Construction of health ministry head office delayed nearly a year since contract awarded, Audit Office finds

-contractor advanced $71M

Up to August, the Audit Office found that construction of the new head office of the health ministry had been delayed. (Audit Office photo)

Almost a year after the contract was signed, the construction of the new head office for the Public Health Ministry is at a standstill despite an advance payment of $71.365 million, the 2017 Auditor General’s report states.

“At the time of the physical verification on 13 August 2018, nine months after the signing of the contract, only piles for the foundation of the building have been driven at the site… In addition, only two workers were seen on site despite the fact that the works were significantly behind schedule. Also, only one piece of equipment was noted and there was no material present, even though the contractor had received the advance payment …,” the report, which was presented to the National Assembly last Thursday, stated.

This newspaper did not observe any major changes during a visit to the site yesterday.

In examining the ministry’s accounts, the Audit Office said that included in the amount of $164.198 million allocated for reconstruction of ministry’s head office is an amount of $71.365 million, which represents payment for a contract awarded in the sum of $365.487 million by the National Procurement and Tender Administration Board for the first phase of construction works.

According to a table included in the report, $164 million was set aside for the reconstruction of the complex, a car park, fence, guard hut and electrical works.

The contract was awarded to the lowest of the eight bidders, against the Engineer’s Estimate of $546.751 million.

A perusal of the contract revealed that it was signed on November 8th, 2017, with a duration of one year and an equally-long defects liability period. The start date was noted as 14 days after the signing of the contract but this was subject to the details of the order to commence, the report said, before adding that on November 27th. 2017, the contractor received an advance payment of $71.365 million, representing 20% of the contract sum.

In response, the ministry pointed out that though the contract was signed on November 8th, 2017, the contractor was given his commencement order on July 19th, 2018. According to the response,  prior to the commencement order, the contactor was engaged in site preparation works and the relocation of the ministry’s assets to make the site available for construction; construction of a bridge ($7.793 million); removal of derelict vehicles and equipment ($1.026 million); supply of a 40ft container ($1.368 million); supply and installation of a signboard ($1.493 million); construction of a transport office ($7.922 million); and construction of a pump room and installation of pressurized plumbing system ($3.420 million).

The ministry informed the Audit Office that its assets had to be relocated because it was encumbering “the footprint of the new building.” It added that further to the commencement order, a pile testing exercise was carried out by the supervisory consultant (Vikab) Guyana Ltd, with the aid of the contractor, to garner sub-surface data, to complete the foundation designs. In this respect, with orders from the consultant, the contractor has proceeded with foundation works, and has commenced stockpiling the respective piles for the said works.

The Audit Office, based on the response received, recommended that the Head of the Budget Agency explain the reasons why the works were delayed and provide approval for the extension of time granted to the contractor.

In November, 2017, it was announced that the ministry would get a new head office at a cost of $365 million. This was one of the contracts taken note of by Cabinet at a previous meeting.

The contract was awarded to Chung’s Global Enterprise.

In 2009, the then Ministry of Health head office on Brickdam had been hit by fire as a result of arson. Some of its divisions had to be accommodated in various parts of the city.

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