Dear Editor,
It was reported in the media that at the 5th Annual Engineering Conference organized by the Ministry of Public Works (MPW), Sunil Ganesh, Project Manager of the Works Services Group of the MPW in a presentation titled, ‘Getting value for money in the construction sector,’ argued that awarding road construction contracts to general contractors has resulted in the scarcity of equipment and human resources causing project completion delay, cost overruns and not getting value for money. He concluded therefore that awarding contracts to specialized contractors to execute specific activities of a project ensures that the project will be delivered on time, within budget and to high standards.
To support his claim, Mr Ganesh stated that the East Bank Demerara four-lane highway project under construction was awarded to three contractors based on geography rather than specialization. Each contractor was responsible for constructing all items of work listed in his contract. Unfortunately the contracts were not completed on time and there are cost overruns yet to be determined because, he opined, that the contractors have had to share/compete for personnel and equipment which created a scarcity of these resources among them, and this adversely impacted their contract costs and timely completion. He presupposed that if the project had been split up among contractors specializing in specific aspects of project work instead of dismembering it willy nilly into three sections and awarding them to general contractors, it would have been completed on time and within budget. No plausible example to support this claim was presented, and he left unmentioned the effects the removal of utilities (water, telephone, electricity) from the work area and land acquisition for the right of way in a timely manner has had on construction progress. These problems were compounded by poor supervision and lax oversight by MPW. Additionally, delays due to adverse weather conditions, traffic disruptions and the timely delivery of materials were not considered in the presentation. Hence delay in completing this project with substantial cost overruns has more to do with poor planning and poor resource management by the contractors, rather than the postulation that the employment of specialized contractors would have made a difference.
The East Coast Demerara Highway Project was another example quoted by Mr Ganesh to support his claim that employing specialized contractors would have made a difference in project execution. This project was awarded to seven contractors. He claims that 75% of project work was for concrete drains and because two of the contractors specialized in concrete work, they were able to finish their contracts on time while the other five who were general contractors have been struggling to complete their contract work. In this respect it appears Mr Ganesh’s claim is misleading regarding the percentage of project work attributed to concrete drains vis-à-vis other items of contract work, since white sand backfilling and other materials placement for the drains and carriageways are substantial and costly, and would have accounted for more than 25% of project cost. Further, many of the contractors have suffered inordinate delays in executing their work as they waited for MPW to resolve its disputes with BM Soat and others to acquire the right of way for the highway.
All major government contracts have had significant time and costs overruns, but no attempt was ever made to audit them to identify the causes and make recommendations to remedy the underlying problems. Mr Ganesh in his presentation dodged these problems, although he is presumably aware of the political dictates involved in the selection of contractors and the award of contracts to them, and fully aware of the procedures which should be followed in the process as he plugs the dubious advantages of awarding projects to specialist contractors as against general contractors.
Mr Ganesh no doubt is aware that before any contractor is allowed to build anything he should be pre-qualified. Pre-qualification is based on a number of factors including professional competence particularly with respect to a contractor’s workforce and equipment, relevance experience and financial capability. After an award, the contractor is required to prepare a work programme for the government and the project supervisor’s approval. The supervisor’s duty is to ensure compliance with the work programme as well as execution of the contract in accordance with the approved drawings and specifications. If these requirements were met and those employed had performed their duties with the desired competence with respect to the two projects mentioned above, there is no reason to believe that the employment of specialist contractors would have been the preferred method for contract execution. Further, the contractors should have been bonded to enable the government to recover its costs should the contractors fail to perform in accordance with the terms and condition of their contracts. In case of default, the government could terminate the work of tardy contractors and have the Bonding Agency complete their work.
Finally, except for very large projects, few of them are split-up into specialized contracts to achieve the objectives outlined by Mr Ganesh, for several reasons. Experience has shown that it is extremely difficult for a supervisor to manage the work of several small contractors on a project, particularly when their work overlaps or is done sequentially, and when completion time is of the essence. Often a contractor cannot start his work until another has finished his activity, and because of this overlapping of contract works coordination becomes difficult with conflicts arising which could easily de-rail completion of a project on time and within cost. A project where many items of work crisscross each other and cannot be easily separated into distinct parts is usually awarded to one general contractor who has the sole responsibility to complete the various items of work based on his means and methods and as per his contract. Large projects such as hydropower are often split up because their varied components (dam, power plant, transmission lines, access road) could be separated into distinct large contracts with little or no overlapping of activities. Such projects, however, require project management teams for coordination, inspection and execution. Splitting up projects whose costs are within the range of those being executed by the government, and awarding them to specialist contractors has shown to be more costly to complete than if they were undertaken by prime contractors with the support of experienced sub-contractors. Also, there is no reason to believe that the works will be done any quicker and the projects are likely to be nightmares to supervise.
Yours faithfully,
Charles Sohan