Budget Concerns for Palisadoes Shoreline Project

KINGSTON — The Palisadoes Shoreline Protection and Rehabilitation Project is progressing well within budget, and is expected to be completed on schedule by September 2012, according to Chief Executive Officer (CEO) of the National Works Agency (NWA), Patrick Wong.

The NWA head gave this update during a meeting of the Public Administration and Appropriations Committee (PAAC) at Gordon House, on Wednesday June 1.

He said that, as at the end of April, some 20 percent of works has been completed on the project, which makes it about five per cent behind schedule.

“At the rate of progress, the project will be completed on schedule by September 2012,” he told committee chairman, Dr. Wykeham McNeil.

Mr. Wong said, however, that a serious challenge to the project, since commencement in September last year, is the amount of money it has been allocated in the budget.

“Last year we got $700 million, this year we got $1.3 billion. The overall cost of the project is $5.6 billion, and it is scheduled to be completed in September 2012. It means that we will not be able to certify for payment the work done by the contractor, once the $2 billion has been exhausted in this financial year,” Mr. Wong complained.

He also stated that this was a “major issue”, as any late payment by the Government would incur an interest of about US$20 to US$25 million, or 30 per cent, by the contractors.

“This means that the allocation in the budget is inadequate for the completion of this project for September, 2012,” Mr. Wong said.

The project is being executed by maritime contractors China Harbour Engineering Company Limited, and sub-contractors Y.P. Seaton and Associates.

Mr. Wong said that though the project is being funded by the China EXIM Bank, “we cannot send that certificate to China EXIM Bank without the Ministry of Finance signing off on it."

“And, the only way they are going to sign off on it, is based on the level of expenditure within the budget, so if the budget says we can only spend $1.3 billion that’s all they’re going to certify,” he added.

He predicted that the project would have exceeded the $2 billion, which it has been allocated, by September of this year, at which point the contractors would be working without pay.

Dr. McNeil suggested that this was a matter of “grave importance”, which must be reported to the Parliament.   

“Our job is really to report to Parliament on issues that we find. Now if what you’re finding is that there’s imminent danger of the Palisadoes Road incurring liabilities, this is something that must be reported,” he stated.

The Palisadoes Shoreline Protection and Rehabilitation project, a partnership between the governments of Jamaica and China, is part of wider programme to protect Kingston Harbour, which is regarded as the first line of defence in the case of a storm surge.

The project, financed by a $65.3 million loan from the China EXIM Bank, will repair and secure the extensively degraded shoreline of the Palisadoes Peninsula in Kingston, over a 24-month period.

Works will include the lifting of the roadway, core filling, utility relocation, construction of a boardwalk, as well as major revetment works. 

By ATHALIAH REYNOLDS, JIS Reporter