East Demerara Highway Expansion... Report reveals... Hundreds of $$M overpaid to contractors

East Demerara Highway Expansion… Report reveals… Hundreds of $$M overpaid to contractors

Jul 09, 2016 News

Incomplete work in Lot Three of the ECD Highway

An audit report for the fiscal year 2014 by the Auditor General of Guyana, Deodat Sharma, has revealed several overpayments which were made to contractors for works done on the East Coast Demerara Highway under the former PPP administration.
The project which began in 2011was aimed at expanding the road network from Better Hope to Belfield villages. The project had two components (i) highway improvement work and (ii) supervision. According to the report, $1.610 billion was budgeted to complete all the road works. A total of $622.161 million had been expended as at December 2014. The project had been split up into several lots but unrecovered overpayments were recorded for works done in two; specifically Lot three and Lot four. The area from La Bonne Intention to Beterverwagting Villages was tagged as Lot Three while Beterverwagting to Triumph was tagged Lot Four. Courtney Benn Contracting Services was contracted to perform works in Lot Three while Compustruct Engineering Inc. was contracted for Lot Four.
Lot Three
According to the audit report the contract sum for Lot Three was $349.007 million. Payments made at the time of the report totalled $278.346 million.
The contract completion date expired on June 17, 2015 and at the time of the physical verification on September 18, 2015 works along the roadway were incomplete.
It was noted that the contractor had submitted bonds for two Advance Payments. Those bonds expired in 2014 and it is unclear whether the advance payments were recovered at the time the physical verification was performed.
Only an advanced payment of 50% was allowed under the contract, however, according to the audit, the contractor received advance payments of $174.504 million (50%) and $37.415 million (10%). This represented 60% of the contract sum which was a clear breach of the contractual terms.
After the advance payments were made, additional funds were spent on the project.
This took the total payments to $278.346 million. At the time of the physical verification, the value of the work done on the site was $157.663 million. Therefore there was an excess of $120.683 million in payments to the company.
Lot Four
The audit report stated that the contractor for Lot Four was also paid two advance payments which amounted to 60% of the total contract sum. This was another breach of the contractual terms since only an advance payment of 50% was allowed. A bond was submitted for the first payment which expired in 2014. No bond was presented for the second payment.
The contract sum for Lot Four was $322.369 million. Total payments made at the time of the report totalled $209.215 million.
At the end of the physical verification conducted on September 18, 2015, the work done at Lot Four was valued at $76.954 million. Therefore the contractor received an overpayment of $132.729 million. According to the report, on the date of the physical verification by the Audit Office, the works on the sites were incomplete and had been abandoned. A drive along the highway shows clearly the abandoned outskirts of the roadway.
After making contact with the Ministry of Public Infrastructure concerning the matter, this newspaper was informed that it is currently before cabinet and the Ministry has not received a response on the matter as yet.