Audit of Infrastructure Projects Uncovers Several Breaches – Dr. Davies

Minister of Transport, Works and Housing, Hon. Dr. Omar Davies, says that a forensic audit conducted on two major infrastructure projects implemented by the former administration, has revealed "a host of occurrences, which demonstrate complete disregard for normal and well established government practices."

The projects reviewed are the Jamaica Development Infrastructure Programme (JDIP) and the Palisadoes Shoreline Protection and Rehabilitation Works Project (Palisadoes project), for which the audit report was tabled by Dr. Davies during Tuesday's (October 2) sitting of the House of Representatives.

"The report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the Government of Jamaica for project implementation, administration and management. These breaches of existing procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity," he stated.

Pointing to specific findings of the audit, Minister Davies noted that the JDIP contract proposed the undertaking of 19 projects. He disclosed however, that the number of projects changed dramatically to a list of more than 1,000.

"The Road Maintenance Fund (RMF), the institution which is the borrower of the loan from China EX-IM Bank, was not consulted during the development of the master list of projects. The forensic auditor was unable to obtain any documentation, which details the rationale underlying the development of the master list," Minister Davies revealed.

He told the House that JDIP funds were used for unrelated projects such as payment for repair work related to the damage caused by the passage of Tropical Storm Nicole in 2010. "This was a deviation from the projects listed in the initial project documents,” he said. 

In addition, he informed that the National Works Agency (NWA) used JDIP funds to clear up obligations on the Northern Coastal Highway Improvement Project (NCHIP).

He said the audit also revealed a non-adherence to allocations approved by Parliament and the Ministry of Finance; arbitrary issuance of Variation Orders and selection of sub-contractors; and unprogrammed and arbitrary allocation of funds for institutional strengthening.

The forensic audit was undertaken by Kroll Consultants Inc. on the US$400 million JDIP programme, which is being implemented by contractor, China Harbour Engineering Company (CHEC) and developed by the former Transport and Works Ministry through the NWA. The programme aims to address damage to Jamaica's road network by hurricanes and flood rains and for the maintenance of the road infrastructure.

The scope of the audit was broadened to include the US$68 million Palisadoes project, which is also being implemented through a contract with CHEC, and is designed to address the Palisadoes Peninsula, which was severely affected by the passage of Hurricane Ivan in 2004.

Both projects are being implemented with funding from the China EX-IM Bank as well as contribution from the Government.

The audit, which began on April 24, 2012, was originally slated to last three months, but was extended after modification to the contract. The final report is dated August 31.

JIS Social