Asphalt Plant spent $71M on transportation in five years

Jan 03, 2021 News

– when it could have purchased own vehicle – audit report

The Garden of Eden asphalt plant that is controlled by the state.

Kaieteur News – The state-owned Garden of Eden asphalt plant could have purchased its own fleet of vehicles for transportation instead it expended a whopping $71 million, outsourcing the same over a five-year period.
The recent audit conducted at the facility controlled by the Demerara Harbour Bridge (DHB) management, revealed that there was a poor oversight of the costs associated with transporting of the materials needed.
It was stated that trucks were mainly hired to transport raw materials from suppliers and occasionally, for stock taking. The report outlined, too, that trucks were not hired to move material during the production process.
In 2015, the plant expended G$19,489,491 on transportation alone.
In 2016, $24,672,566 was expended; $14,234,647 in 2017 while $9,808,934 and $3,169,167 was expended in 2018 and 2019 respectively.
“An analysis of the above payments revealed that the amounts reported for 2018 and 2019 was understated as for those two years’ transportation cost are also included into the cost of inventories,” the state audit report detailed.
Further on, it was revealed that payments were also made to several persons for transportation services.
Angela Gopichand Abdool was paid $34,921,309; Christina Singh received $11,440,000; Jasmattie Goordial was paid $22,481,542; Sheik Ayube & Rachel Simeon collected $281,873 while Demerara Sand & Aggregates Trading would have been paid $2,250,045.
However, it was noted that no contracts or files were found for the aforementioned suppliers.
The special audit team led by Chartered Accountant, Chateram Ramdihal, also pointed out that analysis of the outsourcing of transportation services as against that of the procurement of the plant’s own truck has revealed that the procurement of a truck would have resulted in a savings of approximately sixty percent (60%) of that incurred during the period under review.
“Management should ensure that cost is minimized at all times. Management should consider acquiring its own vehicle for transporting of materials since this is an integral part of the production process and will result in less cost to the plant,” the team recommended.
The audit was ordered after a complaint of an asphalt buying racket at the Garden of Eden, East Bank Demerara location of the plant.
The audit report found significant weaknesses in the operations of the plant.