The Tribune

By NEIL HARTNELL Tribune Business Editor A FORMER Bahamian Contractors Association (BCA) president yesterday said the 13.7 per cent of work sub-contracted out to Bahamian firms on the New Providence Road Improvement Project (NPRIP) "stuck out" as relatively low, and called for "mandatory" local joint venture participation on future such projects. Describing the project's projected 36.28 per cent cost overruns, as per the recently-tabled Public Accounts Committee's (PAC) report, as "astronomical", Stephen Wrinkle said all parties involved in the NPRIP needed to be held accountable and a "thorough investigation" be conducted to ensure the same problems were never encountered again. Referring to the productivity problems that resulted from engaging a predominantly Spanish-speaking contractor, in Argentineans Jose Cartellone Civiles (JCCC), to manage a Bahamian-dominated labour force, Mr Wrinkle said this nation in future needed to maximise local contractor participation through "mandating" joint venture partnerships with their overseas counterparts. Noting the initial $113 million value placed on JCCC's contract, and that just 13.7 per cent or $15.464 million was outsourced to Bahamian sub-contractors as at September 2011, Mr Wrinkle said this percentage was relatively low. Of the latter amount, some 77 per cent or $12.035 million went to Bahamas Hot Mix. "One of the things that stuck out was what the value of Cartellones' contract was, $113 million, and the amount of money going to Hot Mix and those, which doesn't seem very significant," Mr Wrinkle told Tribune Business. "On the face of it, it appears they [JCCC] tried to keep all the work themselves, and that's why they ran into so much trouble. They should have sub-contracted more of that work out." Questioning whether JCCC was getting maximum productivity out of its Bahamian-dominated workforce, Mr Wrinkle added: "Anyone driving through the roadworks would have seen Hot Mix was making three times' as much progress as Cartellones. "When you drive through and see 12 guys standing, and one working, you know they're not getting the productivity. It was an embarrassment to me as a Bahamian contractor. You don't see that with Hot Mix." Tribune Business revealed on Wednesday that the Inter-American Development Bank (IDB) was having to provide 'retroactive financing' of $13 million, prior to its latest proposed $65 million loan to the NPRIP being approved, to prevent a "cash flow shortfall" from bringing the project to a halt. That loan is part of a $77 million financing bridge necessary to complete the NPRIP, which the IDB said would end up costing a total $195.905 million. As a result, the Public Accounts Committee's initial 36.28 per cent cost overrun projection, based on a $154 million price tag, could be somewhat of an underestimate, as the $195.905 million figure is some 73.4 per cent above JCCC's $113 million contract. Suggesting that most Bahamians "would agree it was mismanaged", Mr Wrinkle told Tribune Business that communication problems between JCCC and the project designers, Halcrows, and consultant engineers, Mott McDonald, together with delays to producing a Schedule of Issue and Contract Programme, indicated none of those involved "had a handle on the situation". "The Government needs to be held accountable for it," the former BCA president added. "That's an astronomical amount of cost overruns on this type of work. If I did a contract and came back to the client saying: 'We're 35 per cent over budget', he'd want to know why. He wouldn't just write me a cheque. "A thorough investigation needs to be carried out into this contract. If Mott McDonald were the consultant engineers acting on behalf of the Government, they need to be held accountable. That was poor representation of our interests. This is hundreds of millions of dollars at a time when the country does not have it." Mr Wrinkle queried to Tribune Business why JCCC was ultimately chosen to be the project's main contractor, given that controversy had surrounded its previous works and dealings in Jamaica. Asked what message the Bahamas should take from the difficulties encountered on the New Providence Road Improvement Project, the ex-BCA president told Tribune Business: "The main lesson is to make sure we have good local participation in any major project that we allow. "We cannot keep on bringing in foreign contractors and consultants, and expect to get results with local labour. It doesn't pop; it doesn't work. Joint venture partnerships must be mandated." Mr Wrinkle pointed to the $409.5 million Lynden Pindling International Airport (LPIA) redevelopment as a model for what he was talking about, noting that none of the NPRIP project's problems had been experienced there. The main contractor, Canadian-based Ledcor, had partnered in a joint venture with Bahamian company, Woslee Construction, and as a result "you've got accountability, participation and the quality of work is fine". Mr Wrinkle, though, praised Prime Minister Hubert Ingraham and his government for picking up the dormant roads project and proceeding with it, adding that the IDB borrowing was fine as it was to "the long-term benefit of the country". "The project as a whole is an excellent project," Mr Wrinkle said. "You can see where the money is going, even though there are cost overruns. This infrastructure project is utterly essential to the quality of the country, and the Prime Minister must be commended for borrowing money at extremely low rates. "Unfortunately, the rest of the team fell down. We fell down on implementation. The Ministry of Works, and indeed any government agency, is not set up to handle that type of project..... Someone needs to take control of this and finish on time and on budget, or we'll be up another 20 per cent."