Cost of military housing project shoots up over 50%

file photoThe cost of a housing contract signed to provide accommodation to the Ghana Armed Forces has been increased by over 50%.

The contract, according to the Auditor General’s report for 2011, was signed in 2007 for the construction of 18 houses.

But the project that was approved at the cost of 16.6 million cedis was reviewed upward, costing the state 25 million cedis representing 50.6% increment. This was done without recourse to the Public Procurement Authority’s approval.

This came up Thursday at the Public Accounts Committing sitting when the Defence Minister Dr. Benjamin Kunbuor appeared before it to defend certain expenses by the ministry.

The Public Procurement Act 2003, Act 663 makes variation above 10 percent illegal.

Section 87 (1) stipulates, “Except in cases of extreme urgency, where there will be an aggregate increase in the original amount of the contract by more than 10 percent of the original price, a procurement entity shall inform the appropriate Tender Review Boards in the case of a contract subject to review by the Tender Review Board of any proposed extension, modification or variation order with reasons.”

Head of Engineering at the Ghana Armed Forces, Colonel Isaac Nyarko told the Public Account Committee that the variation was not as a result of change in structure.

The over 50 percent increase in cost was caused by delay in releasing funds to pay the contractor to execute the project on time. This he blamed on the Finance Ministry.

Now the Defence Minister has a daunting task of reviewing the contract after it emerged that only one out of 18 residential houses has been completed.

Dr. Kunbuor told the committee he is finding it difficult to locate the contractor who is said to have abandoned the project.

He has therefore threatened to publish his details in the dailies in a bid to locate his whereabouts.
Story by Isaac Essel | | Ghana

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