Southern highway project won't stall

Southern highway project won't stall

Government says it's now in negotiations with CHEC for restructuring

BY ALPHEA SAUNDERS
Observer senior reporter
saundersa@jamaicaobserver.com

Tuesday, June 23, 2020

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HEAD of National Works Agency (NWA), EG Hunter says that with the cut in the budget for the Southern Coastal Highway, the Government is now deep in discussions with China Harbour Engineering Company (CHEC) to see how best the project can be restructured with minimum fallout.

The budget of $12.91 billion originally set aside for the highway has been slashed by half in the revised national budget, to help make room for billions in COVID-19 expenditure.

Speaking at a recent meeting of the Public Administration and Appropriations Committee (PAAC), which examined the estimates, Hunter said work would forge ahead on the designs, notwithstanding the delay in some elements of actual construction which were supposed to start in the second quarter of the fiscal year. The NWA is administering the Yallahs to Harbour View leg of the highway, while the National Road Operating and Constructing Company (NROCC) is in charge of the second phase, from May Pen in Clarendon to Williamsfield in Manchester

“The majority of the cost will be in the actual construction, so we are still trying to finalise with the contractor how we reorder the activities. The construction will pick up at a later date. Initially what we had done was to identify parts of the construction activity that can proceed at a certain stage, while we proceed with the design of the roadway itself.

“One of the options that we now have is to just continue with the total design, and to cherry-pick the elements of the work that can now go to construction. This requires a lot of discussion with the contractor. Our overall desire is to maintain as much momentum as possible, but we are aware of the fiscal constraints and we are depending on the cooperation and support of the contractor to try and reorder the activities as best as we can,” he explained.

The NWA chief executive officer pointed out that the project was not in danger of stalling as CHEC was paid an advance of US$6 million last year, which gives the Government some breathing room to honour the payment schedule.

“That advanced payment to the contractor is available to the project...the contract gives the Government 72 days to pay for any work that has been done so it is still possible to maintain a decent modicum of activity, and the obligation is managed as you go down the road. So, it is not as simple as saying the budget is cut by 50 per cent therefore you do 50 per cent work.

“It's a question of how the activities are staged to fit within what the contract provides for. The truth is that we oft-times make payment on a schedule more pleasing to the contractor, but we still have the provisions of the contract to rely on in case we have fiscal challenges,” he outlined.

Meanwhile, managing director of NROCC, Ivan Anderson explained that work has started on approximately 11 kilometres out of 28 kilometres of roadway on the second phase of the highway.

“Right now we have not proposed any cuts in the contractor's pace of work, so we continue with the original pace of work while we discuss with the contractor what we can do in relation to the cuts in the budget,” he explained, noting that with the cut in the overall budget for the project, spending on the second leg has been reduced from $4.8 billion to $2.4 billion.

Anderson said lands had already been acquired for the first phase of the priority works.

Hunter, meanwhile, explained that the original aim was for all the undeveloped lands to be made available to CHEC by the end of this month and the developed lands at the end of November, but that timelines are being pushed back due to some challenges with land acquisition.

“With the best of intentions, sometimes our planning goes awry, because with the best of intentions even just giving the people the money for the value [of] the land doesn't necessarily precipitate a removal from the land...these are things we work out as we go along,” he said.

The CEO noted that of the 15 parcels of lands from Yallahs to Port Antonio, five will be developed by local contractors, and tenders are being arranged for another five.

The Southern Coastal Highway Improvement Project was launched in November last year. It is jointly funded by China Exim Bank and involves the rehabilitation of 110 kilometres of roadway, spanning Harbour View in St Andrew to Port Antonio, Portland, and another 25 kilometres from Morant Bay to Cedar Valley in St Thomas.

The second phase of the highway spans May Pen in Clarendon, to Williamsfield, Manchester.


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