The Government will have to foot the tab for additional engineering and consultancy project management services for the Southern Coastal Highway Improvement Project (SCHIP), which is now costing over US$133.9 million more than budgeted to complete.
The engineering consultancy and project management services tab is an additional US$8.7 million. The other additional costs on the project are US$60.83 million for construction, under the 15 packages which make up tranches one to three of the project; and US$64.36 million for the expansion and renewal of National Water Commission (NWC) systems, including sewer.
The original cost of the project, for which ground was broken in November 2019, was US$384 million.
Minister without portfolio in the Ministry of Economic Growth and Job Creation Everald Warmington advised Parliament on Wednesday that considering the impact of the COVID-19 crisis on Government revenues, a recommendation has been made for the service costs to be financed by the Government.
This, he said, was so that the funds already earmarked for the highway project would remain available for construction spending and delay the need for additional budgetary support in 2022/23.
Minister Warmington advised the House in his sectoral debate presentation that all the bids for the project had exceeded the engineer's estimate, “which would have been tied to the original sum in the agreement between the Jamaican Government and the China Exim Bank. What this therefore means is that we will have to find additional funds to cover the cost of the higher tendered sums”.
He stressed that the contracting process for the works for the three tranches of the project have been deliberate and transparent.
“The main contractor, China Harbour Engineering, would have invited tenders for the works from qualified local contractors. Awards were made on a competitive basis, with the lowest bid being accepted,” he stated.
He also pointed out that the utility relocation activities are being completed ahead of the construction activities in order to prevent delays which have dogged some projects over the years.
“We are implementing this programme like none other, based on the integrated strategy with water, sewer, telecoms and other relevant infrastructure being included. This, too, will come at an additional cost to the programme, but will be of super benefits to the country,” Warmington said.
He said the plan is to relocate some 131 Jamaica Public Service Company light poles, as well as NWC pipelines, and install ducts to facilitate the Government's broadband initiative.
The two-part SCHIP involves the rehabilitation of 110 kilometres of roadway, with the National Road Operating and Constructing Company overseeing the segment from May Pen to Williamsfield, while the National Works Agency has oversight for the works from Harbour View to Port Antonio, Portland, and from Morant Bay to Cedar Valley in St Thomas.