“Honorable Speaker, you need to find out what I could not find out. What happened to the 1.5 billion dollars that was allocated for the road and I am told it was transferred?” asked the Auditor General, Steven Wondu, as he presented a report on the Juba-Rumbek road construction project to Parliament on Wednesday.
The audit of the Juba-Rumbek road construction project has uncovered a series of issues, raising concerns about financial transparency, project management, and the overall quality of the road. The audit, conducted in February 2023, has exposed a range of problems that have plagued the project, including delays, unclear financial arrangements, and lack of proper oversight.
One of the key findings of the audit was that the project’s delays and extra costs could have been avoided if the environmental and social impact assessment had been conducted properly and in a timely manner.
The financing of the road construction was a bilateral agreement between the government of South Sudan and the government of China. However, as of the audit date, the Minister of Finance had not provided the National Audit Chamber with a breakdown of how the road’s construction was being financed and paid for.
The sole contractor for the 396 km Juba-Rumbek road construction project was Shandong Hi-Speed Nile Investment and Development Company Limited. It was tasked to construct the 396 kilometers of two-meter wide asphalt concrete surface, two ways with two lanes on each side with an optimized pavement structure, at initial cost of $711,125,700. However, the cost was later revised to $736,533,725.
The audit also revealed discrepancies in the shipment of crude oil, which was supposed to fund the road construction. While records showed that a significant amount of oil had been shipped between 2019 and 2020, auditors could not determine how much of that oil was intended for the road project. Furthermore, no information regarding oil shipments for 2020, 2021, and 2023 was provided.
“The records of the Ministry of Petroleum indicate that 21,780,135 barrels of crude worth 1,558,768,802 dollars had been shipped between 2019 and 2020. Auditors could not determine how much of that oil was meant for financing the construction of the Juba-Rumbek road,” Wondu explained.
The audit raised questions about the lack of involvement of the Road Authority, as required by the contract agreement. Section 14 of the contract stipulates that an advance payment of 15% should have been made. Still, the audit found that only one payment of $104,037,200 had been made to the contractor, with several outstanding invoices totaling $87,824,438.
“That is the only payment that we were aware of. The contractors provided Interim Payment Certificates (IPCs), 5 of them. None of which was paid. These certificates are with the Ministry of Roads and Bridges amounting to 87,824,438 in outstanding invoices,” Wondu revealed. He added that there has been accumulated interest on the non-payment of the IPC’s. “That interest continues to build as we speak today.”
The delays in the road construction, as of the audit in February 2023, had resulted in only 63 km or 16% of the road being completed, leaving 333 kilometers and 84% of the project incomplete. This slow progress was attributed to delays in advance payments and non-payment of Interim Payment Certificates.
The lack of open competitive tendering for the contractor’s selection raised concerns about whether the best contractor had been chosen at the most reasonable cost. Additionally, the original contract was not properly drawn up, leading to an additional cost of $25 million.
In terms of the project’s design and specifications, the audit found that the Ministry of Environment and Forestry was not involved in the feasibility study and environmental and social impact assessment. Moreover, the construction of the road was not adequately supervised, as the Ministry of Roads and Bridges served as both the implementer and the supervisor, while the Road Authority was entirely excluded from the project.
“Inadequate supervision of the road construction occurred because the appointed consultant worked for only one year, from 2020 to 2021. Regrettably, the consultant’s contract was not renewed due to insufficient funds. Consequently, in the absence of the consultant, the resident engineer, who was tasked with monitoring the road’s implementation, took on supervisory responsibilities,” Wondu explained.
In light of the recent audit findings on the Juba-Rumbek road construction project, experts have put forth a series of recommendations aimed at improving the efficiency and effectiveness of road construction practices in the country.
Auditor General Wondu, emphasized the need to reevaluate the Juba-Rumbek road project. “At the time of writing in July,” he stated, “my mindset was that the Juba-Rumbek road project be returned to the Ministry of Roads and Bridges and the Roads Authority for re-evaluation and possible relaunch on a new basis.”
One of the key recommendations revolves around the procurement of road construction projects. Wondu stressed, “The government should always ensure that procurement of road construction in this country be done by the Public Procurement and Disposal of Assets Authority in collaboration with other government agencies like the Ministry of Finance and the Ministry of Roads.”
To attain the desired quality of road infrastructure, Wondu highlighted the importance of adhering to policies, standards, and specifications. He noted, “The Roads Authority should implement the project in line with the policies, standards, and specifications of their legal mandate.”
Wondu recommended, “To ensure that road construction projects are completed within the contract period, there should be clear financing arrangements. The project amount should be budgeted for, and the contractor’s payment should be predetermined and made on time.”
Wondu underscored the need for the relevant government institutions to be involved in the design process. He pointed out, “The Ministry of Roads and Bridges should ensure that the relevant government institutions are involved in the design, including the Ministry of Environment and Forestry.”
In addition to these recommendations, Wondu stressed the importance of incorporating payment of Performance Bank guarantees and punitive measures into major construction contracts. He explained, “All major construction contracts should provide for payment of Performance Bank guarantees and include punitive measures in case of non-performance according to the terms of the financing agreement.”
Lastly, the Auditor General said that standard disbursement procedures for construction contracts should be adopted in the country to enhance accountability and transparency in the construction process.