Roxborough one year later

21.5. The fact that only 61 units have been provided at a cost close to that of building 114 represents a major failure of organisation. It is not suggested that any more units could have been built on the site, given the hostile terrain, but the cost could undoubtedly have been reduced substantially with proper planning. Furthermore the continuing delay waiting for infrastructure works to render the houses habitable represents a further avoidable loss of both revenue and amenity.

21.6. It is to be noted that any building work in Tobago conventionally attracts a premium of about 30 percent compared to costs in Trinidad. This is said to be due to difficulties in securing materials and labour. On further enquiry it appears there is no centrally organised system for bringing in, storing and distributing commonly used building materials such as blocks, cement and rebar. Such a system should certainly be considered by anybody undertaking regular construction, including the HDC. There are plainly serious economies which could be achieved by this approach.


21.7. This was a THA project for the construction of 74 housing units. Udecott was again retained for infrastructure works and HDC for building works. At the date of HDC’s involvement the infrastructure works had already been procured but much remained incomplete. HDC indicated that it had incurred substantial additional costs in remedying infrastructure works. HDC engaged nine contractors who commenced work on May 8, 2006 with a completion period of 30 weeks. The costs of the project increased from $19,254,671 for the nine contracts to a total of $26,857,509, an overall increase of almost 40 percent, with similar levels of increase applying to each of the individual contracts. HDC attribute the reasons for cost increase to the following:

(i) The THA required improvements to the specification;

(ii) Need to elevate the site to avoid flooding, resulting in additional site and superstructure costs;

(iii) Remedial works to waste water and water supply networks on site and connections from road networks to units.

(iv) Waste water disposal tanks and mains connection required to be installed.

21.8. The completion date for the nine Contracts was January 22, 2007. Delays were experienced which would have postponed completion to early 2008, about one year late. A major cause of this delay was the failure of TTEC to provide power, which was finally installed six months late. However, on February 29, 2008 THA instructed HDC to award a contract for remedial infrastructure works, which were not completed until June 2008. Then in July 2008 THA submitted a list of defects which were rectified by HDC contractors, with possession finally being taken by THA in December 2008. At the time of the Commissioners’ inspection in January 2009 there were still no occupants in the houses.

21.9. In oral evidence Mr Reynold Patrick gave further reasons for the delay. In addition to the logistics of procuring supplies from Trinidad, building materials were in short supply in Trinidad due to over-heating in the construction industry in 2006/7. Housing projects in Tobago were arranged to overlap, so that HDC could be administering up to 22 individual contracts at the same time. The programme was set by the THA. Despite being encouraged to pool resources, contractors continued to order their materials individually. Mr Patrick also stated that HDC had no interface with Udecott nor with utility installers and had to accept the site as it was.

Initial Conclusions

21.10. These two projects revealed serious problems of poor planning and poor management which appears to have been exacerbated by a division of responsibilities which allowed HDC and Udecott to blame each other, and both to blame THA. The lack of any proper appreciation of the inevitable problems on the Blenheim site is scandalous and has resulted in a doubling of the cost of the houses. Even so, they are left uninhabitable as a result of a failure to liaise with services undertakers. The Roxborough site posed no particular topographical problems, yet here also there were substantial delays attributed to services undertakers, substantial cost increases and huge delays. While some of these problems may be attributable, in part, to shortage of resources and over-heating in the construction industry, these are not problems which should have taken experienced managers by surprise.

21.11. As in the case of the Trinidad housing projects, the problem may usefully be compared to the detailed report produced by Lockwood Greene in May 2006 on earlier housing projects. The conclusion must be that these projects, particularly the two examined in Tobago, represent a serious and avoidable drain on the public purse and a serious loss of amenity in the number of housing units that could be constructed within the available funding. The Commissioners are convinced that the root of the problem lies in management, and that the solution lies with achieving a better understanding and appreciation of problems likely to occur, and proper planning to mitigate their effect.

22. NIPDEC Projects

22.1. In this section we review delay, cost over-runs and defects on the Scarborough Hospital project, and on a large number of other projects, of varying size, on which Nipdec has provided information on time and cost. To this list should be added the Belmont Police Station for which NIPDEC was responsible, and which has already been reviewed in section ten above.

Scarborough Hospital

22.2. This is a major new project undertaken by Nipdec for the Ministry of Health in which the Tobago House of Assembly (THA) has a “Watching Brief’. The hospital is prominently sited on high ground with extensive approach roads and retaining walls. The project was to be undertaken using the conventional design-tender method, with the FIDIC form of contract. Design and supervision of the works was undertaken by Stantec, a Canadian firm of Architects and Engineers. The successful tenderer was NH International (Caribbean) Ltd (NHIC), who was awarded the contract by letter dated January 30, 2003. The contract sum was $135,912,829 (VAT inclusive) with a contract period of 730 days (two years).

22.3. Disputes developed during the course of the works, following variation orders which included major retaining walls and the addition of air-conditioning which was not included in the original project. The disputes were not resolved. The contractor elected to suspend the work and subsequently both parties served notices of termination. At termination the full contract sum had been expended but only 55 percent of the work had been carried out. The original disputes plus the issue of the disputed termination, were taken to arbitration under the rules of the International Chamber of Commerce (ICC), who appointed Dr Robeti Gaitskell QC as sole arbitrator. Meanwhile the work remained at a standstill.

22.4. Nipdec identified a number of issues said to be responsible for time and cost over-runs comprising problems with contractor performance, site logistics, relationship between consultant and contractor and consultant performance. With regard to contractor performance, Nipdec contended that the work was not procured or executed in an efficient or timely manner, site management, supervision and coordination were inadequate, as were site and quality control personnel. The contractor had failed to deploy sufficient labour, materials or equipment. There was failure to engage requisite skilled operatives, poor construction management, failure to provide programmes or scheduling data, non-compliant work, failure to submit or review shop drawings in a timely manner or to maintain an accurate submittal log, quality assurance failures, failure to secure major suppliers and outstanding defective work.

22.5. With respect to site logistics, Nipdec contended that there were insufficient experienced supervisors and a shortage of experienced manpower to carry out the work; and there was lack of communication between consultant and contractor. With regard to the design, Nipdec accepted that there was insufficient data on topography of the site and on the extent of unsuitable overburden material, resulting in the need for variations to retaining walls involving additional cost of some $20million, together with other variations issued by the consultant. There was a lack of reinforcement detailing resulting in the need for site bending of steel

22.6. Further information on Scarborough Hospital was received as part of other issues in the Inquiry. In the debate on issue (iii) Peter Morris, a quantity surveyor and project manager who was engaged by NHIC, said that the over-all design concept had been flawed and that major variations had been inevitable. Problems were made worse by the absence of competent and experienced project managers. In the context of management, Mr Morris emphasised the need for issues and disputes to be resolved quickly which had not happened on the Scarborough Hospital project, where many issues were not resolved at all. Mr Morris provided a written submission to which Nipdec served a written response.

22.7. Nipdec, through Ms Wendy Ali, defended the design changes, saying that they could be beneficial in leading to delivery of a better project. She accepted that there had been instances of incomplete design and failure of supervision. Ms Ali said that NHIC, the contractor, had become “positional” and difficult to manage. It was also noted that Nipdec’s appointment by the Ministry of Health provided that over-all responsibility for the project was with a non-executive steering committee and executive responsibility for project execution was to lie with a team of senior managers and officials. The management services provided by Nipdec were to be on an “as needed basis,” which made it even less likely that they would be able to respond timeously when management input was needed to keep the project on course.

22.8. Work on the project was suspended, after the termination, for some three years (2005 to 2008) while the arbitration proceedings took their course. This resulted, inevitably, in deterioration of the incomplete works. A design-build contract for re-design and reconstruction was let to China Railway Construction Corporation (CRCC) by letter dated June 4, 2008 with a contract price of $415,362,921. This included both remedial work, completion of the building and provision of fixed medical and other equipment.

The contract period is 18 months. The engineer under the new contract is Nipdec, with additional specialist services being provided by Genivar. Work was under way when the site was inspected by the Commissioners on February 2, 2009. Nipdec indicated that as at August 31, 2009 the sum of $47,718,801 (VAT exclusive) had been paid to CRCC and that the anticipated completion date is April 30, 2010. The estimated final cost remains at $415,362,921 which implies no delay or cost over-run.

22.9. At the date of this report, several awards have been issued in the arbitration and there are outstanding proceedings concerning the awards in both the High Court and the Court of Appeal of Trinidad and Tobago. It is understood that it has been held in the arbitration that NHIC was correct in its notice of termination, but that financial/ quantum issues are still being dealt with.

Other projects

22.10. Nipdec provided a summary of the grounds giving rise to time and cost over-runs in respect of a large number of their other projects comprising Health facilities, Rehabilitation Centres, Police Stations, Connnunity Centres, Sport Facilities and a Youth Centre. The material provided is summarised in the following paragraphs.

22.11. With regard to the Eric William’s Medical Sciences Complex, Nipdec identified an error in the specification of air handling units resulting in the delivery of wrong sized equipment; also inadequate site supervision by consultants, leading to delays. Nipdec contended that elevator refurbishment was prolonged as a result of new regulations and inadequate supervision and inspection by consultants; and that there was further delay to the new incinerator attributed to contractor delay in providing design data; also an increase in the cost of the incinerator owing to delayed ordering. Further delays were said to be caused by uncertainty as to location of subterranean services.

22.12. The Port of Spain General Hospital contract is said to have incurred additional cost through making provision for decanting, and delay resulting from the supervising consultant refusing to start work until outstanding payments were made from the Ministry of Health. For the San Fernando General Hospital contract Nipdec contended that there were time and cost overruns resulting from disputes between the contractor and the employer, variations, late instructions from the Engineer and lack of satisfactory performance by the contractor.

22.13. For the St James’s District Health Facility, time and cost over-runs are said to have resulted from the contractor being slow and inexperienced in specialist work and from consultants also being slow in responding to design preparation and changes required.

For the Oxford Street Enhanced Health Centre, time and cost overrun were attributed to the contractor being slow and inexperienced in specialist work and the consultants similarly being slow in responding to design preparation and design changes. There were reported problems with theft and violence on the site which slowed the progress of work; also the contractor is said to have been forced to employ persons with inadequate skills and experience to satisfy community leaders.

22.14. For the St Joseph Enhanced Health Centre NIPDEC identified reasons for time and cost over-runs as: rapid inflation in the cost of labour and materials resulting in cash flow problems to the contractor, and slow pace of work by the contractor. For the Rehabilitation Centre at Piparo, Nipdec attributed time and cost over-runs to excessive rainfall resulting in loss of 3.5 weeks and client variations.

22.15. Nipdec was responsible for five police stations including the Belmont Station which has been considered in some detail earlier in this report. For the Mayaro Police Station, Nipdec identified reasons for time and cost over-runs as: inclement weather and shortage of materials, incomplete designs for external works, the contractor having inadequate construction management expertise, client variations, delay in the procurement of imported components, the provision of additional water and sewerage connections, significant price increase of materials and an inadequate project period (of ten months). For the Gasparillo Police Station reasons for time and cost over-runs were: slope failure due to underground water, lack of timely response by design consultants, inclement weather, shortage of materials, incomplete designs for external works and significant price increase of materials.


"Roxborough one year later"

More in this section