A Deep Dive into the Auditor General’s Performance Audit for Roads

If the Tetteh-Quarshie to Madina highway is your usual route, I have a couple of revelations for you. Number one: there was approximately 117 months of delay to that project. Number two: the extensions of time resulted in additional costs of about 146.91 million Ghana cedis or six hundred and twenty-four percent (624%).

That is not all. I will also take you through some more revealing facts about the construction of the East Legon to Spintex Road Tunnel and the Ayamfuri to New Obuase Road Project, among others. 

Estimates by the Auditor-General show that the Government of Ghana invested GH¢ 8.24 billion in construction of new and upgrading of old roads between 2012 and 2018 mostly funded by loans. 

Roads are integral part of the transport system as it links main cities, towns and villages. It links agricultural production areas with local, regional and national markets and it carries in excess of 97% of all passenger and freight traffic in Ghana and thus a main economic player. 

But we often see the rampant deterioration of roads a few months after their completion and handing over. This has been a concern to many Ghanaians and questions have been asked about the quality of the road works carried out. Similarly, complaints abound about delays in completing road works due to variations and delayed payments contributing to cost overruns because of fluctuations and in many cases interest on delayed payments. 

So, the Auditor-General and his Team at the Audit Service carried out audits to assess and evaluate whether the Ghana Highway Authority (GHA) ensures roads awarded and constructed under their supervision meet the required standards and guarantees Value for Money.

Here are a few facts arising from Auditor-General’s performance audit report on selected roads. 

Cost overruns

  • The total cost of the Tetteh Quarshie to Madina Road project at completion was GH¢ 170,477,493.66 and US$ 49, 974,242.82 i.e. 624% and 187% respectively of the Cedi and US Dollar components to the contract sum of GH¢ 23,558,960.95 and US$ 17,414,431.78 respectively. There is the possibility of further payments due to costs of Extension of Time which is yet to be claimed.
  • The cost of the Ayamfuri to New Obuase Road Project rose from 13.6 million to 36.2m for the cedi component and from 20.69m to 31.23m for the US dollar component. These increases were approximately 165.5% for the GH¢ component and 50% for the USD component above the contract sum. They were largely due to variation orders made to the project. 
  • Because the GHA did not have traffic data and future projections of traffic on the road corridor, the construction of the East Legon to Spintex Road Tunnel experienced a 70% cost addition or  GH¢ 10.5m in absolute terms. The auditors noted that contrary to legal requirement, GHA did not obtain approval before implementation of the variations.
Above is a condensed breakdown of the Auditor General’s findings on 3 major road projects.

Unapproved variations

  • A review of progress reports, variation orders, and site inspections found that 25 variation orders were issued in the course of the Tetteh Quarshie to Madina Road project, which resulted in the cost of the project increasing by GH 31,256,849.42 and US$ 16,190,746.50 from the original contract sum of GH¢ 23,558, 960.95 and US$ 17,414,431.78.
  • The total cost of variations to the Tetteh Quarshie to Madina Road project resulted in a 133% and 93% increases respectively to the Cedi and US Dollar components of the contract sum. 
  • GHA could not provide proof that it obtained approvals from the MRH for the 10 V.Os. Failure to obtain the necessary approvals for variation orders implied that GHA committed government to projects and expenditures without authorization.

Procurement issues

  • The auditors noted that, although Section 40 (1) (a-d) of the Public Procurement Act 2003 (Act 663) allows for Single Source/Sole method, GHA needed to demonstrate the justification for using single source as an option and getting approval from the PPA.  They say their review of the documents and correspondence files did not show that GHA followed the laid down procedures in engaging the services of Messrs Queiroz Galvao Construction Limited to award the construction of the Bolgatanga-Bawku-Polimakom Road Project.
  • The auditors say from their review of documents, GHA generally complied with the law in obtaining the services of the contractors for the East Legon – Spintex Road Underpass, Eastern Corridor Road Project Lots 5 & 6 and the Oil and Gas Enclave roads. However, the audit team could not validate the fairness and transparency of the processes due to the absence of evaluation reports and approval letters on the Eastern Corridor Road Project and the Oil and Gas Enclave Road Project. Sole sourcing and restricted tendering were used as a preferred method that does not necessarily guarantee Value for Money. All the consultants on the selected projects were sole sourced and two out of three of the contractors were sole source while the third was under restrictive tendering. 

Low quality work

  • Auditors’ analysis of data collected during field inspection of the Ayamfuri to New Obuase Road Project indicates that the Consultant and GHA did not ensure that 60% of the thickness of sampled cores met the specifications, casting doubt on the quality of the test results submitted which indicated that the works had met the specifications in the contract. Going by this interpretation, the Ayanfuri New Obuasi road with 8.385% of air voids will deteriorate faster than expected. Indeed, auditors noted from their site inspections that sections of the road had begun to show signs of deterioration as at the time of the audit inspection in April 2019.

Delay in completion of work

The Tetteh Quarshie to Madina Road project:

  • The Tetteh Quarshie to Madina Road project was supposed to be completed in under three years but there was approximately 117 months (or 10 years) of time overrun beyond the initial 30-month duration for completion of the works.  The extensions of time resulted in additional costs to the project. 
  • The construction works commenced on 17 November 2006 and was scheduled to be completed on 17 May 2009 (30 calendar months). 
  • Auditors review of correspondences between GHA and the contractor found that in the course of construction, a number of events caused by the Employer (MRH) and the Employer’s representative (GHA) resulted in eight Extensions of Time (EOT) and consequent revisions to the expected completion date from 17 May 2009 to 19 February 2019.

Source: Frederick Asiamah

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