Minister of Transport, Works and Housing, Dr. Omar Davies, told Parliament Tuesday (January 24) that over US$398 million of the US$400 million allocated to the Jamaica Development Infrastructure Programme (JDIP) has already been used.
In a statement to the House of Representatives, Dr. Davies said that, up to December 2011, payments under the project, coupled with the value of the work orders certified for payment, amounted to US$209.6 million.
He stated that, in addition to the work orders certified for payment, information presented to him by the National Works Agency (NWA), indicated that additional funds totalling US$188.5 million have been committed, but not spent.
“Simply put, as at December 2011, the combination of funds actually disbursed, works order certified for payment and the value of works committed amounts to just over US$398 million,” Dr. Davies said.
“This means that if, as Minister, I accept the status quo, all but US$1.8 million of the US$400 loan, which was scheduled to be expended over a five year period, would have been completely committed before the end of the second year of the programme. Let me make it abundantly clear, we will not accept this situation,” the Transport Minister warned.
He also stated that the Ministry of Finance, which was required to find US$15 million as the Government’s counterpart for the US$100 million budgeted to be spent in 2011/12, has to find an additional US$15 million to deal with the over-expenditure in this fiscal year.
“I have issued instructions, through the Permanent Secretary and the Acting Chief Executive Officer of the NWA, that a thorough examination of this last set of commitments be carried out to determine the instances where the work has not yet been started,” Dr. Davies said.
He added that the objective of the instruction was to allow the government an opportunity to address the deficiencies identified in the implementation of the project.
Dr. Davies gave a commitment that the forensic audit of the JDIP will be executed. He noted that the terms of reference are being finalised, and will incorporate comments and suggestions from the Auditor General. The request for proposals is also being prepared and, very soon, the invitation to tender will be advertised. JDIP will be formally listed in the Estimates of Expenditure for financial year 2012/13.
He said that the project provided “clear evidence of how easy it was to undermine the systems which have been instituted to increase accountability in, and transparency of public expenditure”.
“How could it be that projected expenditure on a project could have been arbitrarily doubled within a fiscal year, without alarm bells being set off in the parent Ministry and the Ministry of Finance,” Dr. Davies stated.
Opposition Spokesperson on Transport and Works, Karl Samuda, argued that the projected increases in expenditure on certain projects were due to increases in the price of oil.
“Those variations impacted on the sub-contractors who were engaged on the project,” Mr. Samuda explained.
Dr. Davies admitted that the government recognised that the fluctuation in the price of oil could have played a part in the increase in expenditure for certain projects.
In the meantime, the Ministry has initiated the process of filling the position of Chief Executive Officer at the National Works Agency. The post was advertised on Sunday.
“Our expectation is that the person chosen will take up office on March 1. With the appointment of the new CEO, we intend to ensure that she/he will be held accountable for the implementation of the systems and procedures that adhere to best practices,” Dr. Davies said.
By Latonya Linton, JIS Reporter