Showing posts with label MC70. Show all posts
Showing posts with label MC70. Show all posts

May 30, 2019

Value for Money

Enhancing value for money in public procurement of Northern Ireland construction projects


29 May 2019
Gary McArdle and Gerard Gunning evaluate public procurement in Northern Ireland - specifically, the achievement of value for money in public construction projects; they also assess other factors detrimental to creating value, such as sub-economic tendering and the potential impact of Brexit
Civil

Abstract


The purpose of this article was to evaluate public procurement in Northern Ireland (NI) – more specifically, the achievement of value for money (VfM) in public construction projects. Other areas assessed were factors detrimental to creating VfM; sub-economic tendering; and the potential impact of Brexit in NI.
The methodology included primary and secondary data collection. The qualitative research involved six semi-structured interviews to collate the data and use of Decision Explorer to analyse it. Quantitative research was in the form of 81 questionnaire responses, analysed using SPSS.
The findings highlight influences which create VfM in public procurement, along with barriers to achieving VfM. Direct and indirect factors which contribute to public value are also established. Additionally, the potential impact of Brexit on VfM was ascertained.
The article identifies clear implications for practice, with a view of increasing VfM through public procurement procedures. An insight is provided into public procurement in NI from the perspective of both vendor (public bodies) and purchaser (contractors) – an area which appears to be under-represented in current literature.

Introduction


Procurement is the acquisition of resources required for the realisation of a project. These resources include contractors, consultants, subcontractors, suppliers and the client’s own resources.
Public procurement must be based on VfM, which is defined as ‘the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought’.
This should be achieved through competition. Public procurement is subject to a legal framework which encourages free and open competition and VfM, in line with international and national agreed obligations and regulations.
There are sufficient strategic plans provided by NI public bodies on the delivery of infrastructure projects in an efficient manner while also providing VfM. There are a number of ways in which the procurement activities of public bodies can achieve VfM.
However, there appears to be a level of uncertainty as to the most suitable procurement approach. Additionally, there are factors inhibiting the creation of VfM such as lack of funding and long-term perspective; sub-economic tendering; and a claims culture.

Research methodology


The study used a mixed methods research approach by collecting primary and secondary data, utilising both qualitative and quantitative methods to collect, collate and analyse data. Figure 1 demonstrates the research process.
Figure 1 Research methodology
The qualitative research involved six face-to-face, semi-structured interviews with senior individuals currently working in the construction industry.
Four of the individuals work for public sector organisations, providing a range of perspectives from different specialisms.
Two of the individuals are senior managers within contracting companies currently involved in public sector projects in NI – one civil engineer and one quantity surveyor.
It should be noted that the interviewees appeared cautious with their responses due to the sensitive nature of the subject. Details of the interviews are illustrated in Table 1.
The analysis of the interviews also identified areas where further research would be required within the topic.
This was used to aid the development of a questionnaire which formed the basis of the quantitative research.
Table 1 Interview details
A total of 81 individuals working across various sectors of the construction industry completed the questionnaire.

Research outcomes


This section identifies the main outcomes of the research and provides reasoning to the main themes established. Contradictions between different aspects of research in addition are also discussed. The main themes identified include:
1. Creating public value
Public sector organisations not only create public value through the services they provide; they also create value by their approach to the provision of services including:
• Creating employment;
• Supporting the local economy;
• Helping socially deprived areas;
• Support of SMEs; and
• Consideration and protection of the environment.
The main areas requiring improvement in NI include:
• Improvements to the road network;
• Greater employment opportunities;
• Improvements to the health facilities; and
• Improvements to the water and sewerage services.
Although it did appear that VfM was being achieved, the concept of measuring public value would provide a more appropriate assessment of the delivery of public procurement policies.
2. Factors which result in less VfM and have a damaging effect on NI’s construction industry
There are various factors and practices which are detrimental to the objective of achieving VfM through public procurement.
The ‘vicious circle’ in figure 2, illustrates the main causes which are damaging the construction industry in NI. It should be noted that this is more relevant for less complex projects.
Water and roads projects are less complex projects, whereas education and health are more concerned with large complex projects. The rationale is that a new road, water main or sewer may need to be constructed to a required specification; there is less impetus for innovation, whereas the construction of a new hospital or school may be considered complex and more open to radical innovation.
Figure 2 The vicious circle damaging the construction industry in NI
The three main causes of sub-economic tendering in NI are:
a.) The client’s aim to gain VfM places increased pressure on contractors to reduce costs;
b.) The attitude of contractors. Some contractors submit low tenders simply to win the work and offset losses by drawing on more profitable sections of the business. Additionally, legal challenges prior to contract award from unsuccessful tenderers are time consuming, costly and lead to delays in the contract start date.
c.) Lack of work in NI.
During the construction phase, contractors seek claims as an approach to increase income. The increase in claims is forcing the client to ‘fight back’ and apply the contract in a more stringent manner regardless of the contractor or tender price.
Therefore, contractors are not making enough profit or possibly losing money leading to a breakdown in relationships. There is no process improvement on defining the key aspects of the tender evaluation by the client, as contractors will continue to submit sub-economic tenders to win work – resulting in the cycle starting again.
This vicious circle is proving to have a damaging impact on the construction industry in NI for both contractors and clients. The competitive industry, lack of construction contracts and unsustainable rates are proving to be a dis-incentive to larger contractors who are focusing on expanding their geographical spread to gain profitable work.
In an attempt to break this cycle, a starting point would be to obligate public-sector clients to reassess their interpretation of VfM. It is apparent that they can confuse VfM with lowest price and their current approach to place more emphasis on cost is resulting in a ‘race to the bottom’ in relation to tendered rates. Clients must realise that the lowest price will not necessarily mean the lowest outturn cost.
Current regulations have a procedure in place to assess sub-economic tenders. However, clients are happy to receive reassurance rather than exclude them to avoid potential legal challenges.
As demonstrated in the case of DRD v BBMC (2016), BBMC were awarded damages because of DRD excluding them from the tender process based on their abnormally low tender (ALT). A potential change in regulations would give clients more authority to deal with ALTs without risking the backlash of a legal challenge.
Additionally, a reduction in funding provided by the government for capital works projects is resulting in greater operational and maintenance cost. Factors such as restrictions on expenditure along with a reluctance to incur higher capital costs are resulting in greater maintenance cost, suggesting a lack of long-term perspective by public bodies. This is providing a major problem to sustainable construction procurement.
3. Factors which create VfM and proposals for improvement
Figure 3 summarises what creates VfM, based on the qualitative and quantitative research.
Figure 3 Elements that create VfM in NI public procurement
There are certain differences within the findings of the research, particularly in relation to contract strategy for large complex projects. Health and education sectors have adopted a traditional approach for the large complex works such as the new critical care unit at Royal Victoria Hospital (RVH) or the relocation of Ulster University, Jordanstown (UUJ). In each case, the design and construction stages are completed and procured separately.
However, one question in the questionnaire focused on this area for large complex projects. Two-thirds of the responses indicated that design and build would provide the best opportunity to create VfM for the client. Possible reasons for this difference in results include:
• The details provided by health and education sector representatives divulge the procurement approaches for both the consultants who complete the design and specification and the contractors. The procurement of the consultants focuses more on quality with less emphasis on price. Design competitions and ‘narrow average approaches to the cost assessments avoid low cost tenders and ensure that the best consultant is awarded the contract.
• In contrast, contractors are ultimately procured on lowest price. Following a most economically advantageous tender (MEAT) process to determine suitable contractors, the client is confident that the contract is so well defined with necessary risk allocation, that they can accept the lowest bid.
There were several suggestions for improving procurement procedures within the public sector in NI including:
• It is apparent that there is greater emphasis towards price in the price/quality (PQ) combination with an almost default position of 60/40 or 80/20 PQ ratio. However, the client is not aligning projects with adequate PQ combinations. An improved balance in the assessment between cost and non-cost criteria at tender stage is required, depending on project complexity, risks, contractor availability and client’s objectives.
• Proposed changes to the current PQQ process. Figure 4 illustrates possible suggestions for improvement in the current process.
Figure 4 Suggested improvements to the PQQ process
• It is recognised that quality responses are generic. However, clients are not willing to put emphasis on quality since it is more subjective in nature compared to cost. Ultimately, this will result in a ‘race to the bottom’ in terms of cost.
• Frameworks are accepted as an approach to gain VfM as well as reducing the adverse nature of construction procurement, but they are not utilised enough. Frameworks lend themselves to greater specialism and better workmanship, further enhancing the VfM initiative. Additionally, they provide an opportunity to save on tendering costs; form long-term trusting relationships; and improved design and delivery. Benefits to the contractor include a greater security of work through long-term programmes. However, it is acknowledged that frameworks may not be beneficial to SMEs.
• Greater leadership and planning are required to ensure procurement approaches are fair and reasonable and to reduce procurement turnaround times.
4. Brexit
Following the June 2016 referendum and triggering of Article 50, Brexit and its potential impacts is a very current topic. One of the most significant concepts is that Brexit will have a detrimental impact on public works in NI.
This includes fewer foreign contractors coming to NI for work following Brexit. Most of those who responded to the questionnaire were concerned about the potential impact of Brexit on their current work.
To support this, the main outcome from the research was ‘great uncertainty’ over future budgets a result of Brexit. NI already receives a low level of funding from the government. This is not likely to improve following Brexit.
Contrary to this, health sector personnel believe that they could potentially receive more funding in the future. However, they could not make this claim with any certainty.
Public bodies receive a certain level of funding for capital works projects and this is likely to continue following Brexit. However, current funding provided for by the EU for projects involving both NI and ROI is not likely to continue.
Another potential project at risk is the proposed York Street interchange project. The £165 million project is part of a Euroroute E01. A substantial EU contribution of up to 40 per cent could now jeopardise the project.
The consensus is that procurement policies will not change apart from how work is advertised. If it does change, the principles of competition and transparency will remain since the WTO principles would apply.
Depending on the new agreement on how the UK will operate within the EU market, a forum to advertise public works may still be required following Brexit. It is noted that the current approach to advertising in OJEU can be time consuming for little benefit.
It is recommended that the threshold levels for public works are reviewed. In several cases, the values are deemed too low. Although certain works are advertised in the EU market, ultimately it will result in local contractors only tendering for the work.
5. Future funding recommendations along with proposals for year-end flexibility
The current process for funding provided by the government is an annual budget. To create better VfM along with greater security to companies, a better foresight of budget is called for. This would allow companies to improve measures such as more permanent staff and improved training.
Year-end flexibility would be a benefit to clients and contractors. The current process of an annual budget is putting the client under pressure to spend money, particularly towards the end of the financial year.
A lack of planning on the client’s behalf is ultimately putting increased pressure on the contractor to complete the work in tighter time frames.

Recommendations


The study undertaken has potential applications to industrial practice. An insight was gained into the area of public procurement in NI.
The outcomes should be considered by the public sector to enhance VfM from the services that they deliver, in a clear and transparent process.
Due to the sensitive nature of the subject and the cautious responses received through the interviews. Further study could include Freedom of Information Requests for more objective data on relevant public bodies and projects.
The impact of Brexit on public procurement in NI and the wider United Kingdom could be further examined as the current process is based on the EU directive on public procurement.
Public bodies must realise that in order to enhance VfM, more rational thinking at an early stage into aspects such as their objectives, project complexities, project briefs, and budget forecasts, will be required.
Greater leadership and planning by the government and public sector organisations would remove pressures which lead to unsustainable tendering and would help maximise VfM for clients.
In addition to this, it would encourage more cost-effective working practices, greater innovation, better supply chain engagement and improved security to contractors.
Authors: Gary McArdle, BSc MSc, MCIWEM, CWEM MIEI, senior design engineer, Atkins Ireland Ltd; Joseph Gerard Gunning BSc, MSc, PhD, FICE, FCIOB, FIEI, FCQI, honorary senior lecturer, Department of Natural and Built Environment, Queen’s University, Belfast
http://www.engineersjournal.ie/wp-content/uploads/2019/05/a1-34.jpghttp://www.engineersjournal.ie/wp-content/uploads/2019/05/a1-34-300x300.jpgDavid O'RiordanCivilAtkins,construction,Queen's University Belfast
Abstract The purpose of this article was to evaluate public procurement in Northern Ireland (NI) - more specifically, the achievement of value for money (VfM) in public construction projects. Other areas assessed were factors detrimental to creating VfM; sub-economic tendering; and the potential impact of Brexit in NI. The methodology included...

May 27, 2019

BOT- Built to Suck the Blood

NHAI eyes Rs 5,000 crore from roads bidding

To seek bids for roads under TOT plan in Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu next month

NHAI, Uttar Pradesh, Bihar, Jharkhand, Tamil Nadu, Asset monetisation, Road auction, ToT, Macquarie Group, Brookfield Asset Management, IRB Infra, ROADIS, Cube Highways, Adani Infrastructure
The government will soon offer 550km of roads to private companies to operate and collect tolls, in a move to get cracking on an asset monetisation plan.
The National Highways Authority of India will seek bids for the roads under the toll-operate-transfer (TOT) plan in Tamil Nadu, Uttar Pradesh, Bihar and Jharkhand next month, expecting to fetch about Rs 5,000 crore.
Details of the third round of auctions are expected to be finalised soon and bids will be invited in a month.
The government introduced the TOT model in 2016 to monetise publicly funded highways. Under the programme, investors make a one-time lump sum payment in return for long-term toll collection rights. The current TOT offers a 30-year lease.
The government is pursuing the TOT model to help raise resources in the sector and attract private funding, which has remained subdued. The first round of TOT auctions for 680 km of highways ended in February 2018.
It fetched the government over Rs 9,000 crore. The Macquarie Group won with a bid of Rs 9,681 crore against NHAI’s estimated value of Rs 6,258 crore. Brookfield Asset Management, IRB Infrastructure and Roadis-National Investment and Infrastructure Fund were among the other bidders.
However, the second auction was cancelled in February 2019 after it drew a lukewarm response. Cube Highways, a toll road operator backed by I Squared Capital and International Finance Corporation, bid Rs 4,612 crore against the base price of Rs 5,362 crore. Bids were also received from Adani Infrastructure and IRB Infrastructure in the auction. The expectations of bidders and the government in the second round did not match, the official said.
The NHAI expects the third round to succeed after making changes to the TOT framework to make it lucrative for the private sector.The NHAI expects the third round to succeed after making changes to the TOT framework to make it lucrative for the private sector. It had initially planned to re-bundle the 586 km stretches offered in Rajasthan, Gujarat, West Bengal and Bihar in the second round, but decided to offer fresh assets in the third round.
“We are coming out with new stretches… A decision will be taken later as to how to re-bundle TOT round 2,” an official said.
With the Bharatiya Janata Party government winning a second term, long-term institutional investors sense stability in the Indian market as a result of which better responses can be expected in the fresh round of auctions, said Vinayak Chatterjee, Chairman of Feedback Infra.
“It’s great to see NHAI coming up with fresh auctions in a short time. The roads ministry is setting a precedent in the asset monetisation plan of the government. I hope NHAI has learned from the first two rounds in setting the floor price this time,” Chatterjee said.
“We have taken all precautions that our initial estimated concession value (base price) is realistic and there are no issues, to a large extent, in these projects…. These should attract bidders,” the official said. The stretch to be offered in Tamil Nadu is “quite significant,” the official said. However, the official declined to share details because approvals are still being obtained.

Sourc

May 24, 2019

REDUCING LUST FOR LOANS


• The PPP model for the JKIA-Westlands Expressway is only one example of a growing trend for private companies to connect in Kenya.
• The PPP model encourages private companies to compete to build a better road for less money. It encourages competition and professionalism.
Road partnerships
Road partnerships
The national debt has gained a lot of coverage, especially in light of President Uhuru Kenyatta’s visit to Beijing for the Belt and Road Initiative.
Many commentators expected Uhuru to sign an agreement to borrow Sh360 billion from China to extend the SGR, placing Kenya further in debt.
However, to the surprise of most outside of Uhuru’s inner circle, the paradigm has completely changed
Instead of asking for more money, Uhuru understands that a different approach is necessary.
Returning from China we learned that Uhuru’s great achievement was securing a public–private partnership (PPP) to build an 18km speed road — the JKIA-Westlands Expressway.
The road will be built and owned by the China Road and Bridge Corporation (CRBC) and work is expected to begin in August. The Sh65 billion road starts at JKIA and ends at James Gichuru, along Waiyaki Road, in Westlands.
This deal is not just a game changer because it will be the first road of its type on the  African continent with underpasses, overpasses, exits and the Bus Rapid Transit (BRT) system lanes covering the entire stretch.
Nairobi traffic is notorious, among the worst globally, and the current JKIA-Westlands Road is a nightmare for anyone creeping bumper to bumper on it. The World Bank estimates that Nairobi’s traffic jams cost the country about Sh50 million daily in lost man-hours.
The four-lane super expressway will navigate downtown Nairobi, and ease the daily commute for many and ensure travellers to the airport no longer have to risk missing their flights because of traffic.
Most importantly, the PPP model shows a new strategy to build the infrastructure desperately needed without placing the nation further into debt.     
Under the PPP framework, private companies will build, maintain, and operate the roads. They then charge motorists to recoup their investment after which they transfer ownership of the roads to the government. It is a win-win situation for all.
Kenyans get their new roads and reduce traffic; private companies will make a profit for their work and the government will be able to remove an expensive necessity from its budget.
The PPP model for the JKIA-Westlands Expressway is only one example of a growing trend for private companies to connect Kenya.
Other roads to be built using the PPP model include the Nairobi-Mombasa expressway and the Nairobi-Mau Summit highway. The American firm Betchel will fund the Sh300 billion Nairobi-Mombasa Expressway, work is to start by June.
The Kenya National Highways Authority announced recently that it would soon declare the winner of Nairobi-Mau Summit highway bid.
The PPP model also encourages private companies to compete to build the better road for less money. It encourages competition and professionalism.
If a company wins a tender and builds a substandard road, it knows it can lose the tender and be barred from bidding in the future.
The reason so many high-level international firms are willing to put so much money into infrastructure is because Kenya is now an attractive investment hub.
Under President Uhuru Kenyatta, Kenya has greatly improved its ranking for ease of doing business. In 2018, Kenya rose to 61 from 80 in 2017, and 92 the year before. Kenya was also ranked seventh on the list of improvers globally.
This is vitally important because research released by the World Bank in 2012 indicated that a one per cent increase in the 'Doing Business' score amounts to $250 million to $500 million of foreign investment.
Uhuru has made Kenya an attractive investment destination and this has enabled him to move from the model of seeking  foreign loans to an improved model of PPP.
Temba is an adviser to Devolution Cabinet Secretary Eugene Wamalwa
Source- The Star

January 2, 2019

Infrastructure Boom

Controversial tender system allows Turkish companies to dominate World Bank public investment list



Five of the world’s top 10 private sponsors of public infrastructure projects are Turkish companies, figures in the World Bank’s 2018 Private Participation in Infrastructure Database show.
Limak Holding, Cengiz Holding, Kolin, Kalyon and MNG Holding are the Turkish companies crowding the top 10, where they are joined by companies from Brazil, Germany, the United States and France.
The heavy Turkish presence on the list reflects Turkey’s status as one of the world’s highest investors in infrastructure projects. The World Bank’s data places Turkey as the fourth highest with $143 billion worth of investment, after Brazil, India and China.
The increased investment that brought Turkey back to the top five in 2018 was largely thanks to four highway megaprojects, the World Bank’s report said.
However, the number of Turkish companies on the list is likely down to Turkey’s private-public partnership system, which has been used to fund a diverse array of megaprojects that includes bridges, ports, roads, airports and even the planned construction of a massive canal that will join the Black Sea and Marmara Sea, turning Istanbul into an island.
High-profile projects still under construction include a new airport in Istanbul, where a soft opening was held in October. The airport, which is planned to be the world’s largest when construction is finally complete, is being built by a consortium of five companies, four of which - Limak, Kolin, Cengiz and Kalyon – feature in the World Bank’s list. The fifth, Mapa Construction, is a Saudi-based company.
Turkey’s Justice and Development Party (AKP) government has gained great political capital from the projects completed in Turkey using this system, and the long list of successful infrastructure projects serves as an inexhaustible source to draw from when AKP politicians are challenged to defend their party’s achievements over 16 years in power.
However, critics say the system has been used as a way of giving out handouts to the government’s clients. It allows private companies granted tender on the projects to make an initial investment and construct the infrastructure, after which they are granted the license to operate it for periods often reaching decades.
One of the main sources of criticism stems from the guaranteed income the government often grants these companies during their tender period. Agreements may stipulate that, in the event that a tender-operating company’s revenues from the infrastructure projects do not reach a certain level, the government will pay the difference.
This has led at times to massive pay-outs from the public coffers to contractors. That the income is often guaranteed in dollars or euros has exaggerated public losses even further this year, as the lira lost value heavily against international currencies.
With the revelation that five Turkish companies had done enough business in this fashion to enter the World Bank’s top ten list, Turks on social media quickly pointed out that none of these five companies were among the list of Turkey’s top taxpayers.
A glaring example demonstrating the shortcomings of the AKP’s public-private partnership system came with the construction of an airport designed to service the three western Turkish provinces of Kütahya, Uşak and Afyonkarahisar.
The income guaranteed to the contractor, IC İçtaş, is based on passenger quotas of hundreds of thousands of passengers per year. However, over the first five years in operation, the passenger numbers have fallen 95 percent short of these quotas, a figure that has cost the Turkish public over 20 million euros to date.
With the company granted tender until 2044, that figure if it maintains its current rate will rise to over 200 million euros in total – a figure that dwarfs its initial 50 million-euro investment.
Source - AHVAL

December 14, 2018

NHAI repeals tender

Elevtated Road project has been cancelled
By UdaipurTimes Team on December 14, 2018


National Highways Authority of India (NHAI) has repealed the tender that was floated for the elevatted road in Udaipur – from Court Chauraha to Udaipol.

In 2016, the Rs 136 Crore project was approved by the State Government and NHAI was asked to execute the project  by means of its regular tendering process, and NHAI had processed the tender.

However, a public interest litigation , followed by appointment of consultants by the NHAI to look into the project feasibility even after the State Government had given approval, subsequent intervention by the court recently and finally questioning on the feasibility reports by the CRRI to NHAI, resulted in the NHAI cancelling the tender and the project.  There will no longer be an elevated road in the congested areas of the city.

Hearing the Public Interest Litigation (PIL), Rajasthan High Court had put an interim stop on proposed elevated road in Udaipur. The High Court has issued a notice to National Highway Authority of India, Collector of Udaipur and others in this regard.


Two member bench of Chief Justice, Rajasthan High Court, Pradeep Nandrjog along with Justice Vineet Mathur head the PIL and issued a notice to NHAI, PWD, Udaipur Collector and others seeking a response till 30-July 2018.

The High Court had directed the CRRI to review the project and CRRI had asked NHAI to submit the report, following which NHAI cancelled the entire project and the tender that was issued.

This was the proposed project and the problems accompanying it:

Elevated road planned to be constructed from Udiapol to Court Chauraha (Elevated Road length: 1.65 km; Cost: Rs 126-130 Crore)
Project to have been executed in time and completed by 2021
On completion, the traffic situation in the heart of Udaipur would have eased considerably.  Vehicles needing to move from near Hiran Magri/Udiapol would go use the elevated road.  Only vehicles needing to come into the Delhi gate Surajpol, and such internal areas will need to use the existing roads.  This would ease traffic considerably.

DPR of the consulting agencies for the elevated road raised plenty of technical faults with the plan and said that the project was unfeasible.
A report submitted by the NHAI also confirmed that the project was unfeasible.
Project feasibility mentioned that road was not as per Road Congress standards…viz.

Buses, trucks and HTVs will not be allowed to use the elevated road.
Udiapole road is around 90 feet now; out of this 50 feet will be taken in for constructing the fly-over. A service road will be made underneath which will be used by buses and HTVs. The service road will be of 41 feet in this case. Because of this only 20 feet road on each side will be free which is very likely to create traffic jams.

Speed limit for vehicles has been determined at 40 km/hr whereas as per IRC it should be at least 60 km/hr. Hence speed limit is not as per standard rules.
There is no provision of footpath on the elevated road. Any pedestrian on this road is sure to face risk while on the road.

The Public Interest Litigation was filed by Om Prakash Khatri, JS Dave and Udaipur Citizen Society and others. Representing the applicants, Senior advocate M S Singhvi, Sanjay Mathur and Akhilesh Rajpurohit said that regulations and provisions related to road crossing have been overlooked in the proposed flyover at Udiapole and the elevated road. They also alleged that the design of the proposed flyover has technical faults and raises severe issues related to public security.

Finally, the High Court has also, in its order said that the elevated road project, if it ever comes up in future, will take into cognizance the current decision by High Court and NHAI and will seek approval from the High Court before proceeding.

Source- Udaipur Times

December 6, 2018

Swedish Accident Spot to be covered

NCC to sort out 6km Swedish accident blackspot

 1 day NCC is to rebuild a dangerous road in Sweden under a contract worth nearly SEK455m (£40m).

It has signed a comprehensive agreement with the Swedish Transport Administration to build a new road along a 6km stretch of European route E14 between Timmervägen and Blåberget outside Sundsvall. NCC’s assignment includes construction of a new four-lane expressway, intersections and five bridges as well as the reconstruction of the current route.
The existing road is a blackspot for accidents, and the purpose of the project is to improve accessibility and traffic safety for both motorists and unprotected road users along the route.
The construction project will be planned to ensure a safe work environment while minimising disruptions to motorists, through initiatives including construction of temporary bypasses.
Construction work will start in early 2019 and is expected to be completed by the end of 2021.

December 1, 2018

Procurement Model - Progressive or Blocking


SHINOVENE IMMANUEL and TJIPENANDJAMBI KUHANGA
THE Central Procurement Board has told the Roads Authority to re-advertise two highway road tenders worth N$1,4 billion.
However, the Roads Authority, a parastatal tasked with constructing and managing national roads, believes that the procurement process will delay the projects for more years.

The highways in question include the Windhoek to Okahandja road which would be extended by 21 kilometres for N$1 billion while the Swakopmund to Walvis Bay road will be extended by eight kilometres for N$435 million.

A person familiar with this matter said the Central Procurement Board informed the Roads Authority about its decision last month.

The Namibian understands that the tender agency initially told the roads parastatal to also re-advertise the Windhoek to Hosea Kutako International Airport tender, but that decision is still being discussed.

The decision by the Central Procurement Board comes after Roads Authority chief executive Conrad Lutombi wrote to the transport ministry on 2 February 2018, recommending that the three companies which are currently constructing the highways should be given extensions to work on the next kilometres, which would rule out advertising the tenders.

The Roads Authority has in the past warned that these projects would be delayed and it will cost the government more money if the contracts are re-advertised. The Roads Authority believes that it will be cheaper to continue with the current contractors and save up to N$251 million.

The parastatal is of the opinion that re-advertising the Windhoek to Okahandja road, scheduled for completion by next year as part of the 'Harambee road projects' goals, will delay the project.

Sources said officials at the Roads Authority believe that the Central Procurement Board does not have the powers to award these road contracts because they were awarded by the previous tender regime, which gave parastatals powers to hand out tenders.

The Namibian understands that the Central Procurement Board approached attorney general Albert Kawana earlier this year to obtain a legal opinion on whether the tender agency has powers to award or extend contracts issued by the previous procurement regime.

Kawana declined to comment yesterday while chairperson of the Central Procurement Board Patrick Swartz did not answer a question sent to him on Tuesday.

In the meantime, uncertainty faces the completion of the Windhoek to Okahandja two-way road.

The initial plan was to construct the Windhoek to Okahandja road concurrently in the final phase of the project, but the tender has been delayed for more than two years.

“There is no way we can complete the Okahandja road by next year as promised in the Harambee Prosperity Plan,” a person familiar with the project told The Namibian this week.

Roads Authority spokesperson Hileni Fillemon said the construction of the Windhoek to Okahandja section 4A road is progressing. The current phase consists of the 27km road from Döbra River to the Omakunde interchange.

“Progress on this project is at 78%. Five bridges have been fully completed, and works are progressing well on the bridges/interchanges that we are currently busy with,” she said.

The section is set to be completed by September 2019, she added.

The section 4B, which is 21km, covers the road from the Osona military base to the Otjiwarongo junction – behind Okahandja on the southern side, and it will be turned into a highway.

“The design for this section has been completed, and the Roads Authority is currently engaging the government to secure funds for this section,” Fillemon continued.

The spokesperson said phase one of the Windhoek to Hosea Kutako International Airport road, which stretches from Mandume Ndemufayo Avenue to Sam Nujoma Drive, is 60% completed.

BUDGET CUT

The finance ministry and the transport ministry have over the years clashed over the roads tender. The finance ministry bluntly blamed the transport ministry for committing the government to road contracts worth more than N$2 billion without consulting treasury. Deputy transport minister Sankwasa James Sankwasa said in a letter earlier this year that the roads contracts were riddled with corruption.

There is evidence that the finance ministry reduced the initial budget for the three highway projects.

Documents provided by the transport ministry show that the finance ministry chopped the budget for the three roads projects by N$292 million when the national budget was revised last month.

The Windhoek to Okahandja road, which had an initial budget of N$241 million, was reduced by N$90 million, leaving the project with N$151 million to construct the ongoing road project.

The Windhoek to Hosea Kutako road project was reduced by N$102 million and left with N$47 million. This road is set to be funded by the African Development Bank and a Chinese grant.

The Swakopmund to Walvis Bay two-way road, which had a N$149 million budget, was cut to N$47 million, reducing the project amount by N$102 million.

These project cuts were part of the massive cuts faced by the transport ministry last month.
The ministry's entire budget for this year was reduced by N$700 million from N$2,2 billion to N$1,5 billion.

Director in the works department at the Ministry of Works and Transport, Anneline Black told The Namibian two weeks ago that the finance ministry did not consult them when it chopped the budget of 29 out of 44 projects at the cost of N$700 million.

“The Ministry of Finance did not consult the line ministries on the budget cuts of the development budget,” Black said.The finance ministry did not respond to questions about the lack of consultations.
The ministry of works indicated that the upgrading of the railway network was also cut by N$103 million from an initial budget of N$371 million.
The transport ministry is also faced with a poor implementation record.

Black, who was acting as permanent secretary of the transport ministry, said 21 out of 44 projects were not implemented for this financial year due to the lack of money.

The ministry did not respond to questions about the projects budgeted for but not implemented.
Black, however, said the ministry is still making some progress, despite the budget cuts.

“After having looked at all the affected projects, I can in all honesty not see how these project cuts will not negatively impact these projects at all,” she added.

Source - The Namibian