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CHOGM Entebbe airport repair cost sh57b

By Vision Reporter

Added 7th November 2009 03:00 AM

THE Civil Aviation Authority (CAA) spent a whooping sh57b on the renovation of Entebbe International Airport in preparation for the 2007 Commonwealth Heads of Government meeting (CHOGM), according to audit reports.

By Vision reporters

THE Civil Aviation Authority (CAA) spent a whooping sh57b on the renovation of Entebbe International Airport in preparation for the 2007 Commonwealth Heads of Government meeting (CHOGM), according to audit reports.

The auditors were shocked to learn that the contract price for the renovation of the passenger terminal was revised from sh1.1b to sh21b, calling it ‘excessive’. The contract was executed by Cementers.

Roko Construction was also paid sh11.1b for the construction of the Very Very Important Persons (VVIP) lounge; while consultancy for the lounge reached over sh1b, which was 23 times the amount estimated by the Government engineer.

Renovation of the domestic passenger terminal at the old airport cost sh10b up from sh2.4b approved by the Government engineer.

The Engineering Audit Report of CHOGM activities by COWI Uganda noted that the numerous variations had increased the cost of the airport works from the original sh43b to sh57b.

It also observed that all the payments were made without payment vouchers, that no withholding tax was deducted, and that materials worth hundreds of millions were found in lesser quantities than certified and paid for.

Consultancy
Consultancy fees amounting to sh7.5b were paid to two firms, Arch Design and Ssentoogo and Partners.

The audit report says Arch Design, a local consultant firm, was procured directly to carry out the initial design and prepare the bidding documents for the international passenger terminal.

It is not clear if PPDA approval was obtained for direct procurement. Also, no fixed contract sum seemed to have been agreed upon.

“The company submitted a negotiated fee note amounting to sh550m to CAA contracts committee for approval.” The full amount was paid.
The report says all payments to this firm were not accompanied by payment vouchers and no deductions for withholding tax were made and remitted to URA.

The restrictive bidding method was used for three other consultancy jobs: the supervision of the major airport works, the design and supervision of the VVIP lounge, and the design and supervision of the remodelling of the departure hall.
Six firms were invited but only two responded. After evaluation, it was recommended that two of the three consultancy jobs would go to Ssentoogo.

The firm won the tender for over-all supervision of the airport works at a contract price of sh1.1b. This was far above the engineer’s estimate of sh195m. Moreover, the figure was later revised to sh3.4b, which was sh1b above the other bidder’s quotation.

Ssentoogo also won the contract for the design and supervision of the remodeling of the departure hall at sh150m. However, the consultancy firm has made a claim for additional services totaling sh2.3b, the COWI report notes.

“This claim should be closely scrutinised given its value compared to the original contract sum,” it recommends.

The third consultancy contract, for the design and supervision of the VVIP lounge, was awarded to Arch Design though its quotation was more than double that of the other bidder. It signed a contract for sh718m, which was later revised to sh1b, yet Ssentoogo had offered to do the job for sh277m.

The auditors rejected the argument of the works ministry that awarding all consultancy jobs to one firm would not be prudent.
“The response was not satisfactory because the consultant (Ssentoogo) has complained against the decision and could have sued for damages. The decision resulted into a financial loss of sh440m,” stated the report.

The auditors in their report complained that they were not availed with progress reports by the consultant. They also noted that payments were not accompanied by payment vouchers or receipts and that no deductions were made for withholding tax.

lounge
Construction works of the VVIP lounge and associated civil works were awarded to Roko Construction at sh9.8b. The contract price was later revised to sh11.2b.

The work involved the construction of access roads and airport parking apron, fencing and gates, electrical works, grassing and mulching, drainage and a few beautification works.

A physical audit found several materials in lesser quantities than paid for. For example, the murrum base course was found to be about 1,000 cubic metres less than certified, amounting to overpayment of sh107m.

All in all, the company was overpaid sh435m. The quality was also found wanting. Tests on the quality of the base course showed that the lime content was 4.2%, below the specified 5%.

The auditors also found different grades of concretes for the parking apron and the taxiways. As a result, the report said, the taxiway was already failing. They also complained that they were not availed with the consultant’s report, the drawings and strip maps, the engineer’s estimates, and the detailed scope of the works.

Passenger terminal
The contract for the expansion of the arrivals area was awarded to Cementers, yet its bid was only ranked the second best by the CAA contracts committee.

The committee had initially awarded the contract to Multiplex Construction, subject to conditions that the company be vetted and cleared by Security.

Other conditions were that the evaluation team first explained why only three companies were considered whereas five were required, and what the basis was for their comparison.

However, while the committee was still considering the answers, its chairman withdrew his signature to the minutes of the meeting where the contract was awarded.
“The contract committee observed that the evaluation process was mismanaged and the awards were based on defective reports,” the COWI report stated. The evaluation team was disbanded and an independent consultant, Arch Design, was asked to re-evaluate the bids.

The consultant recommended Cementers at a total price of sh17.7b, which was twice revised, increasing it to sh21.8b – over 20 times the engineer’s estimate.

Due to security restrictions, it was difficult for the COWI auditors to measure certain items within the building. However, where they had access, they found items worth sh140m in lesser quantities than paid for. They also found that a number of items originally specified were changed to more expensive items as the contract was being executed.

Cementers also won the contract for the expansion of the departure area. There was no competitive bidding. CAA claims PPDA approved single sourcing for this contract.

The COWI report further noted that at the time of their audit, in August 2008, there was no signed contract agreement, yet Cementers had already started work and payments had been made.
When the auditors measured some of the works executed and compared the quantities to those certified, they found that at least sh30m had been overpaid.

Domestic Terminal

CAA used restricted bidding for the construction of the domestic passenger terminal. China Nanjing International won the contract among seven companies that bid. The contract price was sh7.1b, which was later revised to sh10.5b, four times the engineer’s estimate.

Although the auditors were satisfied with the quality of the works, they noted again that specifications for a number of items were changed.

They also found that payments were not accompanied with payment vouchers and details of works executed, and that no deductions for withholding tax were made.
Cementers was given a third contract, involving the rehabilitation of the apron at the domestic terminal. Direct procurement was used, contrary to PPDA regulations.

Cementers only had to provide labour and equipment for this project, while materials valued at $1.5m were provided by MONUC, the UN peacekeeping mission in Congo.The contract sum of sh298m later increased by sh98m for additional works, although the addendum still had to be approved by the time of the audit, the COWI report noted.

The auditors also complained that no contract documents were availed and that it was difficult to ascertain the exact location of the patchwork repairs done. They also observed that minor cracks had already developed. It recommended that the consultant re-tests the failed concrete sections and recommends remedial measures.

Other works

To improve the general security at the airport, five watch towers were constructed at various points around the airport.
Using the competitive bidding method, Epsilon Construction was awarded the contract at sh187m, which was below the engineer’s estimate of sh185m.

However, at the time of inspection, it was noted that a manhole cover and solar panels were missing and reportedly stolen.

“The towers are security ones and one wonders how theft can occur for manhole covers and solar panels,” the audit report stated.
CAA also invited bids for the beautification of a section of Entebbe Road between St. Johns Church and the airport. The works included bush clearing, landscaping, planting grass, trees and flowers.

Bisons Consults International was the best evaluated bidder out of four companies and was awarded the contract worth sh251m.
There was later a revision for extra works, bringing the total contract price to sh394m, almost double the engineer’s estimate. It is not clear whether there was PPDA approval for the variation.

Findings from the physical audit, however, showed that some of the flowers were stunted and others were missing. The COWI auditors further termed sh71m for 6 months maintenance purposes ‘excessive’.

CHOGM Entebbe airport repair cost sh57b

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