Sloppy servants - House committee blasts technocrats for cost overruns

Daraine Luton, Senior Staff Reporter

PARLIAMENT'S PUBLIC Administration and Appropriations Committee yesterday read the riot act to technical officers in the public sector whose lack of vigilance has facilitated cost overruns on government contracts.

Committee Chairman Wykeham McNeill sent the message yesterday as incensed members chided the National Works Agency (NWA) for the manner in which it approves designs for projects.

"We, as parliamentarians, find it unacceptable that you get a project that you say is going to cost $1.5 billion, and then you come for an increase of $700 million, and in it there are issues like the lights were not put in. How can the lights not be put in in the first rush?" McNeill said as the committee examined the revised estimates for the 2010-2011 fiscal year.

One such project is the Bogue road in St James, which was budgeted to cost $1.4 billion.

At the start of this fiscal year, $500 million was given to the project for contingency and fluctuations.

The Ministry of Finance has since then, in the Supplementary Estimates now before Parliament, asked for an additional $700 million to be set aside for work on the project.

Patrick Wong, CEO of the NWA, told The Gleaner last night that the final cost for the project will be more than $2 billion.

Yesterday, Alwyn Hales, permanent secretary in the Ministry of Works, said design flaws and price escalation contributed to the heavy burden placed on taxpayers for the project's completion.

"... One had to do with fluctuations in the price of material and labour and basic inputs into the contract. The other had to do with scope of work changes occasioned by the design review undertaken by the CEO (of the National Works Agency) and his team in which they found there have been some glaring omissions in the design, which speak to the quality of design and planning of the project in its original scope," Hales said.

He told the parliamentary committee that the omissions were such that the project "could not have been completed and functional and the benefits would not have been derived without those changes in the scope of work".

The additional $700 million includes $318.6 million for fluctuations and $131.5 million for design changes.

"One of the design features we saw that we could not stay with was that the pavement course was using limestone aggregate at the wearing course which polishes. We instructed that it (the material on the pavement course) be changed to river aggregate which gives us a much better abrasion," Hales added.

And although a four-lane highway has been built, it did not have lights nor sufficient traffic signals.

Taxpayers are now required to find additional money to install the lights, median barriers to protect the street lights and to additional traffic signs and access.

An annoyed McNeill said the areas for which money is now required should have been seen by those who are paid to do such a job.

"When you see an appropriation for 2010-2011 of $500 million, and then you see a supplementary of $700 million, it is something that if you get it over and over again, something is wrong with it. There is no justification you can give for that," McNeill said.

"These are technical things, and we are saying that the technical people must be held accountable ... and Dr Hales yourself and Mr (Patrick) Wong are the accountable officers that we have to hold accountable. There has to be a point at which we change the way we do business," McNeill added.

Committee member Ronald Thwaites insisted that there was clear negligence in the design of the work.

"Putting in street lights can't be seen as a mistake," Thwaites said.

"This overrun should not be approved until we have proper corrective measures. Government cannot contract in this way," he added.

Meanwhile, Wong said the agency was moving to deal with the cost overruns as a result of design flaws.

"We are looking at a design built by the contractor to share some of the risk associated with these escalating costs. This methodology that we have is not working," Wong said.

He also said the NWA would have to do a better job of forecasting before contracts are approved.

But committee member Fitz Jackson demanded that the NWA give a timeline for the changes.

"The people who are going to make the difference is you, the technical people, in the agencies," said Jackson.