REMARKS BY
THE HON. BRADLEY B. ROBERTS, MP
MINISTER OF WORKS & UTILITIES
AT
PRESS CONFERENCE
ON

COMPLETION OF THE NEW PROVIDENCE ROAD IMPROVEMENT PROJECT (CNPRIP)

MINISTRY OF WORKS AND UTILITIES CONFERENCE ROOM
 
29 July 2005
 
Ladies and gentlemen of the various media houses present, Staff of the Ministry of Works and Utilities, Good afternoon

The purpose of this press conference today is to give an update on the current status and progress made in relation to the Completion of the New Providence Road Improvement Project.

Many will recall that the Government originally awarded the $52,215,000 Design/Build contract for the New Providence Road Improvement Project (NPRIP) to Associated Asphalt Ltd. (AA) in April 2001.  Work on this NPRIP came to an unexpected stop when the parent company of AA, the Stenoak Group, went into receivership on 5 July 2002.  Subsequently AA was terminated as the Design/Build Contractor, on 12 November 2002.  My Ministry decided not to proceed with the Design/Build form of contract but to proceed with conventional form of contract i.e. to complete the designs first and then to go with Build-Only Contract.  The design consultant for AA, Halcrow, out of the United Kingdom was engaged by my Ministry to complete the designs.

Following pre-qualification exercise in 2002 Jose Cartellone Construcciones Civiles S.A (JCCC) of Argentina was approved as the sole pre-qualified contractor for issuance of the Build-Only Contract Bid Documents. Subsequently my Ministry attended to the design process and preparation of Bidding Documents with Halcrows and Mott MacDonald Consultants. Also my Ministry dealt with the prolonged process of payments to Associated Asphalt Creditors and for obtaining a Statement of No Objection (SONO) from IDB. This has considerably delayed my Ministry’s efforts to expedite the procurement process.   The Bid Documents were subsequently issued to the sole prequalified contractor Jose Cartellone on 23 June 2004 with a Bid closing date scheduled for 24 August 2004, but which was later extended to 18 November 2004 to facilitate issuance of necessary tender addendums and clarifications.  However, Jose Cartellone failed to submit a bid on the 18 November 2004, and indicated that he was unable to procure the required Performance Bond.

My Ministry immediately started developing a strategy to take the project forward.  It is on this basis that my Ministry entered into discussions with the Ministry of Finance (MOF), IDB and our Consultant Mott MacDonald.  Based on those discussions my Ministry developed the following options for consideration:

Option 1 Repeat the pre-qualification process and request bids from pre-qualified companies on the basis that the project remains in it’s original form, that is, as a single package.  It was decided that proceeding with this option would likely result in little or no interest, given the past history of the response by international contractors.

Option 2 Divide the project and tender the works as smaller slices.  This means identifying groups of roads within the overall project to be offered as smaller separate packages for international and local contractors.  Tendering the works on a as individual smaller works is preferable as this will make the project more attractive to a larger number of medium sized international companies and also allow local companies to complete a sizeable amount of the works.

My Ministry feels that Option 2 is the preferred option and has divided the project into seven (7) slices, two (2) International and five (5) local slices.  Details of the composition of the Slices are provided in your press packages for further dissemination to the general public. It should however be noted that tendering the project on the basis of smaller slices does have the disadvantage of duplication of contractor’s establishment costs.  In addition, there will be an increased level of contract administration.  These items would increase the overall cost of the project.  However we see the benefits of completion of NPRIP using both local and international contractors are tremondous.

The total projected cost of completion of the various slices is now estimated to be in the order of US$65-70 million. The substantial increase in project costs are due to inflation, escalation of material, shipping and other costs. Also we have changed the bid format from Design/Build to completely design and then Build only contracts. It is estimated that the balance of funds remaining in the IDB loan Programme is approximately a sum of US$33 million.  It is my Ministry’s opinion that increasing the IDB loan amount will take a significant amount of time and may have very little benefit to the local contracting industry.  Therefore the GOB will not seek additional funding from IDB and decided to supplement the increased cost of completion using GOB funding.

The IDB have given finally their Non-objection to slicing the project in the manner presented just recently and we are ready to proceed.  Slices 1 and 2 will be financed by the IDB+GOB funds of US$ 33 million and slice 3 through 7 will be financed solely by the GOB.

The proposed method of procurement for International Slices 1 and 2 will follow the procedures specified in the IDB’s Guidelines:  Basic Procurement Policies and Procedures of the IDB and will be open to all bidders from eligible member countries of the Bank as defined in the Guidelines.  The post-qualification method will be used for Slice 1 and 2 with the option for slice and package.  Under the slice and package option one contractor can be awarded both Slice 1 and Slice 2.  The slices will not run concurrently in order to minimise the potential conflicts between the two slices.  This can potentially offer a cost savings, as the contractor will not have to remobilise for Slice 2.  It is anticipated that post-qualification documents will be ready for issue to interested contractors by this September 2005 and we estimate that the successful Contractor(S) will be mobilized by January 2006

The proposed method of procurement for Slices 3 through 6 will be similar to that followed for the Harrold Road contract, which went through a pre-qualification exercise for local contractors.  Pre-qualified local contractors will  then be invited to bid.  It is anticipated that Slices 3 through 6 will be tendered as individual contracts and will be programmed to be completed over a 30 to 36 month construction period.  It should be noted that the pre-qualification of local contractors for Slice 3 has already commenced.  Pre-qualifications documents for Slice 3 received in June 2005 are currently being reviewed.

My Ministry has taken into consideration the expected pressures on the local construction industry over the next few years given the already approved developments (i.e Atlantis Phase 3, Cable Beach Bahamar developments) and those that are anticipated.  It is expected that with proper management of the award dates the spread of the slices over this period should not have an adverse affect on the capacity of local contractors to undertake the work.

My Ministry has just concluded negotiations with the Harrold Road contractor, the Joint Venture Partnership of Bethel Trucking and Heavy Equipment and Bahamas Hot Mix, to construct Slice 7.  This is the section of Baillou Hill Road from Robinson Road to Harrold Road Roundabout, which will be expanded to 4 lanes.  This proposed work will allow a better tie-in of the new 4 lane Harrold Rd and greatly improve the existing traffic conditions along this route, which is very congested especially during peak hours.  If approved by the cabinet  a contract to complete this work could be awarded as soon as this August with an anticipated completion date of March 2007.

Let me take this opportunity to say more definitively that the JV Contractors have assured my Ministry that the Harrold Road Project will be completed by end of August 2005 in time for the reopening of schools.  Over the duration of the construction, the Project has experienced unforeseen items that have slowed progress.  Large sinkholes, two hurricanes of 2004 and unexpected underground utility challenges have been some of the major sources of delays on the project.  Admittedly there have been disruptions to the businesses and residents in the Harrold Rd area during the construction period.  This is to be expected with a Project of this size, scope, and complexity however, my Ministry along with the contractor has done all within their powers to maintain access to the area.  Harrold Road has never once been closed to traffic and this is testament to the enormous effort that went into managing traffic during construction.

On July 13, 2005, after receiving a letter from a business owner on Harrold Rd, I arranged a meeting and invited all business owners on Harrold Rd.  Even though my Ministry had numerous public meetings in the initial stages of the road improvement project, I still felt it important to hear the concerns of the business owners.  Be assured that it is not the intention of Perry Christie’s Government to undermine anyone’s business, and so my technical staff will review the concerns of the businesses and do what can be done without compromising the overall objectives of the project.  The Harrold Rd project along with the NPRIP is meant to improve life for the Bahamian public as a whole.  Although some may have their reservations about the new layout of Harrold Rd we are asking the public to be patient and allow everyone to get accustomed to the new layout.  I’m certain that at the end of the day we will all be singing the praises of the new Harrold Rd.

My Ministry, in its continuing endeavor to improve the road network Island wide, is also performing routine maintenance work on several other major arterial roads.  This year we have undertaken major resurfacing works on roads such as West Bay St, East St and Faith Avenue west of Cow Pen Road to afford the public a more comfortable driving experience.  We have also started and planned drainage works for roadways that experience flooding during rainstorms.  This work will be continued on public roads where the need arises and will complement the major improvement works planned under NPRIP.

Based on the slicing strategy presented the NPRIP is estimated to be substantially complete by December 2007.  Tendering the project on the basis of slices would present a more attractive project that would permit a greater number of medium sized international contractors to pre-qualify.  The benefit of having greater participation in the bid process is a more competitive bid.  The proposed way forward will also allow the GOB to ease its cash flow requirements whilst also having more local involvement, which benefits the country in the long term.  Local Contractors would be in a better position to undertake a substantial portion of the project under Slice 3 through 7 as well as possibly form a joint venture with an international contractor on either Slices 1 and/or 2. The extension of Gladstone Road to the north, Corridor 7 is included in Slice 6 and is intended to be redesigned to suit to the proposed Cable Beach Bahamar Development.

Please be assured my Government is committed to successfully completing this project.  The traffic conditions on the island of New Providence are becoming more and more unbearable for the Bahamian public.  With the implementation of this project it is intended that the road network will be greatly enhanced and traffic will be able to flow with greater ease.  Also the greater involvement of the local construction industry, due to my Ministries strategy, will have long-term benefits for our country and local contracting industry as a whole.  Bahamians will be able to boast of completing work in their own country to international standards and at the same time making a valuable contribution to the quality of life for all Bahamians.

Thank You