Major delays and other problems were reported by the Office of the Auditor General on the East Bank Demerara road improvement project, one of the major initiatives of the former PPP/C government.
Difficulties removing utility infrastructure was the main excuse given for delays on the project.
In its report on the 2013 accounts for ministries departments and regions, the Office of the Auditor General (OAG) urged the now Ministry of Public Infrastructure to ensure that proper planning is done in the future so that existing utilities can be identified and removed in a timely manner, thereby obviating excessive delays. Recently-appointed Minister of Public Infrastructure, David Patterson has said that his government intends to take a hard line on delinquent contractors.
Up to September last year, all three lots of the East Bank Demerara Highway improvement project from Providence to Covent Garden, Vreed-en-Ruste to Prospect and Diamond were behind schedule.
The Government of Guyana and the Inter-American Development Bank (IDB) signed a loan agreement on December 8, 2010 for the four-lane extension on the East Bank to the tune of US$22M. Each of the three contracts was signed on 3rd October, 2011 with a start date of November 1st, 2011 and an initial completion date of April 30th, 2013. The project duration was to be 18 months and the defects notification period would be 24 months from the issuing of the taking over certificate.
DIPCON was granted three extensions on the Providence to Covent Garden section: from April 30th, 2013 to October 31st, 2013, then to June 28th 2014 and then to December 28, 2014. The project is still not complete. The OAG report said that of August 2014 only 42% of the project had been completed. The main reason given for the third extension was that GPL and GT&T cables were detaining work at the Mocha Bridge. At the time of the physical inspection, 44% of the US$8m contract sum had been paid to the contractor.
Lot 2 from Vreed-en-Ruste to Prospect was awarded to General Earth Movers Ltd/GAICO Construction and General Services Inc in the sum of US$5.8m. Up to August 2014, 69% of the work had been completed. Work is still continuing on this lot. Two extensions were granted to this contractor, the first from April 30th, 2013 to 31st October, 2013 and the second to June 3rd, 2014. The OAG report noted that the supervising consultant found that there was no justification for an extension of time on this lot which the OAG said would have then resulted in liquidated damages being applied. However, the OAG said that a Government Infrastructure Committee meeting on September 1, 2014 recommended a waiver of the liquidated damages and the IDB granted its no-objection on September 18th, 2014. This waiver was to last up to December 31, 2014. The PPP/C government had been accused of covering poor performance on public works by not applying liquidated damages and the provisions of the defects liability period. At the time of physical inspection, 58% of the contract sum had been paid over.
Lot three at Diamond was awarded to BK International Inc in the sum of US$3.44m. Three extensions were granted to this contractor: to 31st October, 2013, to August 14th 2014 and then March 2nd, 2015.
This project is also not complete. As of August 2014, it was 50% complete. At the time of physical inspection, 32% of the contract sum had been paid over. This lot was the subject of several acrimonious exchanges between BK and utility companies over the pace of work.
Providing the supervision services for Lots 1-3 is MMM Group/CEMCO. The OAG report said that the ministry had requested an extension for the supervisory consultancy up to March 31, 2015 at an additional cost of US$798,822 bringing the revised contract sum to US$2.7m. At the time of the writing of the report the ministry was awaiting the bank’s no-objection to this.
