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Public Infrastructure: When Additional Costs Becoming Bad Habit

5 June 2012 - lexpress.mu

Public Infrastructure: When Additional Costs Becoming Bad Habit

More than Rs 400 million of additional costs on public infrastructure projects have been screened during the last three sessions of Parliament.

Latest: the Ring Road with Rs 150 million in claims before the end of the first phase.

For three consecutive weeks, the opposition MPs and Joe Lesjongard Raffick Sorefan denounced in Parliament recurrence and proportion that make the additional claims of contractors on public works: Rs 166 million on the project all at the sewer in Baie-du-Tombeau or Rs 94 million on the flyover roundabout Caudan.

More than Rs 400 million of additional costs that the recurrence has almost become a habit when it comes to public works. But this is only the tip of the iceberg. The audit director, Raj Jugurnath, had also denounced the claims of additional Rs 500 million in 2010 alone on the establishment of networks of all to the sewer. They involved several projects including Rs 166 million project in Baie du Tombeau, or 65% of the original contract value of Rs 255 million).

Joe's question Lesjongard addressed to Deputy Prime Minister and Minister of Energy and Utilities, Rashid Beebeejaun, May 15, had demonstrated that no substantial penalty had been taken despite the sharp criticism of Raj Jugurnath. It appears that two officers of the Waste Water Management Authority (WWMA) were severely warned.

For Rs 94 million has been released a week later on May 22 following a question Rafick Sorefan the Minister of Public Infrastructure, Anil Bachoo. It turns out that the contractor had not realized that construction of the flyover would require enlargement of the port before the work begins. Measurements made on site did not identify the problem that was eventually classified as unforeseeable Circumstances (contingencies) under the Public Procurrement Act (PPA)

Then last Tuesday Raffick Sorefan tackled another issue: the Ring Road. The contract for the first phase has been allocated to the partnership Rehm-Grinaker/Colas for a total of Rs 1.16 billion.

To date, the consortium has already claimed Rs 150 million even before the end of the first phase, which originally was to cost Rs 1.16 billion. Admittedly, it is only 13% of the value quoted by Rehm-Grinaker/Colas initially, but the sum remains important.

The total cost of the Ring Road was estimated at Rs 8 billion and includes the tunnel to be dug under the mountain of Signals and the Harbour Bridge overlooking the harbor of Port Louis. If additional work continue to flourish at the same rate, the one billion mark will easily affect the delivery of the Ring Road. Assuming that entrepreneurs could find themselves with more unforseeable Circumstances once in the mountains or even on the waters of the harbor of Port-Louis, the note may be much saltier.

The government has promised to invest Rs 21 billion. Similarly, if additional work remains within the parameters of the PPP, the final cost of these investments announced could exceed Rs 30 billion.

Then we will have already paid the Rs 5 billion of debt incurred by the State Trading Corporation (STC) on the hedging of petroleum products. It will then suffice to increase the puncture of the Road Development Authority (RDA) for each liter of fuel sold at the pump to pay the remainder.

 

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