Variations due to delays in completion dates and claims have led to cost overruns of the cedi component of two road projects, costing the government GH₵168.5 million extra money.
The cedi component of the contract sum for the two road projects was GH₵37.2 million.
But cost overruns increased the cedi component to GH₵205.8 million (GH₵205,861,927.2).
For the same two contracts, the dollar component recorded cost overruns of $37.8 million ($37,813,523.2).
The dollar component of the two contract sums was $38.2 million ($38,215,682.53).
However, the cost overruns added to the contract sum brings the final contract sum to $76 million ($76,029,205.73).
These revelations are contained in the Performance Audit Report of the Auditor-General on selected road works in Ghana.
The report, signed by Daniel Yaw Domelevo, Auditor-General, and dated November 28, 2019, has been submitted to Parliament.
The projects in question are the 39.6km long Tetteh Quarshie–Madina-Mamfe trunk road project and the 26km Ayamfuri-New Obuase road project.
The 39.6km Tetteh Quarshie–Madina-Mamfe road took 10 years to complete. The project, which was to be completed in 30 months, was completed in 147 months.
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% respectively.
The cedi component went from GH₵23.5 million (GH₵23,558,960.95) to GH₵170.4 million (GH₵170,477,493.66).
On the other hand, the dollar component also increased from $17.4 million ($17,414,431.78) to $49.9 million ($49,974,242.82).
Variations related to the project amounted to GH₵23.6 million (GH₵23,654,047.83) and $13.4 million ($13,430,608.5).
Unrelated works variation were GH₵11.6 million (GH₵11,621,897.39) and $6.1 million ($6,169,625.91).
According to the report, fluctuations amounted to GH₵61.8 million (GH₵61,891,295.69) and $5.2 million ($5,240,469.41).
The total interest on delayed payment (Part of final contract Sum) were GH₵18.9 million (GH₵18,998,533.10) and $560,842.11.
The 39.6km long Tetteh Quarshie–Madina trunk road project was largely constructed to the required contract specification; however, the implementation process was bedevilled by problems of poor management of scope, schedule, cost and payment, which resulted in significant cost and time overruns.
The project was awarded in October 2006, commenced in November 2006, and was expected to be completed in May 2009.
The projected completion time of 24 months was not met; the final completion time was 64 months.
The variation orders resulted in an increase of approximately 165.5% for the cedi component and 50% for the dollar component.
Due to the variations, compensation of project affected persons, relocation of utilities and claims for delay in payments.
There were cost overruns of GH₵22.5 million (GH₵22,573,895.05) and $10.5 million ($10,543,792.05).
Total interest on delayed payment (Part of final contract sum), GH¢859,380.24 and $79,024.10 were paid.
The estimated cost of the project was about $29 million; it commenced in December 2012 and was expected to be completed in December 2014.
The Ayamfuri-New Obuase road project is part of the Ayamfuri to Asawinso Junction of Inter-Regional Road 6 and Inter-Regional Road 8.
The project comprised the rehabilitation of 26km of the road to asphalt to serve as an effective north-south corridor linking the north to the Takoradi Port in the south.
The Ayamfuri-New Obuase road project took 64 months, instead of 24 months, to complete due to variations brought about by unknown site conditions which should have been determined during the feasibility and design stage.
The Ministry of Roads and Highways estimates that Ghana has about 78,401km of road network as of December 2017.
Of this, 14,583km are trunk roads, 48,357km are feeder roads, and 15,462km are urban roads.
According to the report, analysis of data made available to us shows that challenges exist during the implementation of road projects in the country in the areas of scope management, payments for work done and ensuring projects are completed within the schedule to get the full benefit for users, which have to be addressed.