Contractor behind schedule despite millions in advance payments

Timehri roundabout

…Ministry was unable to recover advance

When Guyana’s first roundabout was opened at Kitty, Georgetown, Government promised it would open similar structures at other locations but at least one of these projects, the Timehri roundabout, has run into serious trouble even before it’s opened.
According to reports, the contractor was given advance payments totalling $30.8 million, with $628,568 being paid to the Guyana Revenue Authority (GRA) as Withholding Tax. The contractor, who was awarded the contract out of 11 bidders, was supposed to construct a single lane rural roundabout and bypass road.
In Auditor General Deodat Sharma’s 2017 report, he revealed that he examined payment vouchers, contract documents and even paid the site a physical visit a

few months ago. Among his findings were that the works were incomplete and very much behind schedule.
While the contractor had mobilised on site, at the time only excavation and general earth work had even started. And this was limited to two small sections of the existing roadway.
The works were expected to be done at the existing two-lane road coming from the Cheddi Jagan International Airport and the four-lane highway.
The AG also revealed that the advance payment bond, meant to be a security in case the contractor defaulted after being paid up front, expired since December 4, 2017. As of August 2018, only 19.5 per cent of the advance payment had been recovered.
The structures are being constructed with the hope of easing traffic congestion and wastage of time at the peak locations.

“It was discovered that no date was inserted in the signed contract agreement and as such, we were only able to determine that the contract was signed sometime in August 2017,” the report states.
“According to the contract, the duration for the completion of the works was 24 weeks from the letter of commencement. However, at the time of reporting a total of 12 months had elapsed and the works were still incomplete.”
It is understood that the contract for the project was awarded for the sum of $74 million below the engineer’s estimate.

Complication
In its response, the Public Infrastructure Ministry explained that complications from removing utility connections in the area resulted in the delays on the project.
“The contract time of 24 weeks had elapsed, and the works were not completed due to the complications that arose with regards to the removal of utilities from the work area, namely GTT (Guyana Telephone and Telegraph) and GWI (Guyana Water Incorporated).”
“These issues arose and required additional $8.5 million to remove GTT utilities and $11.5 million for GWI utilities. These delays caused work to be stalled until June 2018.”
The Ministry noted that the contractor is awaiting the removal of light poles. It acknowledged that the bond did expire and revealed that the contractor has been asked to renew same.
The Auditor General recommended that the letter of commencement be submitted for examination and that the bond remain valid until advance payments have been recovered. It also asked for clarification on whether extensions were given to the contractor and what are the new completion dates.
Works reportedly began on the Timehri roundabout back in June of this year, while Public Infrastructure Minister David Patterson commissioned the $78.9 million Kitty roundabout, which was constructed by S Jagmohan Hardware Supplies and Construction Services.
Minister Patterson had announced plans to construct two roundabouts, with the inclusion of the Timehri structure. The other is expected to be erected on Mandela Avenue, Georgetown.