Audit report reveals losses in road rehabilitation work

Twelve contractors who secured government tenders worth Rs 2.99 billion ( Rs 2,994 million) for rural road rehabilitation work had abandoned the projects and the funds were not recovered by November 30, 2019, an audit report revealed.

The audit report titled Performance Report on Improving Road Accessibility between Rural Community and Socio- Economic Centres under the Integrated Road Investment Programme" released by the National Audit Office last week stated that although it was planned to rehabilitate 3,100 km of rural roads and 400km of national roads in Sri Lanka's road network under this programme, only 508 rural roads with a length of 2,086.41 km were rehabilitated by December 31, 2019.

Rs 23 million had been paid as salaries, allowances, housing, official and vehicle facilities, in addition to the maintenance staff of the employer and engineer ( Consultant) who were attached to contract packages, upto August 2019, even after abandoning the road rehabilitation work, the report found.

The report also noted that as per loan agreements, the estimated total cost of the programme amounted to USD 906 million ( Rs 117, 780 million), and of that USD 800 million ( Rs 104,000 million) was agreed to be provided by the Asian Development Bank under six multi- tranche financing facilities. Of that, four separate loan agreements had been signed up to December 2019 to finance Rs 75,195 million under the first four tranches, and Rs 61,533 million had been utilised for road development works.

Poor implementation of the programme also led to additional loss of State funds unnecessarily. The pro - gramme had to pay Rs 1,180.44 as commitment charges on the unutilised loan balance as of December 31, 2019, due to failure in effective utilisation of the plan provided by ADB in line with the financial plan.

The audit team which visited the projects in Kurunegala and Puttalam for physical inspection found that several road development works were not completed on time - a violation of contract agreements - and those roads were not in usable condition due to mud during the rainy season.

The audit report recommended action be taken to recover losses due to the termination of abandoned contract packages from the relevant parties, and to select contractors in accordance with the Procurement Guidelines issued in 2006 and ADB guidelines.