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The Auditor-General has asked the Ghana Highway Authority (GHA) to stop the implementation of any project which does not have secure and available funding capable of meeting all projected costs.

The directive followed a finding that the state lost $23.8 million in compensation costs for delays in paying the contractor undertaking lots Five and Six of the Eastern Corridor Road.

The entire 696-kilometre (km) Eastern Corridor Road starts from Tema in the Greater Accra Region to Kulungugu in the Bawku municipality in the Upper East Region. The road passes through the Eastern, Volta, Ahafo and North East regions.

Lots Five and Six of the project were implemented to improve 209km of the entire route connecting towns such as Oti-Damanko, Bimbilla, Yendi, Gushiegu and Nankpanduri.

The project was funded with a loan from the Brazilian government and a counterpart funding from the government.

Construction of the road began in 2014 and was expected to be completed in 2016.

However, a performance audit report of the Auditor-General on that project and two other road projects revealed that the government paid $23.8 million as compensation to the contractor for failing to pay in time.

“The contractor suspended works due to delays in payment for 12 months and was granted 21 months extension by the Ministry of Roads and Highways to complete the works with a cost compensation of $23.76 million,” the report revealed.

Audit

The road audit report sighted by the Daily Graphic showed that the exercise was also done on the East Legon-Spintex Road Underpass and the Oil and Gas Enclave roads from Atuabo to Alabokazo Junction in the Western Region.

The exercise was carried out from March to June 2019, focusing on the planning of the projects; procurement of contractors and consultants; execution and other aspects of the project cycle.

Poor Planning

The report revealed that generally the GHA failed to compile feasibility data on roads to aid in reviews of project designs presented by contractors.

“GHA approved preliminary designs which were not detailed enough for the three projects to commence. Detailed designs were, however, provided during implementation which resulted in significant changes to the original project scope,” the report said.

It added that estimates provided by GHA for the three projects were based on preliminary designs and provisional sums, which resulted in variations; increase in project duration and project budget.

Eastern Corridor

For instance, the report said the GHA commenced the Eastern Corridor Road project with preliminary designs which had to be varied three times, leading to a reduction of the project length by 41.3km.

It added that the project, which was scheduled to be completed on November 4, 2016, was 76 per cent complete at the time of the audit in May 2019.

“We found that the length of the asphalted layer of the road to be constructed had reduced from 209.3km to 168km during implementation.

“We noted from correspondence that the consultant issued three variation orders for which GHA sought approval from the Ministry of Roads and Highways,” the report said.

Details of the report also showed that the first variation of $119,241.8 was issued to increase the engineer’s accommodation from 12 to 19 bedrooms and was approved on May 3, 2016.

“The works in variation order one were not done because there were no funds under the contract to pay for the additional works,” the report said.

It added that the second variation order worth $133.74 million was also issued to re-scope the works “after a detailed design of the project was completed and this was approved by the Ministry on November 11, 2016”.

The report said another variation order comprising additions ($40.39 million) and omissions of the same amount was issued on August 23, 2018 and approved by the Ministry on October 31, 2018.

“The net effect of these variations was to maintain a fixed contract sum at the expense of the length of the road and reduction of some facilities. This was because the ministry took a decision to offset the additional cost due to extension of time and other works, by omitting some items from the original scope,” it added.

Procurement

In terms of procurement, the report said the audit team could not validate the fairness and transparency of the procurement of contractors for the three projects because of “the absence of evaluation reports and approval letters on the projects”.

“GHA used sole sourcing and restrictive tendering to procure contractors and consultants partly due to the fact that the projects were not planned to allow for competitive sourcing based on the principles of value for money,” it added.

The Auditor-General, therefore, asked the GHA to use competitive tendering for contracts to improve fairness and transparency in procurement of consultants and contractors.