the East Bank project. Dipcon Engineering Services Ltd is also executing works in more than one lot on the East Coast Demerara road-widening project.
It is hoped the real reasons for the delays may be revealed in the Auditor General’s Report, which is also zeroing in on other large Government projects that required extension such as the East Coast Demerara Public Road four-lane.
According to Auditor General Deodat Sharma, contractors may pass the deadline date for works owing to poor management of technical staff and labourers, shortage of building materials, limited equipment, poor weather conditions, and over-tendering for projects.
Sharma said the Audit Office always requests the start and end dates for projects, since it was observed that some contractors over-tender for projects and cannot conclude them timely. He believes persons in Regional Tender Boards and the National Procurement and Tender Administration Board need to take this into account whenever they are evaluating bids.
Sharma said that the lowest bid does not necessarily guarantee the awarding of a contract and this should come out in the evaluation process. He explained that during this stage the contractor’s competence and capacity to execute projects should be taken into consideration.
He said in the case of the East Bank and East Coast Demerara Public Road widening, the projects were divided into lots, owing to their magnitude. He said only contractors with large fleets of equipment could have qualified.
The Audit Office is looking closely at these projects for numerous reasons, including delays and fraud allegations that tainted Lot One of the East Coast Demerara Public Road four-lane expansion.
According to Sharma, sometimes whenever staff members of the Audit Office review certain projects it is observed that the real reasons for the delays are not reported. He strongly believes that proper monitoring of these projects is required if they are to be completed promptly.
Whilst recommending the strengthening of contract law to include stiffer penalties, other than the payment of liquidated damages, he said it all boils down to proper supervision. The consultancy firm that is responsible for supervising the project should be just as responsible as the contractor for the timely conclusion of the project.
However, these delays have a cost to the economy and progression of Guyana.
According to APNU Member of Parliament, Carl Greenidge, a contract that is delayed has a number of costs to the economy. He pointed to two: the loss of money and reduced benefits to society.
Greenidge said the money engaged in the delayed project could have either been in the bank gaining interest or expended into another worthwhile venture. Using the assumption that money has cash value, he said money earns income.
He added that most large Government contracts are funded by loans and despite the project may take awhile to finish the job, it still has to repay interest on the money borrowed to the lending institution.
On the social aspect, he said if the project were intended to improve the transportation network and it takes awhile to conclude, then the people would have been in discomfort and lost productive hours.

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