Institute payment policy within 56 days - Auditor-General directs Highway Authority

The Auditor-General has directed the Ghana Highway Authority (GHA) to immediately institute and implement a policy on processing and payment of interim payment certificates (IPCs) within 56 days.

The directive follows the revelation made by the Auditor-General, Mr Daniel Domelevo, that delays in the implementation of some road projects had resulted in huge financial losses to the state.

A Performance Audit Report by the Auditor-General on selected road projects which was submitted to Parliament in November last year and sighted by the Daily Graphic is on three road projects executed between 2012 and 2018.

The projects are the Tetteh Quarshie-Madina, the Ayamfuri-New Obuase and the Bolgatanga-Bawku-Polimakom roads.

The report revealed that the Tetteh Quarshie-Madina road project had been unduly delayed for about 10 years, resulting in the state paying more than six times the cost of the project.

It said the contract sum of the Tetteh Quarshie-Madina road project rose by as much as 624 per cent because of the delay.

Audit

The Auditor-General prepared the Performance Audit Report in compliance with Article 18(2) of the 1992 Constitution and Section 13(e) of the Audit Service Act, 2000 (Act 584).

Details of losses

According to the report, although the Tetteh Quarshie-Madina road was largely constructed to the required contract specification, the implementation process had been plagued with problems of “poor management of scope, schedule, cost and payment, which resulted in significant cost and time overruns”.

“The project delayed by over 10 years and the variations and claims led to a rise in the cedi and US dollar components of the contract sums by 624 and 187 per cent, respectively, from GH¢23.56 million and $17.41 million to GH¢170.48 million and $49.97 million,” it said.

On the Ayamfuri-New Obuase road, the report said the project took 64 months, instead of 24, to complete because of the variations brought about by “unknown site conditions which should have been determined during the feasibility and design stage”.

“There were cost overruns of GH¢22.57 million and $10.54 million due to the variations, compensation of project-affected persons, relocation of utilities and claims for delay in payments,” it added.

It said that the Bolgatanga-Bawku-Polimakom road project had stalled because of the non-payment of IPCs on time by the Road Fund Secretariat.

According to the report, the project was just 19.45 per cent complete as of the completion date in June 2019.

“The delay in payment of the IPCs as of June 2019 has led to interest charges of GH¢38.19 million, in addition to the original contract sum of GH¢612.74 million,” it disclosed.

Planning lapses

The audit report also found that although feasibility studies had been carried out on the road projects, there had been no review before implementation to take note of traffic changes in time between the studies and the implementation.

“Apart from the Ayamfuri-New Obuase project, the budgets for the Tetteh Quarshie-Madina and the Bolgatanga-Bawku-Polimakom road projects were based on preliminary or unrevised designs and provisional sums and did not give a true reflection of the final cost during implementation through variations and additional costs,” it added.

Procurement

The report further raised concerns about the procurement processes of the contracts, although it said the GHA generally followed procurement laws.

“It was difficult to validate the fairness and transparency of the procurement processes for the supervision consultant for the Ayamfuri-New Obuase road project and Sonitra Limited for the Tetteh Quarshie-Madina road project due to the absence of evaluation reports and approval letters on the procurement,” it said.

Other recommendations

It recommended that the GHA should capture all intended road projects in a strategic plan for planning purposes and accountability.

It also called on the authority to review design drawings of any project it intended to implement, especially where there was a time lapse between feasibility studies and the implementation.

Among other things, the report asked the GHA to prepare adequately through planning to limit the use of sole sourcing and also document all the processes leading to the award of contracts, including evaluation reports.

Meanwhile, efforts are underway to speak to the management of the GHA.